MCB Bank profit up 10pc to record Rs34.45 billion in 2022

LAHORE: MCB Bank Limited's profit rose by 10 percent in 2022 as compared to the previous year, with its foreign exchange income soaring by 149 percent in a year, according to a notice to the Pakistan Stock Exchange on Wednesday.

MCB posted a profit of Rs34.45 billion in 2022, as compared to Rs31.32 recorded in 2021. Its foreign exchange income was Rs3.84 billion in 2021 which jumped to Rs9.58 billion in 2022 as per the consolidated results.

The board of directors of MCB approved financial statements for the year that ended December 31, 2022, declaring an interim cash dividend for the quarter ended Dec 31 at Rs6 per share i.e. 60 percent.

It was in addition to the interim dividends already paid at Rs14 per share i.e. 140 percent.

MCB posted a before-tax profit of Rs75.3 billion showing a growth of 41.4 percent over the previous year. Retrospective application of tax amendments along with higher tax rates for the current year enacted through the Finance Act, 2022 resulted in higher taxation in 2022. Earnings per share (EPS) increased to Rs.29.00 as compared to EPS of Rs26.31 reported in the last year, according to the consolidated results.

As per the unconsolidated results, the MCB profit registered a growth of 6.3 percent and increased from Rs30.8 billion to Rs32.7 billion.

The net interest income — for the year ended December 31, 2022 — of the bank increased by 36 percent over the last year. Average current deposits of MCB bank registered a highest-ever growth of Rs96.8 billion (+18pc) in 2022, on the back of a strategically focused drive.

Non-markup income reported a base of Rs24.6 billion, against Rs20.1 billion in the last year. Improved transactional volumes, diversification of revenue streams through continuous enrichment of the bank’s product suite, investments towards digital transformation and an unrelenting focus on upholding the high service standards supplemented a growth of 14 percent in fee income. The contribution from foreign exchange line, debit cards, trade business and home remittances remained strong during the year.

The operating expenses of the bank were recorded at Rs41.8 billion, growing by 17 percent over the last year, while the cost to income ratio significantly improved to 37.4 percent from 42.4 percent reported in the last year.

Proactive monitoring and recovery efforts led to a net provision reversal of Rs2.8 billion in specific provision maintained against non-performing loans (NPLs). Persistent focus on maintaining a robust risk management framework encompassing structured assessment models, effective pre-disbursement evaluation tools and an array of post disbursement monitoring systems has enabled MCB to effectively manage its credit risk. The NPL base of the bank was reported at Rs51.3 billion.

MCB Bank has not taken FSV benefit in calculation of specific provision against its NPLs. The coverage and infection ratios of the bank were reported at 86.17 percent and 6.43 percent, respectively.

On the financial position side, the total asset base of the bank, on an unconsolidated basis, was reported at Rs2.1 trillion (+6pc). Its gross advances registered a historic growth of Rs162 billion (+25pc), above the industry average, to close the year at Rs798 billion; improving ADR of the bank to 58 percent. The corporate lending book grew by Rs.161 billion (+36pc) whereas the consumer loan portfolio increased by Rs4.5 billion (+12pc).

On the liabilities side, the deposit base registered a complete transformation with current account growth gaining momentum quarter on quarter. The concentration level of current account improved to 49 percent on the back of strategic drive. Non-remunerative deposits grew by 21 percent to close at Rs680 billion as at December 31, 2022. CASA mix was reported at 95.9 percent whereas the total deposits of the bank were reported at Rs1.37 trillion.

MCB attracted home remittance inflows of $3,434 million, during the year with market share improving to 11.6 percent as an active participant in the SBP’s cause for improving flow of remittances into the country through banking channels.

The bank’s total capital adequacy ratio (CAR) is 18.84 percent, against the requirement of 11.5 percent (including a capital conservation buffer of 1.50 percent as reduced under the BPRD Circular Letter No. 12 of 2020). It reported a liquidity coverage ratio (LCR) of 204.16 percent and net stable funding ratio (NSFR) of 138.10 percent against the requirement of 100 percent.

Return on assets and return on equity were reported at 1.61 percent and 19.78 percent respectively, whereas the book value per share was reported at Rs144.17.