By M J Hayat
LAHORE: The Board of Directors of MCB Bank Limited, met under the chairmanship of Mian Mohammad Mansha on Wednesday to review the performance of the Bank and approved the financial statements for the half year ended June 30, 2018.
During the six months period ended June 30, 2018, MCB Bank Limited reported Profit Before Tax (PBT) of Rs. 16.00 billion (-9.74 percent) and Profit After Tax (PAT) of Rs. 9.76 billion (-28.68 percent). The significant decrease in PAT was on account of a tax provision reversal amounting to Rs. 3.59b recorded in June 2017 results.
Net interest income of the Bank improved significantly by 12.49 percent over corresponding period last year and was reported at Rs. 22.55 billion. Analysis of the interest earning assets highlights that income on advances increased by Rs 4.8 billion, primarily on account of significant increase in average advances volume of Rs. 118 billion with improved yield of 39bps.
On the investment side, the average volume dropped by Rs. 88b with decrease in yield of 9bps, resulting in a decrease of Rs. 3.4b in investment income.
On the interest expense side, the Bank registered a decrease of Rs. 756 million (-4.75 percent) in comparison with the same period last year. The decrease in cost was on account of improved current account concentration level and constant reduction in high cost deposits.
Resultantly, the spread of the Bank improved to 3.69 percent from 3.48 percent of same period last year.
The non-markup income block of the Bank was reported at Rs 8.26 billion reflecting a decrease of 14.63 percent when compared with corresponding period last year.
The Bank continued with its focus on core non-fund based income stream which was reflected in 11 percent growth in the fee, commission and brokerage line. Income from dealing in foreign currencies reflected an increase of Rs. 225 million (+32 percent) when compared with corresponding period last year.
Capital gains and dividend income went down by Rs. 2.09 billion and Rs. 242 million respectively, due to the lackluster performance of the capital market during the period.
On the administrative expenses side, the Bank reported an increase of 18.87 percent (excluding pension fund) over corresponding period last year with major increase in personnel cost, rent, depreciation and repairs, primarily on account of cost associated with Ex-NIB operational activity.
Administrative expenses include one-off expense of Rs. 1.90 billion on account of past service cost based on actuarial valuation of pension cost payable as per Honourable Supreme Court’s order.
On the provision against advances front, the Bank continued with its recovery trajectory and posted a reversal of Rs. 1.43 billion, with Rs. 220 million reversals in provision against investments.
The total asset base of the Bank on a standalone basis was reported at Rs. 1.42 trillion reflecting an increase of 7.11 percent over December 31, 2017. Analysis of the assets mix highlights that net investments have increased by Rs. 32.15 billion (+4.89 percent) with net advances increasing by Rs. 41.38 billion (+8.82 percent) over December 31, 2017.
The coverage and infection ratios of the Bank improved to 94.07 percent (Dec 2017: 93.74 percent) and 8.49 percent (Dec 2017: 9.47 percent) respectively.