The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Entity Ratings of MCB Islamic Bank Limited | Outlook is Positive

Rating Type Entity
(29-Jun-18 )
(16-Oct-17 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Positive Stable
Rating Watch - -

MIB is a wholly owned subsidiary of MCB Bank Limited (MCB). MCB has long term rating of "AAA" reflecting its robust profile duly supplemented by its strong market position in local banking landscape, established brand equity, and sound financial profile. MIBs standalone risk profile is improving. The management’s strategy is to focus primarily on high-rated, blue chip corporate clients. Meanwhile, undertaking new business lines including Micro, SME and Consumer financing are also on the horizon. MIB has set relatively high targets for deposit growth and plans to focus on maintaining its financing book quality. The thrust of the business plan is to achieve breakeven. The bank is in the process of advancing its operational infrastructure including branch network. Technological implementation and setting governance structure were mile stones achieved by bank in the last year. The ratings incorporate inherent constraints faced by MIB, mainly limited branch network, small deposit base and high cost structure particularly in early years.
The positive outlook captures the continued improvement in the MIB's relative positioning in the growing Islamic banking industry.

About the Entity
MIB was formed as a banking company in May, 2014. MIB is a wholly owned subsidiary of MCB one of Nishat Group's major concern having strong presence in the financial sector. It started its commercial operations in November, 2015. Initially, it had six branches, however, currently working at 166 branches after the migration of 90 MCB branches into/ within MIB. MCB Islamic bank’s deposits are 0.2% of total Islamic banking industry.

The overall control of the bank vests with eight members of the Board of Directors (BoD) including CEO. The Board currently comprises seven members (one position is vacant). Mr. Ali Muhammad Mahoon – Ex Group Head MCBIBG is the President of MIB. He is supported by an experienced team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.