Higher capital gains and lower mark-up expenses lift MCB’s profits by 23% YoY

MG News | February 10, 2021 at 02:27 PM GMT+05:00

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February 10, 2021 (MLN): MCB has unveiled its CY20 financial results wherein the bank posted net profits of Rs 29.56 billion with earnings per share (EPS) of Rs 24.82, as against the net profits of Rs 23.95 billion (EPS: Rs 20.14) in CY19, showing an increase of 23% YoY.

In conjunction with the results, the bank announced a cash dividend of Rs 15 per share, i.e. 150%, taking cumulative dividend to Rs 20 per share.

The strong profitability of the bank was largely attributed to rise in net interest income (NII) and non-interest income.

The net interest income of the bank during the year registered an increase of 19% YoY due to 17% YoY decline in interest expenses and higher asset base and yields of PIBs further supported the bank’s NII.

The not interest income of the bank recorded a modest jump of 10% YoY as a result of a 4x increase in capital gains.

On the expense side, the provisioning expenses of the bank remained on the higher side compared to CY19, as it rose by 174% YoY owing to covid-19 related provisioning during the year, however, operating expenses of the bank remained flat during the year.

Consolidated Profit and Loss Account for the Year ended December 31, 2020 (Rupees '000)
	Dec-20	Dec-19	% Change
Mark-up/return/interest earned	145,772,451	148,088,700	-1.6%
Mark-up/return/interest expensed	69,929,012	84,370,609	-17.1%
Net mark-up/interest income	75,843,439	63,718,091	19.0%

Non-mark-up/interest income
Fee and commission income	11,971,491	12,230,871	-2.1%
Dividend income	969,322	1,240,771	-21.9%
Foreign exchange income	2,735,228	2,957,999	-7.5%
Income from derivatives	4,087	14,616	-72.0%
Loss/Gain on securities	3,396,296	828,873	309.7%
Other income	192,103	244,551	-21.4%
Total non-mark-up /interest income	19,268,527	17,517,681	10.0%
Total income	95,111,966	81,235,772	17.1%
Non mark-up/interest expenses
Operating expenses	37,763,917	37,685,431	0.2%
Workers welfare fund	974,808	802,046	21.5%
Other charges	297,987	260,743	14.3%
Total non-mark-up/interest expenses	39,036,712	38,748,220	0.7%
Share of profit of associates	573,078	339,633	68.7%
Profit before provisions	56,648,332	42,827,185	32.3%
Provisions/(reversals) and write offs-net	7,330,044	2,673,592	174.2%
Profit before taxation	49,318,288	40,153,593	22.8%
Taxation	19,756,019	16,206,382	21.9%
Profit after taxation	29,562,269	23,947,211	23.4%
Basic and diluted earnings per share	24.82	20.14	23.2%

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