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

By MG News | August 20, 2020 at 01:16 PM GMT+05:00

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August 20, 2020 (MLN): MCB Bank Limited has disclosed its financial performance for the half year ended on June 30^th 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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