December 02, 2006	Saturday	Ziqa'ad 10, 1427

KARACHI, Dec 1: MCB Bank is planning to open overseas branches in Toronto, Dubai, Bahrain and Qatar etc., while it has set target to expand its local network to 1,000 branches.

This was revealed in a briefing arranged for analysts by the bank here on Friday. Banking sources said that the bank had been facing problem to open overseas branches because of its name. Its earlier name was Muslim Commercial Bank which was not received so well by the western countries due to “Muslim”, so it was changed to MCB Bank in recent past.

Pakistani banks have limited presence in the region where hundreds and thousands of Pakistanis reside. The trade volume is said to be in several billion dollars.

The vast opportunities to earn the benefits of trade are mostly received by the foreign banks and now the race among the denationalised for getting business from abroad has started. Sources said that other local private banks were also in the process to respond to the situation.

“These branches, we believe, will allow MCB Bank to capture the foreign trade and remittances businesses,” said Atif Malik, analyst at JS and Company. While the exports had been increasing at the rate of 15 per cent for couple of years, the remittances also went up.

The current fiscal year showed a 20 per cent increase in remittances indicating the growing potential for the banks to earn. The expected remittances the current fiscal is about $5.5 billion. This huge remittance business attached with high profits for the banks.

However, the absence of banking services in Europe, United States and Canada, provides opportunities to only foreign banks and financial institutions. Highest remittance still comes from the United States while EU and Canada are also significant contributors.

This growing business has attracted foreign banks. Those already have existence in Pakistan increased their network or in the process to expand network by acquiring banks while several foreign banks are looking for openings.

The banks having presence in European Union and United States were the most beneficial from the growing trade volume of the country. Most of the transactions are made through these banks.

“Pakistani banks have open chance to exploit the opportunities already exist here,” said Abid Kaleem, a banker. But he believes that long-term planning is required to compete with the banks having strong global network.

“Pakistanis have been failed to avail the vast opportunity in the shipping services where foreign shipping companies used to earn up to $1 billion each year from Pakistan,” he said.

Despite adequate capital, the bank does not have any plan for aggressive acquisition of a small size bank, since it believes that acquisition prices of local small sized banks are very much inflated, Atif observed.

MCB Bank also plans to bring its branch network to over 1000 by the end of 2007 in which 43 branches are to be opened in 2006 (39 already operational) and 40 in 2007.