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TABLE OF CONTENTS
S.NO PARTICULARS PAGE NO.
1 Acknowledgments 4
2 Abstract 5
3 MCB Bank 6
4 Historyof MCB bank 7
5 VisionandMissionStatements 8
6 Core Values 9
7 Board of Directors 10
8 ManagementCommittees 11
9 Group Companies 12
10 Patternof Share holdings 13
11 Special AssetManagementGroup 14
12 Workingprocessof SAMG 15
13 Managerial Structure and working 16
14 EfficiencyandEffectivenessof SAMG 17
16 General Environmentof SAMG 18
17 Managers andEmployeesRelationships 19
18 Ethical Factors at SAMG 20
19 At the End 21
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ACKNOWLEDGMENTS
First of all we would like to thanks to Almighty Allah for giving us the power
and ability to complete this task so easily and without any problem, without his will
we would not have been able to complete this report.
We would like to express our deepest appreciation and thankfulness to Ms.
Saleha Jamal, Relationship Manager at Special Asset Management Group of MCB
bank, who is a brain, for giving us the valuable information that we required
regarding this report, elaborating and highlighting all the important aspects of their
day to day management and their course of conduct. Without her help it was
impossible to prepare this report.
We would like to thank our mentor and teacher Sir Yamman Khan for
believing in us to prepare such report and for teaching and exposing us to the real
world management. Without his help, it would have been far more difficult to
conclude this report.
At last, we would like to thank all of our team members for being so nice, kind
and collaborative. It was the team efforts that lead us to formulate this report.
Without their collaboration and dedication it was not possible to complete this
report.
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WHAT’S AHEAD…
MCB bank is one of the huge banking institutions of Pakistan which has the
privilege to be a Multi-National Bank. Being successful and huge institution MCB
requires being efficient in its managerial operations.it has various groups working
together to achieve the primary organizational goals. One of the groups of MCB bank
is Special Asset Management Group.
The SAMG group of MCB bank is basically a recovery department which requires
special credit management and recovery skills. The recovery process requires great
patience and eagle’s eye on client to be successful and to achieve the goals.
The success of this group directly effects the financial position of the
organization but it depends upon the efficiency and effectiveness of their work as
well the attitude and dedication of employees toward their work.
The role of the managers and their conducts of relations with the employees
greatly affect the level of achievement of the goals of SAMG. The ethical conduct of
employees and managers also has a great impact on the working of the department.
Summing it up, the managerial activities carried out in this group plays a sheer
part in the financial health of the department which depends upon the relations
between employees and managers and the level of effectiveness and efficiency with
which the work is being carried out. This is crux of what’s ahead in detail.
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MCB BANK
TYPE Public
TRADED AS KSE: MCB, LSE, ISE
INDUSTRY Banking
Capital Markets
FOUNDED 1947
HEADQUATERS Registered Office:
Islamabad
Principle Office: Lahore
PRODUCTS Loans, Credit Cards,
Savings, Consumer
banking etc.
REVENUE PKR 35.782 billion
NET INCOME PKR 26.753 billion
TOTAL ASSETS US$ 0.02 billion
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HISTORY OF MCB BANK
MCB Bank Limited (formerly Muslim Commercial Bank) previously named as a
(Mansoor Co-operative Bank) was incorporated by the Adamjee Group on July 9,
1947, under the Indian Companies Act, VII of 1913 as a limited company. The bank
was established to provide banking facilities to the business community of South
Asia. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto.
This was the first bank to be privatized in 1991 and the bank was purchased by a
consortium of Pakistani corporate groups led by Nishat Group. As of June 2008, the
Nishat Group owns a majority stake in the bank. The president of the bank is Imran
Maqbool.
The group has a presence in business sectors of the country such as banking, textile,
cement and insurance.
www.wikipedia.com
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Vision Statement
To be the leading financial services provider, partnering with our
customers for a more prosperous and secure future.
Mission Statement
We are a team of committed professionals, providing innovative and
efficient financial solutions to create and nurture long-term
relationships with our customers. In doing so, we ensure that our
shareholders can invest with confidence in us.
http://www.mcb.com.pk
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Core Values
Integrity
We are the trustees of public funds and serve our community with integrity.
We believe in being the best at always doing the right thing. We deliver on our
responsibilities and commitments to our customers as well as our colleagues.
Innovation
We encourage and reward people who challenge the status quo and think
beyond the boundaries of the conventional. Our teams work together for the smooth
and efficient implementation of ideas and initiatives.
Excellence
We take personal responsibility for our role as leaders in the pursuit of excellence.
We are a performance driven, result oriented organization where merit is the only
criterion for reward.
Customer Centricity
Our customers are at the heart of everything we do. We thrive on the
challenge of understanding their needs and aspirations, both realized and unrealized.
We make every effort to exceed customer expectations through superior services
and solutions.
Respect
We respect our customers’ values, beliefs, culture and history. We value the
equality of gender and diversity of experience and education that our employees
bring with them. We create an environment where each individual is enabled to
succeed.
http://www.mcb.com.pk
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Board of Directors
1 Mian Mohammad Mansha Chairman
2 S. M. Muneer Vice Chairman
3 Tariq Rafi Director
4 ShahzadSaleem Director
5 Sarmad Amin Director
6 Mian Raza Mansha Director
7 AftabAhmadKhan Director
8 Mian Umer Mansha Director
9 Dato' Seri Ismail Shahudin Director
10 AhmadAlmanAslam Director
11 MuhammadAli Zeb Director
12 Mohd Suhail AmarSureshBinAbdullah Director
13 Imran Maqbool President&CEO
http://www.mcb.com.pk
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Management Committee
http://www.mcb.com.pk
1 Imran Maqbool President& CEO
2 AghaSaeedKhan Group Head – Operations
3 SalmanZafar Siddiqi Chief Financial Officer
4 Ali MubashirKazmi Group Head - International
Investments
5 MuhtashimAshai Group Head - Wholesale Banking
6 Mohammad Ramzan Group Head - Treasury& FX
7 Usman Hassan Group Head - Human
Resource Management
8 Laqa Sarwar Group Head - Special Assets
Management
9 Kamran Rasool Group Head - CSR & Security
10 Mohammed NaumanChughtai Group Head - RiskManagement
11 SyedMudassar HussainNaqvi Group Head - Legal Affairs
12 ShahidMalik Group Head - CCM & Special
Projects
13 ImtiazMahmood Head- InformationTechnology
14 Zargham KhanDurrani Head- Retail BankingNorth
15 NadeemAfzal Head- Retail BankingSouth
16 Ali MuhammadMahoon Group Head - IslamicBanking
17 SalmanZafar Siddiqi Chief Financial Officer
18 Kamran ZaffarMuggo Group HeadAudit& RAR
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Group Companies
Associated Companies
1. Adamjee Insurance Company Ltd.
2. First Women Bank Ltd.
3. Euronet Pakistan (Pvt.) Ltd.
Subsidiary Companies
1. MCB Financial Services Ltd.
2. MNET Services (Pvt.) Ltd.
3. MCB Trade Services Ltd. - Hong Kong
4. Arif Habib Investments Ltd.
5. "MCB Leasing" Closed Joint Stock Company – Azerbaijan
http://www.mcb.com.pk
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http://www.mcb.com.pk
11%
21%
0%
0%7%
1%
3%14%
0%
37%
6%
PATTERN OF SHARE HOLDINGS
Directors, CEO and children
Associated Companies
NIT and ICP
Bank, DFI and NBFI
Insurance Companies
Modarbas and Mutual funds
Public Sector COS, and Corporations
General Public(local)
General Public(foreign)
Foreign Companies
Others
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SPECIAL ASSET MANAGEMENT GROUP
Special asset management department group (SAMG) is a separate group that
looks after the non-performing loans that requires adept, dedicated and specialized
recovery skills. This group is staffed with experience credit officers who possess the
skill-set required for managing problem loans.
The main responsibility of SAMG department is to manage accounts classified
as loss above threshold limit of PKR 2 million. However exceptions to this rule are
allowed.
SAMG is assisted by a panel of bank’s approved lawyers, particularly with
regards to cases involving legal complications, filling of recovery suits, etc.
SAMG’s significant functions include the following:
Ensure availability of data/information/documentation pertaining to SAMG
customers.
Determine account action plan/recovery strategy
Pursue all options to maximize recovery
Negotiate with the defaulted client for recovery.
Arrange asset tracing.
File recovery suit.
Refer cases to SECP for black listing of directors.
Refer case to district administration for recovery under Baking Companies
ordinance Act 1984.
Any miscellaneous function delegated by authorities.
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WORKING PROCESS OF SAMG:
The work of this department starts with the defaulting of a client
whose portfolio is above threshold level of PKR 2 million.
The braches of MCB bank provides loans to customers who are
corporates or businesses that are willing to acquire loan. If the client gets
defaulted because of any reason may be bankruptcy, the case if transferred to
the head office where SAMG department looks after the case.
The process of transferring an account from the branch to SAMG
department involves:
Request for transferring the account.
Debiting the liability at the branch to write off the account and transferring to
SAMG.
Completion of all the documents which includes names of directors,
companies addresses, the receipts of installments that have been paid
previously and all the documents from the opening of the account till then.
Next step involves the first negotiation with the client for restructuring or
rescheduling the loan.
If the loan is rescheduled, then a written consent is asked by the client
regarding the rescheduling of the loan.
If the customer is not willing to negotiate than a case suit is filed against them
after noticing and protesting.
The case is then forwarded to law courts for further processing which also
includes getting the permission from court for asset tracing.
The assets of the clients are then traced so that those assets can be sold and
recover the amount of loan.
Between these courses of conduct, negotiations are being carried with the
client for rescheduling.
.
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MANAGERIAL STRUCTURE AND WORKING:
The overall managerial structure of MCB is somewhat of a learning
organization having group heads, project managers, following up day to day
operations with employees. Particularly, the management structure of the
SAMG group includes group head, unit heads, relationship managers and
other staff. The power distance is so low among them that the group head,
himself, greets the tea boy of the department and everybody is comfortable
talking with each other.
The managers focus first on self-motivation of employees and then
putting their effort to motivate them to achieve the departmental goals
because according to them “an employee who is not self-motivated cannot be
motivated by an external source”.
Strategy making process is carried out by the unit heads and RMs or
sometimes it may require the involvement of group head also which occurs
often which shows the essence of participative strategy.
The monitoring of the department is carried out by taking the feedback
from the employees. They have a proper check and balance of every
employee as every employee’s performance report is submitted to project
head on quarterly basis.
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EFFICIENCY AND EFFECTIVENESS OF SAMG:
Efficiency and effectiveness depends upon the monitoring and
supervision. The main reasons for loans going bad debts are the lack of
monitoring. However this lack-ness is minimized by using Management
Information System (MIS) which ensure the credibility of the work and keeps a
proper check and balance on the loans.
The recovery of the loans takes a lot of time as it is followed by long
legal procedures and negotiations. In some cases it gets worse because of the
obstructive and reluctant behavior the client. Secondly, it may take too long to
recover a loan because the client files a petition to high court or even
Supreme Court against the judgment which is not in favor of him. This makes
their work less efficient and effective.
In response to these scenarios the managers provides strong evidences
and makes their prosecution so strong that the defaulter cannot easily escape.
However, it gets too costly to carry on these long legal procedures.
The efficiency and effectiveness of this department is directly related
with the organizations capital as if the defaulted loan is not recover it
jeopardize the organizations capital and if recovered it is directly credited to
the organizations capital strengthening their financial health.
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GENERAL ENVIORNMETOF SAMG:
General environment greatly effects the department in accordance to
legal political and economic factors prevailing in the country.it effects their
recovery of loans and even some times they are cause because of which a
customer gets defaulted. Unexpected changes in local/international economic
scenario. Unexpected changes in government policies, local/global market
trends results in financial losses to customers’ business which, in turn,
jeopardize bank’s position with regard to recovery of finances.
Bad law and order situations delays the hearing of the law suit
deliberately which makes the recovery procedure long and sticky causing
heavy costs to the bank. Bad law and order situation also causes in the delay
of the sale of traced asset. Sometimes the defaulted client is backed by some
political party which greatly affects the recovery of the loan because of their
notorious behavior.
The economic conditions or sudden changes in the policies also affects
greatly. The recent decrease in bank policy rate caused loss to the bank
because they were then indirectly forced to cut of the interest amount
according to the interest rate prevailing in the sector. High inflation rates and
dis-investment in the country also affects their recovery as the asset traced of
a defaulter is not sold according to the original worth of the asset traced.
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MANAGERS AND EMPLOYEES RELATIONSHIP:
The relationship between employees and managers is somewhat
satisfactory at the SAMG group.
On one hand managers and employees have less power distance and
employees have good coordination with each other and with managers and
on the other hand domination of bosses and some unethical issues are also
present.
The managers and employees structure is more of a like a team. They
work collectively as a team to accomplish a certain task. Managers tend to
help their employees to achieve goals which show an essence of learning
organization. Managers motivate their employees time to time to accomplish
a certain task.
The employees and managers have great correspondence with each
other as employees also discuss their personal matters with the managers and
they try to sort out any personal issue that is happening with employee or
manager so that they can be focused on their work.
The adverse factor that is present among them is that some of the
managers want to take credit of the work which they have not done in front of
their bosses.
Another adverse factor is the somehow obstructive behavior of the
senior managers. They are not willing to accept their mistake as they have the
mindset of “bosses are always right”.
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ETHICAL FACTORS AT SAMG:
Ethically, SAMG is undoubtedly is up to the mark. There is not gender
or other discrimination as well as the justice is provided accordingly.
Employees are appraised for their good performances, they have proactive
response to their clients, hiring and firing is done on the basis of merit.
The SAMG department consists of only one lady others are all men still
there is no gender discrimination instead they work with collaboration and
great enthusiasm. The SAMG also consist of people from different cast, sects,
religion but still they all are treated as same. The code of conduct is pre-
defined and justice is given accordingly.
Employees are motivated by giving appraisal twice a year or even thrice
a year according to their performance and without any favoritism. According
one of their managers he got 18 basic bonuses in a year for his performance
which shows their act of justice.
In relation to their clients, they have no obstructive approach instead
they react proactively. If the mistake is from their side they accept it with
great gratitude even if their client bears any losses because of their mistake
they tends to compensate them.
In case of firing any employee, the very first step they take is to take
resignation from him/her instead of firing the employee but if the situation
gets worse they fire employees. According to the manager, they fired a whole
team of 5 people because of their obstructiveness and due to the violation of
the code of conduct.
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AT THE END…
Managementissuch a unique thingthatisknownto everybodyandisimpliedevenwithout
properlearningbutwhenitcomesto manage a corporate bodyensuringthe profitabilityof the
organizationandtoattain the organizational goalsatbest,managementsomehow getstrickyand
technical.
The managementthatwe learnfromthe booksisso narrow than the actual management
that isappliedonground.Inreal life,managementtendstodeal withsituationsthatare mostly
uncertainor abruptinnature.
The managershere at the SAMG departmentface the same uncertainty.Theirworkis
uncertainwitheveryindividual clientbecauseeveryclientisdealtinaunique manner. The workis
lessefficientasittakestoomany sourcesandtime to be fulfilledandsometimesthe resultis
adverse. Still theyare goodleadersandleadtheirgroupfromthe frontfacinganysituationthat
comesaround.
The relationbetweenthe employeesandmanagers issatisfactory. Onone handtheybelieve
inself-empowerment,motivations andappraise thembybonusesandappraisals onthe otherhand
theyhave obstructive behaviortowardstheiremployees.
The bestthingabout thisgroupis that the managersand employeeshave lesspower
distance whichenablesthemtolearnbyeach otherratherthan competingfiercely.Another
positivitythatispresentisthatthe ethical code of conductis upto the mark.Justice isprovidedon
meritbasisratherthan doingfavoritism.
“Managementisefficiencyon climbingladderofsuccess; leadership
determines whether the ladderis leaningagainstthe rightwall”
Stephen Covey
