Lahore, December 29, 2017 (PPI-OT):The ratings take note of MCB’s sustained financial profile, reflected in very strong capitalization, sound liquidity and diverse deposit base. This has been enabled by the bank’s able parentage, wherein a diverse mix of sponsors – mainly led by Nishat Group – has been providing an effective oversight. The ratings factor in MCB’s strong market positioning, supported by its well established brand name and substantial out reach. MCB has the highest CASA in the industry, with lowest cost of funds amongst all players. The bank lately has added sizeable chunk to its deposit base, slightly inching it up.
The bank continues with its current strategy of lending to premier corporates with sustained focus on government exposure. At the same time, beefing up of the consumer and SME book is also anticipated amidst improving macro fundamentals. The prevailing interest rate environment is a challenge especially with the drying stream of PIBs. The bank has established an Islamic Banking subsidiary, thereby, becoming the first conventional bank to do so. NIB Bank Limited was merged with and into MCB in July-17. Post-merger, MCB’s risk profile has sustained – which bodes well for the bank.
The ratings are dependent on the bank’s ability to hold its existing position in the banking sector. Any deterioration in the perceived strength of the bank or ownership with consequent impact upon its governance efficacy would have negative implication. Further strengthening of human resource would be vital.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425