MCB Bank shows highest ever quarterly profit

LAHORE: MCB Bank Limited reported the highest ever-quarterly profit amounting to Rs 9.4 billion. Board of Directors of MCB Bank with Mian Mohammad Mansha in chair reviewed the performance of the Bank and approved the financial statements for half year ended June 30, 2014.
The Board of Directors declared 2nd interim cash dividend of Rs 3.5 per share for the period ended June 30, 2014, which was in addition to Rs 3 per share interim dividend already paid to the shareholders.
From financial performance perspective, operational profitability from core business indicated significant improvement.
The impact of regulatory revision in minimum deposit rate was managed by strategically increasing current and saving account (CASA) deposit base and tapering off high cost fixed deposits. This timely shift in concentration of earning assets based on interest rate call resulted in improvement of interest margins by 14 percent.
On gross mark-up income side, the Bank recorded an increase of Rs 4.6 billion whereas mark-up expense registered an increase of Rs 1.97 billion. 
Non mark-up income block of the Bank was reported at Rs 5.45 billion, primarily fuelled by an increase of 153 percent in income from dealing in foreign currencies. The administrative expense base (excluding pension fund reversal) recorded an increase of approximately 11 percent.
Recovery trajectory observed over last few years in the non performing loans (NPL) base continued during the first half of 2014, resulting in a reversal of provision of Rs 0.980 billion. 
This translated into profit before tax at Rs 17.80 billion and profit after tax at Rs 11.72 billion.
Bank’s total asset base was reported at an all-time high of Rs 868.51 billion, which increased by a healthy 6 percent over December 31, 2013. 
Analysis of the asset mix highlights net advances have increased by Rs 35.8 billion (14%) over December 2013, whereas net investments have decreased by Rs 4.9 billion (1%) over December 31, 2013. NPL base of the Bank, following the trend set over last few quarters, has further decreased by Rs 0.414 billion in the second quarter, taking the overall decrease to Rs 1.167 billion in the first half of 2014.
Coverage ratio of the Bank was reported at 85.6 percent with infection ratio improving to 7.29 percent, primarily on account of significant increase in gross advances and corresponding decrease in NPL base. 
On the liabilities side, deposit base of the Bank recorded an increase of Rs 53.4 billion (8%) over December 2013. CASA base of the Bank was reported at 91 percent with current deposits increasing by 23 percent and savings deposits by 3 percent over December 2013 numbers.
High cost term deposits of the Bank decreased by 10 percent over December 2013 numbers.
MCB Bank reported the highest return on assets in the banking industry of 2.79 percent. Return on equity improved to 23.53 percent whereas book value per share improved to Rs 91.68.

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