KARACHI, Sept 7: MCB Bank has planned to sell $150 million global depository receipts (GDRs) in the international market through roadshows starting from 25th of this month.
The bank has become the first Pakistan bank to offer GDRs which would enable it to carry out its expansion plan and invest more in the capital market.
A senior MCB official told Dawn on Thursday that the roadshows would be held in Dubai, Singapore, London, Hong Kong, Boston, New York, San Francisco and Amsterdam. The final pricing would be decided on October 9, 2006.
Banking sources confirmed that some other banks were also preparing to launch their GDRs. Response to the MCB GDR would help them to chart out their strategy in this regard.
MCB Bank’s GDR is the first during the last 10 years and third in the private sector. Earlier, Hubco sold $100 million GDRs, Chakwal Cement $50 million and PTCL $890 million.
Banking analysts believed that the response would be highly encouraging and it would help change the world’s perception about our banking industry.
“The MCB’s move will pave the way for others to enter the international market,” MCB CFO Ali Munir told Dawn.
He said the Indian banks had already sold numerous GDRs and were doing so for long time.
“The banking sector has already proved to be a high profit earning industry and the success of MCB GDR would improve image of the sector at international level,” said research analyst Mohammad Imran at Jahangir Siddiqi and Company.
He was expecting good response to the MCB GDR as it had been earning huge profits for the last two years.
The government has also planned to sell $1 billion to $1.5 billion GDRs of Oil and Gas Development Company (OGDCL) and the deadline is December 2006.
Another analyst estimated that the MBC GDR would increase the bank’s paid-up capital by five per cent and inflows of Rs9 billion ($150 million) would provide enough cash for investing in the capital market.
MCB Bank plans to raise the number of branches to 1,200 from 960 within the next three years. It will also open four offices in Toronto, Kabul, Dubai and Mumbai. Presently it has three branches in Sri Lanka and one in Bahrain.Net income of the bank in the six months ended June 30, 2006 rose to Rs5.74 billion or Rs11.22 a share, from Rs3.04 billion or Rs5.94 a year earlier.
The bank’s deposits rose by 3.7 per cent to Rs229 billion last year making it the country’s fourth-biggest bank by savings after National Bank, Habib Bank and United Bank. Loans rose 31 per cent to Rs180.3 billion.
It is expected that the MCB’s deposits will grow by 16 per cent in 2006 and eight per cent in 2007.
The bank aims to increase the bank’s share in total deposits from 8.5 per cent to 15 per cent in the next three to five years.
