MCB BANK LIMITED PAKISTAN...MCB Strategic Thrusts 1. Build leading payments bank – Extensive Branch Network – #1 in ADCs – Dominant in paymentproducts – TransactionalConvenience

MCB BANK LIMITEDPAKISTAN

LondonDecember 10, 2010

OVERVIEW OF THE BANK

Headquarters: Lahore, Pakistan

Founded: 1947

Privatised: 1991

Size: Leading Bank in Pakistanrepresenting 9% of total Banking

Sector Assets & Deposits

Snapshot

ATMs 500

Branches 1,109

Staff 9,276

Share price 188.31

Paid-up Capital (M) 7,602

Authorised Capital (M) 10,000Sector Assets & Deposits

PKR mm US$ mm **

Total Assets: 539,485 6,243

Total Advances: 246,887 2,857

Total Deposits: 422,272 4,886

Listed: KSE,LSE,ISELondon Stock

Exchange

Note: Stand Alone Financials as of Sep 30, 2010; ** 1US$ = PKR 86.42* Position as of June 30, 2010

ROA 3.18%

ROE 26%

EPS 21.92

Foreign Investment 33.60%

Free Float shares* 328,757,457

Free Float (% of O/S shares) 43.25%

Ratings - PACRA Long Term - AAShort Term - A1+

MCB Strategic Thrusts

1. Build leading payments bank– Extensive Branch Network– #1 in ADCs– Dominant in payment products– Transactional Convenience

MCB Strategic Positioning

Customer Financial Needs

Build leadingpayments bank

Convert branches fromprocessing hubs to sales /service centers

Transactional Borrowing

2

1

2. Branches into customer focused centers– branch sales and service model– Quality product menu– Cross Selling of Products

MCB’sKey Strategic Success Factors

3. Strengthen business platforms for future growth– Focused growth in SME & Islamic sectors– Grow Privilege proposition– Strengthen consumer assets– Technological / Network Updation

Performance driven company

processing hubs to sales /service centers

Strengthen business platformsfor future growth

Savings /Growth Protection

3

Controlled and efficient organization

4

5

– Centralization & BPR to drive branch efficiency

4. Performance driven company- Fair performance management, training- Pay for performance

5. Controlled and efficient organization- Stringent cost focus- Effective Risk Management Function- Efficient and robust internal processes

KeyPerformanceFinancialIndicatorsIndicators

(Covering last 5 yearsperformance / growth)

Financial Position - Strong Bottom Line GrowthPKR Mln

31%

10% 10%

20%

-3% -10%

-20%

-10%

0%

10%

20%

30%

40%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Growth in Advances – CAGR 5%

Less credit lending opportunities resulted in in growth in

Year 2005 2006 2007 2008 2009 9M 10

Total Assets 298,777 342,108 410,486 443,616 509,224 539,485

Growth 15% 15% 20% 8% 15% 6%

70%

80%

90%

100%

Other Assets

Less credit lending opportunities resulted in in growth ininvestments over the years as a securer and stable means

of return

Growth in Investments – CAGR 24%

3%

-9%

78%

-15%

73%

24%

-20%

0%

20%

40%

60%

80%

100%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 100%

10%

20%

30%

40%

50%

60%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Advances - Net

Investements

Cash&Bal with Teasury &Other Banks

Securing Our Investments Into More Viable OptionsPKR Mln

CAGR (‘05-09)T-Bills: 32%

CAGR (‘05-09)PIBs: 9%

Perc

enta

gesh

are

toto

tali

nves

tmen

ts

47,00036,873

85,48271,835

142,957 185,951

4,508

3,791

5,104

4,683

7,6996,952

4,549

7,388

2,9835,681

6,082 5,178

4,8364,716

4,8756,233

1,143 2,2045,5446,348 8,135 8,883

7,647 7,3570 124 1,667 667 448 188

30%

40%

50%

60%

70%

80%

90%

100%

Year 2005 2006 2007 2008 2009 9M 2010

TotalInvestments 69,481 63,486 113,089 96,632 167,134 207,794

Growth % 3% -9% 78% -15% 73% 24%

T-Bills: 32%

Perc

enta

gesh

are

toto

tali

nves

tmen

ts

36,873

0%

10%

20%

30%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Open End Fund/NIT Units Sukook Bonds Shares in Listed and Unlisted Co.sOther Government Securities TFCs, Debentures, Bonds COIs and PTCs Pakistan Investment BondsTreasury Bills

(246)

822

73

1,385

991

1,3731,222

(200)

-

200

400

600

800

1,000

1,200

1,400

1,600

Q310 Q210 Q110 Q409 Q309 Q209 Q109

Q310 Q210 Q110 Q409 Q309 Q209 Q109OAEM

5 (2) (6) (150) 133 (17) 11Substandard

(271) 479 (1,210) (573) 36 (600) (1,318)Doubtful

(503) (768) 204 1,048 (720) 83 1,235Loss

523 1,113 1,085 1,060 1,542 1,907 1,293Total NPLs

(246) 822 73 1,385 991 1,373 1,222

Quarterly additions in NPLs & Concentration

Quarterly Addition In NPLs

PKR Mln

(246)(400)

74 77

1,9832,9863,176

4,243

18,654

15,933

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Sep 2010 Dec 2009

OAEMSubstandardDoubtfulLoss

Sep 2010 Con. Dec 2009 Con. + / - %OAEM 74 0.3% 77 0.3% (3) -3.3%Substandard 1,983 8.3% 2,986 12.8% (1,002) -33.6%Doubtful 3,176 13.3% 4,243 18.3% (1,067) -25.2%Loss 18,654 78.1% 15,933 68.6% 2,721 17.1%Total 23,888 100.0% 23,239 100.0% 649 2.8%

Category wise Concentration

Equity and LiabilitiesPKR Mln

40%

50%

60%

70%

80%

90%

100%

Deposits – CAGR 13%

12%13% 13%

15%

14%16%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Fixed 13,296 33,297 32,202 61,680 62,652 78,122

Savings 137,251 137,122 160,789 156,126 176,055 193,643

Current 78,798 87,043 99,106 112,375 128,898 150,507

Deposits 229,345 257,462 292,098 330,182 367,605 422,272

Year 2005 2006 2007 2008 2009 9M 2010

Total Liabilities 275,469 301,264 355,366 385,180 439,484 464,172

Growth 13% 9% 18% 8% 14% 6%

0%

10%

20%

30%

40%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Other Liabilities

Deposits

Borrowings from F.I

Bills Payable

4%

12% 13%11%

0%2%4%6%8%

10%12%14%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Focused Increase in ProfitabilityPKR Mln

Profit After Tax (Rs.) – CAGR 15%

8,922

12,142

15,266 15,375 15,495

Markup Income (Rs.) – CAGR 31%

17,75625,778 31,787

40,04451,616

FY2005 FY2006 FY2007 FY2008 FY2009

Sep 2010: 40,241

NIM (Rs.) – CAGR 24%

28,48335,775

CAGR 2005 – 09

FY2005 FY2006 FY2007 FY2008 FY2009

Sep 2010: 12,497

14,97521,253 23,921

28,483

FY2005 FY2006 FY2007 FY2008 FY2009

Sep 2010: 26,981

Revenues (Rs.) – CAGR 19%

20,72926,244

30,36934,275

41,417

FY2005 FY2006 FY2007 FY2008 FY2009

Sep 2010: 31,572

72

134

251

79

152 143

-

50

100

150

200

250

300

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Market Capitalisation

Performance Snapshot

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

ROA EPS

0.00

5.00

10.00

15.00

20.00

25.00

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

Rs. In BlnIn Rupees

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

ROE: Profit after Tax/ Avg Equity (before surplus), ROA: Profit after Tax/Avg Assets, Book Value/share: Equity before surplus/ Shares, ADR: Gross Loans/ Deposits, EPS: Profit after Tax/ Average no. of shares

Book Value per Share

0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00

100.00

YE 05 YE 06 YE 07 YE 08 YE 09 9M 100.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

YE 05 YE 06 YE 07 YE 08 YE 09 9M 10

ADR Capital Adequacy

Shareholders Returns

Dividend Yield (Based on Cash Dividends)

2.4%2.9% 3.1%

9.1%

5.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2005 2006 2007 2008 2009

34.08%

45.39%

62.25%56.86%

53.97%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

55.00%

60.00%

65.00%

70.00%

2005 2006 2007 2008 2009

Dividend Payout

Share Price (Market Value per share) Dividend per share (In Rupees)

2005 2006 2007 2008 2009Based on EPS 11.74 15.97 20.08 20.22 20.38

167.8

246.1

399.95

125.81

219.68

0.3

50.3

100.3

150.3

200.3

250.3

300.3

350.3

400.3

450.3

2005 2006 2007 2008 2009

4.0

7.3

12.511.5 11.0

0.3

2.3

4.3

6.3

8.3

10.3

12.3

14.3

2005 2006 2007 2008 2009

MCB – Financial Position as at September 30, 2010PKR Mln

Sep2010

Dec2009 +/ - %age

Sep2009 %age

June2010 %age

Assets 539,485 509,224 30,261 6% 468,802 15% 532,102 1%

Advances - net 228,577 253,249 (24,672) -10% 238,292 -4% 245,058 -7%

Investments 207,794 167,134 40,660 24% 142,937 45% 179,515 16%

T-Bills and PIBs 192,903 150,656 42,246 28% 126,095 53% 161,646 19%

Other Debt Securities 5,877 6,998 (1,121) -16% 6,192 -5% 8,212 -28%

Equity Securities 7,545 8,095 (550) -7% 9,265 -19% 8,188 -8%

Subsidiaries and Associates 1,469 1,385 84 6% 1,384 6% 1,469 0%Subsidiaries and Associates 1,469 1,385 84 6% 1,384 6% 1,469 0%

Cash and Balances with Treasury Banks 43,851 38,775 5,076 13% 39,233 12% 44,463 -1%

Other Assets 59,262 50,065 9,197 18% 48,341 23% 63,066 -6%

Liabilities 464,172 439,484 24,688 6% 401,206 16% 458,827 1%

Deposits 422,272 367,605 54,667 15% 362,116 17% 419,270 1%

Borrowings 14,052 44,662 (30,610) -69% 12,793 10% 13,379 5%

Bills Payable 8,844 8,201 643 8% 8,392 5% 5,370 65%

Other Liabilities 19,003 19,016 (13) -0.1% 17,905 6% 20,808 -9%

Equity without surplus 67,084 61,076 6,008 10% 59,086 14% 64,752 4%

Equity with surplus 75,313 69,740 5,573 8% 67,596 11% 73,275 3%

MCB – Profitability Review – September 30, 2010

Increase of 354M, with QoQincrease of 312M in NIM

1. YoY increase of 1.95B inInterest Income;- On loans, dec of 2.9B- On Investments, inc of 4.7B

2. Increase in Interest Expenseby 1.6B YoY;- On deposits, inc of 1.3B- Securities under rep-agreement, inc of 115M- 24M inc in discount &commission

YoY inc of 667M in non-markupincome ;

Sep 2010 Sep 2009 +/- % Budgeted +/- +/- %

Mark-up Income 40,241 38,289 1,953 5% 41,229 -988 -2%

Mark-up Expense 13,260 11,662 1,598 14% 13,334 -74 -1%

Net Mark-up Income 26,981 26,627 354 1% 27,895 -914 -3%

Non Interest Income 4,591 3,924 667 17% 4,590 1 0.0%

Total Revenues 31,572 30,551 1,022 3% 32,485 -912 -3%

Non Mark-up Expense 10,185 7,884 2,301 29% 10,973 -789 -7%

admin expenses 11,469 10,144 1,325 13% 12,235 -766 -6%

PKR Mln

income ;• Inc in fee & brokerage incomeby 448M, 17%• Inc in capital gains by 90M, 38%• Income from dealing in FC up by211M, 80%

YoY inc of 13% in admin exp;• Personnel cost +17%• Rent +19%• Insurance +24%• Electricity & Gas +12%• Rep & maint +30%• Travelling & fuel +27%• Instrument clearing +26%• CTC -21%• Communications -14%

admin expenses 11,469 10,144 1,325 13% 12,235 -766 -6%

PF reversal (2,069) (2,814) 745 -26% (1,875) (194) 10%

other charges 785 554 231 42% 614 171 28%

Profit before Provisions 21,387 22,667 -1,280 -6% 21,511 -124 -1%

Provisions 2,025 5,014 -2,989 -60% 3,925 -1,901 -48%

against Invesments 114 751 (637) -85% - 114 100%

against loans & advances 1,868 4,228 -2,361 -56% 3,904 -2,036 -52%

bad debts written offdirectly 43 35 8 24% 22 21 99%

Profit before Tax 19,363 17,653 1,710 10% 17,586 1,777 10%

Taxation 6,866 5,848 1,018 17% 6,155 711 12%

Profit after Tax 12,497 11,805 691 6% 11,431 1,066 9%

MCB – Highest Quarterly Profit in the History

Q3- 10 Q2 - 10 Q1 - 10 Q4- 09 Q3- 09 Q2 - 09 Q1 - 09

Mark-up Income 13,845 13,295 13,101 13,327 12,350 12,847 12,983

Mark-up Expense 4,560 4,322 4,377 4,180 3,830 3,857 3,886

Net Mark-up Income 9,285 8,973 8,724 9,148 8,520 8,990 9,097

Non Interest Income 1,600 1,591 1,400 1,719 1,183 1,070 1,675

Total Revenues 10,885 10,563 10,124 10,867 9,703 10,060 10,772

Non Mark-up Expense 3,759 3,555 2,871 3,056 2,818 2,459 2,791

admin expenses 3,909 4,035 3,525 3,887 3,668 3,397 3,264

11,50012,00012,50013,00013,50014,000

Q3-2010

Q2 -2010

Q1 -2010

Q4-2009

Q3-2009

Q2 -2009

Q1 -2009

Highest Markup Income Earned

8,0008,2008,4008,6008,8009,0009,2009,400

Highest Net Mark-up Income

PKR Mln

admin expenses 3,909 4,035 3,525 3,887 3,668 3,397 3,264

PF reversal (425) (769) (875) (1,109) (1,050) (1,114) (650)

other charges 275 289 221 278 200 176 178

Profit before Provisions 7,125 7,009 7,253 7,810 7,086 7,601 7,981

Provisions -25 1,048 1,002 2,308 1,120 2,149 1,743

against Invesments (11) 1 124 733 232 568 (49)

against loans & advances (26) 1,029 865 1,568 855 1,582 1,791

bad debts written offdirectly 11 18 14 7 33 - 0

Profit before Tax 7,151 5,961 6,251 5,502 5,964 5,451 6,238

Taxation 2,596 2,160 2,110 1,812 1,916 1,829 2,103

Profit after Tax 4,554 3,801 4,141 3,690 4,049 3,622 4,135

-1,0002,0003,0004,0005,0006,0007,0008,000

Q3-2010

Q2 -2010

Q1 -2010

Q4 -2009

Q3-2009

Q2 -2009

Q1 -2009

Highest Profit before Tax

-

1,000

2,000

3,000

4,000

5,000

Q3-2010

Q2 -2010

Q1 -2010

Q4-2009

Q3-2009

Q2 -2009

Q1 -2009

Highest Profit after Tax

8,000

Q3-2010

Q2 -2010

Q1 -2010

Q4-2009

Q3-2009

Q2 -2009

Q1 -2009

MCB – Stand Outs

• Highest Capital Adequacy ratio

• Highest Return on Assets (ROA)

• Registered highest PBT / PAT for the period ended September 30, 2010

• Significant Return on Equity (ROE)

• Effective Cost Cutting / Risk Management Policies

NPL coverage ratio

• Highest EPS

• Infected portfolio below 10% of gross advances

• MCB exposure in risk free govt. securities

• MCB’s strong CASA base

• NPL coverage ratio

• Highest Market Capitalization in the peer banks

• Controlled NPL growth over quarters

• First financial institution to launch Mobile Banking in Pakistan

• First ICFR compliant Bank in Pakistan

Recognitions/ AwardsRecognitions/ Awards

MCB BANK LIMITED – EXCELLENCE

“Seriesof AwardsWon”

Asia Money – Best Domestic Bank in PakistanThe Asset - Best Domestic Bank in Pakistan

EuroMoney – Best Bank In AsiaEuroMoney Best Bank In Pakistan

AsiaMoney – Best Domestic Bank In Pakistan

2009 2008

2006 2005

EuroMoney – Best Bank In PakistanAsiaMoney – Best Domestic Bank In Pakistan

EuroMoney – Best Bank In PakistanAsiaMoney – Best Domestic Bank In Pakistan

2006 2005

2004 2000, 2001 & 2003

EuroMoney – Best Bank In PakistanAsiaMoney – Best Domestic Bank In Pakistan

EuroMoney – Best Bank In Pakistan

“Most Stable Bank in Pakistan

MCB BANK LIMITED – ACHIEVEMENTS IN 2010

“Best Bank Led Mobile Money TransferProgram”

Awardsin 2010

“Best Corporate Report Award 2009”

Awardsin 2010

THANKYOU

For further details on MCB Bank Limited, please visitFor further details on MCB Bank Limited, please visitwww.mcb.com.pk

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