MCB Bank Limited, one of the largest commercial banks in the country, has received approval of the State Bank of Pakistan (SBP) to commence operations of its wholly-owned Exchange Company (EC).
In a notice to the Pakistan Stock Exchange (PSX) on Wednesday, MCB stated: “The State Bank of Pakistan has issued the License for Commencement of Operations to M/s MCB Exchange Company (Private) Limited.”
Days ago, the central bank gave its green signal to Bank AL Habib Limited (BAHL) and Allied Bank Limited (ABL) to commence operations of their wholly-owned ECs.
Last year in August, the SBP, in its bid to strengthen controls amid the massive fall in rupee’s value in the open market, decided to introduce ‘structural reforms’ in the EC sector.
“As part of these reforms, leading banks actively engaged in foreign exchange business will establish wholly-owned Exchange Companies (EC) to cater to the legitimate foreign exchange needs of general public,” said the SBP in a statement back then.
In addition, the SBP also raised the minimum capital requirement for EC from Rs200 million to Rs500 million, raising the barrier to entry for the private sector.
Following the SBP directives, the Board of Directors (BoD) of MCB in September last year announced that it will establish an EC as a wholly-owned subsidiary.
“The BoD of the bank vide its resolution, dated September 15, 2023 has granted its approval to establish an Exchange Company, with Rs1 billion as initial paid-up capital, as a wholly-owned subsidiary of the bank,” MCB said in a statement to the bourse back then.
In the following month, the central bank issued the no-objection certificate (NOC) to MCB Bank Limited for establishing an exchange company in the name of MCB Exchange Company (Private) Limited.
As per MCB’s latest financial results, the bank achieved significant growth in core earnings to post a historic Profit Before Tax (PBT) of Rs125.2 billion; registering an increase of 75% over last year.
The Profit After Tax (PAT) was recorded at Rs59.6 billion (+82%) and translated into an Earning Per Share (EPS) of Rs50.32 compared to an EPS of Rs27.63 reported in the last year.
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