The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha, on February 15, 2018 to review the performance of the Bank and approve the financial statements for the year ended December 31, 2017. During the year 2017, the Bank completed the merger of NIB Bank Limited with and into MCB Bank Limited. The synergies from the merger were reflected in the financial numbers in NPL recoveries and deferred tax adjustment.
On the financial performance side, MCB Bank Limited reported Profit Before Tax (PBT) of Rs 31.01 billion and Profit After Tax (PAT) of Rs 22.46 billion. In comparison with the last year, Profit Before Tax has decreased by 14.03 percent whereas Profit After Tax has increased by 2.59 percent on account of reversal of prior year tax charges. Net markup income of the Bank was reported at Rs 42.41 billion, down by 3.21 percent over last year owing to the maturity of high yielding bonds and low-interest rate environment. On the gross markup income side, the Bank reported an increase of Rs 6.69 billion whereas on the interest expense side, the Bank registered an increase of Rs 8.09 billion over last year. To supplement its net interest margins, the Bank remained focused on increasing its low cost deposit base and venture in higher yielding assets.
On the non-markup income front, the Bank reported a base of Rs 17.96 billion with the growth of 11 percent over last year despite significant capital market volatility in later half of the year. Major contributions to non-markup income growth were operational in nature with fees & commissions increasing by 22.44 percent YoY and income from dealing in foreign currencies increasing by 42.93 percent YoY.
The administrative expense base (excluding pension fund reversal) recorded an increase of 23.62 percent over last year mainly on account of amalgamation of NIB Bank Limited (NIB) with and into MCB Bank Limited. On the provision against advances front, the Bank continued with its recovery trajectory and posted a significant reversal of Rs 2.90 billion. Based on the volatility in the equity markets, net impairment on equity investments was recorded to the tune of Rs 3.57 billion.
The total asset base of the Bank on a standalone basis was reported at Rs 1.33 trillion reflecting a healthy increase of 26.19 percent over December 2016. Analysis of the asset mix highlights that net investments have increased by Rs 101.04 billion (+18.17 percent) with net advances increasing by Rs 121.24 billion (+34.83 percent) over December 31, 2016. The coverage and infection ratios of the Bank were reported at 93.74 percent and 9.47 percent, respectively.
On the liabilities side, the deposit base of the Bank registered a splendid increase of Rs 187.05 billion (+23.94 percent) over December 2016, including Rs 61 billion contribution from Ex-NIB Bank Limited. The significant increase in deposits resulted in MCB achieving an all-time high deposit base of Rs 968 billion on standalone basis with deposits crossing Rs 1 trillion mark on consolidated basis. MCB Bank Limited continued to enjoy one of the highest CASA mixes in the banking industry of 92.86 percent with current deposits increasing by 27 percent and savings deposits by 19 percent over December 2016. Strategic focus on current accounts resulted in increase in concentration level to 38.94 percent of the total deposit base. Earning per share (EPS) for the year stood at Rs 19.56 as compared to Rs 19.67 for 2016. Return on Assets and Return on Equity were reported at 1.89 percent and 17.65 percent respectively, whereas book value per share stood at Rs 115.18.
The Bank remained a well-capitalized institution with a capital base well above the regulatory limits and Basel capital requirements. While complying with the regulatory capital requirements, the Bank has the highest cash dividend per share in the industry with regular interim dividends and remains one of the prime stocks traded in the Pakistani equity markets reflected by the highest market capitalization in the financial institution category as at December 31, 2017. Bank''''s total Capital Adequacy Ratio is 16.44 percent against the requirement of 11.275 percent (including capital conservation buffer of 1.275 percent). Quality of the capital is evident from Bank''''s Common Equity Tier-1 (CET1) to total risk weighted assets ratio which comes to 14.42 percent against the requirement of 6.00 percent. Bank''''s well capitalization also resulted in a leverage ratio of 7.67 percent which is well above the regulatory limit of 3.0 percent. The Bank reported Liquidity Coverage Ratio (LCR) of 194.13 percent and Net Stable Funding Ratio (NSFR) of 128.80 percent against requirement of 90 percent and 100 percent, respectively.
The Bank enjoys highest local credit ratings of AAA/A1+ categories for long term and short term respectively, based on PACRA notification dated June 19, 2017. Moreover, TFC rating of MCB Bank Limited (Ex-NIB) has been upgraded from A+ to AAA, based on the notification from PACRA dated October 06, 2017.
The Bank has filed a petition in the Honourable Lahore High Court for de-merger of 90 branches from MCB and its merger into wholly owned subsidiary MCB Islamic Bank Limited. The Board of Directors declared final cash dividend of Rs 4.0 per share for the year ended December 31, 2017 which is in addition to Rs 12.0 per share interim dividends already paid to shareholders.-PR
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