Muslim Commercial Bank

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The MCB Bank Limited is one of the largest banks in Pakistan. The MCB Tower in Karachi serves as the Muslim Commercial Bank's headquarters, and is also the tallest building in Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other three being Hubco, PTCL and Chakwal Cement - they all have been delisted) to list on the London Stock Exchange when it raised $150 million floating global depositary receipts.

MCB Bank Ltd. ranks amongst the Leaders in the commercial banking industry. MCB has been one of the most profitable banks of 2005, registering an increase of over 250% in net profits. The bank’s branch network increased to 952 in 2005 (2004: 946). Out of the 6 new branches, 2 are for Islamic banking. In 2005, significant increase in profits stemmed from higher markup income due the hike in interest rates and increased core-lending activity, as well as internal cost efficiencies. There was a 5% reduction in the employee workforce. Moreover, there was a one-time reversal in pension fund-related administrative expenses due change in actuarial accounting policy. The change added about Rs. 2.29 to the bank’s 2005 earnings per share. The bank is concentrating on improving internal efficiencies by investing in technology, and improving customer services through employee awareness, and its new corporate culture. However, given expected shrinkage in average banking spreads, 2006 will require balance sheet growth momentum to sustain earnings growth.

• MCB is the fourth largest bank in the sector having nearly 8% market share of total assets and deposits.
• MCB has a low market share of the consumer market compared to its peers (5%). However, it is expected that this will increase as MCB has been relaunching its consumer credit side.
• MCB has one of the highest NIMs (Net Interest Margin) in the sector, due to its ability to maintain low funding costs. It is expected that this margins will be maintained, with higher yielding consumer loans offsetting pricing pressures in other segments of the loan book as well as rising funding costs.
• MCB has one of the highest RoA’s (Return on Assets) and RoE’s (Return on Equity) in the banking sector on account of high NIMs.
• MCB’s cost/income ratio is one of the lowest among its peers with similar sized branch networks owing to its restructuring efforts over the past few years, and a near trebling of income in 2005.

[edit] External links

• Muslim Commercial Bank