MCB announces amalgamation with MNET Services and 1QFY19 profits of Rs5 bln

April 24, 2019 (MLN): MCB Bank Limited on Wednesday announced its financial results for the quarter ended March 31, 2019, wherein the company has posted bottom-line earnings of Rs. 5 billion (EPS: Rs. 4.21), signifying a growth of 6% YoY.  

As per a research report by Arif Habib Limited, the bank’s profitability was abetted by growth in the net mark-up income by 26%, which was driven by policy rate hikes announced in November and January. Moreover, lower operating expenditure provided further respite to the earnings

On the other hand, the net reversals booked by the bank declined by 70%, which exerted some pressure on the net margins.

The total non-markup income dwindled by 15% on account of fall in capital gains by 97.5%, which was due to poor equity market performance and higher interest rates eroding gains on PIB’s.

The increase in taxation by 65% was the final straw, as it dragged down change in PBT of 24% to PAT of 6%. The increase in tax expense was a direct result of additional super tax booked during the quarter on CY17 profits.

The Bank also announced an interim cash dividend during 1QFY19 at Rs. 4 per share, i.e. 40%

Furthermore, the Board of Directors of MBC has approved amalgamation of MNET Services (Private) Limited, a wholly owned subsidiary of MCB bank Limited, with and into MCB Bank. The effective date of amalgamation is April 30, 2019 in terms of the Scheme of Amalgamation.