MCB Pakistan Business Report
MISSION STATEMENT ANALYSIS
The mission statement of Muslim Commercial Bank is extremely concise and does not cover most of the components that should be included in a mission statement. Their focus is too broad with no emphasis given on important details which might provide valuable guidelines and directions to its employees in the long term.
There is no mention of the customers in the mission statement and no recognition of how valuable customer satisfaction is for the company, which shows the lack of importance given to the customers of the bank. This fact is very typical of local banks as compared to foreign banks operating in Pakistan.
Products & services
The mission statement does mention that the bank intends to provide high quality financial services but fails to state the different types of financial products and services it intends to provide its customers and how its products are differentiated from its competitors.
The mission statement reveals that the bank is providing its services in only Pakistan even though it is also operating in other countries including Sri Lanka, Bangladesh, Bahrain, China and United Kingdom. This not only provides incorrect information to the readers but also shows how narrowly focused the company really is.
There is no mention of the technological innovations being used by the company to improve and modify its products in the mission statement even though MCB is the only bank in Pakistan which is currently using a televerification system to avoid the forgery of its travellers cheques.
Concern for survival, growth & profitability: In the mission statement the company emphasises on profitable operations rather than growth which shows that the company’s main focus is on improving profitability.
The major philosophy of the company that can be deduced from the mission statement is the focus on improving profitability by providing high quality financial services to its customers.
The company has failed to mention its competitive advantage in the mission statement which the employees could capitalise on in order to provide better solutions to the needs and problems faced by the customers.
Concern for public image
There is no mention of the environmentally friendly activities that the company is undertaking to enhance its image in the public.
Concern for employees
The mission statement does mention that the company intends to be the best place to work but it does not emphasise the rights and privileges of the employees who will be working for the bank.
“To become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work”
HISTORY OF THE BANKING SECTOR
Prior to partition in 1947, branches of British banks dominated banking in Pakistan. The first domestic banking institutions emerged in the 1940s, immediately preceding or shortly after Pakistan’s independence from Britain. These institutions include Australasia Bank (today: Allied Bank Ltd. or ABL), Habib Bank (HBL), Muslim Commercial Bank (MCB), and the National Bank of Pakistan (NBP). Except for the NBP which was wholly government-owned, prominent merchant families established the other three banks.
The SBP or State Bank of Pakistan (the central bank) was formed after Partition. It assumed the supervisory and monetary policy powers of the State Bank of India.
The Government issued the State Bank Ordinance, explaining the functions of the state bank in the emerging Pakistan.
United Bank Limited (UBL) formed.
1960-65: During the second five-year plan (1960-65), the SBP opened six new offices. The number of other bank branches increased from 430 to 1,591 over the period. Total deposits increased from Rs2,943mn to Rs6,883mn, while total advances increased to
Rs5,759mn from Rs1,458mn. During the period, comprehensive banking laws were formulated.
1965-70: During the third five year plan (1965-70), the total number of bank branches increased to 3,133, with a 91% increase in deposits and a 64% growth in advances.
The emergence of a number of specialised development finance institutions (DFIs) such as Industrial Development Bank of Pakistan (IDBP) and the Agricultural Development Bank (ADB). These DFIs were either controlled directly by the state or through the SBP, and were intended to concentrate on specific priority sector lending.
The government of Zulfiqar Ali Bhutto nationalized all domestic commercial banks. The Pakistan Banking Council (PBC) was established, which assumed the role of a bank holding company but with limited supervisory powers. However, PBC was dissolved in1997, leaving the SBP as the sole regulatory authority for banks and financial institutions in Pakistan (leasing companies and modarabas are now regulated by the Corporate Law Authority). Nationalization of the banking sector led to significant government interference and resulted in directed lending to pet projects. The branch network of the NCBs also proliferated in an effort to provide banking services to all regions/territories of the country, often with disregard to the viability or feasibility of such expansions.
1991: After the opening up of the economy, the Sharif Government introduced the second set of banking sector reforms.
Deregulation of the financial sector and capital markets led to mushrooming growth of banking companies in the private sector. Several big industrial groups set up their own banks, which to date remain relatively small compared to the NCBs and other larger foreign banks.
1991: MCB privatized by Sharif Government.
1991: Allied Bank Limited was privatized. Employees of the bank took it over matching the highest bid received by the Privatization Commission.
1992: Nawaz Sharif introduced a yellow cab scheme that took Rs10bn from the local banking sector.
The SBP canceled the privatization of United Bank, which was bought by a Saudi based group.
The Privatization Commission called for bids for the privatization of HBL.
Financial sector reforms were introduced by the caretaker government of Meraj Khalid.
Nawaz Sharif took steps to implement banking sector reforms.
STRUCTURE OF THE BANKING SECTOR IN PAKISTAN
The financial sector in Pakistan is comprised of Scheduled Commercial Banks, which include nationalized, foreign and private banks; and Non-Banking Financial Institutions (NBFIs) which include Development Finance Institutions (DFIs), Investment Banks, leasing companies, modarabas, and housing finance companies.
Scheduled Banks and NBFIs (excluding modarabas and leasing companies) are both regulated by State Bank of Pakistan’s (SBP) Prudential Regulations although through different wings and are required to meet different regulatory requirements such as capital and liquidity reserve requirements.
Commercial banks engage in activities that mostly cater to short term working capital requirements while NBFIs cater to medium and long-term financing needs. Therefore NBFIs are barred from engaging in commercial banking activities. However in September ’97 the SBP allowed commercial bank to undertake long term project lending. Among the scheduled banks, only Pakistani commercial banks are listed.
BANKING SECTOR REFORMS IN PAKISTAN
Early Banking Sector Reforms
The first Bhutto government introduced a comprehensive set of restructuring measures in 1971. These reforms were aimed at:
- Widening the supervisory powers of the SBP;
- Increasing capital adequacy standards;
- Introducing credit ceilings;
- Establishing an institution that would monitor the credit requirements of both the public and private sectors.
These reforms were ineffective and short lived since even before they were fully implemented, the then Bhutto Government issued the 1974 Nationalisation Act. This act was implemented to widen the dispersion of credit and increase its availability to the agricultural sector.
With the replacement of professional bankers with GoP appointees, the banks quickly lost their growth momentum following nationalisation. Although the GoP was able to extensively expand its branch network of public sector banks during the early 1980s, this expansion was economically unviable leading to declining profits for the banks. Over the same period the banks inexperienced management contributed to an increase in poor credit expansion and non-performing assets. The limited regulatory authority of the SBP during the period led to a lack of disclosure of the banking sectors poor performance.
Following the partial restoration of democracy in Pakistan in 1985, the newly elected government manipulated the banks to serve its own ends in the assemblies. Under this process, loans without adequate security were sanctioned to members to set up economically unviable industries. This led to an increase in the level of non-performing assets for banking companies.
Banking Sector Reforms of the early 1990s
After coming to power, Nawaz introduced a comprehensive set of economic reforms that included the internationalization of capital markets and the opening up of the financial sector to private sector participation. The key areas were capital adequacy standards, provisioning for non-performing assets, the partial independence of the central bank, opening up of foreign currency accounts by Pakistani nationals, better risk management and procedural details for T-bill auctions (OMO details). Along with these reforms, the government also issued licenses for the opening of ten new banks in the private sector. The Sharif government also initiated the privatization process in the country.
These reforms failed to boost the banking sector significantly due to various factors. The factors included unstable macroeconomic conditions, financially poor state of public sector banks and the notorious yellow cab scheme. The reforms were further undermined by the restricted freedom of nationalised commercial banks and the limited power of the SBP that prevented it from successfully implementing its prudential regulations.
The reforms did however change the landscape of the local banking sector. The lack of market orientation of the LCBs provided the NEPB with an opportunity to firmly establish themselves in the market. Following the granting of permission to open foreign currency accounts, the dollarisation of the economy (foreign currency deposits to total domestic liquidity) increased to 14% from 2.6% in1991. This dollarisation and lack of local competition led to heavy investments by foreign banks in Pakistan.
Banking sector reforms of 1996-1997
On 21 January 1997, the caretaker government promulgated 3 Ordinances that were later legislated by the Parliament. These legislations relate to the Bank Nationalisation Act 1974, Banking Companies Ordinance 1962 and State Bank of Pakistan Act 1956 and encompass the following reforms:
- The SBP will now have singular authority to formulate and monitor monetary and credit policies in line with recommendations of the Monetary and Fiscal Policies Co-ordination Board.
- The SBP has also been granted the authority to strictly monitor the limits set by the Board for borrowing by federal and provisional governments.
- The Board of SBP will approve the credit requirements of the private sector.
- The SBP will be the only regulatory body (the Pakistan Banking Council has been abolished).
- The SBP has been empowered to nominate the President and Board of Directors of nationalised banks. All private banks are also required to seek approval from the SBP with regards to nomination of their Chief Executives. All appointments made by the SBP will be valid for three years. The appointee can only be removed on charges of misconduct.
- The federal government has been stripped of its powers to issue instructions to banks. Also, all notifications issued by the federal government with regards to leasing corporations, leasing companies and modaraba companies have been rescinded.
Apart from the above 3 Ordinances, other measures introduced during 1996-97 include the following:
- Banks have been asked by the SBP to improve their capitalisation in order to improve their Tier 1 Capital Adequacy Ratio to the internationally accepted 8%. However, no specific deadline has been given for this purpose.
- An Ordinance has been passed for establishing a Resolution Trust Corporation of Pakistan (RTCP) as a temporary entity to acquire the infected portfolios of NCBs and DFIs. This is similar to the trust funds established in the 1980s to bail out the American Savings and Loans. However, the exact modus operandi of RTCP’s operation has not been finalised as yet.
Implications of the latest banking sector reforms
With this latest set of reforms the SBP now has the authority to restrict government borrowing used to fund the budget deficit. This will result in lower interest rates and a significantly larger share of credit availability for private sector borrowing. By stripping the governments powers from interfering in a banks operations these reforms will substantially reduce political influence/intervention in the banking sector leading to improved credit quality.
Entrusted with the power to nominate the management of banks the SBP has appointed private sector professionals to enforce stricter credit policies and cut overheads with the aim of making NCBs more attractive for privatization.
The government has announced a set of new foreclosure laws to expedite the recovery of defaulted loans without having to engage in a lengthy court process. The SBP has completely revamped the disclosure laws and introduced a highly informative new format for presenting annual accounts of banks.
LARGE COMMERCIAL BANKS (NCBs AND DENATIONALIZED BANKS)
NCBs are still the markets dominant players, controlling 51% of the entire banking sector deposits and 50% of advances as of 31 Dec 1996. There are currently three NCBs remaining National Bank of Pakistan (NBP), United Bank Ltd. (UBL), and Habib Bank Ltd. (HBL), following the privatization of Allied Bank and Muslim Commercial Bank (MCB) in which the GoP still maintains a significant stake.
NCBs have the most extensive branch networks extending into both the rural and urban areas of Pakistan. This provides them with a competitive advantage over the NEPBs and foreign banks. The extensive branch network has allowed NCBs access to a large base of stable and low cost deposits. However, the maintenance of extensive branch networks has led to high operational cost and a large number of loss making branches causing NCBs to remain relatively less profitable than their competitors. The loss making branches are being identified and shut down as the NCBs prepare for privatization.
As victims of political interference NCBs have acquired a large share (roughly 58%) of total loan defaults. Inefficient operations and high loan defaults have resulted in huge losses, decline in shareholder equity and a low return on earning assets. Capital adequacy ratios range between 2-5% for NCBs compared to over 8% for NEPB banks and the 8% needed to meet BIS requirements.
Deposits by banks Advances by banks
NCBs becoming more competitive
The restructuring of NCBs to prepare them for privatization has involved the appointment of private sector banking professionals as heads of these institutions. Positive changes that the new management has implemented involve:
- Lower interest rates and higher customer orientation allowing NCBs to become more competitive.
- The closure of loss making branches with the voluntary retirement of employees.
- Speeding up of the loan recovery process by NCBs with the shortfall being covered through NPL provisioning. HBL has put aside Rs5.6bn for doubtful debts for the year ended 1996 and retiring 1,079 employees. The bank intended to cut its work force by 25% by the end of 1997.
ABL, MCB and Habib Credit and Exchange Bank Ltd. (HCEBL) are the first 3 banks to be denationalized.
- ABL was privatized in 1991 in an employee buy out deal. The government still owns 49% of its shares.
- MCB was privatized in 1992. A 51% stake of MCB was sold to National Group. The government still retains a 24% stake in the bank.
- HCEBL, a subsidiary of HBL, was privatized in 1997. 70% stake of HCEBL was sold to an UAE-based Al Nahyan consortium. The government still owns 20% HCEBL.
Of the 3 banks, only MCB is listed. Both MCB and Allied have shown a strong performance since privatization. From 1995-97 MCBs advances and deposits have increased at a CAGR of 22%. However, these banks have also inherited many problems.
MCB was left with a Rs5bn bad debt portfolio (20% of outstanding advances in1991). In 1996 MCB put aside Rs1.81bn to account for the shortfall in loan loss provisions. Apparently, MCB had also decided to shut down unprofitable branches to cut costs.
Allied Bank’s post privatization phase has been marked by severe management problems, with successive management’s alleged of being involved in corruption.
Foreign Banks comprise 24% of total advances within the banking system, but as a percentage of total profitability are far ahead. On an after tax basis, foreign banks constitute 70% of the total banking sector profit (excluding profits of NCBs which incurred huge losses in 1996). Traditionally, the foreign banks have focused on short-term trade finance, targeting mainly low risk blue chip clients and high net worth individuals. More recently, foreign banks have also expanded into merchant banking, capital market operations, and consumer/retail banking. Foreign banks have been extremely successful in capturing a major market share of consumer banking business, especially that of credit cards. Head office support in terms of international network and technology has enabled the foreign banks to become important players in the corporate and consumer-banking arena.
With the turnaround possibilities of LCBs foreign banks are likely to face increased competition in the near future. With their international branch network and access to low cost funds LCBs will be in a position to compete directly with FBs. Although, pending WTO legislation could ease restrictions on FBs operating in Pakistan.
PRIVATE SECTOR BANKS
Allied Bank Limited (ABL), MCB and Habib Credit and Exchange Bank Ltd. (HCEBL) are the first 3 banks to be denationalised, where as, as a result of the Sharif government laying more emphasis on the creation and strengthening of the private sector, new privately owned banks emerged such as Askari Commercial Bank, Soneri Bank, Prime Bank, Union Bank, Bank Al-Habib, Bolan Bank, Mehran Bank, Platinum commercial Bank, Schon Bank and Metropolitan Bank.
These banks are small in structure and assets and deal largely with a very selective market segment, where these have been successful and account for about 22% of the profitability of the entire sector.
MUSLIM COMMERCIAL BANK
MCB was privatised in 1992. A 51% stake of MCB was sold to National Group. The government still retains a 24% stake in the bank.
HCEBL, a subsidiary of HBL, was privatised in 1997. 70% stake of HCEBL was sold to an UAE-based Al Nahyan consortium. The government still owns 20% HCEBL.
ALLIED BANK LIMITED
Allied Bank Limited came into being due to the nationalization scheme of the GOP. During the course of nationalization, four banks namely Pak Bank, Sarhad Bank, Lahore Commercial Bank and Australasia Bank were merged to form a new bank. Following nationalization, the bank expanded its network to almost 900 branches.
The bank was offered for privatization in 1992. The employees and the management group matched the highest offer which the PC received from the private sector investors and as a result acquired the bank.
Since privatization, the bank has achieved double digit growth in deposits, advances and pre-tax profits. The bank’s total income including interest and non-interest income amounted to Rs. 3,287 million in 1995, its deposits were Rs. 51 billion and investments were Rs. 16 billion in 1995. ABL earned a profit of Rs. 146 million in 1995.
LIFE CYCLE OF MCB
Prior to partition in 1947, branches of British banks dominated banking in Pakistan. The first domestic banking institutions emerged in the 1940s, immediately proceeding and shortly after Pakistan’s independence from Britain. Except for the NBP, which was wholly government-owned, prominent merchant families established the other three banks. The State Bank of Pakistan (the central bank) was formed after Partition in 1948 and it assumed the supervisory and monetary policy powers of the State Bank of India. In 1955 the Government issued the State Bank Ordinance, explaining the functions of the state bank in the emerging Pakistan.
Muslim Commercial Bank Ltd. the third largest commercial bank and the largest private sector bank in Pakistan, was incorporated on 9th July 1947 in Calcutta. Following the partition of the Indian Subcontinent, the head office of the bank was initially transferred to Dhaka, before shifting to Karachi in 1956. The Adamjee Group was the major sponsor of the bank. MCB soon earned a reputation of a solid and conservative financial institution.
During the 1960s, in Ayub era, greater emphasis was laid on massive industrialisation. Medium and long term industries were set up, which obviously required major financing. As a result the existing banking sector got a boost and more banks were involved in industrial financing. In this period MCB got prominence and emerged as a major advancer of the industrial sector.
Major focus was on growth policies at that point in time as the economy was facing a resurgence and growth prospects were bright. Still in its early years, and because of a narrow reserve base, the innovation process did not get the desired attention it deserved, although schemes that were radical at that time were launched to attract more corporate and consumer clients. Recently the trends have been gained prominence and more emphasis has been on these innovative processes.
Group sense developed at that point in time, has formed the core values of the bank which can be seen today in its cultural values and working norms.
Formalization and Control Stage
In 1974 the government of Zulfiqar Ali Bhutto nationalised all domestic commercial banks. The Pakistan Banking Council (PBC) was established, which assumed the role of a bank holding company but with limited supervisory powers. Nationalisation of the banking sector led to significant government interference and resulted in directed lending to pet projects. The branch network of the Nationalised Commercial Banks proliferated in an effort to provide banking services to all regions/territories, without regard to the viability or feasibility of such expansions.
Along with other banks, MCB was nationalised in January 1974 and in June of that year Premium Bank Limited, was merged into MCB. During this period the quality of the Bank’s loan portfolio deteriorated. However, principally on account of its sound systems and credit policies the amount of bad bank loans accumulated by MCB was much lower relative to some of the other public sector banks.
In 1991 after the opening up of the economy, the Sharif Government introduced the second set of banking sector reforms. Deregulation of the financial sector and capital markets led to mushrooming growth of banking companies in the private sector. Several big industrial groups set up their own banks. In 1991 and 1992 respectively, Sharif Government privatised MCB and ABL.
MCB was the first financial institution to be privatised on 2nd April 1991. A group of industrialists, the National Group acquired control by buying a 26% stake for Rs. 800 million. The National Group was comprised of ten major industrial groups including Nishat, Din, Shafi, Husein, Ishaq, Universal, Ibrahim, Be Be Jan, Sapphire, Sitara, Siddique and Chakwal. Almost all the groups had significant exposure to cotton based textiles. During the first five years, the private management concentrated on growth through utilising its extensive network of branches and developed a large and stable deposit base.
In February 1992, the government disinvested an additional 25% of the shareholding of MCB through an offer for sale to the general public, which was heavily oversubscribed (5.5 times) despite carrying a premium of Rs.46.15. In December 1992, the National Group acquired an additional 24% of the shares of MCB at the same initial acquisition price. Since privatisation, MCB has achieved a compounded annual growth of 23% in deposits and advances.
When Hussein Lawai took over the management of MCB, he had to deal with a lot of problems that were the legacy of nationalisation era. After the nationalisation of banks in 1973, political stalwarts wrung money in the form of un-secured or fake-named loans from the nationalised banks. These institutions were also forced to hire people on the criteria other than merit and for reasons other than their need at the bank. Consequently, out of total bad loan portfolio of Rs. 122 Billion for commercial banks, Rs. 85 Billion is lying with the three NCBs, while foreign banks have only Rs. 6 billion as bad debts. Privatised banks namely MCB and ABL also have a bad debt portfolio of Rs. 11 billion, most of which has been carried over from their nationalised days. At the end of FY 1997, MCB had a total non-performing loans worth Rs. 4.3 Billion. A total of Rs. 3.3 Billion of this amount was from the loans which are overdue by three or more years. So, almost three-quarters of the bad loans of MCB are from the loans made during nationalisation era.
Poor recruitment policies have resulted in a low quality human resource base as well as overstaffing at these nationalised banks compared to foreign and new private banks. This results in higher operating costs per rupee of deposit and consequently lower profits for these banks.
Capital adequacy ratios during Mr. Lawai’s time declined initially but then improved later on as can be seen in the ratio analysis section of this report. Part VII, i.e. the ratio analysis section also shows that the profitability also improved during Mr. Lawai’s time.
Most interestingly what part VII shows is that though there is a continuation of trend of improved operating efficiency, there is also increasing number of branches that are being opened. In fact, increase in number of branches is highest at this time during the ten year period under consideration in part VII.
Change of Management – Mian Mansha Takes Over
On 21 January 1997, after the new management headed by Mian Mohammed Mansha took over in late 1996, the caretaker government promulgated 3 Ordinances that were later legislated by the Parliament. This legislation relates to the Bank Nationalisation Act 1974, Banking Companies Ordinance 1962 and State Bank of Pakistan Act 1956. After implementation of these reforms the SBP was given singular authority to formulate and monitor monetary and credit policies in line with recommendations of the Monetary and Fiscal Policies Co-ordination Board. The Board of SBP was given authority to approve the credit requirements of the private sector. The SBP was made the only regulatory body of financial institutions(the Pakistan Banking Council was abolished). The SBP was empowered to nominate the President and Board of Directors of nationalised banks. All private banks were also required to seek approval from the SBP with regards to nomination of their Chief Executives. The federal government was stripped of its powers to issue instructions to banks.
After the above ordinance the banks have been asked by the SBP to improve their capitalisation in order to improve their Tier 1 Capital Adequacy Ratio to the internationally accepted 8%. However, no specific deadline was given for this purpose. The SBP has also almost completely overhauled the disclosure laws in Pakistan. Starting 31 December 1997, all banks were required to provide detailed information about their assets and liabilities such as: sectoral allocation of advances, maturity profile of both assets and liabilities, details of NPLs and the reserves held against them, foreign currency exposure, and asset structure. These new disclosure laws will significantly enhance the transparency of banks’ operations and improve the analysis of banking companies.
Mian Mansha’s management also introduced restructuring in the organisation. Restructuring has been started at a slow but gradual pace. All the branches have been divided into two categories: Consumer and Corporate. The classification of a branch into these categories is done on the basis of the level of import/ export business, deposit level and profits. The classification is done to determine the focus of these branches.
The new President and chairman has hired professionals at the top management level of the organisation to inject new ideas and professional management practices in the organisation. Along with new people, new departments have also been established. Consumer Banking Group has been established for product development and centralised marketing of the bank. Strategic Management and Business Process Reengineering Department has been established to revamp different processes carried out in various departments of the bank. The department has developed strategic management process for the organisation in addition to the mission statement and vision statement for the bank. It has now started pushing these ideas down in the organisation.
MCB in its first year under Mansha’s management has continued to show good financial performance as its ROI and ROE recovered to pre 1996 levels. The ratios of 1996 in particular were not good due to huge provisions for bad debts taken that year. Capital adequacy ratios not only recovered but improved beyond previous levels.(see part VI)
One figure that shows departure from norm is that of number of employees. This fell by 1,119 from 14,729 in 1996 to 13,610 in 1997(see part VI). The number of employees fell for the first time since first year of privatisation( Head count further fell to 12,882 at June 30,1998 signifying a reduction of 13% over December 1996). Number of branches also showed a decline of 11, reversing the post privatisation trend of increasing branch numbers(see part VI). These numbers are in line with policy announced by chairman Mansha of ‘right sizing’ in his review in MCB’s annual report of 1997. According to this policy more branches would be closed and more employees are likely to leave under various voluntary separation schemes.
The organisational structure of MCB can be termed as a ‘Hybrid Structure’, where services of same nature have been grouped together. Two major line function divisions of MCB are 1) Consumer Banking and 2) Credit & Risk Management.
The function of Consumer Banking wing is to develop and offer services to the target market which includes both the corporations and individuals. The departments included in this wing are given below:
Travellers cheques services were started in 1993 under Hussein Lawai’s management. MCB has the market leadership in this area with a share of over 85% in market followed by HBL 8%, NBP 4% and ABL 2.5%. In the initial stages, the department faced the difficulty in quick verification of the cheques, however now they have televerification system, which has links with all the branches, and keeps updated information about the clients.
MCB Master Cards
Credit cards department of MCB has mainly been targeting only the existing account holders of the bank. This is done in order to avoid incurring of bad debts, which are quite high in the industry.
Business Development and Marketing Division
The function of this department is collection of every type of information from all the branches through regional and circle offices and also to classify and consolidate information and its presentation to the management of the organisation, evaluation of performance of the branches according to the objectives, and taking corrective actions against any deviations in the performance. The problem faced by this department is of communication. Due to poor communication system the data processing takes almost one month which considerably delays the process of analysis and implementation of corrective action. As a result of which, several other departments which have to rely on BDMB can not successfully formulate their strategies.
Information Resource Management Division
The function of this department is to provide resources so as to manage the information requirements of various departments.
Consumer Banking Department
This department has basically been assigned the function of product development and marketing of all the products.
Credit & Risk Management
Credit & Risk Management division is divided in to 1) Industrial credit department, 2) Agriculture & Small Loan department and 3) Credit Management Department.
The functions of first two departments are to achieve the objectives given to them by the executive committee of the bank. While the credit management department basically monitors the performance of the first two departments with respect to the value and risk of the credit.
The Bank also has the following Divisions:
Treasury and Accounting Division
Treasury and Accounting Division has 1) Treasury & Fund Management Department, 2) Central Accounting Department and 3) Foreign Trade & Exchange Operations Department.
Treasury & Fund Management Department is responsible for managing short-term surplus or deficit of the funding requirements. It can not play its role effectively at MCB since it cannot get timely information regarding the total liabilities and assets of the bank.
Central Accounting Department is responsible for managing accounting records submitted by different departments and divisions.
FT&EO Department controls all the foreign trade related transactions including opening of L/Cs (Letters of Credit) and guarantees, and management of remittances. The activity in this department has subsided significantly since Pakistan carried out the nuclear explosion.
Human Resource Management
Human Resources Division comprises of 1) Human Resources Department and 2) The Training Department. The function of HR Department is to manage human resources by retaining and recruiting, while training departments engages in training and developmental activities for various departments of the bank.
Additional divisions of MCB are:
- Legal Affairs & International Division
- Corporate Affairs Division
- Audit & Inspection Division
- Fraud & Forgery Prevention Division
Pak Rupee Current Account
MCB’s Pak Rupee Current Account offers the convenience of unlimited withdrawals i.e. access to one’s funds whenever he wants without any notice. There is no limit on the number of transactions one make in a day plus you can avail finance facility upto 75% of the total deposit.
In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides one with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.
Pak Rupee Savings Account
MCB’s Pak Rupee Savings Account offers attractive returns on Pak Rupee investment.
In addition, one has access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.
Pak Rupee Term Deposits
MCB Pak Rupee Term Deposit gives a higher rate of return.
Choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits.
Khushali Bachat Account
A Rupee savings account is one of Muslim Commercial Bank’s most popular products. Due to the low initial deposit, the account can be opened by people from all walks of life and still avail the facility of daily product profit calculation.
The account offers unique and attractive benefits to the Account holders:
- Open a Khushali Bachat Account with a minimum initial deposit of RS. 2,500
- Profits are calculated on daily product basis at the savings rate and payable on a half yearly basis
- One can open your account at any of 1,200 branches nation-wide
Saving Account with Current Account Facilities
- The MCB Saving 365 calculates profits on a daily product basis and gives one the facility of unlimited withdrawals.
- One can open a Saving 365 Account with a minimum initial deposit of RS. 500,000
- Profits are calculated on daily product basis payable on a half yearly basis
- No restrictions on the number of withdrawals
- One can avail a credit facility up to 75% of the total deposit value
MCB Rupee Maximizer Account
A latest PLS Savings Account specially made to help MCB Foreign Currency Account holders to convert their account into Pak Rupees. It gives individuals, businessmen and corporations the chance to earn a high rate of return on their deposits in Pak Rupees.
The account offers unique and attractive benefits to the Account holders:
- Profits calculated on a daily product basis
- No restrictions on number of withdrawals
- No restriction on initial deposit
- Free ATM Card to each customer
- Locker facility free of cost
MCB Rupee Traveller Cheque
Muslim Commercial Bank Limited has been at the forefront of providing it’s customers with new and innovative products and financial instruments that are safe, secure and profitable.
MCB Rupee Travellers Cheques were first introduced in 1993 as a safe way to pay for high valued purchases. The product has become extremely popular and is used by consumers in all walks of life – for business dealings, high value transactions or purchases, MCB Rupee Travellers Cheques are Ideal for Every Deal.
- As Good as Cash – Can be used safely and conveniently to make all kinds of payments
- Easily Purchased – One can buy them at over 500 designated MCB branches across Pakistan
- Easily Encashed – Promptly and easily encashed at any designated MCB branch
- Easily Refunded – In case of loss or theft the amount is fully refundable
- Exclusive Security Features – Printing with special security features
- Valid Until Used – No expiry date
- Denominations – Available in RS. 1,000, RS. 10,000 and RS. 50,000 denominations
- 24 hour service available at MCB booths at Karachi, Lahore and Islamabad airports
- Only MCB Rupee Travelers Cheques provide the special feature of Televerification whereby one can call number and find out about any lost or stolen Travelers Cheques. This service is available 24 hours in Urdu and English.
Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and checks. Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space.
Plastic or “virtual” money, credit, debit, and electronic cash products, inevitably will displace cash and checks as the money of the future.
- Master Card International has expanded globally in more locations in the world than any other card.
- The card was introduced by Muslim Commercial Bank Limited in 1995 and now offers card members over 12 million outlets in 232 countries.
- Photo security – The first bank in Pakistan to introduce the enhanced feature of your photograph on the card limiting fraud in case of card loss
- Welcomed at over 3,000 outlets in Pakistan
- Provides upto 45 days Free Credit
- Free Travel Insurance of RS. 3.5 million
- 24 Hour Customer Services – One can call 111-800-800 and get information from customer services representatives on new card application or have queries resolved anytime of the day
- Cash Advance Facilities available in Pakistan and world-wide
- World Travel Facilities – Utilize travel desk facilities for air or hotel reservations, visa arrangements
MCB Capital Growth Certificates
It provide one an excellent opportunity to double savings. Investing in a Capital Growth Certificate can double deposit amount in five years.
- Minimum deposit of RS. 10,000
- Deposit to remain fixed for five years
- One can avail a credit facility up to 75% of the total deposit value
The Largest ATM Network In Pakistan
The largest ATM network supported by the largest private bank in Pakistan offers over 70 ATMs in five major cities. ATMs are located at safe locations in high traffic areas at the branch premises, and two off-site ATMs are located at the Karachi and Lahore airports.
Muslim Commercial Bank is committed to provide its customer transaction ease, flexibility and convenient banking.
With the MCB ATM 24-Hour Cash Card a Muslim Commercial Bank customer can:
- Access over 70 machines in five major cities in Pakistan
- Request for their account statement
- Order a new cheque book
- Select between two languages, Urdu and English, for the on screen transactions
- Withdraw cash immediately instead of waiting in long queues and delays at the branch
After the financial sector reforms imposed by the IMF, the monetary policy has been totally handed over to State Bank of Pakistan (SBP). SBP has tried to follow a tight monetary policy but excessive government borrowing in the past has thwarted SBP efforts to reduce or at least control inflation. But according to latest SBP figures CPI has increased by 6.9% during the period of July-August, 98 while during same period last year CPI moved up by 11.2%.
In the wake of the uncertain and ambiguous economic environment of the country, MCB has adapted the policy of reactive change, where only perceived problems, threats, and opportunities warrant a response from the management. A perceived problem in the existing scenario is that of the severe liquidity crunch the financial markets are facing these days. Even at MCB, about Rs.12 bln are lying idle and being advanced out as low as at 0.25%. To deal with this problem, the management has decided to mobilise the currency so that this idle money could be used to bring in more funds.
One step taken is that some of this money has been allocated to the opening of around 60 new branches in the rural sector as it has been identified as a major revenue generating sector. Also, since already MCB boasts of being the pioneer in computerizing its rural branches, these new branches would also require a computerized network. Also, all the furniture and the fresh hirings would have their own costs associated as well. So, most of the liquid money is going into this plan.
A current major threat is posed by the post-blast scenario along with the unsafe and uncertain environment of Karachi, Pakistan’s largest city and its financial headquarter. Due to this most of the potential investors are driven off. Already Pakistan has a rating of ‘-C’ in investor preference. This has meant a reduced economic activity phase in the country. For this threat SCB is striving to achieve cost leadership by reducing expenses at various lesser productive branches. Also major irregularities were detected in the medical expenses figures, which were curtailed from Rs.5 mln to Rs.2 mln. All these steps would and are enabling SCB to stay competitive in this ferociously competitive scenario. Lack of foreign investment has given SCB the opportunity to look more closely into the prospects of import and export activities. Already, MCB exports pharmaceutical, surgical and textile goods. Currently SCB is looking into the prospects of expanding further in the surgical and textile sectors while also stepping into the sports goods field. In this regard talks are being held with the related EPB personnel. Results on these would be seen within the next two years with increased mark-up figures.
Other potential threats include the emergence of more private sector and foreign banks as competitors. Already Citibank Visa and ANZ Grindlays Master Card are major competitors of the MCB Diner’s Club and MCB Master Card. For this purpose, SCB is adapting the policy of internal scrutiny first and then bringing in more clients.
Also, the threat of the worsened law and order situation in the city poses a threat to the bank’s own operations at various strategic localities in the city.
Economic Scenario After The Nuclear Option
The nuclear blast radically changed the economic scenario of the country. One of the most affected sector has been the banking sector and following issues have emerged since the blasts.
Slower Credit Expansion
Private sector credit growth has been showing signs of decline. In the first quarter 1998, private sector credit declined by Rs.33 billion. This has been mainly caused by SBP directives that bars corporations from collateralizing their frozen foreign currency accounts for seeking credit, as well as by economic slow down. 
Lower Trade Finance Activity
After the nuclear explosion by Pakistan, the government has introduced various exchange controls and mechanisms, which have affected the pace of trade activity in Pakistan. It is estimated that the cost of imports of gone up by 15-20% due to the introduction of Multiple exchange rate regime. Consequently, imports have declined by 21.4% during July-September 1998. At the same time exports have also shown a decline of 9.3%. So this has affected another major source of earnings for the banking industry.
At the time of atomic explosion on May 28, 1998 there were USD 11.8 billion worth of private sector deposits in the financial sector. After the government announced the freeze on FC accounts approximately USD 3.2 billion deposits have been converted into rupee accounts. The conversion at the rate of Rs. 46/ dollar has created Rs. 147.2 Billion worth of new rupee deposits. However, the actual increase in rupee deposits is minimal. This has resulted in contraction in the deposit size of the financial sector.
Due to economic slow down the rates of inflation is going down. Consumer price index has shown an increase of 6.8% during July- August 1998 on year-on-year basis. This rate was 11.2% last year. The decline in the rate of inflation has been a minimal decline of 0.84% in nominal interest rates causing real interest rates to go up. The rise in real interest rates can cause undermining of the value of the collateral for the loans. It also increases the probability of default by the creditors.
Non Performing Loans
It is estimated that a total of Rs. 216 billion of deposits of the financial sector are bad debts out of which the Nationalised Commercial Banks (NCBs) have Rs. 85.2 Billion. worth of bad debts. This is almost 20% of the total deposits of the banking sector. The high proportion of bad debts in the loan portfolio of the banking industry depicts poor quality of assets and can adversely affect the future earnings of the industry.
After the financial sector reforms imposed by the IMF, the monetary policy has been totally handed over to State Bank of Pakistan (SBP). SBP has tried to follow a tight monetary policy but excessive government borrowing in the past has thwarted SBP efforts to reduce or at least control inflation. But according to latest SBP figures CPI has increased by 6.9% during the period of July-August ‘98 while during same period last year CPI moved up by 11.2%. Also SBP lowered the Statutory Liquidity Requirement (SLR) from 18% to 15% after the nuclear blasts to accommodate the conversion and liquidation of frozen foreign exchange accounts, but now its back to 18%.
Freezing of Foreign Currency Accounts
SBP declared the Statutory Liquidity Requirement (SLR) from 18 to 15% after the nuclear blasts to accommodate the conversion and liquidation of frozen foreign exchange accounts, but now its reduced it back to 18%.
Also, after the nuclear explosion the SBP ran into a frenzy by issuing different regulations almost every day. This created a serious problem in the day to day operations of the bank and the overall efficiency suffered. This situation is being dealt as an opportunity problem. To convert it into a favourable situation MCB is launching schemes such as MCB Rupee Maximizer, MCB Instant Finance, and MCB Savings Instant. This is to encourage the masses to save their unutilized funds where they can be mobilized to drive the economy out of its financial crunch.
Social And Cultural Environment
Pakistan has one of the lowest literacy rates in the world. Only 37% of the total population can read or write their own names. The high level of illiteracy has hampered proper documentation of all economic activities. Loose monitoring of laws has enabled a lot of people to not report their economic activities properly. Consequently, a huge portion of economic is undocumented. Along with this, Pakistan has failed to develop a culture of savings. The official savings rate has been hovering between 13 to 15 percent.
Potential Problems and opportunities
Low saving rates coupled with high level of informal economy makes our economy an unbanked economy compared to other countries. This can be tipped as a great opportunity problem for banks to capitalise upon. Banking industry can increase its efforts to create awareness among people about the usefulness and the advantages of the banking services and so, can increase their customer base along with finding ways to grow sustainably. The government also has to expedite its efforts to increase the level of documentation in the economy.
In the current situation when, the deposit growth efforts of the industry has seriously been hampered by the changes in the political environment, the banks can change their focus to increasing the number of services and creating awareness about them. The emphasis must be on strengthening customer loyalty, and as especially in our culture where people prefer long term relationships this step can greatly increase one’s customer base.
At the SCB, this has been identified as a major opportunity and our strength already lies in our strong customer relations. For this purpose, newer schemes with emphasis on customer satisfaction must be launched as in our society usually more customers come in by ‘word of mouth’. So a satisfied customer largely means more customers. For example, banks can make increased efforts to create awareness about credit cards and Rupee Travellers Cheques, which have a great potential to grow.
Weaknesses and Corrective Measures
On the social aspect, we see that representativeness is prevalent in the bank. It is some what biased towards women as none hold a high level post. On this front SCB is looking closely into the matter and is adopting a changed policy from the past. Women and other minority groups are coming up the ladder of the heiarchy.
Another weakness prevalent in the bank’s operations is largely a legacy inherited from the pre-privatization era, i.e. over-staffing. Even at present, we can clearly identify this as a major reason for the increased inefficiencies of most of the sick units being run by the government. In this regard, SCB is adapting the policy of retrenchment and reengineering. In the process, the ‘golden handshake scheme’ was offered to all of its employees at all managerial levels with some modifications. The results were very successful as we were able to lay off a large proportion of our unneeded staff.
One major advantage that the SCB has is that its structure is well defined and has been followed for such a long time that it has developed into a well integrated unit. SCB has adapted a hybrid structure with the top management categorized under the functional structure while the middle and lower management come under the divisional structure.
This has created an environment in which vertical co-ordination has been encouraged between the various heiarchial levels. In this regard middle and lower managers are encouraged to participate in and make decisions at their own levels. They are also given greater confidence by sharing the viewpoint of the senior management with them.
Another aspect of our organizational structure is that it is a flat structure. This promotes faster decision making and reduced work load for the top management and has encouraged specialization in the respective fields of operations.
Another prevalent trend in the SCB has been its emphasis on the promulgation of a mixture of the bureaucratic and clan control which has enabled the employees to interact more amongst each other, giving rise to greater employee relations.
Pakistan has always had a political structure where personalities have determined the state of institutions. Consequently, the system of checks and balances have never been imposed properly. Any personality in power has manipulated the working of institutions in Pakistan. The same has happened to the financial institutions. After the nationalisation of banks in 1973, political stalwarts wrung money in the form of un-secured or fake-named loans from the nationalised banks. These institutions were forced to hire people on the criteria other than merit. Consequently, out of total bad loan portfolio of Rs. 122 Bln for commercial banks, Rs. 85 Bln is lying with the three NCBs while privatised banks namely MCB and ABL have a bad debt portfolio of Rs. 11 bln. While foreign banks have only Rs. 6 bln as bad debts. Poor recruitment policies have resulted in a low quality human resource base for these nationalised banks compared to foreign and private banks. This results in higher operating costs and consequently lower profits for these banks.
Political un-stability has also been a major problem for the banking industry. Changing governments follow different policies, which make the industry to change their strategies. This hampers the process of long range planning and all plans have to be made on a short-term basis.
In Pakistan, it is commonly held belief that, the latest the technology the better it is. Well, this does not hold true in the banking sector at least. In Pakistan, because of the cultural and social factors as well as lack of infrastructure, the latest technology is not the best solution always.
The above fact is especially apparent in the lack of popularity of Automated Teller Machines (ATM) in Pakistani market. The main reason being cited for this lack of popularity is that the clients of the banks are uncomfortable with dealing in money with machines. Most bank clients in Pakistan prefer to deal with human tellers because an ATM works under the Cybernetic Control System principle, as it keeps a record of all checks and balances by itself without any intervention.
Despite the client attitude, the banks are going ahead with the introduction of latest technology products. They are trying to offset client attitudes through raising awareness about the products and the benefits that they bring to the clients. And banks are having some successes too, especially with the corporate clients where most of decision-making is based on rational cost and benefit analysis. An example of this being Cash Management Group of Citibank whose success has caused other foreign banks to come up with their own Cash Management departments.
Also, by adapting the strategic alliance policy undergoing the technological transfer process, in 1995 MCB successfully installed the SWIFT Network, thus becoming the first Pakistani bank to be on the international network SWIFT is the “Brussels-based Society for Worldwide Interbank Financial Telecommunications Network. Thus MCB is part of the international organization of 2795 banks that own this network. This alliance was created to standardize, develop, and control a network for electronically transferring funds across borders.” Technological transfer is the transmission of technology from those who posses it to those who do not. MCB management followed the rational decision making process in incorporating the SWIFT Network.
625 of the total 1320 branches of MCB are computerized, whereas plans are afoot to computerize any new branch that is opened, especially in the rural sector. Also MCB has 50% of its branches on-line. 34 of its branches in the major cities, i.e. Karachi, Lahore, Faisalabad, Rawalpindi and Islamabad, are connected to the SWIFT Network. 50 ATM’s are also installed in these five major cities.
A major threat that all the computers in the world are facing at the moment is that of the ‘Year 2K Bug’. This threat has been identified at the bank as well, and measures are afoot to tackle the issue before its too late. In this regard, SCB is bringing in the latest software, in steps, to completely reprogram its hardware.
Regulatory Framework and Disclosure Laws
In 1991, following the opening up of Pakistan’s economy, the World Bank approved a Financial Sector Adjustment Loan (FSAL) to help fund the structural changes in the Pakistani finical sector. However, this loan carried some covenants. These forced the State Bank of Pakistan to introduce Prudential Regulations for the banks.
Important Prudential Regulations
Limits of a bank’s exposure to a single person
The total outstanding financing facilities by a banking company to any single person shall not at any point of time exceed 30% of the bank’s unimpaired capital and reserves, subject to the condition that the maximum outstanding against fund based financing facilities do not exceed 20% of the unimpaired capital and reserves. In the case of branches of foreign banks operating in Pakistan, the maximum exposure limit of 30% shall be calculated on the basis of their assigned capital.
Contingent liabilities of a bank shall not exceed at any point of time 10x its paid up capital and general reserves free of losses. In case of branches of foreign banks operating in Pakistan, capital will mean capital maintained under section 13 (3) of the Banking Companies Ordinance 1962. Contingent liabilities that arise on account of guarantees against guarantees liabilities. For the purpose of clarification, a guarantee which does not appear in the book maintained in Pakistan by a foreign bank and if invoked does not require the said bank in Pakistan to honor the same, shall not be counted towards determining exposure for the purpose of the Prudential Regulations.
Financing Shares of Companies
No bank shall provide unsecured credit for the subscription of the shares floated by a public limited company. No bank shall provide any fund or non-fund based facility against the security of shares of a non-listed company. Financing against the shares of a public limited listed company shall carry a margin ranging from 20-50% for different cases.
Provisioning for loss and other assets
The provisions are to be made at the specific percentage on the ‘net difference’ (i.e., the difference between the outstanding balance of principal and amount of liquid assets realizable without recourse to a Court of Law). The unrealized mark up and interest on classified facilities is to be kept in a Suspense Account and not to be credited to an Income Account. The bank shall provide the following provisioning in respect of its risky assets:
Apart from the Prudential Regulations, banks are also required to maintain the following reserve requirements:
|Cash Reserve||5% of FC Demand and Time Liabilities and 3.5% of LC Demand and Time Liabilities must be kept as cash reserves with the SBP|
|Statutory Liquidity Reserve||15% of Demand and Time Liabilities must be invested in government securities and/or NIT units|
The SBP has almost completely overhauled the disclosure laws in Pakistan. Starting 31 December 1997, all banks would be required to provide detailed information about their assets and liabilities such as: sectoral allocation of advances, maturity profile of both assets and liabilities, details of NPLs and the reserves held against them, foreign currency exposure, and asset structure. These new disclosure laws will significantly enhance the transparency of banks’ operations and improve the analysis of banking companies.
Impact on MCB and its Policies
All the regulations imposed by the SBP have been adopted by SCB and its management team has already started drafting policies regarding its course of action based on these policies. One positive step taken by the SCB is to introduce strategic controls in which a panel of experts from the field & treasury division has been delegated to constantly stay in touch with the stock exchange and its proceedings on a daily basis. Their purpose is not only to monitor its own performance but also that of all its competitors and the whole of the market. Another panel of experts has been delegated the role to stay in touch with the different government agencies continuously and also with the government itself, so as to press home their point of view in all matters relating to the major decision making processes.
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (page 1-2)
 Banking Sector Report, June 1998 by ABN AMRO N.V. (pages 2-3) & ING BARINGS, Pakistan Research, June 1997 (pages 37-38)
 Banking Sector Report, June 1998 by ABN AMRO N.V. (page 1)
 Banking Sector Report, June 1998 by ABN AMRO N.V. (pages 4, 5 & 6) & ING BARINGS, Pakistan Research, June 1997 (pages 39, 40, 41)
 Banking Sector Report, June 1998 by ABN AMRO N.V. (pages 9 -10)
& ING BARINGS, Pakistan Research, June 1997 (pages 2 & 35)
 Banking Sector Report, June 1998 by ABN AMRO N.V. (page 11)
& ING BARINGS, Pakistan Research, June 1997 (pages 2 & 35)
 ING BARINGS, Pakistan Research, June 1997 (pages 2 & 35)
 ABL, Annual Statement 1995.
 Managerial Policy Report (pages 3-10) & MCB Annual Statements, Chairman’s Report (1991-97)
 ING BARINGS, Pakistan Research, June 1997 (page 42)
 ING BARINGS, Pakistan Research, June 1997 (page 90)
 Business Recorder, August 17, 1998.
 MCB Annual Statement, 1997.
 Ratio Analysis, ‘Part VII’
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (pages 13-17) & Interviews Conducted At Respective Departments
 CONSUMER PERCEPTION SURVEY, ‘Marketing of Financial Services’ report, presented to Mr. Farrukh Hassan (Marketing Research Course), (pages 6-7) also
MCB Annual Statement 1991 & MCB Product Brochures
 CONSUMER PERCEPTION SURVEY, ‘Marketing of Financial Services’ report, presented to Mr. Farrukh Hassan (Marketing Research Course), (pages 8-10), also
MCB Annual Statement 1991 & MCB Product Brochures
P Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (pages 3-6)
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (pages 11-13)
 DAWN, October 14, 1998.
 DAWN, September 17, 1998.
 DAWN, October 2, 1998.
 DAWN, October 2, 1998.
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (page 5-6)
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (page 6-7) & MCB Annual Reports 1995, 97 ‘Chairman’s Review’
 Managerial Policy Report, MBA-IV report, submitted to Dr. Mahnaz Fatima (page 7-8)
 Managing Information Systems & Technology, Chapter 19, Management, Bartol & Martin
 Banking Sector Report, June 1998 by ABN AMRO N.V. (pages 7-8)
& ING BARINGS, Pakistan Research, June 1997 (page 45)
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