Increase in unconsolidated profit to Rs14.74bn: MCB Bank declares highest dividend per share for H1 2021

LAHORE: The Board of Directors of MCB Bank Limited (MCB) in its meeting under the Chairmanship of Mian Mohammad Mansha, on August 11, 2021, reviewed the performance of the Bank and approved the condensed interim financial statements for the half year ended June 30, 2021.

The Board of Directors has declared 2nd interim cash dividend of Rs5.0 per share i.e. 50% bringing the total cash dividend for the year ending 2021 to 95%, continuing with its highest dividend payout trend.

MCB’s unconsolidated Profit After Tax (PAT) for the six month period ended June 30, 2021 increased to Rs14.74 billion (+12%); translating into an Earning Per Share (EPS) of Rs12.44 against an EPS of Rs11.15 reported in the corresponding period last year. Net Interest income reported at Rs31.55 billion with a drop of 12%.

Non-markup income registered phenomenal growth of 34% and aggregated to Rs9.50 billion against Rs7.08 billion in the corresponding period last year, a growth of 17% in fee income while the dividend income increased by 83%.

On the provision front, the equity scrip disposals resulted in net reversal of Rs529 million for the six month period ended June 30, 2021. Proactive monitoring and recovery efforts led to a net provision reversal against non-performing loans (NPL’s) aggregating to Rs,387 million for the period under review.

On the financial position side, the total asset base of the Bank on an unconsolidated basis was reported at Rs1,861 billion (+6%). Analysis of the asset mix highlights that while the growth in gross advances remained subdued amidst a dearth of quality lending, the excess liquidity was diverted towards the investment book; which in turn grew by Rs80 billion and contributed the major share to the total increase. However, the consumer lending book grew by Rs3.98 billion (+14%) on account of significant activity in the construction and auto segment.

The non-performing loan (NPLs) base of the Bank hence registered a decline over December 2020 to report at Rs51.06 billion.

The Bank has not taken FSV benefit in calculation of specific provision and carries un-encumbered general provision reserve of Rs3.06 billion. The coverage and infection ratios of the Bank were reported at 95.67% and 9.98% respectively.

On the liabilities side, achieving growth in no-cost current account base remained a key strategic objective for the Bank. Thereby, non-remunerative deposits grew by 20% to close at Rs589 billion; improving their mix in the total deposits to 41% as at June 30, 2021 compared to 38% as at December 31, 2020. CASA mix was reported at 92% whereas the total deposits of the Bank grew by 12% to close the period at Rs1.44 trillion.

Return on Assets and Return on Equity reported at 1.63% and 18.66% respectively, whereas the book value per share was reported at Rs129.68.

Under Roshan Digital Account (RDA), the Bank has brought in over US$125 million since the inception of the proposition in September 2020. The volume of foreign trade showed tremendous growth of 64% over H1’2020.

While complying with the regulatory capital requirements, the Bank’s total Capital Adequacy Ratio (CAR) is 19.51% against the requirement of 11.5% (including capital conservation buffer of 1.50% as reduced under the BPRD Circular Letter No. 12 of 2020). Quality of the capital is evident from Bank’s Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 16.07% against the requirement of 6%. Bank’s capitalization also resulted in a Leverage Ratio of 6.33% which is well above the regulatory limit of 3.0%. The Bank reported Liquidity Coverage Ratio (LCR) of 245.82% and Net Stable Funding Ratio (NSFR) of 187.82% against requirement of 100%.

The Bank’s exceptional performance has also been recognized by the globally coveted Finance Asia’s Country Awards wherein it has been bestowed with the “Best Bank in Pakistan” accolade for the year 2020. The Bank enjoys highest local credit ratings of AAA / A1+ categories for longterm and shortterm respectively, based on PACRA notification dated June 23, 2021.

The Bank on consolidated basis is operating the 2nd largest network of more than 1,550 branches in Pakistan.—PR

Copyright Business Recorder, 2021