The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha, on August 25, 2017 to review the performance of the Bank and approve the financial statements for the half year ended June 30, 2017. During the half year ended June 30 2017, MCB Bank posted profit before tax of Rs 17.73 billion and profit after tax of Rs 13.69 billion. In comparison with the corresponding period last year, profit before tax has decreased by 6.23 percent whereas profit after tax has increased by 27.81 percent on account of reversal of prior year tax charges.

Net markup income of the Bank was reported at Rs 20.05 billion, down by 14.30 percent over corresponding period last year, owing to the maturity of high yielding bonds and low interest rate environment. On the non-markup income front, the Bank reported a base of Rs 9.68 billion with exceptional growth of 59.76 percent over corresponding period last year. Major contributions to non-markup income growth are fees & commissions, capital gains and dividend income.

The administrative expense base (excluding pension fund reversal) recorded an increase of 15.43 percent over corresponding period last year. On the provision front, the Bank continued with its recovery trajectory and posted a reversal in provision against advances of Rs 1.95 billion in first half of 2017.

The total asset base of the Bank was reported at Rs 1,321.01 billion reflecting a healthy increase of 25.59 percent over December 2016. Analysis of the asset mix highlights that net investments have increased by Rs 194.16 billion (+34.93 percent) with net advances increasing by Rs 41.66 billion (+11.97 percent) over December 31, 2016. The coverage and infection ratios of the Bank were reported at 78.76 percent and 5.52 percent, respectively.

On the liabilities side, the deposit base of the Bank recorded an exceptional increase of Rs 110.12 billion (+14.09 percent) over December 2016, outperforming the industry growth number by a significant margin. MCB Bank Limited continued to enjoy one of the highest CASA mixes in the banking industry of 94.03 percent with strategic focus on current deposits (+24 percent) and savings deposits (+7 percent) over December 2016. The concentration level of no-cost current accounts has increased to an all-time high of 41 percent of the total deposit book.

Earnings per share (EPS) for the period came to Rs 12.30 as compared to Rs 9.62 for same period last year. Return on Assets and Return on Equity were reported at 2.31 percent and 22.82 percent respectively, whereas book value per share stood at Rs 109.65.

The Bank remained a well-capitalized institution with a capital base well above the regulatory limits and Basel capital requirements. While complying with the regulatory capital requirements, the Bank has the highest cash dividend per share in the industry with regular interim dividends and remains one of the prime stocks traded in the Pakistani equity markets.

Bank's total Capital Adequacy Ratio is 17.43 percent against the requirement of 10.65 percent (including capital conservation buffer of 0.65 percent). Quality of the capital is evident from Bank's Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 15.36 percent against the requirement of 6.00 percent

Bank's well capitalization also resulted in a leverage ratio of 7.27 percent which is well above the regulatory limit of 3.0 percent. The Bank enjoys highest local credit ratings of AAA / A1+ categories for long term and short term respectively, based on PACRA notification dated June 19, 2017. The Board of Directors declared 2nd interim cash dividend of Rs 4.0 per share for the half year ended June 30, 2017, which is in addition to Rs 4.0 per share interim dividend already paid to shareholders.-PR

Copyright Business Recorder, 2017