MCB Bank Limited (MCB) has announced a substantial profit before tax (PBT) of Rs 32.5 billion for the first quarter ending March 31, 2024, marking a significant 41% increase from the previous year.
The bank also reported a profit after tax (PAT) of Rs 16.6 billion, showing a 27% growth, resulting in earnings per share (EPS) of Rs 13.97, up from Rs 11.02 in the same period last year.
The Board of Directors, chaired by Mian Mohammad Mansha, convened on Wednesday to approve the MCB Bank condensed interim financial statements for Q1 and declared a generous interim cash dividend of Rs 9.0 per share, which equates to 90%.
A key driver of MCB’s financial success has been a 13% year-over-year increase in average current deposits and a strategic repositioning within the asset book, which boosted net interest income by 27%. Additionally, non-markup income soared by 54% to Rs. 9.1 billion, fueled by substantial gains in fee commission income, foreign currency dealings, and dividend income.
MCB’s robust performance in fee-based income, which saw notable increases across various service categories, reflects the bank’s strategic focus on diversifying its revenue streams and enhancing service delivery through investments in digital transformation and service suite enrichment.
Despite challenging economic conditions characterized by high inflation and rising commodity prices, MCB has efficiently managed operating expenses, which increased by 18% to Rs. 13.9 billion. The bank’s cost to income ratio improved significantly to 29.50% from 32.77% in the corresponding period last year.
The bank has also maintained a disciplined approach to risk management, particularly in credit underwriting, which has helped manage the non-performing loans (NPLs) effectively. The NPL base stood at Rs. 55.4 billion as of March 31, 2024, with coverage and infection ratios at 92.67% and 8.56%, respectively.
MCB’s asset base slightly decreased by 1% to Rs. 2.41 trillion compared to December 2023, with investments and gross advances growing modestly. The total deposits crossed Rs. 1.85 trillion, and the domestic market share increased to 6.05%.
The bank’s financial health is further evidenced by improved returns on assets and equity, standing at 2.74% and 31.54%, respectively. MCB also reported strong capital adequacy, with a total Capital Adequacy Ratio (CAR) of 19.62% and a Common Equity Tier-1 (CET1) ratio of 16.50%, well above regulatory requirements.
The Pakistan Credit Rating Agency has reaffirmed MCB’s credit ratings at “AAA / A1+” for long term and short term, respectively, reflecting its solid financial position.
MCB continues to focus on enhancing customer experience and expanding digital access points, maintaining its position as one of the leading banks in Pakistan with the second-largest branch network and market capitalization in the industry.
