Nov. 30 (Bloomberg) -- Habib Metropolitan Bank Ltd., a Pakistani lender, plans to open over 65 outlets by 2014, aiming to tap deposits in small trading towns in the central province of Punjab.
“You have to follow the money flow,” Sirajuddin Aziz, chief executive officer, said in an interview in Karachi yesterday. “Commodities dealers in Karachi are trading with cities up country and we don’t want to miss that leg of the transaction.”
Mid-sized Pakistani banks are seeking lower cost deposits outside the major cities as falling interest rates reduce income from loans, squeezing profits. These smaller lenders generated 70 percent of fresh deposits in the six months ended Dec. 31, outpacing their bigger rivals, according to a central bank report this month.
The bank plans to expand its network to at least 250 branches in 50 cities by 2014 from 183 outlets in 32 locations, said Aziz, 56, who took over as CEO in December.
Continual growth in the bank’s deposits has kept revenue rising consistently, said Nauman Waqar, an analyst at Optimus Capital Management Pvt. Ltd. in Karachi.
Pakistan’s central bank lowered borrowing costs for a second meeting in October, to 10 percent from 10.5 percent, following a moderation in inflation.
Habib Metropolitan may see flat growth in 2013, an election year in Pakistan, Aziz said. “Maintaining the current stream of income will be a challenge for banks since we’ll see populist policies until the election.”
Net income rose 29 percent to 2.81 billion rupees ($29 million) in the nine months ended Sept. 30, according to the company’s profit statement.
The bank’s shares have gained 10.2 percent this year, compared with a 49 percent increase in the benchmark KSE 100 index. The shares rose 2.5 percent to 18.61 rupees at the close of trade in Karachi, the highest in three months with volume more than twice the three-month daily average.
Habib Metropolitan plans to increase its loans by about 12 percent to 135 billion rupees by 2013, after remaining static for three years at 120 billion rupees, he said. This will be done by increasing lending to small and medium enterprises involved in foreign trade, Aziz said. Lending for overseas shipments accounts for 80 percent of the bank’s loans, he said.
Habib Metropolitan Bank acquired Swiss-based Habib Bank AG Zurich’s 18 Pakistani branches in 2006. AG Zurich owns 51 percent of Habib Metropolitan.
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