LAHORE: The Board of Directors of MCB Bank Ltd (MCB) met on Wednesday to review the bank’s performance and announce its financial statements for the first quarter ending March 31, 2020.
According to the financials, the bank’s profit after tax increased to Rs6.62 billion in the quarter ending March 2020, as compared to the Rs4.99 billion in the corresponding period last year, showing a growth of 33pc year-on-year.
However, when compared to the fourth quarter of 2019, profit after tax declined by 14pc.
The bank also announced an interim cash dividend of Rs 5 per share. The bank’s earnings per share (EPS) clocked in at Rs5.6, which is an increase from the Rs4.2 during the same period last year.
The bank’s earnings were above analysts’ expectations.
According to a report prepared by AKD Research, the interim cash dividend of Rs 5 per share was higher than their expectations of Rs4.5 per share.
“Provisioning costs and capital gains coming in better than expectation resulted in the bank’s 1QCY20 release beating our estimates,” said Hamza Kamal, senior analyst at AKD Research.
Similarly, a research report prepared by AHL noted that the bank had maintained its net interest income momentum.
The net interest income of the bank stood at Rs17.3 billion, which was a 21pc year-on-year increase from the Rs14.3 billion during the same period last year.
Meanwhile, the total non-interest income increased 10pc year-on-year, from Rs3.79 billion last year to Rs4.167 billion this year. Most of this was due to the rise in foreign exchange income, by 72pc to Rs834 million.
Operating expenses were also mostly controlled at Rs9.8 billion, only rising 1pc year-on-year, and 2pc quarter-on-quarter.
However, the quarterly numbers show a different story. The decline of 14pc quarter-on-quarter can be attributed to the somewhat flat net interest income, and a downturn in the non-fund income contribution.
Net interest income fell 2.3pc, from Rs17.7 billion in the last quarter to Rs17.3 this quarter.
The contribution of non-fund income fell to 20.4pc this quarter, compared to 23.6pc in the previous quarter, due to lower dividend income, and less capital gains. Dividend income stood at Rs223.6 million this quarter, compared to Rs412.5 million in the previous quarter; while capital gains clocked in at Rs71.1 million, compared to Rs1.02 billion last quarter.
The non-interest income also declined by 24pc, from Rs5.49 billion last quarter to Rs4.17 this quarter. According to AHL, this was due to a loss in loss on sale of securities of Rs6 million (the bank had gained almost Rs1 billion last quarter).
This quarter also saw a significantly higher taxation rate, at 40.5pc, compared to 38.5pc in the previous quarter.
