Karachi, August 2, 2023 – MCB Bank, one of the largest banks in Pakistan, stunned investors by announcing an exceptional financial performance with a remarkable 150 percent growth in profit after tax (PAT) for the first half of the calendar year 2023.
According to the consolidated financial results submitted to the Pakistan Stock Exchange (PSX), the bank reported a profit after tax of Rs 28.60 billion for the period of January to June 2023, compared to Rs 11.37 billion in the same period of the previous year.
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The bank’s earnings per share (EPS) for the period under review also experienced a significant surge, reaching Rs 24.13 compared to Rs 9.59 in the same period of the last year, indicating strong earnings per outstanding share.
During a board of directors meeting held on August 2, 2023, MCB Bank Limited recommended an interim cash dividend for the half-year ended June 30, 2023, at Rs 7 per share, representing 70 percent. This dividend is in addition to the interim dividend of Rs 6 per share, or 60 percent, already paid.
Financial analysts at Arif Habib Limited noted that MCB Bank achieved an all-time high in half-yearly PAT during 1HCY23, underscoring the bank’s exceptional financial performance.
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For the second quarter of CY23, MCB Bank announced earnings of Rs 14.7 billion (EPS: Rs 12.38), depicting an astounding uptick of 542 percent Year over Year (YoY) and 27 percent Quarter over Quarter (QoQ). This remarkable rise in profitability before tax (YoY) is primarily attributed to a substantial increase in net interest and non-interest income.
Net Interest Income for the bank settled at Rs 41.2 billion during 2QCY23, exhibiting an impressive 80 percent YoY growth and 25 percent QoQ increase. Interest income surged by 81 percent YoY and 28 percent QoQ, while interest expenses were up by 83 percent YoY and 31 percent QoQ, mainly influenced by the impact of the policy rate hike during the outgoing quarter. As a result, the net interest income during 1HCY23 reached Rs 74.2 billion, a remarkable 76 percent YoY increase.
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The bank’s Non-Funded Income (NFI) witnessed a 16 percent YoY increase during 1HCY23, driven by a surge in fee and commission income, which posted a 37 percent YoY increase owing to higher trade volumes. Additionally, dividend income recorded a substantial 79 percent YoY increase. However, FX income declined by 3 percent YoY, settling at Rs 2.8 billion. Furthermore, the bank recorded a loss on the sale of securities amounting to Rs 12 million, compared to a gain of Rs 88 million recorded in the same period last year (SPLY).
During 2QCY23, the bank provisioned Rs 1.5 billion, representing a significant 20.9x YoY increase (2QCY22: Rs 71 million). Thus, the total provisioning during 1HCY23 amounted to Rs 2.2 billion compared to reversals of Rs 921 million in SPLY.
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The bank’s operating expenses (OPEX) increased by 23 percent YoY during 2QCY23, amounting to Rs 15.1 billion, and rose by 7 percent QoQ. As a result, the Cost/Income ratio stood at 30.1 percent in 2QCY23, a notable improvement compared to 40.4 percent during the same period last year.
The effective tax rate during 2QCY23 was set at 56.6 percent, considerably lower than the 87.4 percent recorded in SPLY.
The outstanding financial performance of MCB Bank reflects the bank’s robust strategies and operational efficiency in a challenging economic environment. With such impressive growth figures, the bank continues to garner the confidence of investors and solidify its position as a leading player in Pakistan’s banking sector.
