MCB Bank Limited (PSX:MCB) is intensifying its focus on digital banking and expanding its branch network, as part of its strategy to drive stronger, more sustainable earnings over the next few years. The bank is positioning itself to increase its current account ratio to 60%, well above its current levels, through a combination of digital initiatives, strategic expansions, and improved customer engagement. The ambitious target reflects the bank’s commitment to securing long-term profitability in an evolving financial landscape.
In a recent corporate briefing, MCB Bank management outlined its plan to open 45 new conventional branches and 10 to 15 Islamic branches by the end of calendar year 2026 (CY26). This expansion is part of the bank’s broader strategy to enhance its footprint across Pakistan, ensuring that it reaches both urban and rural populations with its banking services. As of now, the bank’s current account ratio has already surpassed the target set for this year, with a clear trajectory to achieve the 60% ratio within the coming years.
The focus on increasing the current account mix is a key element of MCB Bank’s growth strategy. By emphasizing current deposits, which are a low-cost and stable source of funding, the bank aims to improve its liquidity position and strengthen its financial base. A significant portion of this effort will involve mobilizing current deposits through its growing retail franchise, reactivating dormant accounts, and leveraging employee incentives to drive performance.
In addition to its branch network expansion, MCB Bank is making substantial investments in its digital banking infrastructure. The bank has reported strong growth in digital banking, with notable increases in card income and branch banking fees driven by improvements in customer engagement tools. MCB’s commitment to digital transformation is reflected in its ability to generate revenue from alternative channels, even as traditional income sources such as remittance fee income faced temporary pressure due to regulatory changes. However, MCB expects this segment to normalize once competitive pressures stabilize in the remittance market.
Despite facing a challenging market environment, MCB Bank remains optimistic about its financial outlook. The bank expects no significant changes in the policy rate over the next six months and does not foresee any near-term margin compression, as a large portion of its investment book has already been repriced. The bank’s asset quality also remains stable, with non-performing loans (NPLs) declining to Rs 50 billion, which signals sound credit risk management practices.
However, the bank’s profit for the first nine months of CY25 (9MCY25) reached Rs 44.6 billion, a 15.5% decrease compared to the same period last year, primarily due to margin compression and higher operational costs. Mark-up, return, and interest income saw a sharp decline of 23.7% year-on-year (YoY), falling to Rs 244.39 billion from Rs 320.34 billion. On the flip side, mark-up, return, and interest expenses also dropped by 35.1%, reflecting the bank’s prudent cost management strategies.
The decline in profit was partially offset by improved non-markup income and higher share of profit from associates. Investments surged to Rs 2 trillion, with a large portion of these investments placed in Pakistan Investment Bonds (PIBs). These investments are not expected to undergo major repricing in the near term, which should provide some stability to the bank’s income stream in the coming months.
Operating expenses, however, saw an increase due to heightened spending on technology and human capital, pushing the bank’s cost-to-income ratio to around 38%. Despite the challenges posed by external market factors, MCB Bank remains committed to its long-term strategy of sustainable growth, improved profitability, and enhanced customer experience.
In a bid to reward shareholders, MCB Bank declared a cash dividend of Rs 9 per share, bringing the total dividend payouts for 9MCY25 to Rs 27. The bank’s focus on expanding its branch network, strengthening its digital banking capabilities, and enhancing customer engagement underscores its commitment to adapting to the evolving banking landscape while ensuring strong financial health in the years to come.
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