Karachi, October 25, 2023 – MCB Bank, a prominent financial institution in Pakistan, has made a stunning announcement with a remarkable 134 percent growth in after-tax profit for the nine-month period ending on September 30, 2023.
This financial milestone was shared in a report submitted to the Pakistan Stock Exchange (PSX) on Wednesday.
According to the financial statement released by MCB Bank, the bank reported an after-tax profit of PKR 48.23 billion for the first nine months of the current fiscal year, in stark contrast to the PKR 20.62 billion reported during the corresponding period in the previous year. Earnings per share (EPS) for the nine-month period also witnessed a substantial increase, reaching PKR 40.70 compared to PKR 17.40 in the same period of the prior year.
The bank’s board of directors convened on October 25, 2023, and recommended an interim cash dividend for the quarter ending on September 30, 2023, at PKR 8 per share, which is equivalent to 80 percent. This interim dividend is in addition to the interim dividend(s) already paid at PKR 13 per share.
In line with expectations, MCB Bank reported consolidated earnings of PKR 16.57 per share for the third quarter of 2023, marking an impressive 112 percent year-on-year (YoY) increase and a notable 34 percent quarter-on-quarter (QoQ) growth. The bank’s performance exceeded industry expectations, primarily driven by higher-than-expected Net Interest Income (NII).
NII for the third quarter of 2023 reached PKR 45 billion, representing a robust 80 percent YoY increase and a 9 percent QoQ growth, signaling a rise in asset yields. Additionally, MCB recorded a reversal of provisions amounting to PKR 434 million in the third quarter of 2023, a significant improvement compared to the PKR 377 million reversal in the same period in 2022 and a provision charge of PKR 1.5 billion in the second quarter of 2023.
Non-interest income also witnessed a substantial increase, rising by 17 percent YoY, primarily attributed to a 53 percent YoY growth in Fee & Commission income and a 30 percent YoY increase in dividend income during the third quarter of 2023.
However, operating expenses experienced a 28 percent YoY increase and an 11 percent QoQ rise, driven by inflationary pressures. Despite these challenges, the bank managed to reduce its cost-to-income ratio to 31 percent in the third quarter of 2023, as opposed to 40 percent in the same period last year.
The effective tax rate of the bank stood at 49 percent in the third quarter of 2023, showing an improvement from 57 percent in the second quarter, primarily due to the imposition of a 10 percent Super Tax.
MCB Bank’s remarkable financial results for the nine-month period underscore its robust position in the banking sector and have garnered the attention of investors and analysts, highlighting its growth potential in the evolving economic landscape.
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