The profitability of the MCB Bank declined by 12 percent to Rs. 19.9 billion during the first nine months of 2022.
The bank booked a profit of Rs. 22.6 billion in the same period last year.
The board of directors of MCB Bank Limited has declared a 3rd interim cash dividend of Rs. 5.0 per share i.e. 50 percent, in addition to 90 percent already paid, bringing the total cash dividend for the nine months period ended September 30, 2022, to 140 percent. This is one of the highest dividend incomes announced by large banks.
Earning Per Share (EPS) of the bank was reported at Rs. 16.75 compared to an EPS of Rs. 19.03 in the corresponding period last year.
The negative growth in profitability attributed to the retrospective application of tax along with higher tax rates for the current period enacted through the Finance Act, 2022 resulted in a 62 percent average tax rate for the nine months ended September 30, 2022, as compared to an average tax rate of 41 percent for the corresponding period last year.
MCB’s Profit Before Tax (PBT) for the nine months period ended September 30, 2022, increased to Rs. 51.6 billion against PBT of Rs. 38.3 billion of the corresponding period last year. On the back of strong overall performance, the Bank reported the highest-ever quarterly profit before tax of Rs. 19.05 billion in Q3 2022.
The net interest income for nine months period ended September 2022 increased by 29 percent over the corresponding period last year. Average current deposits of the Bank registered a growth of Rs. 91.6 billion, up 17 percent YoY.
Non-markup income registered a growth of 41 percent and reported a base of Rs. 20.25 billion against Rs. 14.38 billion in the corresponding period last year. The contribution from foreign exchange lines, debit cards, trade businesses, and home remittances remained strong during the period.
Despite exceptionally high inflation, the impact of currency devaluation, and continued investments in human resources, branch network, and technological upgradation, the operating expenses of the bank were recorded at Rs. 30.52 billion, growing by a modest 16 percent YoY, while the cost to income ratio significantly improved to 37.3 percent from 42.5 percent reported in the corresponding period last year.
Proactive monitoring and recovery efforts led to a net provision reversal against non-performing loans (NPLs) which aggregated to Rs. 1,883 million for the period under review. Persistent focus on maintaining a robust risk management framework encompassing structured assessment models, effective pre-disbursement evaluation tools, and an array of post-disbursement monitoring systems has enabled MCB to effectively manage its credit risk.
The Non-performing loan (NPL) base of the bank was reported at Rs. 52.47 billion. The Bank has not taken FSV benefit in the calculation of specific provisions against its NPLs. The coverage and infection ratios of the Bank were reported at 85.14 percent and 8.37 percent, respectively.
MCB attracted home remittance inflows of USD 2,666 million, during the period under review with a market share of 11.5 percent as an active participant in SBP’s cause for improving the flow of remittances into the country through banking channels.
The bank on a consolidated basis is operating the 2nd largest network of more than 1,600 branches in Pakistan and remains one of the prime stocks traded in the Pakistani equity market, with the second highest market capitalization in the industry.
