MCB Bank has posted a negative profit growth of 3.6 percent in the first quarter of 2017.
The bank is facing the heat of low discount rates regime and the prevailing higher tax rates.
According to its declared financial results (consolidated), MCB Bank’s profit decreased to Rs 5.89 billion this year against Rs 6.11 billion quarterly profit recorded last year.
Last year in 2016, MCB Bank profit declined by 11 percent for full year to reach Rs 22.174 billion as compared to Rs25.034 billion earned in 2016.
The net interest income (NII) of the bank decreased significantly to Rs 10.85 billion due to low interest rates which have been stable at 5.75 percent for nearly a year. The bank earned Rs 6.85 billion from non-interest sources mainly on gain on sale of securities, fee commission and brokerage income.
Analysts were of the view that the declared profit was in line with expectations as growth in profit is a challenge in the prevailing scenario of low interest rates and higher taxation. Further, the bank observed its huge expenses and growth its income from non-interest avenues.
The bank total revenue earning stands at Rs 16 billion. Its earning per share stand at 5.30.
The bank also announced cash dividends of Rs 4/share.
MCB Bank has been in the process of amalgamation of NIB Bank. The merger will give an edge to the bank over its competitors including HBL, UBL and NBP. This will enhance bank’s penetration in different untapped areas.
MCB Bank is also operating a separate subsidiary of MCB Islamic Bank, which is continuously expanding its operations in big cities.