MCB bank reports a 2.77% decline in profit

February 06, 2025 (MLN): MCB Bank Limited (PSX: MCB) disclosed its financial results for the year ended December 31, 2024, reporting a 2.77% decline in profit after taxation, which stood at Rs63.47 billion [EPS: Rs53.35] compared to Rs65.27bn [EPS: Rs54.94] in the previous year.

The company declared a final cash dividend of Rs9.00 per share (90%) for the year, in addition to the interim dividends already distributed, totaling Rs27.00 per share (270%).

An overview of the profit and loss statement reveals that MCB managed to maintain profitability despite a 1.53% increase in net interest income, which reached Rs167.95bn, driven by a 13.47% rise in mark-up/interest earned.

However, a 23.40% surge in interest expenses significantly impacted overall earnings.

The bank's non-markup income showed a 16.51% increase, amounting to Rs41.24 billion, with key contributors being fee and commission income (+10.35%), dividend income (+16.69%), foreign exchange income (+4.53%), and a notable gain on securities (+313.95%).

However, income from derivatives dropped sharply by 87.49%.

On the expense side, non-markup expenses rose 18.87% to Rs75.57bn, primarily due to a 20.62% increase in operating expenses.

Other charges and Workers Welfare Fund expenses showed a mixed trend, with the latter declining 5.30%.

The bank also recorded a 353.68% increase in credit loss allowance and write-offs, reaching Rs4.88bn, impacting overall profitability.

Consequently, profit before taxation fell by 4.61% to Rs131.18bn, while taxation expenses declined by 6.28% to Rs67.71bn.

Despite the challenges, the bank's share of profit from associates surged 81.03%, contributing Rs2.44bn to the overall earnings.

The bank's non-controlling interest also grew 44.62%, reaching Rs240.62mn.

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