customers for a more prosperous and secure future and ... · However, the modes and quality of financing is a major concern vis-à-vis the invisible demand in the private sector and

To be the leading financial services provider, partnering with our customers for a more prosperous and secure future

Our Vision

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 ensurethat our shareholders can invest with confidence in us

Our Mission

The standards and principles which determine our behavior and how we interact with our customers and each other

Our Values

MCB

MCBMCB Bank Limited

CORPORATE PROFILE

Mian Mohammad Mansha Chairman

S.M. Muneer Vice ChairmanTariq Rafi Director

Shahzad Saleem Director

Sarmad Amin Director

Director

Director

Director

Director

Director

Director

Director

M.U.A. Usmani

Abdul Farid Bin Alias

President / CEO

Board of Directors:

Mian Raza Mansha

Aftab Ahmad Khan Manzar Mushtaq

Dato’ Seri Ismail Shahudin

Mian Umer Mansha

Member

Member

Member

Tariq Rafi Chairman

Audit Committee:

Aftab Ahmad Khan

Dato’ Seri Ismail Shahudin

Ahmad Alman Aslam

Ahmad Alman Aslam

Company Secretary: Abdus S. Sami

Auditors: M/s. A.F. Fergusons & Co.

Chartered Accountants

Legal Advisors: M/s.

Advocates & Legal Consultants

Khalid Anwer & Co.

Chief Financial Officer: Salman Zafar Siddiqi

Registrar's and Share

Registration Office:

M/s. THK Associates (Pvt.) Ltd

State Life Building No. 3

Dr. Ziauddin Ahmed Road

Karachi, Pakistan

Principal Office: MCB 15 Main Gulberg,

Lahore, Pakistan.

Registered Office: MCB Building F-6/G-6,

Jinnah Avenue, Islamabad,

Pakistan.

April, 24, 2012

MCBMCB Bank Limited

Ratings

Economy Review

Future Outlook

Acknowledgement

PACRA maintained the long term credit rating of AA+ [double A plus] and short term credit rating of A1+ [A one plus] of the Bank, through its notification in June 2011 (2010: Long term: AA+ [double A plus] and Short term: A1+ [A one plus]).

The macroeconomic platform of the economy is in much need of prudent corrections and instigation of enforced measures to curb the impaired controls on inflationary pressures. The prevalent political unrest, trade gaps, deteriorating reserves and international pressure on commodity prices are reaping its adversities at a much higher pace. In the banking sector, remarkable results have been witnessed in a continuing trend despite economic disturbances. However, the modes and quality of financing is a major concern vis-à-vis the invisible demand in the private sector and limited growth opportunities in the area. Growing concentration levels in government securities at banking industry level has raised concerns internationally and is likely to impact ratings of financial institutions. However, to spur private sector credit, concrete remedial actions are required with stable discount rate being the only factor considered so far.

Moving forward, unless the adversities are reversed there remains little room for foreign investments and injections in the economy. Main industries have already suffered the loss on part of power shortages and lack of government support. Tax evasion issues, rising deficit, impact of negative parity on exchanges and debt repayments is putting the economy under further strain. Although equity market has performed exceptionally well in the first quarter of 2012, necessary measures should be adopted to repose international confidence going forward.

MCB Bank Limited is determined in growth and creating opportunities to strengthen itself further to meet the fore coming challenges. The Bank's focus shall be in product and services innovation, further improvements in quality of services on offer, improved use of technology, strengthening of internal policy and control frameworks and adding value in the economy through its channel of businesses.

In the end the Board would like to greet and thank all shareholders and customers for their trust, our staff for their continuous hard work and dedication, and the Government and the State Bank of Pakistan for their patronage and support.

MCBMCB Bank Limited

DIRECTORS' REPORT - MARCH, 2012

43 First Quarterly Report, 2012

On behalf of Directors

First Quarterly Report, 2012

I am pleased to place before you, on behalf of the Board of Directors, the quarterly financial statements of your Bank for the period ended March 31, 2012.

Performance Review

The Bank registered remarkable performance in the first quarter as profit before and after tax increased to Rs. 8.656 billion and Rs. 5.644 billion respectively, increasing by 10% and 12% over the corresponding quarter last year. Net markup income of the Bank decreased by 2% over March 2011 whereas non-markup income increased by 20% to Rs. 2.413 billion. On the operating expenses side, gross administrative expenses (excluding the impact of pension fund reversal) increased by a controlled growth of 11% over March 2011, whereas provisions significantly reduced by 94% to Rs. 75 million.

The asset base of the Bank grew to Rs. 666.644 billion from Rs. 653.233 billion as at year end 2011. Advances (gross) of the Bank registered a growth of 2% over December 31, 2011, increasing to Rs. 252.787 billion. The classified portfolio of the Bank decreased by 1% owing to effective risk management framework adopted by the Bank, improving the quality of advances with a lower infection ratio of 10.38% from 10.75% in December 31, 2011. The investment portfolio increased by 3% over December 2011 to Rs. 327.630 billion. The deposit base of the Bank went up by 4%, with 3% and 8% increase reported in current and saving deposits respectively, improving the CASA percentage to 82% from 81% as of December 31, 2011.

Earnings per share (EPS) for the quarter was reported at Rs. 6.14 compared to Rs. 5.46 for the corresponding quarter last year. Return on assets improved to 3.42% (2011: 3.18%) whereas return on equity improved to 28.09% (2011: 26.23%).

ChairmanMian Mohammad Mansha

Financial Highlights

Transfer from Surplus on Revaluation of Fixed Assets (net of tax)

Profit Available for Appropriation

Appropriations:Statutory ReserveFinal Cash Dividend – December 2011

Issue of Bonus Shares – December 2011

Total Appropriations

Un-appropriated Profit Carried Forward

Profit Before Taxation

Un-appropriated Profit Brought Forward

Profit After Taxation

Taxation

8,656

9

28,375

34,019

564 2,509

836

3,909

30,110

Rs. in Millions

28,366

5,644

(3,012)

Unconsolidated Condensed Interim Statement of Financial Position (Un-audited)As at March 31, 2012

MCBMCB Bank Limited MCBMCB Bank Limited

Unconsolidated Condensed Interim Profit and Loss Account (Un-audited)

65 First Quarterly Report, 2012 First Quarterly Report, 2012

Unaudited Audited

Note March 31, December 31,

2012 2011

Assets

Cash and balances with treasury banks 46,915,513

53,122,522

Balances with other banks 2,451,944

2,281,263

Lendings to financial institutions 7 2,819,768

955,087

Investments - net 8 327,630,294

316,651,613

Advances - net 9 230,456,782

225,801,259

Operating fixed assets 22,368,978

22,007,903

Deferred tax assets - net -

-

Other assets - net 34,000,787

32,413,576

666,644,066

653,233,223

Liabilities

Bills payable 8,404,870

9,466,818

Borrowings 10 28,544,617

39,100,627

Deposits and other accounts 11 512,067,061 491,188,710 Sub-ordinated loan - - Liabilities against assets subject to finance lease -

-

Deferred tax liabilities - net 12 6,538,486

6,294,886 Other liabilities 18,658,258

18,379,700

574,213,292

564,430,741

Net assets 92,430,774

88,802,482

Represented by:

Share capital 9,198,601

8,362,365

Reserves 42,505,941

42,186,467

Un-appropriated profit 30,109,900

28,366,171

81,814,442

78,915,003

Surplus on revaluation of assets - net of tax 10,616,332

9,887,479

92,430,774

88,802,482

Contingencies and commitments 13

---------- (Rupees in '000) ----------

The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.

Note

Mark-up / return / interest earned 17,545,206 15,960,038

Mark-up / return / interest expensed 6,846,822 5,036,886

Net mark-up / interest income 10,698,384 10,923,152

Provision against loans and advances - net 74,532 1,002,304

Provision for diminution in the value of investments - net 591 187,177

Bad debts written off directly 120 7,394

75,243 1,196,875

Net mark-up / interest income after provisions 10,623,141 9,726,277

Non mark-up / interest income

Fee, commission and brokerage income 1,462,470 1,182,288

Dividend income 505,117 188,515

Income from dealing in foreign currencies 255,268 213,995

Gain on sale of securities - net 55,436 278,448

Unrealized loss on revaluation of investments classified as held for trading (1,486) -

Other income 136,694 144,772

Total non mark-up / interest income 2,413,499 2,008,018

13,036,640 11,734,295

Non-mark-up / interest expenses

Administrative expenses 4,123,496 3,668,980

Other provisions / (reversals) 15,775 (13,763)

Other charges 241,136 242,705

Total non mark-up/interest expenses 4,380,407 3,897,922

8,656,233 7,836,373

Extra ordinary / unusual item - -

Profit before taxation 8,656,233

7,836,373

Taxation - current period 2,769,475 2,705,674

- prior years - -

- deferred 242,617 107,082

3,012,092 2,812,756

Profit after taxation 5,644,141 5,023,617

Earnings per share - basic and diluted - Rupees 14 6.14 5.46


Quarter ended

March 31,

2011

Quarter ended

March 31,

2012

---------- (Rupees in '000) ----------

For the three months period ended March 31, 2012

Sarmad Amin

Director S.M. Muneer

President / CEO M.U.A. Usmani Mian Umer Mansha Sarmad Amin

Director

S.M. MuneerPresident / CEO M.U.A. Usmani Mian Umer Mansha

Unconsolidated Condensed Interim Cash Flow Statement (Un-audited)For the three months period ended March 31, 2012

MCBMCB Bank LimitedMCBMCB Bank Limited

Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited) For the three months period ended March 31, 2012


Profit after tax for the period 5,644,141

5,023,617

Other comprehensive income

Effect of translation of net investment in foreign branches (244,940) 4,773

Comprehensive income transferred to equity 5,399,201 5,028,390

Components of comprehensive income not reflected in equity

Net change in fair value of available for sale securities 738,786 34,146

Deferred tax (985) (80,094)

737,801 (45,948)

Total comprehensive income for the period 6,137,002 4,982,442


Quarter ended

March 31,

2012

Quarter ended

March 31,

2011

March 31, March 31,2012 2011

Cash flows from operating activitiesProfit before taxation 8,656,233 7,836,373Less: Dividend income (505,117) (188,515)

8,151,116 7,647,858Adjustments for non-cash charges

Depreciation 312,693 265,918Amortization 62,391 47,025Provision against loans and advances - net 74,532 1,002,304Provision for diminution in the value of investments - net 591 187,177Other provisions / (reversals) 15,775 (13,763)Bad debts written off directly 120 7,394Unrealized loss on revaluation of investments classified as held for trading 1,486 -Gain on disposal of fixed assets (4,298) (3,798)

463,290 1,492,257

8,614,406 9,140,115(Increase) / decrease in operating assetsLendings to financial institutions (1,864,681) 3,376,781

Net investment in held for trading securities (5,198,447) -

Advances - net (4,730,175) (5,514,460)

Other assets - net 1,522,562 (233,589)(10,270,741) (2,371,268)

Increase / (decrease) in operating liabilities

Bills payable (1,061,948) (638,933)

Borrowings (10,556,010) 3,985,767

Deposits and other accounts 20,878,351 30,929,050

Other liabilities (1,895,995) (2,042,505)

7,364,398 32,233,379

5,708,063 39,002,226Income tax paid (5,657,112) (3,953,961)

Net cash flows from operating activities 50,951 35,048,265

Cash flows from investing activitiesNet investments in available-for-sale securities (6,631,753) (37,400,104)Net investments in held-to-maturity securities 1,588,228 118,598Investment in associated undertaking - (52,521)Dividend income received 267,203 117,509Investment in operating fixed assets - net of disposals (731,861) (765,522)

Net cash flows from investing activities (5,508,183) (37,982,040)

Cash flows from financing activities

Dividend paid (334,156) (258,570)

Net cash flows from financing activities (334,156) (258,570)

Exchange difference on translation of net investment in foreign branches (244,940)

4,773

---------- (Rupees in '000) ----------

Increase in cash and cash equivalents (6,036,328) (3,187,572)

Cash and cash equivalents at January 1 55,403,785 46,885,752

Cash and cash equivalents at March 31 49,367,457 43,698,180


Sarmad Amin


President / CEO M.U.A. Usmani Mian Umer Mansha Sarmad Amin

Director


---------- (Rupees in '000) ----------

MCBMCB Bank Limited

Unconsolidated Condensed Interim Statement of Changes in Equity (Un-audited)For the three months period ended March 31, 2012

MCBMCB Bank Limited

Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012

9 10

First Quarterly Report, 2012 First Quarterly Report, 2012

Balance as at December 31, 2010 7,602,150

-

9,702,528

345,979

11,514,399

18,600,000

21,414,955

69,180,011

Change in equity for three months ended March 31, 2011

Transferred from surplus on revaluation of fixed

assets to unappropriated profit - net of tax -

-

-

-

-

-

8,947

8,947

Exchange differences on translation of net

investment in foreign branches -

-

-

4,773

-

-

-

4,773

Profit after taxation for three months period

ended March 31, 2011 -

-

-

-

-

-

5,023,617

5,023,617

Total comprehensive income for the period ended March 31, 2011 -

-

-

4,773

-

-

5,023,617

5,028,390

Transferred to statutory reserve -

-

-

-

502,362

-

(502,362)

-

Transfer to reserve for issue of bonus shares -

760,215

-

-

-

-

(760,215)

-

Final cash dividend - December 31, 2010 -

-

-

-

-

-

(2,280,645)

(2,280,645)

Balance as at March 31, 2011 7,602,150

760,215

9,702,528

350,752

12,016,761

18,600,000

22,904,297

71,936,703

Change in equity for nine months ended December 31, 2011



-

-

-

-

-

26,841

26,841



-

-

76,297

-

-

-

76,297

Profit after taxation for nine months period

ended December 31, 2011 -

-

-

-

-

-

14,401,289

14,401,289

Total comprehensive income for nine months ended December 31, 2011 -

-

-

76,297

-

-

14,401,289

14,477,586


-

-

-

1,440,129

-

(1,440,129)

-

Issue of bonus shares - December 31, 2010 760,215

(760,215)

-

-

-

-

-

-

Interim cash dividend - March 31, 2011 -

-

-

-

-

-

(2,508,709)

(2,508,709)

Interim cash dividend - June 30, 2011 -

-

-

-

-

-

(2,508,709)

(2,508,709)

Interim cash dividend - September 30, 2011 -

-

-

-

-

-

(2,508,709)

(2,508,709)


-

9,702,528

427,049

13,456,890

18,600,000

28,366,171

78,915,003




-

-

-

-

-

8,947

8,947



-

-

(244,940)

-

-

-

(244,940)



-

-

-

-

-

5,644,141

5,644,141

Total comprehensive income for the period ended March 31, 2012 -

-

-

(244,940)

-

-

5,644,141

5,399,201


-

-

-

564,414

-

(564,414)

-


836,236

-

-

-

-

(836,236)

-

Issue of bonus shares - December 31, 2011 836,236 (836,236) - - - - - -

Final cash dividend - December 31, 2011 - - - - - - (2,508,709) (2,508,709)

Balance as at March 31, 2012 9,198,601 - 9,702,528 182,109 14,021,304 18,600,000 30,109,900 81,814,442


Reserve for

issue of bonus

shares

Revenue Reserves

---------------------------------------------------------- (Rupees in'000) ----------------------------------------------------------

Share

premium

Statutory

reserve

Total Share capital

Capital Reserves

General

reserve

Exchange

translation

reserve

Unappropriated

profit

1 STATUS AND NATURE OF BUSINESS

2 BASIS OF PRESENTATION

2.1

2.2

3 STATEMENT OF COMPLIANCE

3.1

3.2

3.3

4 BASIS OF MEASUREMENT

4.1

4.2

5 SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT

5.1

5.2

MCB Bank Limited('the Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related

services. The Bank's ordinary shares are listed on all the stock exchanges in Pakistan whereas its Global Depositary Receipts

(GDRs) (representing two ordinary equity shares) are traded on the International Order Book (IOB) system of the London Stock

Exchange. The Bank's registered office and principal office are situated at MCB Building, Jinnah Avenue, Islamabad and MCB 15-

Main, Gulberg, Lahore, respectively. The Bank operates 1,165 branches including 22 Islamic banking branches (December 31, 2011:

1,165 branches including 22 Islamic banking branches) with in Pakistan and 8 (December 31, 2011: 8) branches outside the country

(including the Karachi Export Processing Zone Branch).

In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State

Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include

purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment

basis. The purchases and sales arising under these arrangements are not reflected in these unconsolidated condensed interim

financial statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up

thereon.

The financial results of the Islamic banking branches have been consolidated in these unconsolidated condensed interim financial

statements for reporting purposes, after eliminating material intra branch transactions / balances. Key financial figures of the Islamic

banking branches are disclosed in note 18 to these unconsolidated condensed interim financial statements.

These unconsolidated condensed interim financial statements have been prepared in accordance with approved accounting standards

as applicable in Pakistan. Approved Accounting Standards comprise of such International Financial Reporting Standards (IFRS)

issued by the International Accounting Standards Board (IASB) as are notified under the Companies Ordinance, 1984, provisions of

and directives issued under the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and the directives issued by

SBP. In case requirements differ, the provisions of and directives issued under the Banking Companies Ordinance, 1962, the

Companies Ordinance, 1984, and the directives issued by SBP shall prevail.

The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments:

Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for Banking Companies

through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has deferred

applicability of IFRS-7 "Financial Instruments:Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008. Accordingly,

the requirements of these standards have not been considered in the preparation of these unconsolidated condensed interim financial

statements. However, investments have been classified and valued in accordance with the requirements prescribed by the State Bank

of Pakistan through various circulars.

The disclosures made in these unconsolidated condensed interim financial statements have, however been limited based on the format

prescribed by the State Bank of Pakistan vide BSD Circular No. 2 dated May 12, 2004 and International Accounting Standard 34,

"Interim Financial Reporting". They do not include all of the disclosures required for annual financial statements and these

unconsolidated condensed interim financial statements should be read in conjunction with the financial statements of the Bank for the

year ended December 31, 2011.

These unconsolidated condensed interim financial statements are presented in Pak Rupees, which is the Bank's functional and

presentation currency.

The financial risk management objectives and policies are consistent with those disclosed in the annual financial statements of the

Bank for the year ended December 31, 2011.

These unconsolidated condensed interim financial statements have been prepared under the historical cost convention except that

certain fixed assets are stated at revalued amounts, certain investments, commitments in respect of certain forward foreign exchange

contracts and derivative financial instruments have been marked to market and are carried at fair value.

The accounting polices adopted in the preparation of these unconsolidated condensed interim financial statements are the same as

those applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2011.

Sarmad Amin


President / CEO M.U.A. Usmani Mian Umer Mansha

MCBMCB Bank Limited


MCBMCB Bank Limited



Surplus on revaluation of available for sale securities - net

Investments at revalued amounts - net of provisions

8.2 Investments include Pakistan Investment Bonds amounting to Rs. 232.600 million (December 31, 2011: Rs. 232.600 million)

earmarked by the State Bank of Pakistan and National Bank of Pakistan against TT / DD discounting facilities and demand note

facilities sanctioned to the Bank. In addition, Pakistan Investment Bonds amounting to Rs. 5 million (December 31, 2011: Rs. 5 million)

have been pledged with the Controller of Military Accounts on the account of Regimental Fund Account.

472,254

291,848,744 13,483

24,802,869

485,737 316,651,613

6

7. LENDINGS TO FINANCIAL INSTITUTIONS March 31, December 31,

2012 2011

-

-

2,819,768 955,087

2,819,768 955,087

8 INVESTMENTS - NET

8.1 Investments by types

Held-for-trading securities 5,198,447

-

5,198,447

Available-for-sale securities 8.2 301,670,391

13,548,342

315,218,733

Held-to-maturity securities 8.2 7,304,613

62,087

7,366,700

314,173,451

13,610,429

327,783,880

Associates 8.3 1,059,421

-

1,059,421

Subsidiaries 482,208

-

482,208

1,541,629 - 1,541,629

Investments at cost 315,715,080 13,610,429 329,325,509

Less: Provision for diminution in the value of investments (2,918,252)

-

(2,918,252)

Investments (net of provisions) 312,796,828

13,610,429

326,407,257Surplus / (deficit) on revaluation of available for sale securities - net 1,231,109

(6,586)

1,224,523Deficit on revaluation of held-for-trading securities - net (1,486)

-

(1,486)

Investments at revalued amounts - net of provisions 314,026,451

13,603,843

327,630,294

Held-for-trading securities -

-

-


24,306,386

308,996,384

Held-to-maturity securities 8.2 8,471,928

483,000

8,954,928

293,161,926 24,789,386 317,951,312

Associates 8.3 1,059,421 - 1,059,421

Subsidiaries 482,208 - 482,208

1,541,629 - 1,541,629


Less: Provision for diminution in the value of investments (3,327,065) - (3,327,065)

Investments (net of provisions) 291,376,490 24,789,386 316,165,876

Given as

collateral

Held by

bank

Given as

collateral

Call money lendings

SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

TotalHeld by

bank

The basis for significant accounting estimates and judgments adopted in the preparation of these unconsolidated condensed interim

financial statements are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended

December 31, 2011.

Repurchase agreement lendings

---------- (Rupees in '000) ----------

March 31, 2012

December 31, 2011

Total

8.3

9 ADVANCES - NETMarch 31, December 31,

2012 2011

Loans, cash credits, running finances, etc

- In Pakistan 229,558,248

223,963,444

- Outside Pakistan 10,686,204

10,959,873

240,244,452

234,923,317Net Investment in finance lease


1,226,014

- Outside Pakistan 220,928

151,463

1,435,693

1,377,477Bills discounted and purchased (excluding treasury bills)

- Payable in Pakistan 861,262

722,522

- Payable outside Pakistan 10,245,156

11,111,385

11,106,418

11,833,907

Advances - gross 252,786,563

248,134,701

Less: Provision against loans and advances

- Specific provision 9.1 (21,868,395)

- General provision (252,787)

- General provision against consumer loans (188,441)

- General Provision for potential lease losses (in Srilanka operations) (20,158)

(22,329,781)

(21,869,401)

(248,135)

(198,340)

(17,566)

(22,333,442)

Advances - net of provision 230,456,782 225,801,259

9.1

Other Assets Especially

Mentioned (OAEM) 9.1.1 10,605

-

10,605

-

-

Substandard 2,007,885

-

2,007,885

439,221

439,221

Doubtful 358,140

3,324

361,464

178,247

178,247

Loss 19,600,150

4,290,188

23,890,338

21,250,927

21,250,927

21,976,780

4,293,512

26,270,292

21,868,395

21,868,395


Mentioned (OAEM) 9.1.1 - - - - -

Substandard 2,036,968 7,857 2,044,825 461,374 461,374

Doubtful 292,466 - 292,466 115,289 115,289

Specific

Provision

HeldDomestic

------------------------------------- Rupees in '000 ------------------------------------

Classified Advances

Category of Classification

Domestic

Total

Overseas

Investment of the Bank in Adamjee Insurance Company Limited is carried at cost amounting to Rs. 943.600 million (December 31,

2011: Rs. 943.600 million)as at March 31, 2012 in accordance with the treatment specified in International Accounting Standard

(IAS) 28 "Accounting for Investments in Associates". The market value of the investment in Adamjee Insurance Company Limited

as at March 31, 2012 amounted to Rs. 2,039.867 million (December 31, 2011: Rs. 1,675.927 million).


Specific

Provision

Required

March 31, 2012

---------- (Rupees in '000) ----------

December 31, 2011

------------------------------------- Rupees in '000 ------------------------------------

Specific

Provision

Held

Classified Advances

Total

Specific

Provision

Required

Overseas

Advances includeRs. 26,270.292million(December 31, 2011:Rs. 26,664.873million)which have been placed under non-performing

status as detailed below:

Loss 20,061,976 4,265,606 24,327,582 21,292,738 21,292,738

22,391,410 4,273,463 26,664,873 21,869,401 21,869,401

9.1.1 This represents non-performing portfolioof agricultural financing classified as OAEM as per the requirements of the Prudential

Regulation for Agricultural Financing issued by the SBP.

---------- (Rupees in '000) ----------

---------- (Rupees in '000) ----------

MCBMCB Bank Limited


MCBMCB Bank Limited



10 BORROWINGS March 31, December 31,

2012 2011

In Pakistan 26,737,202 37,397,843

Outside Pakistan 1,807,415 1,702,784

28,544,617 39,100,627

10.1 Details of borrowings (secured / unsecured)

Secured

Borrowings from State Bank of Pakistan

Export refinance scheme 9,926,134

9,903,657

Long term financing facility 1,511,310

2,026,175

Long term financing - export oriented projects scheme 1,310,028

949,375

Financing Facility for Storage of Agricultural Produce 460,799

219,932

Scheme for Revival of SMEs & Agricultural Activities in Flood Affected Areas -

450

13,208,271

13,099,589

Borrowings from other financial institutions 13,362

293,113

Repurchase agreement borrowings 13,591,017

24,781,254

13,604,379

25,074,367

26,812,650

38,173,956Unsecured

Call borrowings 991,480

816,139

Overdrawn nostro accounts 740,487

110,532

1,731,967

926,671

28,544,617

39,100,627

11 DEPOSITS AND OTHER ACCOUNTS

Customers

Fixed deposits 90,839,753

91,501,846

Savings deposits 244,609,624

225,920,953

Current accounts 166,504,701

161,680,596

Margin accounts 3,067,361

3,511,830

505,021,439

482,615,225Financial institutions

Remunerative deposits 4,911,666

6,319,827

Non-remunerative deposits 2,133,956

2,253,658

7,045,622

8,573,485

512,067,061

491,188,710

12 DEFERRED TAX LIABILITY / (ASSET) - NET

The details of the tax effect of taxable and deductible temporary differences are as follows:

Taxable temporary differences on:

Surplus on revaluation of operating fixed assets 778,160

782,977

Accelerated tax depreciation 972,090 1,033,028

Receivable from pension fund 5,261,164 5,156,165

Surplus on revaluation of securities 50,378 49,393

7,061,792 7,021,563Deductible temporary differences on:

Provision for bad debts (228,171)

Provision for contributory benevolent scheme (1,080)

Provision for post retirement medical benefits (294,055)

---------- (Rupees in '000) ----------

(523,306)

6,538,486

(414,114)

(5,655)

(306,908)

(726,677)

6,294,886

12.1

March 31, December 31,

2012 2011

13 CONTINGENCIES AND COMMITMENTS

13.1 Direct credit substitutes

Contingent liabilities in respect of guarantees given favouring

- Government 4,369,412

2,634,218

- Banks and financial institutions 2,744,964

2,519,451

- Others 5,022,186

4,885,951

12,136,562

10,039,62013.2 Transaction-related contingent liabilities

Guarantees in favour of:


2,761,601

- Others 4,982,788

4,217,157

Suppliers credit / payee guarantee 2,457,093

2,373,006

8,441,656

9,351,764

13.3 Trade-related contingent liabilities 63,830,600

77,075,699

13.4 Other contingencies

Claims against the Bank not acknowledged as debts 818,363

844,099

13.5 Commitments to extend credit

13.6 Commitments in respect of forward foreign exchange contracts

Purchase 26,888,166

32,395,900

Sale 26,658,002

35,030,445

13.7 Commitments for the acquisition of fixed assets 191,335

276,277

13.8 Taxation

March 31, March 31,

2012 2011

14 BASIC AND DILUTED EARNINGS PER SHARE - AFTER TAX


Number of shares

Weighted average number of shares outstanding during the period 919,860,123 919,860,123

Rupees

Basic and diluted Earnings per share - after tax 6.14 5.46

15 CREDIT RATING

---------- (Rupees in '000) ----------

The Finance Act, 2009 and 2010 have made significant amendments in the Seventh Schedule to Income Tax Ordinance, 2001. The

deduction for provision for doubtful and loss categories of advances and off balance sheet items is allowable up to a maximum of 1%

of total advances whereas provisions for advances and off-balance sheet items for consumer and small and medium enterprises

(SMEs) ("as defined under the SBP's Prudential Regulations") is now allowed at 5% of total consumer and SME portfolio. The

amount of bad debts classified as substandard under Prudential Regulations issued by State Bank of Pakistan would not be allowed asan expense.

PACRA throughits notificationin June 2011,has assigned longterm credit rating of AA+ [doubleA plus] and short-term credit rating

of A1+ [A one plus] to the Bank.

---- (Rupees in '000) ----

The Bank makes commitmentsto extend credit in the normal course of its business but these being revocablecommitments do not

attract any significant penalty or expense if the facility is unilaterally withdrawn.

Three months ended

The income tax assessments of the Bank have been framed upto and including the Tax Year 2011. For the Assessment

Year 1988-89 through Tax Year 2011, the department has amended the assessments on certain issues against the Bank.

The Bank has filed appeals which are pending at various appellateforums. in addition, certain decision made in favour of

the Bank are being contested by the department at higher forums. No provision has been made in the financial

statements as the management and the Bank's legal counsel are of the view that the issues will be decided in the Bank's

favour as and when these are taken up by the Appellate Authorities.

MCBMCB Bank Limited


MCBMCB Bank Limited



16 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

The segment analysis with respect to business activity is as follows:

Total income 28,479 10,357,788 3,655,716 5,916,722 19,958,705

Total expenses (5,935)

(1,773,834)

(8,542,758)

(979,945)

(11,302,472)

Income tax expense -

-

-

-

(3,012,092)

Net income 22,544

8,583,954

(4,887,042)

4,936,777

5,644,141

Segment assets - (Gross of NPLs Provisions) -

358,035,312

120,268,037

201,331,006

679,634,355

Advance taxation (payment less provision) -

-

-

-

8,878,106

Total assets -

358,035,312

120,268,037

201,331,006

688,512,461

Segment non performing loans -

-

8,061,887

18,208,405

26,270,292

Segment specific provision required -

-

6,711,023

15,157,372

21,868,395

Segment liabilities -

21,189,519

515,896,953

30,588,334

567,674,806

Deferred tax liabilities - net 6,538,486

Total liabilities - net -

21,189,519

515,896,953

30,588,334

574,213,292

Segment return on assets (ROA) (%) 11.57% 12.88% 12.71% -

Segment cost of fund (%) 11.37% 4.44% 6.11% -

Total income 3,858

7,478,375

3,470,816

7,015,007

17,968,056


(1,456,446)

(7,121,176)

(1,550,668)

(10,131,683)


-

-

-

(2,812,756)

Net income 465

6,021,929

(3,650,360)

5,464,339

5,023,617

Segment assets - (Gross of NPLs provision) -

274,667,774

112,698,621

233,524,193

620,890,588


-

-

-

3,782,057

Total assets -

274,667,774

112,698,621

233,524,193

624,672,645


-

6,700,062

18,193,854

24,893,916


-

5,376,326

14,599,279

19,975,605

Segment liabilities - 24,466,656 463,742,920 29,460,264 517,669,840

Deferred tax assets - - - - 5,121,195

Three months ended March 31, 2012


Total

---------------------------------------------(Rupees in '000)-----------------------------------------

Corporate

Finance

Trading

and

Sales

Retail &

Consumer

Banking

Commercial

Banking

Total liabilities - net - 24,466,656 463,742,920 29,460,264 522,791,035

Segment return on assets (ROA) (%) - 10.89% 12.94% 12.82% -

Segment cost of fund (%) - 11.39% 3.96% 5.64% -

17 RELATED PARTY TRANSACTIONS

DepositsDeposits at beginning of the period / year 4,398,756

2,088,985

766,387 955,014 77,043 24,677,392 90,816

Deposits received during the period / year 1,100,134

20,407,581

30,536,355 169,261,154 986,420 250,452,445 830,780

Deposits repaid during the period / year (1,064,312)

(18,097,810)

(30,733,501) (169,449,781) (1,019,609) (249,736,033) (871,418)

Deposits at the end of the period / year 4,434,578

4,398,756

569,241 766,387

43,854

312,093

(312,884)

43,063 43,854

25,393,804

74,117,220

(73,141,611)

26,369,413 25,393,804

50,178

190,356

(178,102)

62,432 50,178

Advances (secured)

Balance at beginning of the period / year -

-

- - 449,729 112,548 81,302 - 49,743 54,474

Loan granted during the period / year -

-

- - 3,580 337,759 67,815 81,302 1,796 3,525

Repayment during the period / year -

-

- - - (578) (54,072) - (4,895) (8,256)

Balance at end of the period / year -

-

- - 453,309 449,729 95,045 81,302 46,644 49,743

Outstanding Balance of credit card 713

1,137

- - - - - - 866 856

Receivable from Pension Fund -

-

- - - - 15,031,898 14,731,898 - -

Adamjee Insurance Company LimitedInsurance premium paid-net of refund - - 202,676 - - - - - - -

Insurance claim settled - - 17,863 8,443 - - - - - -

Rent Income received - - 405 1,638 - - - - - -

Outstanding commitments and contingent liabilities - - 8,365 8,365 - - - - - -

Commission income from bancassurance - - 89,554 38,144 - - - - - -

Adamjee Life Assurance Company LimitedInsurance Premium Paid - - 25,262 26,342 - - - - - -

Outstanding commitments and contingent liabilities - - 500 500 - - - - - -

Euronet Pakistan Private LimitedATM Outsourcing Revenue - - 29,258 5,607 - - - - - -

Capital injection - - - 52,519 - - - - - -

Trade payable - - 4,292 7,317 - - - - - -

Training expenses reimbursed - - - 27 - - - - - -

The Bank has related party relationship with its associates, subsidiaries, employee benefit plans and its key management personnel (including their associates) and companies with common directors.

The Bank enters into transactions with related parties in the normal course of business. Contributions to and accruals in respect of staff retirement benefits and other benefit plans are made in accordance with the actuarial

valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment.

Three months

ended

March 31,

2012

Three months

ended

March 31,

2012

Associates

Associates

Details of transactions with related parties and balances with them as at the period-end were as follows:

Subsidiary companies Key management personnel

Three months

ended

March 31,

2012

Year

ended

Dec 31,

2011

Key management personnel

Year

ended

Dec 31,

2011

---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------

Subsidiary companies

Year

ended

Dec 31,

2011

Three months

ended

March 31,

2012

Other Related Parties

Year

ended

Dec 31,

2011

Three months

ended

March 31,

2012

March 31,

2012

Directors Other Related Parties

Directors

March 31 /

December 31,

2011

March 31 /

December 31,

2011

Year

ended

Dec 31,

2011

---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------

March 31,

2012

March 31,

2012

March 31,

2012

March 31 /

December 31,

2011

March 31,

2012

March 31 /

December 31,

2011

March 31 /

December 31,

2011

Mayban International Trust (Labuan) BerhadForward foreign exchange contracts (Notional) - - - - - - - 1,913,753 - -

Unrealized loss on forward foreign exchange contracts - - - - - - - 40,914 - -

MNET Services (Private) LimitedDividend received - - - - - 4,998 - - - -

Outsourcing service expenses - - - - 15,283 16,115 - - - -

Payment system managed service revenue (PSM) - - - - - 6,449 - - - -

Payable for trade debts - - - - 20,814 16,506 - - - -

Receivable for other expenses - - - - - 3,490 - - - -

"MCB Leasing" Closed Joint Stock CompanyMarkup Receivable - - - - 2,960 4,265 - - - -

MCB Trade Services LimitedDividend received - - - - - 4,664 - - - -

Arif Habib Investments LimitedDividend received - - - - 27,718 29,998 - - - -

Markup payable - - - - 193 610 - - - -

Commission Receivable - - - - 12,744 1,924 - - - -

Commission on distribution of units and managementfee sharing

- - - - 10,391 15,762 - - - -

MCB Employees FoundationService expenses - - - - - - 4,594 4,378 - -

Cash sorting expenses - - - - - - 8,966 10,889 - -

Stationery Expenses - - - - - - 40,095 31,484 - -

Advance receivable - - - - - - 20,000 20,000 - -

Payable for stationery expenses - - - - - - 6,834 1,255 - -

MCB Employees Security System

and Services (Private) LimitedSecurity guard expenses - - - - - - 63,507 47,384 - -

Remuneration and non-executive directors' fee 16,134 15,302 - - - - - - 46,828 40,212

Mark-up expense on deposits 89,899 21,785 20,410 16,535 1,056 723 995,318 1,058,302 1,059 1,025

Markup income on advances - - - - 4,739 1,264 2,346 - 888 636

Clearing expenses paid to NIFT - - - - - - 29,268 30,065 - -

Other miscellaneous expenses - - - - - - 3,195 3,924 - -

Investment in Metro-Bank Pakistan Sovereign Fund-Perpetual - - - - - - 4,000,000 4,000,000 - -

Dividend Income - - - - - - 216,893 - - -

Contribution to provident fund - - - - - - 43,941 39,703 - -

Commission Received - - 919 - - - 13 - - -

Gas charges - - - - - - 3,115 2,239 - -

Rent Paid - - - - - - 53 42 - -

The chairman has been provided with free use of the Bank maintained car. The Chief Executive and certain executives are provided with free use of the Bank's maintained cars and household equipment in accordance with the terms of their employment.

Others

MCBMCB Bank Limited


18

MCBMCB Bank Limited



18 ISLAMIC BANKING BUSINESS


2012 2011

Assets

Cash and balances with treasury banks 278,465

334,398

Investments - net 2,818,271

2,938,706

Financing and receivables

- Murabaha 4,490,409

4,094,212

- Ijara 95,899

96,146

- Islamic export refinance 1,189,248

1,420,784

Fixed Assets 996,394

1,008,864

Deferred tax assets 720

-

Other assets 3,059,821

3,330,885

12,929,227

13,223,995

Liabilities

Bills payable 108,607

45,297

Deposits and other accounts - - - Current accounts 813,666

1,022,119

- Saving accounts 1,578,387

1,636,924

- Term deposits 3,259,045

4,565,234

- Others 13,759

81,503

Borrowing from SBP 1,391,682

1,664,996

Due to head office 4,367,708

2,558,624

Deferred tax liability -

8,182

Other liabilities 372,270

449,518

11,905,124

12,032,397


1,191,598

Represented by:

Islamic Banking Fund 1,000,000

1,000,000

Other Reserves (124)

70

Unappropriated profit 25,564

176,334

1,025,440

1,176,404

Surplus / (deficit) on revaluation of assets - net of tax (1,337)

15,194

1,024,103

1,191,598

CHARITY FUND

Opening balance 782 1,763

Additions during the year

Received from customers on delayed payments 829 1,397

Profit on charity saving account 14 122

843 1,519

---------- (Rupees in '000) ----------

The Bank is operating 23 Islamic banking branches including 1 overseas branch (December 31, 2011: 23 branches including 1

overseas). The statement of financial position of the Bank's Islamic Banking Branches as at March 31, 2012 is as follows:

Payments / utilization during the year

Social Welfare - (1,500)

Health - (1,000)

Education - -

Relief and disaster recovery -

- (2,500)

Closing balance 1,625 782

Quarter ended Quarter ended

March 31,

2012

March 31,

2011

Income / return / profit earned 349,420

380,684

Income / return / profit expensed 278,248

266,914

Net Income / Profit 71,172

113,770

Provision against loans and advances - net (130)

9,290

Provision for diminution in the value of investments -

-

Bad debts written off directly -

-

(130)

9,290

Net profit / income after provisions 71,302

104,480

Other income

Fees, commission and brokerage income 8,904

13,723

Dividend income -

Income from dealing in foreign currencies 2,342

412

Other Income 30,406

5,467

Total other income 41,652

19,602

112,954

124,082

Other expenses

Administrative expenses 87,045 65,895

Other provisions / write offs -

-

Other charges (Penalty paid to SBP) 344

237

Total other expenses 87,389

66,132

Extra ordinary / unusual items -

-

Profit before taxation 25,565

57,950

Remuneration to Shariah Advisor / Board 486

420

19 GENERAL

- Figures have been rounded off to the nearest thousand of rupees unless otherwise stated.

-

20 NON-ADJUSTING EVENT

21 DATE OF AUTHORIZATION FOR ISSUE

Comparative information has been reclassified and rearranged in these unconsolidated condensed interim financial statements for the

purpose of comparison.

The profit and loss account of the Bank's Islamicbankingbusiness for the three monthsperiod ended March 31, 2012 is as

follows:

---------- (Rupees in '000) ----------

The Board of Directors in its meeting held on April 24, 2012 has announced cash dividend in respect of the three months period ended

March 31, 2012 of Rs. 3.00 per share (March 31, 2011: Rs. 3.00 per share). These unconsolidated condensed interim financial

statements for the three months period ended March 31, 2012 do not include the effect of these appropriations which will be

accounted for subsequent to the period end.

These unconsolidated condensed interim financial statements were authorized for issue by the Board of Directors of the Bank in their

meeting held on April 24, 2012 .

Sarmad Amin



-

MCBMCB Bank Limited

19

(Consolidated Financial Statements of MCB Bank Limited and its Subsidiary Companies)

First Quarterly Report, 2012

MCBMCB Bank Limited & Subsidiary Companies

Consolidated Condensed Interim Profit and Loss Account (Un-audited)For the three months period ended March 31, 2012


2221

Consolidated Condensed Interim Statement of Financial Position (Un-audited)As at March 31, 2012

First Quarterly Report, 2012 First Quarterly Report, 2012

Unaudited Audited

Note March 31, December 31,

2012 2011

Assets

Cash and balances with treasury banks 46,915,598

53,122,620

Balances with other banks 2,542,298

2,357,418

Lendings to financial institutions 7 2,819,768

955,087

Investments - net 8 330,522,492

319,005,983

Advances - net 9 230,442,850

225,794,738

Operating fixed assets 22,775,547

22,418,450

Deferred tax assets - net -

-


32,670,511

670,260,854

656,324,807

Liabilities

Bills payable 8,404,870

9,466,818

Borrowings 10 28,544,617 39,100,627

Deposits and other accounts 11 512,027,617 491,146,798

Sub-ordinated loan - - Liabilities against assets subject to finance lease - - Deferred tax liabilities - net 12 6,760,596 6,497,097 Other liabilities 18,731,596

18,459,162

574,469,296

564,670,502


91,654,305

Represented by:

Share capital 9,198,601

8,362,365

Reserves 42,732,393

42,412,588

Un-appropriated profit 32,107,021

30,259,449

84,038,015

81,034,402

Minority interest 486,006

492,497

84,524,021

81,526,899

Surplus on revaluation of assets - net of tax 11,267,537

10,127,406

95,791,558

91,654,305

Contingencies and commitments 13

---------- (Rupees in '000) ----------

The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.

Note

Mark-up / return / interest earned 17,560,674 15,969,922

Mark-up / return / interest expensed 6,846,237 5,036,958

Net mark-up / interest income 10,714,437 10,932,964

Provision against loans and advances - net 74,532 1,002,304

Provision for diminution in the value of investments - net 591 187,177

Bad debts written off directly 120 7,394

75,243 1,196,875

Net mark-up / interest income after provisions 10,639,194 9,736,089

Non mark-up / interest income

Fee, commission and brokerage income 1,463,841 1,182,967

Income earned as trustee to various funds 4,787 5,525

Dividend income 477,399 149,042

Income from dealing in foreign currencies 255,519 214,890

Gain on sale of securities - net 43,922 256,755

Unrealized gain on revaluation of investments classified as held for trading 23,473 32,945

Other income 240,102 203,806

Total non mark-up / interest income 2,509,043 2,045,930

13,148,237 11,782,019 Non-mark-up / interest expenses

Administrative expenses 4,205,129 3,722,592

Other provisions / (reversals) 15,775 (13,763)

Other charges 241,136 243,405

Total non mark-up/interest expenses 4,462,040 3,952,234

Share of profit of associates 130,309 139,462

Extra ordinary / unusual item - -

Profit before taxation 8,816,506

7,969,247

Taxation - current period 2,779,174 2,716,762

- prior years - -

- deferred 262,828 116,983

Share of tax of associates 6,880 22,969

3,048,882 2,856,714


(Profit) / Loss attributable to minority interest (19,709) 357

Profit attributable to ordinary share holders 5,747,915 5,112,890

Earnings per share - basic and diluted - Rupees 14 6.25 5.56


Quarter ended

March 31,

2011

Quarter ended

March 31,

2012

---------- (Rupees in '000) ----------

Sarmad Amin


President / CEO M.U.A. Usmani Mian Umer ManshaSarmad Amin

Director



Consolidated Condensed Interim Cash Flow Statement (Un-audited)For the three months period ended March 31, 2012


Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited) For the three months period ended March 31, 2012


Profit after tax for the period 5,767,624 5,112,533

Other comprehensive income

Effect of translation of net investment in foreign branches and subsidiaries

- Equity shareholders of the Bank (244,609)

4,719

- Minority interest 17 8

(244,592) 4,727

Comprehensive income transferred to equity 5,523,032

5,117,260

Components of comprehensive income not reflected in equity

Net change in fair value of available for sale securities 738,786

34,146

Deferred tax (985)

(80,094)

737,801

(45,948)

Total comprehensive income for the period 6,260,833 5,071,312


Quarter ended

March 31,

2012

Quarter ended

March 31,

2011

March 31, March 31,2012 2011

Cash flows from operating activities

Profit before taxation 8,816,506 7,969,247

Less: Dividend income & share of profit of associates (607,708) (288,504)

8,208,798 7,680,743Adjustments for non-cash charges

Depreciation 312,693

265,918

Amortization 62,391

47,025

Provision against loans and advances - net 74,532

1,002,304

Provision for diminution in the value of investments - net 591

187,177

Other provisions / (reversals) 15,775

(13,763)

Bad debts written off directly 120

7,394

Unrealized gain on revaluation of investments classified as held for trading (23,473)

(32,945)

Gain on disposal of fixed assets (4,298)

(3,798)

438,331

1,459,312

8,647,129

9,140,055(Increase) / decrease in operating assets

Lendings to financial institutions (1,864,681)

3,376,781

Net investment in held for trading securities (5,176,473)

21,693

Advances - net (4,722,764)

(5,511,279)


(230,052)

(10,235,634)

(2,342,857)

Increase / (decrease) in operating liabilities

Bills payable (1,061,948) (638,933)

Borrowings (10,556,010)

3,985,767

Deposits and other accounts 20,880,819

30,959,449

Other liabilities (1,902,119)

(2,037,808)

7,360,742

32,268,475

5,772,237

39,065,673

Income tax paid (5,657,426)

(3,969,237)

Net cash flows from operating activities 114,811

35,096,436

Cash flows from investing activities

Net investments in available-for-sale securities (6,631,753)

(37,400,104)

Net investments in held-to-maturity securities 1,588,228

118,598

Investment in associated undertaking -

(52,521)

Dividend income received 239,485

78,036

Investment in operating fixed assets - net of disposals (727,883)

(761,915)

Net cash flows from investing activities (5,531,923)

(38,017,906)

Cash flows from financing activities

Dividend paid (360,438)

(258,574)

Net cash flows from financing activities (360,438) (258,574)

Exchange difference on translation of net investment in foreign branches and subsidiaries (244,592) 4,727

Increase in cash and cash equivalents (6,022,142) (3,175,317)

Cash and cash equivalents at January 1 55,480,038 46,958,782

Cash and cash equivalents at March 31 49,457,896 43,783,465


---------- (Rupees in '000) ----------

Sarmad Amin


President / CEO M.U.A. Usmani Mian Umer ManshaSarmad Amin

Director


---------- (Rupees in '000) ----------

Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012

MCBMCB Bank Limited & Subsidiary CompaniesMCBMCB Bank Limited & Subsidiary Companies

Consolidated Condensed Interim Statement of Changes in Equity (Un-audited)For the three months period ended March 31, 2012


Balance as at December 31, 2010 7,602,150 - 9,702,528 347,599 11,514,399 18,600,000 23,458,429 71,225,105 2,698 71,227,803




-

-

-

-

-

5,112,533

5,112,533

- 5,112,533

Profit attributable to minority interest -

-

-

-

-

-

357

357

(357) -

Profit after taxation for the three months ended March 31, 2011

attributable to ordinary shareholders of the group -

-

-

-

-

-

5,112,890

5,112,890

(357) 5,112,533


investment in foreign branches and subsidiaries -

-

-

4,719

-

-

-

4,719

8 4,727

Total comprehensive income for the three months period ended

March 31, 2011 -

-

-

4,719

-

-

5,112,890

5,117,609

(349) 5,117,260



-

-

-

-

-

9,071

9,071

- 9,071

Share of dividend attributable to minority shareholders -

-

-

-

-

-

-

(4) (4)


-

-

-

502,362

-

(502,362)

-

- -


760,215

-

-

-

-

(760,215)

-

- -

Final cash dividend - December 2010 -

-

-

-

-

-

(2,280,645)

(2,280,645)

- (2,280,645)

Balance as at March 31, 2011 7,602,150

760,215

9,702,528

352,318

12,016,761

18,600,000

25,037,168

74,071,140

2,345 74,073,485

Profit after taxation for the year ended

December 31, 2011 -

-

-

-

-

-

14,189,950

14,189,950

- 14,189,950


-

-

-

-

-

(28,524)

(28,524)

28,524 -

Profit after taxation for the nine months ended December 31, 2011

attributable to ordinary shareholders of the group - - - - - - 14,161,426 14,161,426 28,524 14,189,950


investment in foreign branches and subsidiaries - - - 78,942 - - - 78,942 134 79,076

Total comprehensive income for the nine months

ended December 31, 2011 - - - 78,942 - - 14,161,426 14,240,368 28,658 14,269,026


assets to unappropriated profit - net of tax - - - - - - 27,111 27,111 128 27,239


-

-

-

1,440,129

-

(1,440,129)

-

- -

Issue of bonus shares - December 2010 760,215

(760,215)

-

-

-

-

-

-

- -

Adjustments pertaining to additional issue of share capital to minority

interest on amalgamation of MCB Assets Management Company

Limited with Arif Habib Investments Limited -

-

221,910

-

-

-

-

221,910

513,947 735,857

Share of dividend attributable to minority interest -

-

-

-

-

-

-

-

(52,581) (52,581)

Interim cash dividend - March 2010 -

-

-

-

-

-

(2,508,709)

(2,508,709)

- (2,508,709)

Interim cash dividend - June 2010 -

-

-

-

-

-

(2,508,709)

(2,508,709)

- (2,508,709)

Interim cash dividend - September 2010 -

-

-

-

-

-

(2,508,709)

(2,508,709)

- (2,508,709)


-

9,924,438

431,260

13,456,890

18,600,000

30,259,449

81,034,402

492,497 81,526,899

Profit after taxation for the three months period ended

March 31, 2012 -

-

-

-

-

-

5,767,624

5,767,624

- 5,767,624


-

-

-

-

-

(19,709)

(19,709)

19,709 -

Profit after taxation for the three months period ended

March 31, 2012 attributable to ordinary shareholders of the group -

-

-

-

-

-

5,747,915

5,747,915

19,709 5,767,624


investment in foreign branches and subsidiaries -

-

-

(244,609)

-

-

-

(244,609)

17 (244,592)

Total comprehensive income for the three months period


-

-

(244,609)

-

-

5,747,915

5,503,306

19,726 5,523,032



-

-

-

-

-

9,016

9,016

65 9,081


-

-

-

564,414

-

(564,414)

-

- -

Transfer to reserve for issue of bonus shares - 836,236 - - - - (836,236) - - -

Issue of bonus shares - December 2011 836,236 (836,236) - - - - - - - -

Share of dividend attributable to minority interest - - - - - - - - (26,282) (26,282)

Final cash dividend - December 2011 - - - - - - (2,508,709) (2,508,709) - (2,508,709)

Balance as at March 31, 2012 9,198,601 - 9,924,438 186,651 14,021,304 18,600,000 32,107,021 84,038,015 486,006 84,524,021


---------------------------------------------------------- (Rupees in'000) ----------------------------------------------------------

Share

capital

Capital reserves Revenue Reserves

SubtotalMinority

InterestTotalReserve for issue

of bonus sharesShare premium

Exchange

translation

reserve

Statutory reserve General reserve Unappropriated

profit

3 STATEMENT OF COMPLIANCE

3.1 These consolidatedcondensed interimfinancialstatements have been prepared in accordance with approved accounting standards as

applicable in Pakistan. Approved Accounting Standards comprise of such International Financial Reporting Standards (IFRS) issued

by the International Accounting Standards Board (IASB) as are notified under the Companies Ordinance, 1984, provisions of and

directives issued under the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and the directives issued by SBP.

In case requirements differ, the provisions of and directives issued under the Banking Companies Ordinance, 1962, the Companies

Ordinance, 1984, and the directives issued by SBP shall prevail.

1 STATUS AND NATURE OF BUSINESS

2 BASIS OF PRESENTATION

2.1

2.2

2.3

a)

b)

c)

The Group consists of:

Holding Company

- MCB Bank Limited

"Percentage holding of

MCB Bank Limited"Subsidiary Companies

- MCB Financial Services Limited 99.99%

- MNET Services (Private) Limited 99.95%

- MCB Trade Services Limited 100%

- Arif Habib Investments Limited 51.329%

- "MCB Leasing" Closed' Joint Stock Company 95.00%

The consolidated condensed financial statements include the financial statements of MCB Bank Limited and its subsidiary companies

and associates.

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies accompanying a

shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently

exercisable are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the

date on which control is transferred to the Group. They are de-consolidated from the date when control ceases. The assets and

liabilities of subsidiary companies have been consolidated on a line by line basis based on the unaudited financial statements for the

period ended March 31, 2012 and the carrying value of investments held by the Group is eliminated against the subsidiaries'

shareholders' equity in these consolidated condensed interim financial statements. Material intra-Group balances and transactions have

been eliminated.

Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for

under the equity method of accounting and are initially recognised at cost, thereafter adjusted for the post-acquisition change in the

Group's share of net assets of the associate. The cumulative post-acquisition movements are adjusted in the carrying amount of the

investment. Accounting policies of the associate have been changed where necessary to ensure consistency with the policies adopted

by the Group. The Group's share in associate has been accounted for based on the financial statements for the period ended March

31, 2012.

Minority interest are that part of the net results of operations and of net assets of subsidiary companies attributable to interests which

are not owned by the Group.

MCB Bank Limited ('the Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related

services. The Bank's ordinary shares are listed on all the stock exchanges in Pakistan whereas its Global Depositary Receipts

(GDRs) (representing two ordinary equity shares) are traded on the International Order Book (IOB) system of the London Stock

Exchange. The Bank's registered office and principal office are situated at MCB Building, Jinnah Avenue, Islamabad and MCB 15-

Main, Gulberg, Lahore, respectively. The Bank operates 1,165 branches including 22 Islamic banking branches (December 31, 2011:

1,165 branches including 22 Islamic banking branches) with in Pakistan and 8 (December 31, 2011: 8) branches outside the country

(including the Karachi Export Processing Zone Branch).

In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State

Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include

purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment

basis. The purchases and sales arising under these arrangements are not reflected in these consolidated condensed interim financial

statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up thereon.

The financial results of the Islamic banking branches have been consolidated in these consolidated condensed interim financial

statements for reporting purposes, after eliminating material intra branch transactions / balances. Key financial figures of the Islamic

banking branches are disclosed in note 18 to these consolidated condensed interim financial statements.

Sarmad Amin








3.2

3.3

4 BASIS OF MEASUREMENT

4.1

4.2

5 SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT

5.1

5.2

6

7. LENDINGS TO FINANCIAL INSTITUTIONS March 31, December 31,

2012 2011

-

-

2,819,768 955,087

2,819,768 955,087

8 INVESTMENTS - NET

8.1 Investments by types

Held-for-trading securities 5,538,691

-

5,538,691


13,548,342

315,530,995

Held-to-maturity securities 8.2 7,304,613 62,087 7,366,700

314,825,957 13,610,429 328,436,386

Adamjee Insurance Company Limited 8.3 3,614,503 - 3,614,503

Euronet Pakistan (Private) Limited 8.4 53,413 - 53,413

First Women Bank Limited 8.5 63,300 - 63,300

These consolidated condensed interim financial statements have been prepared under the historical cost convention except that certain

fixed assets are stated at revalued amounts, certain investments, commitments in respect of certain forward foreign exchange

contracts and derivative financial instruments have been marked to market and are carried at fair value.

The accounting polices adopted in the preparation of these consolidated condensed interim financial statements are the same as those

applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2011.

The basis for significant accounting estimates and judgments adopted in the preparation of these consolidated condensed interim

financial statements are the same as those applied in the preparation of the annual financial statements of the Group for the year ended

December 31, 2011.

Repurchase agreement lendings

---------- (Rupees in '000) ----------

March 31, 2012

TotalHeld by

bank

The financial risk management objectives and policies are consistent with those disclosed in the annual financial statements of the

Group for the year ended December 31, 2011.

SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments:

Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for Banking Companies

through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has deferred

applicability of IFRS-7 "Financial Instruments:Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008. Accordingly,

the requirements of these standards have not been considered in the preparation of these consolidated condensed interim financial

statements. However, investments have been classified and valued in accordance with the requirements prescribed by the State Bank

of Pakistan through various circulars.

The disclosures made in these consolidated condensed interim financial statements have, however been limited based on the format

prescribed by the State Bank of Pakistan vide BSD Circular No. 2 dated May 12, 2004 and International Accounting Standard 34,

"Interim Financial Reporting". They do not include all of the disclosures required for annual financial statements and these

consolidated condensed interim financial statements should be read in conjunction with the financial statements of the Group for the

year ended December 31, 2011.

Given as

collateral

These consolidated condensed interim financial statements are presented in Pak Rupees, which is the Bank's functional and

presentation currency.

Call money lendings

3,731,216 - 3,731,216


Less: Provision for diminution in the value of investments (2,918,252) - (2,918,252)

Investments (net of provisions) 315,638,921 13,610,429 329,249,350

Surplus / (deficit) on revaluation of available for sale securities - net 1,256,255 (6,586) 1,249,669Gain on revaluation of held-for-trading securities - net 23,473 - 23,473

Investments at revalued amounts - net of provisions 316,918,649 13,603,843 330,522,492

Held-for-trading securities 345,602 - 345,602

Available-for-sale securities 8.2 285,002,260 24,306,386 309,308,646

Held-to-maturity securities 8.2 8,471,928 483,000 8,954,928

293,819,790 24,789,386 318,609,176

Adamjee Insurance Company Limited 8.3 3,101,352

-

3,101,352

Euronet Pakistan (Private) Limited 8.4 53,917

-

53,917

First Women Bank Limited 8.5 63,300

-

63,300

3,218,569

-

3,218,569

Investments at cost 297,038,359

24,789,386

321,827,745

Less: Provision for diminution in the value of investments (3,327,065)

-

(3,327,065)

Investments (net of provisions) 293,711,294

24,789,386

318,500,680

Surplus on revaluation of available for sale securities - net 475,204

13,483

488,687

Gain on revaluation of held-for-trading securities - net 16,616

-

16,616

Investments at revalued amounts - net of provisions 294,203,114

24,802,869

319,005,983

8.2

8.3

March 31, December 31,2012 2011

Opening Balance 3,101,352

3,703,265

Share of profit / (loss) for the period / year before tax 130,707

(73,069)

Dividend from associate -

(90,084)

Share of tax (6,774)

71,214

123,933

(91,939)

Share of unrealized surplus on assets -net of tax 389,218

(509,974)

Closing Balance 3,614,503

3,101,352

8.4


2012 2011

Opening balance 53,917 -

Investment made during the year - 52,521

Investment in Adamjee Insurance Company Limited under equity method - holding 29.13%

December 31, 2011

Total

Investments include Pakistan Investment Bonds amounting to Rs. 232.600 million (December 31, 2011: Rs. 232.600 million)

earmarked by the State Bank of Pakistan and National Bank of Pakistan against TT / DD discountingfacilitiesand demand note

facilities sanctioned to the Bank. In addition, Pakistan Investment Bonds amounting to Rs. 5 million (December 31, 2011: Rs. 5 million)

have been pledged with the Controller of Military Accounts on the account of Regimental Fund Account.

Held by

bank

Investment of the Group in Adamjee Insurance Company Limitedhas been accounted for under the equity method of accountingin

accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting for Investments in

Associates'. The market value of the investment in Adamjee Insurance Company Limited as at March 31, 2012 amounted to Rs.

2,039.867 million (December 31, 2011: Rs. 1,675.927 million).

Investment of the Group in Euronet Pakistan Private Limited has been accounted for under the equity method of accounting in

accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting for Investments in

Associates'.

Investment in Euronet Pakistan Private Limited under equity method - holding 30%

Given as

collateral

Share of profit / (loss) for the period / year before tax (398) 1,562

Share of tax (106) (166)

(504) 1,396

Closing Balance 53,413 53,917

8.5 The Group's investment in First Women Bank Limited is carried at cost and have not been accounted for under equity method of

accounting as the Group does not have significant influence over the entity.

---------- (Rupees in '000) ----------

---------- (Rupees in '000) ----------

---------- (Rupees in '000) ----------

---------- (Rupees in '000) ----------






9 ADVANCES - NETMarch 31, December 31,

2012 2011

Loans, cash credits, running finances, etc

- In Pakistan 229,558,248 223,963,444

- Outside Pakistan 10,232,896 10,511,019

239,791,144 234,474,463Net Investment in finance lease


1,226,014

- Outside Pakistan 660,304

593,796

1,875,069

1,819,810Bills discounted and purchased (excluding treasury bills)

- Payable in Pakistan 861,262

722,522

- Payable outside Pakistan 10,245,156

11,111,385

11,106,418

11,833,907

Advances - gross 252,772,631

248,128,180Less: Provision against loans and advances

- Specific provision 9.1 (21,868,395)

- General provision (252,787)

- General provision against consumer loans (188,441)

- General Provision for potential lease losses (in Srilanka Operations) (20,158)

(22,329,781)

(21,869,401)

(248,135)

(198,340)

(17,566)

(22,333,442)

Advances - net of provision 230,442,850

225,794,738

9.1


Mentioned (OAEM) 9.1.1 10,605

-

10,605

-

-

Substandard 2,007,885

-

2,007,885

439,221

439,221

Doubtful 358,140

3,324

361,464

178,247

178,247

Loss 19,600,150

4,290,188

23,890,338

21,250,927

21,250,927

21,976,780

4,293,512

26,270,292

21,868,395

21,868,395


Mentioned (OAEM) 9.1.1 - - - - -

Substandard 2,036,968 7,857 2,044,825 461,374 461,374

Doubtful 292,466 - 292,466 115,289 115,289

Overseas

Advances includeRs. 26,270.292million(December 31, 2011:Rs. 26,664.873million)which have been placed under non-performing

status as detailed below:

Classified Advances


Specific

Provision

Held

Classified Advances

Total

Specific

Provision

RequiredCategory of Classification

Specific

Provision

Required

March 31, 2012

---------- (Rupees in '000) ----------

December 31, 2011

------------------------------------- Rupees in '000 ------------------------------------

Domestic

Total

Overseas

Specific

Provision

HeldDomestic

------------------------------------- Rupees in '000 ------------------------------------

Loss 20,061,976 4,265,606 24,327,582 21,292,738 21,292,738

22,391,410 4,273,463 26,664,873 21,869,401 21,869,401

9.1.1 This represents non-performing portfolioof agricultural financing classified as OAEM as per the requirements of the Prudential

Regulation for Agricultural Financing issued by the SBP.

10 BORROWINGS March 31, December 31,

2012 2011

In Pakistan 26,737,202 37,397,843

Outside Pakistan 1,807,415 1,702,784

28,544,617 39,100,627

10.1 Details of borrowings (secured / unsecured)Secured

Borrowings from State Bank of Pakistan

Export refinance scheme 9,926,134

9,903,657

Long term financing facility 1,972,109

2,026,175

Long term financing - export oriented projects scheme 849,229

949,375

Financing Facility for Storage of Agricultural Produce 460,799

219,932

Scheme for Revival of SMEs & Agricultural Activities in Flood Affected Areas -

-

450

13,208,271

13,099,589

Borrowings from other financial institutions 13,362

293,113

Repurchase agreement borrowings 13,591,017

24,781,254

13,604,379

25,074,367

26,812,650

38,173,956Unsecured

Call borrowings 991,480

816,139

Overdrawn nostro accounts 740,487 110,532

1,731,967

926,671

28,544,617

39,100,627


2012 2011

---------- (Rupees in '000) ----------11 DEPOSITS AND OTHER ACCOUNTS

Customers

Fixed deposits 90,814,753

91,476,846

Savings deposits 244,606,406

225,916,109

Current accounts 166,493,475

161,668,528

Margin accounts 3,067,361

3,511,830

504,981,995

482,573,313Financial institutions

Remunerative deposits 4,911,666

6,319,827

Non-remunerative deposits 2,133,956

2,253,658

7,045,622

8,573,485

512,027,617

491,146,798

12 DEFERRED TAX LIABILITY / (ASSET) - NET

The details of the tax effect of taxable and deductible temporary differences are as follows:

Taxable temporary differences on:

Surplus on revaluation of operating fixed assets 779,895 788,352

Accelerated tax depreciation 1,002,131 1,057,564

Receivable from pension fund 5,261,164 5,156,165

Investments in associates 205,531 193,138

Others 10,219

Surplus on revaluation of securities 50,378 49,393

7,299,099 7,254,831

---------- (Rupees in '000) ----------

Deductible temporary differences on:

Provision for bad debts (228,493) (414,436)

Provision for contributory benevolent scheme (1,080) (5,656)

Provision for post retirement medical benefits (294,055) (306,908)

Provision for gratuity (1,019) (1,019)

Taxable losses (13,856) (29,715)

(538,503) (757,734)

6,760,596 6,497,097






12.1


2012 2011

13 CONTINGENCIES AND COMMITMENTS

13.1 Direct credit substitutes

Contingent liabilities in respect of guarantees given favouring


2,634,218

- Banks and financial institutions 2,744,964

2,519,451

- Others 5,022,186

4,885,951

12,136,562

10,039,62013.2 Transaction-related contingent liabilities

Guarantees in favour of:


2,761,601

- Others 4,982,788

4,217,157

Suppliers credit / payee guarantee 2,457,093

2,373,006

8,441,656

9,351,764

13.3 Trade-related contingent liabilities 63,830,600

77,075,699

13.4 Other contingencies

Claims against the Bank not acknowledged as debts 818,363

844,099

13.5 Commitments to extend credit

13.6 Commitments in respect of forward foreign exchange contracts

Purchase 26,888,166

32,395,900

Sale 26,658,002

35,030,445

13.7 Commitments for the acquisition of fixed assets 191,335

276,277

13.8 Taxation

March 31, March 31,

2012 2011

14 BASIC AND DILUTED EARNINGS PER SHARE - AFTER TAX

Profit after taxation 5,747,915

5,112,890

Number of shares

Weighted average number of shares outstanding during the period 919,860,123 919,860,123

Rupees

Basic and diluted Earnings per share - after tax 6.25 5.56

15 CREDIT RATING

The Bank makes commitmentsto extend credit in the normal course of its business but these being revocable commitmentsdo not

attract any significant penalty or expense if the facility is unilaterally withdrawn.

Three months ended

The income tax assessments of the Bank have been framed upto and including the Tax Year 2011. For the Assessment

Year 1988-89 through Tax Year 2011, the department has amended the assessments on certain issues against the Bank.

The Bank has filed appeals which are pending at various appellateforums. in addition, certain decision made in favour of

the Bank are being contested by the department at higher forums. No provision has been made in the financial

statements as the management and the Bank's legal counsel are of the view that the issues will be decided in the Bank's

favour as and when these are taken up by the Appellate Authorities.

---------- (Rupees in '000) ----------

The Finance Act, 2009 and 2010 have made significant amendments in the Seventh Schedule to Income Tax Ordinance, 2001. The

deduction for provision for doubtful and loss categories of advances and off balance sheet items is allowable up to a maximum of 1%

of total advances whereas provisions for advances and off-balance sheet items for consumer and small and medium enterprises

(SMEs) ("as defined under the SBP's Prudential Regulations") is now allowed at 5% of total consumer and SME portfolio. The

amount of bad debts classified as substandard under Prudential Regulations issued by State Bank of Pakistan would not be allowed as

an expense.

PACRA throughits notificationin June 2011,has assigned longterm credit rating of AA+ [doubleA plus] and short-term credit rating

of A1+ [A one plus] to the Bank.

16 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES

The segment analysis with respect to business activity is as follows:

Total income 34,072

10,408,817

3,689,738

5,971,787

116,223

(20,611)

20,200,026


(1,783,236)

(8,553,789)

(997,798)

(58,496)

20,611

(11,383,520)


-

-

-

-

-

(3,048,882)

Net income 23,260

8,625,581

(4,864,051)

4,973,989

57,727

-

5,767,624

Segment assets - (Gross of NPLs Provisions) 49,597

359,757,327

120,848,353

202,281,771

1,335,740

(1,011,946)

683,260,842


-

-

-

-

-

8,868,407

Total assets 49,597

359,757,327

120,848,353

202,281,771

1,335,740

(1,011,946)

692,129,249


-

8,061,887

18,208,405

-

-

26,270,292


-

6,711,023

15,157,372

-

-

21,868,395

Segment liabilities 4,631

21,695,261

516,062,029

30,858,885

99,840

(1,011,946)

567,708,700

Deferred tax liabilities - net -

-

-

-

-

-

6,760,596

Total liabilities - net 4,631

21,695,261

516,062,029

30,858,885

99,840

(1,011,946)

574,469,296

Segment return on assets (ROA) (%) -

11.57% 12.93% 12.77% 34.80% -

-

Segment cost of fund (%) -

11.37% 4.44% 6.11% -

-

-

Total income 10,212

7,506,536

3,507,540

7,084,788

71,678

(25,440)

18,155,314


(1,459,525)

(7,132,321)

(1,572,564)

(39,446)

25,440

(10,186,067)


-

-

-

-

-

(2,856,714)

Net income 2,561

6,047,011

(3,624,781)

5,512,224

32,232

-

5,112,533

Segment assets - (Gross of NPLs provision) 41,497

276,077,842

113,288,322

234,726,399

535,092

(709,094)

623,960,058


-

-

-

-

-

3,764,352

Total assets 41,497

276,077,842

113,288,322

234,726,399

535,092

(709,094)

627,724,410


-

6,700,062

18,193,854

-

-

24,893,916


-

5,376,326

14,599,279

-

-

19,975,605

Segment liabilities 3,976

24,748,306

463,859,918

29,698,803

24,644

(709,094)

517,626,553

Deferred tax assets - - - - - - 5,343,810

Total liabilities - net 3,976 24,748,306 463,859,918 29,698,803 24,644 (709,094) 522,970,363

Segment return on assets (ROA) (%) - 10.88% 13.00% 12.87% 53.58% - -

Segment cost of fund (%) - 11.39% 3.96% 5.64% - - -

Asset

Management



Elimination Total

---------------------------------------------(Rupees in '000)-----------------------------------------

Corporate

Finance

Trading

and

Sales

Retail &

Consumer

Banking

Commercial

Banking

---------- (Rupees in '000) ----------

17 RELATED PARTY TRANSACTIONS

Deposits

Deposits at beginning of the period / year 4,398,756

2,088,985 766,387

955,014 25,393,804

24,677,392 50,178 90,816

Deposits received during the period / year 1,100,134

20,407,581

30,536,355

169,261,154

74,117,220

250,452,445

190,356 830,780

Deposits repaid during the period / year (1,064,312)

(18,097,810)

(30,733,501)

(169,449,781)

(73,141,611)

(249,736,033)

(178,102) (871,418)

Deposits at the end of the period / year 4,434,578

4,398,756

569,241

766,387

26,369,413

25,393,804

62,432 50,178

Advances (secured)

Balance at beginning of the period / year -

-

-

-

81,302

-

49,743 54,474

Loan granted during the period / year -

-

-

-

67,815

81,302

1,796 3,525

Repayment during the period / year -

-

-

-

(54,072)

-

(4,895) (8,256)

Balance at end of the period / year -

-

-

-

95,045

81,302

46,644 49,743

Outstanding Balance of credit card 713

1,137

-

-

-

-

866 856

Receivable from Pension Fund -

-

-

-

15,031,898

14,731,898

- -

Adamjee Insurance Company Limited

Insurance premium paid-net of refund -

-

202,676

-

-

-

- -

Insurance claim settled -

-

17,863

8,443

-

-

- -

Rent Income received -

-

405

1,638

-

-

- -

Outstanding commitments and contingent liabilities -

-

8,365

8,365

-

-

- -

Banca Revenue -

-

89,554

38,144

-

-

- -

---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------

March 31,

2012

March /

December 31,

2011

March 31,

2012

March 31,

2012

Three months

ended

March 31,

2012

March 31,

2012

Three months

ended

March 31,

2012

Year

ended

Dec 31,

2011


Year

ended

Dec 31,

2011

March /

December 31,

2011

March /

December 31,

2011

Year

ended

Dec 31,

2011


Three months

ended

March 31,

2012

Other Related Parties

Year

ended

Dec 31,

2011

Directors Other Related Parties

March /

December 31,

2011

Directors

The Group has related party relationship with its associates, employee benefit plans and its key management personnel (including their associates) and companies with common directors.

The Groupentersinto transactionswith relatedpartiesin the normalcourseof business.Contributionsto andaccrualsin respectof staff retirementbenefitsandotherbenefitplansaremadein accordancewith the

actuarial valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment.

Three months

ended

March 31,

2012

Associates

Associates

Details of transactions with related parties and balances with them as at the period-end were as follows:

---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------

Adamjee Life Assurance Company Limited

Insurance Premium Paid - - 25,262 26,342 - - - -

Insurance claim settled - - 18,686 - - - - -

Outstanding commitments and contingent liabilities -

-

500

500

-

-

- -

Euronet Pakistan Private Limited

ATM Outsourcing Revenue -

-

29,258

5,607

-

-

- -

Capital injection -

-

-

52,519

-

-

- -

Trade payable -

-

4,292

7,317

-

-

- -

Training expenses reimbursed -

-

-

27

-

-

- -

Mayban International Trust (Labuan) Berhad

Forward foreign exchange contracts (Notional) -

-

-

-

-

1,913,753

- -

Unrealized loss on forward foreign exchange contracts -

-

-

-

-

40,914

- -

MCB Employees Foundation

Service expenses -

-

-

-

4,594

4,378

- -

Cash sorting expenses -

-

-

-

8,966

10,889

- -

Stationery Expenses -

-

-

-

40,095

31,484

- -

Advance receivable -

-

-

-

20,000

20,000

- -

Payable for stationery expenses -

-

-

-

6,834

1,255

- -

MCB Employees Security System

and Services (Private) Limited

Security guard expenses -

-

-

-

63,507

47,384

- -

Remuneration of key management personnel 16,134 15,302 - - - - 46,828 40,212

Mark-up expense on deposits 89,899 21,785 20,410 16,535 995,318 1,058,302 1,059 1,025

Markup income on advances - - - - 2,346 - 888 636

Clearing expenses paid to NIFT - - - - 29,268 30,065 - -

Other miscellaneous expenses - - - - 3,195 3,924 - -

Investment in Metro-Bank Pakistan Sovereign Fund-Perpetual - - - - 4,000,000 4,000,000 - -

Dividend Income - - - - 216,893 - - -

Contribution to provident fund - - - - 43,941 39,703 - -

Commission Received - - 919 - 13 - - -

Gas charges - - - - 3,115 2,239 - -

Rent Paid - - - - 53 42 - -

Others

The chairman has been provided with free use of the Bank maintained car. The Chief Executive and certain executives are provided with free use of the Bank's maintained cars and household

equipment in accordance with the terms of their employment.






18 ISLAMIC BANKING BUSINESS


2012 2011

Assets

Cash and balances with treasury banks 278,465

334,398

Investments - net 2,818,271

2,938,706

Financing and receivables

- Murabaha 4,490,409

4,094,212

- Ijara 95,899

96,146

- Islamic export refinance 1,189,248

1,420,784

Fixed Assets 996,394

1,008,864

Deferred tax assets 720

-

Other assets 3,059,821

3,330,885

12,929,227

13,223,995

Liabilities

Bills payable 108,607

45,297

Deposits and other accounts - - - Current accounts 813,666 1,022,119 - Saving accounts 1,578,387

1,636,924

- Term deposits 3,259,045

4,565,234

- Others 13,759

81,503

Borrowing from SBP 1,391,682

1,664,996

Due to head office 4,367,708

2,558,624

Deferred tax liability -

8,182

Other liabilities 372,270

449,518

11,905,124

12,032,397


1,191,598

Represented by:

Islamic Banking Fund 1,000,000

1,000,000

Other Reserves (124)

70

Unappropriated profit 25,564

176,334

1,025,440

1,176,404

Surplus / (deficit) on revaluation of assets - net of tax (1,337)

15,194

1,024,103

1,191,598

CHARITY FUND

Opening balance 782 1,763

Additions during the year

Received from customers on delayed payments 829 1,397

Profit on charity saving account 14 122

843 1,519

---------- (Rupees in '000) ----------

The Bank is operating 23 Islamic banking branches including 1 overseas branch (December 31, 2011: 23 branches including 1

overseas). The statement of financial position of the Bank's Islamic Banking Branches as at March 31, 2012 is as follows:

Payments / utilization during the year

Social Welfare - (1,500)

Health - (1,000)

- (2,500)

Closing balance 1,625 782



35


36First Quarterly Report, 2012 First Quarterly Report, 2012

19

20

21

Quarter ended Quarter ended

March 31,

2012

March 31,

2011

Income / return / profit earned 349,420

380,684

Income / return / profit expensed 278,248

266,914

Net Income / Profit 71,172

113,770

Provision against loans and advances - net (130)

9,290

Provision for diminution in the value of investments -

-

Bad debts written off directly -

-

(130)

9,290

Net profit / income after provisions 71,302

104,480

Other income

Fees, commission and brokerage income 8,904

13,723

Dividend income -

Income from dealing in foreign currencies 2,342

412

Other Income 30,406

5,467

Total other income 41,652

19,602

112,954

124,082

Other expenses

Administrative expenses 87,045

65,895

Other provisions / write offs -

-

Other charges (Penalty paid to SBP) 344

237

Total other expenses 87,389

66,132

Extra ordinary / unusual items -

-

Profit before taxation 25,565

57,950

Remuneration to Shariah Advisor / Board 486

420

GENERAL

- Figures have been rounded off to the nearest thousand of rupees unless otherwise stated.

-

NON-ADJUSTING EVENT

DATE OF AUTHORIZATION FOR ISSUE

Comparative information has been reclassified and rearranged in these unconsolidated condensed interim financial statements for the

purpose of comparison.

The profit and loss account of the Bank's Islamicbankingbusiness for the three monthsperiod ended March 31, 2012 is as

follows:

---------- (Rupees in '000) ----------

The Board of Directors in its meetingheld on April24, 2012 has announced cash dividendin respect of the three months periodended

March 31, 2012 of Rs. 3.00 per share (March 31, 2011: Rs. 3.00 per share). These consolidated condensed interim financial

statements for the three months period ended March 31, 2012 do not include the effect of these appropriations which will be

accounted for subsequent to the period end.

These consolidatedcondensed interimfinancialstatements were authorizedfor issue by the Board of Directors of the Bank in their

meeting held on April 24, 2012 .

Sarmad Amin



Documents

customers for a more prosperous and secure future and ... · However, the modes and quality of financing is a major concern vis-à-vis the invisible demand in the private sector and