Home Equity Super tax drags down MCB’s profits by 24% in 1HCY22

Super tax drags down MCB’s profits by 24% in 1HCY22

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August 17, 2022 (MLN): MCB Bank Limited (PSX: MCB) has reported a net income of Rs11.39 billion in 1HCY22 ended June 30, 2022, down by 24% YoY when compared to Rs15bn recorded in the same period last calendar year, mainly on the back of imposition of super tax.

This translates into basic and diluted earnings per share of Rs9.59 during the review period as compared to Rs12.56 in the same period last year (SPLY).

In conjunction with financial results, the Board of Directors has recommended the interim cash dividend of Rs4 per share i.e. 40% for the half year ended June 30, 2022. This is in addition to the interim cash dividend already paid at Rs5 per share i.e. 50%.

Going by the financial results, the bank’s interest income went up by 47% YoY while interest expenses surged by around 73% YoY, hence MCB’s net interest income (NII) stood at Rs42bn, showing an increase of 25% YoY due to higher policy rate in order to tame down rising inflation.

While, the non-funded income (NFI) of the bank saw a 31% YoY jump, clocking in at Rs13.23bn. The bank witnessed an 11.5% increase in fee income whereas dividend and foreign exchange incomes soared by 3x YoY & 29.5% respectively, driven by improved transactional volumes, business activities and investments toward digital transformation.

On the expense front, the bank’s total non-mark-up expenses rose by 13% YoY to Rs23bn on the back of inflationary pressures amidst currency devaluation and rising commodity prices, higher compliance-related regulatory charges and expansion in branch outreach.

The bank reported a reversal of Rs921mn, registering a fall of 54% YoY in 1HCY22.

Accordingly, MCB declared a profit before income tax at Rs33.45bn for the half year ended on June 30, 2022, 30% higher when compared to Rs25.6bn in the same period of the last year.

The bank paid an amount of Rs22bn as taxes during 1HCY22, showing a two-fold increase against Rs10.68bn taxes paid in SPLY, due to imposition of super tax in the large-scale industry.

 Consolidated Profit and Loss Account for the half year ended June 30, 2022 (Rupees 000)

 

Jun-22

Jun-21

% Change

Mark-up/return/interest earned

 92,315,591

 62,733,431

47.2%

Mark-up/return/interest expensed

 50,066,043

 29,001,691

72.6%

Net mark-up/interest income

 42,249,548

 33,731,740

25.3%

 

 

 

 

Non-mark-up/interest income

 

 

 

Fee and commission income

 7,373,534

 6,611,051

11.5%

Dividend income

 1,104,802

 853,078

29.5%

Foreign exchange income

 4,237,583

 1,424,246

197.5%

Income from derivatives

 11,970

 8,545

40.1%

Gain/ (loss) on securities

 377,997

 534,539

-29.3%

Other income

 123,470

 669,132

-81.5%

Total non-mark-up /interest income

 13,229,356

 10,100,591

31.0%

Total income

 55,478,904

 43,832,331

26.6%

Non-mark-up/interest expenses

 

 

 

Operating expenses

 22,582,275

 19,731,252

14.4%

Worker’s welfare fund

 667,307

 510,192

30.8%

Other charges

 64,668

 376,395

-82.8%

Total non-mark-up/interest expenses

 23,314,250

 20,617,839

13.1%

Share of profit of associates

 362,387

 431,851

-16.1%

Profit before provisions

 32,527,041

 23,646,343

37.6%

Provisions/(reversals) and write offs-net

 (921,170)

 (1,999,908)

-53.9%

Profit before taxation

 33,448,211

 25,646,251

30.4%

Taxation

 22,061,683

 10,682,617

106.5%

Profit after taxation

 11,386,528

 14,963,634

-23.9%

Basic and diluted earnings per share

 9.59

 12.56

-23.6%

 

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Posted on:2022-08-17T13:12:29+05:00

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