Karachi: MCB Bank, Pakistan's largest lender by market value, plans to expand overseas and add branches and employees at home even as economic growth slows after the worst floods in the nation's history.

The lender will add 70 outlets in its home market and increase staff as it expands trade financing, remittances management and mobile-banking operations, Chief Executive Officer Mohammad Usman Ali Usmani said.

MCB may open branches in China, the Middle East, Europe, Singapore and Indonesia if it gets regulatory approvals, he said.

The investments may bolster MCB's lead over rivals struggling to fend off profit declines as credit growth stalls in an economy forecast to expand 2.5 per cent in the year ending June 30, missing the government's initial target of 4.5 per cent.

Usmani, who took the helm at MCB in June, forecasts his bank's profit will climb as much as 8 per cent in 2011 while the nation's lenders on average post a drop of as much as 7 per cent.

MCB is considering buying Abu Dhabi Group's 21 per cent stake in Pakistan's United Bank, the nation's third-biggest lender, because of its potential dividend returns, Usmani said.

Abu Dhabi Group on December 15 said it contacted buyers to gauge their interest in buying its stake.

Aggressive strategies

"MCB has been known for its aggressive investment strategy and capital strength," said Mustufa Bilwani, a research analyst at JS Global Capital in Karachi who rates MCB as a "hold."

"It's always good to invest during a downturn."

Shares of MCB rose 0.1 per cent to Rs223.20 on the Karachi Stock Exchange yesterday.

The stock has advanced 12 per cent this year, compared with a 26 per cent gain in Pakistan's benchmark Karachi Stock Exchange 100 Index.

Only half of MCB's Rs500 billion (Dh21 billion) in capital has been deployed, and deposits are climbing at about 15 per cent a year amid a slump in demand for loans, leaving the bank with surplus cash, Usmani said.

The lender will aim to reduce its cost of funds from about 4 per cent, he said.

Pakistan's central bank last month raised its benchmark rate for the third time since July to stem the most inflation in Asia. Credit growth in the nation slowed to 2.2 per cent this year as of December 10, compared with 18.3 per cent for the same period of 2008, according to central bank data.

National Bank of Pakistan, the country's biggest lender by assets, and local rivals may post a 10 per cent profit drop next year as higher interest rates curb loan demand and the economy falters, Chairman Syed Ali Raza said in an interview last week.