Nov 10 - 16, 2008

MCB is one of the leading banks of Pakistan with a deposit base of more than Rs. 300 billion and total assets of around Rs. 400 billion. Even in the global financial crisis, the MCB's performance has been commendable. MCB retained its convention of a solid financial institution managed by expatriate executives. The brand equity of the bank is among the highest in the country. The MCB believes in constant value additions in customers' services. During the last fifteen years, the MCB 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. MCB Bank's team of committed professionals is dedicated to maintaining long term customer relationships through outstanding service and convenience.

Mr. Munir Ahmed Saleem is currently Group Head of Commercial Banking MCB. He started his career in the MCB as Probationary Officer some 30-year ago. Since then he remained associated with the MCB and worked in different positions such as Branch Manager, Regional Manager and General Manager. It was his commitment that brought Mr. Munir Ahmed Saleem to the highest position of Group Head of Commercial Banking.

In an exclusive interview with Pakistan and Gulf Economist, Mr. Munir Ahmed Saleem shared his experience and ideas about the country's banking sector in the wake of global financial crisis. He also highlighted vision of the MCB and its priorities.

He said: "We continuously seek to exceed our customer's expectations, forging and maintaining long term relationships. We strive to be the market leaders in innovative products and services offering, customized financial solutions with flawless execution. The diversity of our people is our strength. We inspire and challenge each other - working together to achieve synergy. Our people are our most valuable assets. We are committed to a result oriented culture. Our goals are clear and merit is the only criterion for reward''.

Sharing his views on the country's economic situation, he said that fiscal year 2007-08 proved to be a difficult year for Pakistan, with several political and economic events transpiring unexpectedly. "The global financial turmoil and higher international commodity prices have had negative fallout on the economy. Heightened political tensions, soaring global oil prices, the international and domestic food inflation phenomena, a slowdown in global economic activity, and the troubled law and order situation prevalent in the country affected the economy'', he said.

He said the manufacturing sector was smashed by the record inflation of 24.5% during July to September 2008.

This has resulted in turn down of output to 3.5% year on year. GDP growth is projected to slow down to 4% in the current fiscal year compared to 2.8% in fiscal year 2008, he said adding that the external deficit has been on the higher side even though strong growth in exports and remittances. Exports grew during the third quarter 2008 to 19% (Year on Year) in relation to the sharp depreciation of rupee while the foreign remittances grew by 25% (Year on Year) to 1.9 billion. Even then July to September 2008, trade deficit increased to $5.5 billion which is an increase of 53% (Year on Year), as the import bill remained overblown, he pointed out.

Answering a question, Mr. Munir Ahmed Saleem said the global financial disorder resulted in the foreign exchange inflows slowing down to $100 million from $1.2 billion in the same period last year. The large external deficit had to be financed by drawing down the foreign exchange reserves of the central bank. This resulted in the falling down of central bank's foreign exchange reserves to $ 4.7 billion from $ 8.7 billion by end June 2008. By end September 2008, the Pak rupee closed on 78.2 against dollar. This is a sharp depreciation of rupee by 14.3 % from 68.4% by the end of June 2008, he added. He further said that swift reduction of foreign exchange reserves gave rise to depletion in liquidity from the banking system as PKR deposits were drawn down to meet the foreign exchange payments.

There was a net withdrawal of Rs 162 billion in deposits during third quarter of 2008. The banks have to face liquidity pressure because of this. The gross advances to deposits ratio reached 80.4% by the end of September 2008 in contrast to 70% in September 2007, he added.

Mr. Munir Ahmed Saleem said further that increase in the mandatory Cash Reserve Ratio played a vital role in the liquidity crunch faced by the banks. However, SBP has slashed CRR for all deposits up to one year by one percent to 8% with effect from October 11. The temporary cut back in reserve requirements is expected to release close to Rs 250 billion liquidity into the system. This will help banks to ease the liquidity stress, he added.

About his bank, he said: ''MCB's commitment to excellence is clear from the appreciation it gets over the years in form of different awards. MCB received the esteemed Euromoney Award several times. Recently MCB has been awarded as a Euromoney Award 2008 for the "Best Bank in Asia". It is the only bank to receive the Euromoney Award for Excellence for the sixth time in the past seven years. MCB Bank Ltd., shares are traded on the Karachi, Lahore & Islamabad Stock Exchanges. MCB Bank GDRs are listed on the London Stock Exchange's Professional Securities Market. Malaysia's leading MayBank acquired 20 % strategic stake in MCB. MayBank is the largest financial services group in Malaysia. The Group has over 450 offices in the 14 countries namely, Malaysia, Singapore, Philippines, Brunei Darussalam, Indonesia, Vietnam, Cambodia, Papua New Guinea, Hong Kong SAR, People's Republic of China, Bahrain, Uzbekistan, Great Britain and United States of America''.

He said that Pakistan can capitalize this opportunity and can establish its presence in developed and emerging economies of the world. 'MCB is constantly coming up with different innovative products and services for customers, the recently introduced new products include Savings Extra, Current Life and Business Account''.

Mr. Munir Ahmed Saleem said the MCB has been financing agriculture sector since 1973. Due to large branch network and specialized staff posted in the branches, we cater to the financing requirements of the farming community spread throughout the country and facilitate in achieving increased productivity.

He said the MCB has reinvigorated its agri financing products under the brand name MCB Green Scheme. The scheme is designed and aimed at meeting all types of financial needs of agriculture sector covered under extended list of eligible items. Agri financing facilities are available throughout the country at designated Lending Branches. All types of financing are available for short, medium and long term depending upon farmers' choice and the nature of finance, he added.

He further said that the MCB attaches top priority to small & medium size farmers so that they could be protected from the exploitation of private moneylenders.