Muslim Commercial Bank


Muslim Commercial Bank

Infobox_Company
company_name = MCB Bank Ltd "(Formerly Muslim Commercial Bank)"
company_
company_type = Private
company_slogan =
foundation = Lahore
location = Registered Office: Islamabad, Principal Office: Karachi Pakistan
key_people = Mian Mohammad Mansha (Chairman)
industry = Banking
Capital Markets
products = Loans, Credit Cards, Savings, Consumer Banking etc.
revenue = profitPKR 31.787 Billion (2007) [ [http://www.mcb.com.pk/ir/ir.asp Welcome to MCB Bank Limited ] ]
net_income = profitPKR 15.266 Billion (2007) [ [http://www.mcb.com.pk/ir/ir.asp Welcome to MCB Bank Limited ] ]
num_employees =
homepage = [http://www.mcb.com.pk www.mcb.com.pk]

MCB Bank Ltd formerly known as Muslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a limited company. The bank was established with a view to provide banking facilities to the business community of the sub-continent. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the first bank to privatized in 1991 and the bank was purchased by a consortium of distinguished Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake in the bank. The president of the bank is Mr. Atif Bajwa (previously with Citibank). Founded in 1948, Nishat Group is one of the leading and most diversified business groups in Pakistan. The group has strong presence in the most important business sectors of the country such as banking, textile, cement and insurance.

Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played instrumental role in its success. In recognition of Mr. Mansha’s contribution, the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the country.

MCB is Pakistan’s fourth largest bank by assets having an asset base of US$6.7 billion, and the largest by market capitalization having a market capitalization of US$4.1 billion. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 160 million.

History

In 2007, MCB reported a profit after tax of PKR16.4 billion (US$270 million) and generated a return on average equity of 38% and a net interest margin of 8.08%. The Bank’s asset quality is strong with a gross NPL ratio of 4.7% and provision coverage of 100%.

During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base and managing its non-performing loans via improved risk management processes.

In 2005, the management of the bank changed its name from Muslim Commercial Bank Limited to MCB Bank Limited (MCB). The reason was to explore international markets as they were facing resistance specially from Western Countries to avail license. In 2008 the head office of MCB was shifted to Lahore in a newly constructed building, namely MCB House, located at Sharea Ghous-ul-Azam (formerly known as Jail Road) from Karachi.

The MCB Tower in Karachi serves as the MCB's headquarters, and is also the tallest building in Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other three being Hubco, PTCL and Chakwal Cement - they all have been delisted) to list on the London Stock Exchange when it raised US$150 million global depositary receipts.

In May 2008 Malaysian bank, Maybank and MCB sponsors Nishat Group signed an agreement, whereby Maybank will acquire up to 20% of the ordinary shares in MCB from Nishat Group. The acquisition is in-line with Maybank’s strategy, as Malaysia’s financial services leader in the region, to build its presence in key growth markets across the region. It also paves the way for MCB, one of Pakistan’s premier financial services groups, to engage Maybank as its exclusive foreign commercial bank strategic partner.

Maybank initially acquired from Nishat Group 94,241,527 ordinary shares in MCB, representing a 15% stake in the Bank, for a cash price of PKR470 per share. The total consideration paid was approximately US$686 million. The purchase price represented a 11.4% premium to MCB’s closing share price of PKR 422 on May 2, 2008, and a premium of 12.9% to the average closing share price for MCB over the 30 trading days immediately preceding the date of this announcement.

Based on MCB’s December 31, 2007 audited book value, the purchase price represents an implied price to book value multiple of 5.13x, a price to 2007 earnings multiple of 18.0x and a price to 2008 earnings multiple of 15.2x. In July 2008 Maybank exercised its right to increase its stake to 20%.

The stake in MCB allows Maybank the right to appoint two Directors to represent its interest on the Board of MCB. One of these Directors was to be appointed immediately and the second Director will be appointed upon completion of the term of the existing Board, scheduled to be on March 27, 2009.

As part of the transaction, Maybank and MCB are also expected to enter into a business cooperation arrangement which will include, among others, Islamic banking, retail banking, credit cards, asset management and SME banking. Leveraging Maybank’s leadership and experience in these segments coupled with MCB’s brand and broad distribution network, Maybank and MCB believe that significant revenue synergies can be attained. Both Maybank and MCB are also expected to benefit from increased business ties and trade flows between Pakistan and Malaysia.

See also

*List of Banks in Pakistan
*Economy of Pakistan
*Adamjee Group

See also

* Maybank
* List of banks in Pakistan

References

External links

* [http://www.mcb.com.pk/ Muslim Commercial Bank]


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