MCB Bank claimed that it has paid off the highest dividend per share in the banking industry during the nine months of 2021.
Its board of directors has declared a 3rd interim cash dividend of Rs. 4.5 per share, i.e., 45 percent bringing the total cash dividend for the year ending 2021 to 140 percent, continuing with its highest dividend payout trend.
During the nine months period ended September 30, 2021, MCB Bank Limited reported Profit After Tax (PAT) of Rs. 22.56 billion. Earnings Per Share (EPS) stood at Rs. 19.03 against an EPS of Rs. 19.35 reported in the corresponding period last year.
The State Bank of Pakistan (SBP) continued with its expansionary monetary policy stance during the major part of the period in order to combat the downside risks emanating from the COVID-19 outbreak. The average Policy rate registered a decline of 27 percent (258bps) from an average of 9.59 percent in the corresponding period last year to 7.01 percent in the current period under review.
However, on account of historic growth in average current deposits, the net interest income of the bank decreased by 14 percent only, from Rs. 55.35 billion to Rs 47.74 billion.
Non-markup income registered a growth of 6 percent and aggregated to Rs. 14.38 billion against Rs. 13.56 billion in the corresponding period last year. Improved transactional volumes, surge in business activities, diversification of revenue streams through continuous enrichment of bank’s product suite, investments towards digital transformation, and an unrelenting focus on upholding the high service standards supplemented a growth of 14 percent in fee income, whereas dividend and foreign exchange incomes increased by 98 percent and 21 percent, respectively.
On the operating expenses side, despite sustained inflationary pressures amidst currency devaluation and rising commodity prices, higher compliance-related regulatory charges, expansion in branch outreach, and regular performance and merit adjustments of the Human Capital, the bank was able to curtail the total growth to 7 percent.
On the provision front, disposal of equity scrips resulted in a net reversal of Rs. 183 million for the nine-month period ended September 30, 2021. Proactive monitoring and recovery efforts led to a reversal of Rs. 294 million in specific provision maintained against non-performing loans (NPL’s) while the general loss reserve created amidst the uncertainty surrounding the COVID-19 outbreak was reversed, to the tune of Rs. 3 billion as the systematic risks surrounding the economic recovery receded and the domestic activity witnessed a resurgence.
On the financial position side, the total asset base of the bank, on an unconsolidated basis, was reported at Rs. 1,931 billion (+10%). An analysis of the asset mix highlights that while the consumer lending book garnered significant interest and grew by Rs. 6.6 billion (23 percent) on the back of significant activity in the construction and auto segment, the overall growth in gross advances still remained subdued (+3 percent).
The total deposits of the bank grew by 13 percent compared to industry growth of 11 percent (domestic deposits) to close the period at Rs. 1,457 billion. Return on Assets and Return on Equity were reported at 1.63 percent and 18.86 percent, respectively, whereas the book value per share was reported at Rs. 132.09.
MCB attracted home remittance inflows of $2.683 billion during the period under review to further consolidate its position as an active participant in SBP’s cause for improving the flow of foreign reserves into the country through banking channels. The inflow under the Roshan Digital Account (RDA) initiative has stood over USD 170 million since the inception of the proposition in September 2020.
The bank, on a consolidated basis, is operating the 2nd largest network of more than 1,550 branches in Pakistan. The bank remains one of the prime stocks traded in the Pakistani equity market with 2nd highest market capitalization in the industry.
