MCB Bank (Formerly Muslim Commercial Bank) has a solid foundation of over 50 years in Pakistan, with a network of over 950 branches, over 250 ATMs in 41 cities nationwide and a network of over 12 banks on the MNET, an ATM Switch. Folling are excerpts from an exclusive interview with Shahid Sattar, SEVP and Head of Retail Banking Group, MCB Bank

June 26 - July 02, 2006

Consumer banking has become a key initiative of almost all the financial institutions in Pakistan. Higher margins, lower risk and better spread are some of the key attractions. Consumer banking in Pakistan offers variety of products from a simple bank account to clean and secured loan. Couple of decades ago, very few people could think that they would be so dependent on their banks to meet their daily expenses. However transfer of technology, skills and best practices from developed markets and knowledge empowerment of the customer has ushered in a new era in financial services in Pakistan.

The biggest barrier in the development of this business segment is that consumer banking is often treated as other segment of financial services. Getting conscious about cost to income from day one is one of the most usual mistakes that is committed by a financial institution. Indeed monitoring of the same is one of the key element but as consumer business is like a steam ship that pickups the pace once annuity start to realize, managing cost from day one is not long term successful consumer banking proposition. It creates one of the biggest problems as compromises are made on numerous aspects. Cost driven or biased strategies tend to ignore the improvement of delivering value to the customer. Lack of innovation often adversely affects some financial institutions in the shape of losing market share and losing skilled and trained employees. This translates into higher market re-entry and resource re-acquisition cost.

Customization of products and services instead of standardization is one of the solutions to both the above mentioned problems. Customization can be done to the level of geographic, income/savings, repayment ability and also demographic situation of the customer. It might create an internal competition but still it is better than facing external competition. Some banks compromise innovation due to fear of loosing market share of their highly profitable products.

In short, consumer banking is on the rise and innovation is the differentiating factor. Innovation is not the outcome a specific need, rather it creates needs and deliver beyond the wildest dreams. Time has come for continues customization of products in order to match the ever changing present and future needs of the market. Manage cost through productivity model and find avenues to increase income through innovative strategies.

MCB launched its auto financing product, MCB Car4U in 2000 and the scheme is among the top 3 in Pakistan and we wish to take to the top position. CAR4U offers the option for financing or leasing at the competitive rate with financing amount up to Rs 2 million. The facility is available for local as well as imported new/used cars. MCB is among the few banks, which offers this facility to contractual salaried employees as well. The customers are given the option to choose the equity options that suit them the best. They can also choose a suitable tenure ranging from one to seven years. Car4U also offers a unique product of 3 months deferral to its customers through which customers don't have to pay the initial three installments. The product is being offered in all major cities of Pakistan.

Launched in 2001, MCB Pyara Ghar offers the financing for the purchase of a house, renovation of existing house or the construction of a new house at very competitive rates. A Home Finance Facility that is outstanding with another bank for at least one year can also be transferred to MCB through a hassle-free process on attractive terms and on preferred rates. The financing is offered between Rs 500,000 to Rs 20 million for the financing tenure up to 20 years. MCB Pyara Ghar will soon be offering an Islamic Housing Finance Product as well. The product is available in five major cities namely Karachi, Lahore, Islamabad, Rawalpindi and Faisalabad.

MCB Business Sarmaya launched in year 2005 is a running finance facility offered against the personal residential property to businessmen. The basic idea is to unlock the equity that is stucked in the house without compromising to the living standard of the customer. Maximum financing available is up to Rs. 20 million. Financing against commercial properties is also available. Currently, customers in five major cities Karachi, Lahore, Islamabad, Rawaplindi and Faisalabad are being offered this product.

Initially launched in year 2000, personal loan scheme was re-launched in 2006 with more flexibility and features. Under Personal Loan scheme customers can avail the loan ranging from Rs 50,000 to one million rupees with minimum documentation and no collateral or guarantor. MCB personal loan also offers special benefits to our branch and other product's customers.

Committed to give the clients the best value, MCB's is aggressively expanding its consumer business and product menu. Number of new initiatives, including new product derivatives, and geographical expansion plans are in pipeline. New product developments that are in pipeline includes launch of credit cards, Islamic financing products and many more.

MCB is also working on getting into building business relationship and coordination with other banks in different countries, with major focus towards the banks in Middle East to assist the non-resident Pakistanis living in these countries and seeking consumer loans. With right foresight, planning and affordable products consumer financing has a bright future in Pakistan and MCB fully plans to further strengthen its grounds in this segment.