MCB Bank has recorded a profit of Rs. 21.36 billion in 2018, which is the highest profit so far among the private banks of Pakistan, and most likely the second highest in the overall banking industry.
Among the competitive banks of similar standing, UBL recorded a profit of Rs. 15.2 billion in 2018. It is followed by Allied Bank of Pakistan with Rs. 13 billion and Habib Bank Limited with a profit of Rs. 12.44 billion.
National Bank of Pakistan (NBP) is the only bank, which did not announce its profits yet however, its profitability of three quarters stood at Rs. 16.18 billion showing the bank could achieve the highest profitability mark in the industry if it posts a profit of Rs. 6 billion in the fourth quarter of 2018.
According to the past two years’ record, NBP being a public sector bank posted a profit between Rs. 8 and 9 billion in the last quarter to conclude a profitable year with handsome double-digit growth.
Nonetheless, MCB Bank took the lead as the most profitable private bank operating in Pakistan.
MCB Bank’s profit saw a drop of 4.8 percent, or Rs. 1 billion, in 2018 compared with the previous year with a profit of Rs. 22.4 billion.
MCB Bank Takes Lead With Highest Dividends Income
While complying with the regulatory capital requirements, the bank claimed to have paid the highest cash dividend per share in the industry with regular interim dividends and remains one of the prime stocks traded in the Pakistani equity markets.
It declared a final cash dividend of Rs. 4.0 per share for the year ended December 31, 2018, which is in addition to Rs. 12.0 per share interim dividends already paid to shareholders.
Earnings per share (EPS) for the year ended December 31, 2018 was Rs. 18.02 as compared to Rs. 19.56 for 2017.
During the calendar year 2018, the changing macro-economic factors made the operating environment more challenging with discount rate registering a steep increase of 425 bps in absolute terms.
The bank increased its average deposits by Rs. 123 billion when compared with last year. Average borrowings volume registered a significant decline of Rs. 84 billion over last year.
The bank’s gross markup income decreased by Rs. 2.2 billion due to a decrease in average volume to Rs. 66 billion whereas the non-markup income block of the bank was reported at Rs 17.2 billion with major contributions coming in from fee, commission income and income from dealing in foreign currencies.
On the administrative expenses side, excluding pension fund, despite the surge in inflationary pressures coupled with significant devaluation and increase in operational outreach, the bank was able to contain the growth percentage to 10%.
On the financial position side, the total asset base of the bank on an unconsolidated basis was reported at Rs. 1.5 trillion depicting a significant increase of 12% over December 2017. Investment mix continued to shift from long-term PIBs to the short-term T-Bills during the year in the wake of rising interest rate scenario.
On the liabilities side, the deposit base of the bank registered a significant increase of Rs. 81 billion over December 2017. The increase of Rs. 81 billion is sum of the deposits amounting to Rs. 22 billion transferred to MCB’s wholly owned subsidiary MCB Islamic Bank Limited under the demerger scheme sanctioned by the Lahore High Court.
The non-performing loan base of the bank remained static with a marginal increase of Rs. 203 million and was reported at Rs. 48.9 billion.