“The bank is in final stages of making a decision on potential Easypaisa acquisition and the announcement in this regard will be made shortly,” the management told at analyst briefing.
Management indicated that it is likely that bank will maintain dividend payout ratio whether the acquisition goes through or not.
MCB Bank conducted its 1Q2022 analyst briefing today where management discussed financial performance and future outlook of the bank.
With rising differential between kibor and policy rates, a 100-150 basis points increase in policy rate in upcoming monetary policy is likely as per management.
A significant chunk of government securities will reprise in 2Q2022 however reprising of advances will continue till 3Q2022 which will continue to support Net Interest Margins (NIMs) of the bank.
MCB remains very selective in its lending policy and it does not see any major uptick in Non Performing loans (NPLs) despite high kibor rate of ~15 per cent. Consumer loans contribute around 6 per cent to the total loan book of the bank.
Current Account Deposit as percentage of total deposits for the bank clocked in at 43 per cent in March 2022 against 40 per cent in December 2021. Rising current accounts (zero cost deposits) will continue to support Net Interest Income (NII) of the bank going forward.
Duration on fixed rate PIBs is close to 3 years where the average yield on such bond is around 10.5 per cent.
Management do not expect any significant impact on bank earnings due to falling Pakistan Eurobond prices as the bank test the instruments for impairment if the value is down by 30 per cent or above.
Exposure in US$ Sri Lankan bonds was gradually phased out by the bank hence no impact of the bond default is anticipated.
The entire banking industry is witnessing strong growth in foreign exchange income led by volatility in exchange rate.
MCB reported 1Q2022 earnings of Rs7.7/share, up 29 per cent YoY led by rise in Net Interest Income (NII) which was up 19 per cent to Rs19bn. Non-interest income of the bank increased by 18 per cent YoY to Rs5.9bn in 1Q2022 also supporting profitability of the bank.
MCB remains one of the leading commercial banks in Pakistan with 1,426 Domestic Branches across Pakistan, over 8.2 million customer accounts, 7 per cent share in industry deposits, and 2nd largest market capitalization.