The Board of Directors of MCB Bank Limited met under the chairmanship of Mian Mohammad Mansha on Tuesday to review the bank’s performance and approve its financial statements for the year ended December 31, 2019.
The board declared 4th cash dividend of Rs5 per share, i.e. 50pc, bringing the total cash dividend for the year ended 2019 to 170pc (highest dividend payout trend in commercial banks category).
MCB’s profit before tax grew to Rs40.10 billion which reflects a tremendous growth of 25pc over 2018, despite the tough operating environment. The key highlights were impressive increase in net interest margins through gradual shift in the maturity profiling of investment base along with a more refined structure.
The strategic profiling of the investments based on the interest rate calls resulted in a gradual shift from shorter to longer-term investments, thereby capitalizing on the significant interest rate movement during the year. Net interest income rose to Rs59.62 billion, 30pc higher than the last year on account of effective asset deployment of the low-cost deposits.
Analysis of the interest-earning assets highlights that income on advances increased by Rs20.37 billion, primarily on account of increase in yield of 398bps. On the investment side, gross markup income increased by Rs30.76 billion, due to increased average volume by Rs66.61 billion and yield of 391bps. On the interest-bearing liabilities side, the cost of deposits increased by 278bps over last year.
The non-markup income block of the bank was reported at Rs16.68 billion with major contributions coming in from fee commission and foreign exchange income.
Despite inflationary surge during the year, growth in the operational network and constant investment in digital, cyber security and information technology related platforms, the operating expense growth was contained to an impressive 5pc, as efficient cost management remains one of the key strengths for MCB Bank Limited.
On the provision side, the bank reversed provision amounting to Rs. 158 million on advances; whereas, the bank recorded net charge of Rs2.8 billion on equity portfolio in 2019.
On the financial position side, the total asset base of the bank on unconsolidated basis was reported at Rs1.52 trillion depicting an increase of 1pc over December 2018. Analysis of the asset mix highlights that net investments and advances are reported at Rs748.77 and Rs496.68 billion respectively.
Return on Assets and Return on Equity were reported at 1.59pc and 16.84pc respectively, whereas book value per share was reported at Rs122.54.