The Board of Directors of MCB Bank Limited met under the Chairmanship of Mian Mohammad Mansha on Thursday to review the performance of the bank and approve the condensed interim financial statements for the nine months ended September 30, 2019.
The board declared 3rd interim cash dividend of Rs4.0 per share i.e. 40pc, bringing the total cash dividend for the year ending 2019 to 120pc and continuing with its highest in the industry dividend payout trend.
MCB reported profit before tax of Rs27.51 billion, which is 18pc higher than the corresponding last period and translated into earnings per share of Rs13.74 (2018: Rs12.08). The key highlights of the performance included an impressive increase in net interest margins through a gradual shift in the maturity profiling of investment base along with an efficient cost base.
Profit after tax (PAT) of the bank increased by 14pc to Rs16.29 billion as the bank recorded additional supertax at 4pc for the tax year 2018, as enacted through the Second Supplementary Finance Act, 2019. The effective tax rate for the nine months ended September 30, 2019, came to 41pc which is 2pc higher than the corresponding last period.
Net interest income increased to Rs42.99 billion, 27pc higher than the corresponding period of last year. Volumetric growth in average earning assets, particularly investments, along with effective mix of shorter maturity earning assets in a rising interest rate scenario enabled the bank to post growth in gross mark-up income of Rs39.52 billion, up 67pc over the corresponding period.
The bank has been riding the yield curve over the last few years, taking the benefit of the significant interest rate hike despite the fact that interests on deposits are repriced earlier than the earning assets.
The non-markup income block of the bank was reported at Rs11.45 billion with major contributions coming in from fee commission and foreign exchange income. Fees and commissions generated from core banking businesses increased by 5pc to Rs8.32 billion. Foreign exchange income increased by 26pc to Rs2.19 billion as a result of better leveraging of market opportunities.
Despite the inflationary surge during the period, (September-19 YoY CPI of 12.5pc) and growth in the operational network and infrastructure, operating expenses recorded an insignificant increase of 6pc over the corresponding period, excluding pension fund cost.
The coverage and gross NPLs to advances ratios were 83.65pc and 9.66pc respectively.
The total asset base of the bank on an unconsolidated basis was reported at Rs1.58 trillion, showing an increase of 6pc over December 2018. Analysis of the assets mix highlights that net investments have increased by Rs115.1 billion (+15pc) whereas net advances have decreased by Rs13.3 billion over December 31, 2018.
The deposit base of the bank has registered a healthy increase of Rs96.1 billion and stood at Rs1,145.14 billion, a growth of 9pc over December 2018. Focusing on its low-cost deposit base, the bank was able to increase current deposits at the rate of 4pc over December 2018, with overall CASA base of approximately 91pc which reflects the customer confidence and the inherent value of a strong brand name.
The bank enjoys the highest local credit ratings of AAA / A1+ categories for long term and short term respectively, based on PACRA notification dated June 27, 2019.