MCB's profits suffer considerable decline due to uninhibited administrative expenses

MG News | October 24, 2018 at 12:57 PM GMT+05:00

0:00

October 23, 2018 (MLN): Muslim Commercial Bank (MCB) has suffered a decline worth Rs.5.5 billion in profits for the nine month period ended on September 30, 2018, when compared to profits earned during the same period last year.

As per a formal report on MCB’s financial earnings for the period, the institution gained Rs.2.5 billion in net mark-up/interest income after provisions.

However, a heavy decline of 76% in gain on sale of securities, dragged down total non-mark-up /interest income by Rs.1.9 billion. The bank had to bear additional burden on account of administrative expenses which grew substantially, by Rs.5.5 billion.

These components, along with higher taxation weighed down MCB’s profits on the whole, pulling them down from Rs.19 billion to Rs.13.6 billion.

MCB’s basic and diluted earnings per share have also dropped by 31%, as they tumbled down to Rs.11.46 per share.

In addition to this, MCB has also recommended an interim cash dividend at Rs.4 per share (40%) in addition to the interim dividend already paid at Rs.8 per share (80%).

Profit and Loss Account for the nine month period ended September 30,2018 (Rupees '000)
	Sep-18	Sep-17	% Change
Mark-up/return/interest earned	61,534,246	56,894,828	8.2%
Mark-up/return/interest expensed	(26,401,364)	(24,580,169)	7.4%
Net mark-up/interest income	35,132,882	32,314,659	8.7%
Provision/(reversal) against loans and advances - net	(1,910,064)	(2,469,249)	-22.6%
Provision/(reversal for diminution in the value of investments - net	295,800	575,404	-48.6%
Bad debts written off directly	30	14	114.3%
Net mark-up/interest income after provisions	36,747,116	34,208,490	7.4%
Non mark-up/interest income
Fee, commission and brokerage income	8,302,696	7,533,178	10.2%
Dividend income	724,689	1,003,452	-27.8%
Income from dealing in foreign currencies	1,356,808	1,101,265	23.2%
gain on sale of securities - net	977,302	4,105,789	-76.2%
Unrealized gain/(loss) of revaluation of investments classified as held for trading	(8,236)	(5,973)	37.9%
Other income	924,414	449,747	105.5%
Total non-mark-up /interest income	12,277,673	14,187,458	-13.5%
Non mark-up/interest expenses
Administrative expenses	27,186,042	21,623,621	25.7%
Other provision - net	(714,499)	555,078	-228.7%
Other charges	579,932	635,891	-8.8%
Total non-mark-up/interest expenses	27,051,475	22,814,590	18.6%
Share of profit of associates	477,014	494,867	-3.6%
Extraordinary / unusual item	-	-
Profit before taxation	22,450,328	26,076,225	-13.9%
Taxation	8,826,823	6,953,371	26.9%
Profit after taxation	13,623,505	19,122,854	-28.8%
Basic and diluted earnings per share (Rupees)	11.46	16.77	-31.7%

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