MCB Bank Limited recorded a decline of 22% in profits for the first quarter of 2018. The decline has been primarily attributed to a one-off charge of pension-related expenses amounting to Rs. 2.03 billion. The raise in pensions was done in compliance with the Honorable Supreme Court’s order that called for raising the minimum pension to Rs. 8,000/= per month.
MCB Bank Limited ‘s earnings in Q12018 amounted to:
- Rs. 4.78 billion Profit After Tax
- Rs. 7.31 billion Profit Before Tax
Net markup income of the Bank was reported at Rs. 11.00 billion, with a significant increase of 12.97% over the corresponding period last year. On the gross markup income side, the Bank reported an increase of Rs. 940 million (+5.44%) whereas on the interest expense side, the Bank registered a decrease of Rs. 323 million (-4.28%) in comparison with the same period last year. To supplement its net interest margins, the Bank remained focused on increasing its low cost deposit base and ventured in higher yielding assets.
On the non-markup income front, the Bank reported a base of Rs. 4.3 billion with a decrease of 17.09% over the corresponding period last year. Major contributions to non-markup income were operational in nature with fees & commissions increasing by Rs. 426 million (+19.39%) and income from dealing in foreign currencies increasing by Rs. 138 million (+48.65%). Capital gains for the first quarter were reported at Rs. 780 million as compared to Rs. 2,243 million reported for the corresponding period last year.
The administrative expense base recorded an increase of 16.78% over the corresponding period last year on account of a merger. On the provision against advances front, the Bank continued with its recovery trajectory and posted a reversal of Rs. 314 million, with Rs. 416 million reversals in provision against investments.
Earnings per share (EPS) for the quarter came to Rs. 4.03 as compared to Rs. 5.52 during the same period last year. Return on Assets and Return on Equity were reported at 1.46% and 13.99% respectively, whereas book value per share stood at Rs. 115.35.
MCB Bank To Add 90 Branches for MCB Islamic Bank
MCB Bank has received approval from Lahore High Court to transfer ninety (90) branches including assets, rights, liabilities, operations, systems, staff, assets of backoffice functions and obligations to its subsidiary MCB Islamic Bank.
With the transfer of branches, MCB Islamic Bank’s penetration rate will enhance and its branches will be available at 166 different locations in different cities in the coming weeks.
MCB Islamic Bank is operating with 76 branches at present, with 77 on-site ATMs network using Oracle Flexcube as its Core Banking Software.
The banking business of these branches will also stand converted into Islamic banking business after the approval of the high court.
MCB Bank is working aggressively to enhance its business of Islamic Banking keeping in view the increasing acceptability among the public and handsome profit rate of the Islamic banking system.
Last year, MCB Bank injected equity of Rs 1.2 billion in MCB Islamic Bank Limited through subscription of rights shares offered at face value.
MCB Islamic Bank introduced various products and services in the recent months.
These include Islamic Micro Finance on Murabaha basis, Consumer Car Finance and House Finance on Diminishing Musharakah, Consumer Car Finance on Ijarah basis, Musharakah Running Finance, Musharakah Export Finance, Murabaha Financing, Diminishing Musharakah of corporate and commercial business.
Its Shariah Compliance Department (SCD) carried out reviews of each types of transactions, products, process flows/modus operandi and concepts at all 66 branches.
Further, SCD has taken initiative to establish an effective and comprehensive Islamic Banking training mechanism for all business centers, Branch Managers/ Branch Operation Managers. Internal trainers were also part of Shari’ah related training initiatives during the year.