October 27, 2020 (MLN): MCB Bank Limited has reported a 45% growth in its earnings for the nine months ended September 30, 2020, from Rs. 16.1 billion (EPS: 13.63) to Rs. 23.5 billion (EPS: 19.75).
The Bank did not announce any dividend for the third quarter. However, the first interim cash dividend has already been paid at Rs. 5 per share i.e. 50% for the quarter ended March 31, 2020.
The improvement in earnings resulted from a 28% increase in net interest income, as well as a 21% increase in non-interest income. The growth in the latter transpired on the back of the presence of Gains on securities, which amounted to Rs. 2.8 billion.
On the other hand, the total expenses changed by only 1%, despite there being an increase in workers’ welfare fund and other charges by 39% and 51%, respectively.
While the above points contributed positively to the Bank’s profits, the increase in provisioning cost by 1.85x came as a huge setback. Moreover, the income tax paid during the period surged by 41%, thereby further restricting the increase in earnings.
|
Consolidated Financial Results for nine months ended September 30, 2020 (Rupees'000) |
|||
|---|---|---|---|
|
Sep-20 |
Sep-19 |
% Change |
|
|
Mark-up / return / interest earned |
114,516,948 |
105,533,314 |
9% |
|
Mark-up / return / interest expensed |
(55,717,040) |
(59,508,698) |
-6% |
|
Net mark-up / interest income |
58,799,908 |
46,024,616 |
28% |
|
NON-MARK-UP / INTEREST INCOME |
|||
|
Fee and commission income |
8,791,768 |
9,048,543 |
-3% |
|
Dividend income |
629,210 |
828,495 |
-24% |
|
Foreign exchange income |
2,100,027 |
2,214,113 |
-5% |
|
Income / (loss) from derivatives |
(3,604) |
3,045 |
|
|
Gain / (loss) on securities – net |
2,877,447 |
(186,879) |
|
|
Other income |
168,490 |
115,393 |
46% |
|
Total non-markup / interest income |
14,563,338 |
12,022,710 |
21% |
|
Total income |
73,363,246 |
58,047,326 |
26% |
|
NON-MARK-UP / INTEREST EXPENSES |
|||
|
Operating expenses |
(28,232,321) |
(28,385,235) |
-1% |
|
Workers welfare fund |
(767,073) |
(551,441) |
39% |
|
Other charges |
(259,326) |
(171,882) |
51% |
|
Total non-markup / interest expenses |
(29,258,720) |
(29,108,558) |
1% |
|
Share of profit of associates |
518,852 |
374,289 |
39% |
|
Profit before provisions |
44,623,378 |
29,313,057 |
52% |
|
Provisions and write offs – net |
(5,189,574) |
(1,823,093) |
185% |
|
Extraordinary / unusual items |
|||
|
PROFIT BEFORE TAXATION |
39,433,804 |
27,489,964 |
43% |
|
Taxation |
(15,921,924) |
(11,327,158) |
41% |
|
PROFIT AFTER TAXATION |
23,511,880 |
16,162,806 |
45% |
|
Earnings per share |
19.75 |
13.63 |
45% |
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