KARACHI, Jan 18: On an average, a branch of a local commercial bank keeps Rs315.3 million deposits, whereas a branch of a foreign bank can boast of deposits worth Rs3.367 billion, analysis of data obtained from the State Bank publications show.

The Rs229 billion deposits of 11 foreign banks as against Rs1,980 billion deposits of 25 local commercial banks at end-September 2004, according to the SBP data, gives an impression that on an average foreign banks have much smaller deposit bases than those of local banks.

But if one compares the per-branch deposit base of foreign banks with that of their local peers, foreign banks' performance turns out to be excellent. The details on the number of bank branches as at end-September 2004 are not available but end-June 2004 data show that 11 foreign banks were running 68 branches whereas 25 commercial banks were operating with 6,279 branches.

Assuming that there has been little change in the composition of this ratio in branch networks of local and foreign commercial banks between July-September 2004, one can work out the per-branch deposit base of local as well as foreign banks at the end of September last.

The numbers so obtained show that the per branch deposit base of foreign banks was Rs3.367 billion whereas the per branch deposit base of local commercial banks was Rs315.3 million only. As for specialized, three in number operating with 524 branches and having Rs15.2 billion deposits, per branch deposit becomes very nominal -- only Rs2.9 million.

Meanwhile, five major local banks, four of them now privatized and one still in the state control, boasts of more than 60 per cent share in the total deposits of the banking system.

State-run National Bank of Pakistan and four privatized banks namely Habib Bank, Muslim Commercial Bank, United Bank and Allied Bank reported a combined deposit base of Rs1,350 billion at end-September 2004, according to data compiled by the State Bank. This was 60.7 per cent of the total deposits of about Rs2,224 billion of all the 39 banks operating in Pakistan, 11 of them headquartered abroad.

SBP data, annexed with its quarterly performance review of the banking system, show that at the end of September last year, NBP had the largest deposit base of Rs443 billion, followed by HBL Rs366 billion, MCB Rs216 billion, UBL Rs199 billion and ABL Rs125 billion.

Their combined deposits of Rs1,350 billion made up 60.7 per cent of total deposits of Rs2,224 billion of the entire banking system, according to unaudited statistics provided by the banks to the central bank.

The statistics show that all the 25 local commercial banks including the above-named five major banks had a deposit base of Rs1,980 billion or equal to more than 89 per cent of the total deposits of the banking system.

Following is the list of 20 local commercial banks with their deposit base as at end-September 2004 (Big five banks have already been named, figures have been rounded off: (1) Bank Alfalah Rs100bn (2) Askari Commercial Bank Rs78bn (3) Union Bank Rs62bn (4) Bank Al-Habib Rs59bn (5) Faysal Bank Rs50bn (6) Metropolitan Bank Rs46bn (7) The Bank of Punjab Rs43bn (8) PICIC Commercial Bank Rs39bn (9) Soneri Bank Rs34bn (10) Saudi-Pak Bank Rs29bn (11) Prime Commercial Bank Rs26bn (12) The Bank of Khyber Rs14bn (13) Meezan Bank Rs10bn (14) Bolan Bank Rs9.2bn (15) NDLC-IFIC Bank Ltd. Rs8.8bn (16) KASB Bank Rs8.7bn (17) First Women Bank Rs7.7bn (18) Crescent Commercial Bank Rs2.4bn (19) Trust Bank Rs1.5bn; and (20) Dawood Bank Rs690 million only.

The State Bank statistics show that three specialized banks had a combined deposit base of Rs15.2 billion at end-September 2004. Among them, Industrial Development Bank of Pakistan had the highest deposit of Rs11.6bn, followed by Zarai Taraqiati Bank Ltd. Rs1.78bn and Punjab Provincial Co-operative Bank Rs1.78bn.

The statistics also show that 11 foreign banks had a combined deposit base of around Rs229 billion, equal 10.3 per cent of total deposits of the entire banking system.

Following is the list of the foreign banks with their deposit base at end-September 2004 (figures have been rounded off): (1) Standard Chartered Bank Rs82bn (2) Citibank Rs49bn (3) ABN Amro Rs44bn (4) Habib Bank AG Zurich Rs27bn (5) The Hong Kong & Shanghai Banking Corporation Rs8.3bn (6) Al-Baraka Islamic Bank Rs7.3bn (7) American Express Rs5.4bn (8) The Bank of Tokyo Mitsubishi Rs3.2bn (9) Deutsche Bank Rs1.6bn (10) Oman International Bank Rs644 million; and (11) Rupali Bank Rs149 million.

As the list shows several foreign banks have much larger deposit bases than those of the local banks. And, the fact that these banks are operating with a much smaller number of branches than the local banks further strengthens the view that foreign banks are richer than their local peers.

For example, Standard Chartered Bank with a branch network of 23 and deposits of Rs82bn outperformed 13 local commercial banks, all of them working with larger number of branches. (Six local banks also had less than Rs82bn deposits but they were smaller in size and the other six had much larger deposit base than the foreign bank in question).

A key reason why foreign bank branches are operating with much larger deposit base of their local peers is that foreign banks have an entirely different clientele than the local banks.

They interact with the wealthiest among corporate, commercial and individual clients (whether they are borrower or depositors or both) and are thus able to generate the largest amount of deposits.