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MCB posts 29% rise in profits despite fall in non-interest income and soaring provisions

August 20, 2020 (MLN): MCB Bank Limited has disclosed its financial performance for the half year ended on June 30th 2020, as per which the bank’s net profits jumped by 29.3% YoY to Rs 13.47 billion compared to Rs 10.42 billion reaped in the corresponding period last year.

This reflected in Bank’s earnings per share which also grew by the same percent from Rs 8.79 per share to Rs 11.33 per share.

The rise in profits of the Bank is mainly attributable to surge in net interest income by 29.3% YoY to Rs 38.25 billion.

According to the report by Darson Securities, the increase in net interest income was due to lagged impact of asset repricing.

Following 6.8% YoY decline in fee and commission income and 14.2% YoY decline in FX income, the Banks non-interest income went down by 9% YoY.

On provision side, the MCB posted 4.49x (349%) increase in its provisions from Rs 907.49 million to Rs 4 billion, while its operating expenses during the period declined negligibly by 0.7% YoY to Rs 18.68 billion.

Furthermore, in line with the SBP directives to suspend the dividend payment, the bank did not announce any interim cash dividend.

Profit and Loss Account for the Half Year Ended June 30,2018 (Rupees '000)

 

Jun-20

Jun-19

% Change

Mark-up/return/interest earned

 80,408,589

 63,418,278

26.8%

Mark-up/return/interest expensed

 42,155,774

 33,838,728

24.6%

Net mark-up/interest income

 38,252,815

 29,579,550

29.3%

 

 

 

 

Non mark-up/interest income

 

 

 

Fee and commission income

 5,658,116

 6,069,062

-6.8%

Dividend income

 415,562

 654,605

-36.5%

Foreign exchange income

 1,533,230

 1,786,380

-14.2%

Income from derivatives

 (6,903)

 (3,936)

75.4%

Loss/Gain on securities

 (57,664)

 (177,682)

-67.5%

Other income

 84,159

 57,003

47.6%

Total non-mark-up /interest income

 7,626,500

 8,385,432

-9.1%

Total income

 45,879,315

 37,964,982

20.8%

Non mark-up/interest expenses

 

 

 

Operating expenses

 18,683,734

 18,809,457

-0.7%

Workers welfare fund

 445,087

 365,700

21.7%

Other charges

 240,180

 106,880

124.7%

Total non-mark-up/interest expenses

 19,369,001

 19,282,037

0.5%

Share of profit of associates

 412,806

 199,907

106.5%

Profit before provisions

 26,923,120

 18,882,852

42.6%

Provisions/(reversals) and write offs-net

 4,076,022

 907,499

349.1%

Profit before taxation

 22,847,098

 17,975,353

27.1%

Taxation

 9,373,265

 7,553,728

24.1%

Profit after taxation

 13,473,833

 10,421,625

29.3%

Basic and diluted earnings per share

 11.33

 8.79

28.9%

 

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Posted on: 2020-08-20T13:16:00+05:00

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