MCB Is­lamic Bank aims to ex­pand its branch net­work to 66

The Pak Banker - - FRONT PAGE - Muham­mad Yasir

The man­age­ment of MCB Bank has de­cided to ex­pand op­er­a­tions of its 100 per­cent owned sub­sidiary, MCB Is­lamic Bank Lim­ited (MCBIBL) with 66 branches by the end of cur­rent year of 2016 in or­der to tap max­i­mum op­por­tu­ni­ties in the de­mands and re­quire­ments of lo­cal mar­ket of bank­ing in­dus­try.

Ac­cord­ing to of­fi­cial in­for­ma­tion avail­able to Daily The Pak Banker the man­age­ment is keen to en­hance its pen­e­tra­tion in the flour­ish­ing Is­lamic Bank­ing in­dus­try with full-fledged new branches of its Is­lamic Bank­ing sub­sidiary but it has been wait­ing for the go-ahead sig­nal of La­hore High Court.

At present, the bank is op­er­at­ing with 6 branches which will be en­hanced sig­nif­i­cantly with the de­merger of branches of Is­lamic Bank­ing Divi­sion hav­ing net­work of 34 branches which will en­hance the num­bers to 40 in short pe­riod of time.

The man­age­ment has de­signed a con­ser­va­tive busi­ness strat­egy, which en­vis­ages a grad­ual growth in as­sets while main­tain­ing sound as­set qual­ity. In ini­tial years, the bank would fo­cus its ef­forts on es­tab­lish­ing pri­mary bank­ing in­fra­struc­ture, in­clud­ing branch net­work, tech­nol­ogy plat­form, and a com­pre­hen­sive risk man­age­ment frame­work.

MCBIBL has put in place a stan­dard man­age­ment struc­ture along­side a pre­lim­i­nary gov­er­nance frame­work. This should help MCBIBL to es­tab­lish its mar­ket po­si­tion rel­a­tively ex­pe­di­tiously.

How­ever, MCBIBL's prospects are de­pend- ent upon the man­age­ment's abil­ity to es­tab­lish its po­si­tion. Ef­fec­tive im­ple­men­ta­tion of busi­ness strat­egy is im­por­tant. Healthy de­posit mo­bi­liza­tion and build­ing a qual­ity as­set book will re­main a key to meet per­for­mance tar­gets.

The com­pany of MCBIBL was formed as a bank­ing com­pany in May, 2014. It posted a quar­terly profit of nearly Rs 35 mil­lion till Septem­ber 2015.

Ali Muham­mad Ma­hoon is the Pres­i­dent of MCBIBL who is sup­ported by an ex­pe­ri­enced man­age­ment, most of them hav­ing prior as­so­ci­a­tion with MCB. MCBIBL is a wholly owned sub­sidiary of MCB - one of Nishat Group's ma­jor con­cerns hav­ing strong pres­ence in the fi­nan­cial sec­tor.

MCBIBL was pro­vided by Rs 15 bil­lion paid-up cap­i­tal and share cap­i­tal by MCB Bank to make its fi­nan­cial sound­ness up to the mark of the bank­ing in­dus­try, and the stan­dard set by the cen­tral bank.

PACRA As­signs Rat­ings to MCB Is­lamic Bank Lim­ited The Pak­istan Credit Rat­ing Agency (PACRA) has as­signed a long-term en­tity rat­ing of "A" (Sin­gle A) and short-term rat­ing of "A1" (A One) to MCB Is­lamic Bank Lim­ited (MCBIBL). Th­ese rat­ings de­note a low ex­pec­ta­tion of credit risk em­a­nat­ing from a strong ca­pac­ity for timely pay­ment of fi­nan­cial com­mit­ments. The rat­ings in­cor­po­rate inherent con­straints faced by MCBIBL, mainly lim­ited branch net­work, small de­posit base, and high cost struc­ture par­tic­u­larly in early years.

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