MCB Bank’s profit falls 30 percent in first half

KARACHI: Profit of MCB Bank fell 30 percent to Rs9.471 billion for the half year ended June 30, translating into earnings per share (EPS) of Rs7.95, a bourse filing said on Wednesday.

MCB Bank earned Rs13.611 billion with EPS of Rs12.18 in the corresponding period a year earlier, a statement to Pakistan Stock Exchange said.

The bank declared cash dividend of Rs4/share, which is in addition to interim dividend of Rs4/share already paid.

The bank said the significant decrease in profit after tax was on account of a tax provision reversal amounting to Rs3.59 billion recorded in June 2017 results.

The bank said its deposit crossed the landmark of one trillion rupees.

Net interest income of the bank improved significantly by 12.49 percent in the first half over the corresponding period last year and was reported at Rs22.55 billion, the bank said in a statement. Interest expense decreased Rs756 million or 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,” it said. The bank’s spread improved to 3.69 percent from 3.48 percent of the same period last year.

The non-markup income block of the Bank was reported at Rs8.26 billion, reflecting a decrease of 14.63 percent when compared with corresponding period last year.

Capital gains and dividend income went down by Rs2.09 billion and Rs242 million respectively, due to the lacklustre performance of the capital market during the period.

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.

Analyst Umair Naseer at Topline Securities said earnings of the bank declined on the back of higher taxation, one-off pension cost, booked in 1Q2018, and lower non-interest income.

“Key risks for the company include delay in hike in policy rate, lower than expected advances growth and deposit growth, and deterioration in economic indicators,” Naseer added.

MCB Bank recorded profit of Rs4.7 billion with EPS of Rs3.99/share during the second quarter of 2018 compared to Rs7.7 billion with EPS of 6.88/share in the corresponding period a year earlier. Analyst Mustafa Mustansir at Taurus Securities said uptick in operating expenses, possibly due to conversion cost of branches into Islamic along with super-tax charge further dented earnings.

Naseer of Topline Securities said net interest income of the bank improved 13 percent year-on-year to Rs11.9 billion in the April-June period amid higher interest rates during the period under review. SBP increased policy rate to 7.5 percent between January and July.

Naseer said non-interest expense of MCB increased 14 percent year-on-year to Rs8.6 billion in the second quarter mainly on back of higher admin charge. Cost to income ratio of 52 percent was in line with average seen during the last three quarters post consolidation of NIB with MCB.

Capital gains, during the quarter, declined 65 percent to Rs400 million due to lower gains from bonds and equities. Consequently, non-interest income of MCB dropped nine percent to Rs4 billion, keeping bottom-line of the bank in check.

Atlas Honda’s quarterly profit rises to Rs1.195bln

Profit of Atlas Honda rose nine percent to Rs1.195 billion for the three months period ended June 30, translating into EPS of Rs11.55. The motorcycle maker recorded profit of Rs1.100 billion with EPS of Rs10.64 in the corresponding period a year ago.

The company didn’t announce dividend.

Sales increased to Rs22.128 billion in the April-June from Rs17.693 billion in the corresponding period a year earlier.

Cost of sales also rose to Rs20.006 billion from Rs15.747 billion. Atlas Honda said its activities expose it to a variety of financial risks, including credit, liquidity and market (foreign exchange, interest rate and price risks). “There have been no significant changes in the risk management policies since the year end,” the company said in a statement.

Aisha Steel’s annual profit soars 26 percent

Aisha Steel Mills Limited’s profit surged 26 percent for the year ended June 30 on higher demand, resulting in rising revenue for the company.

The company’s profit amounted to Rs1.283 billion with EPS of Rs1.54 in the July-June period as against Rs1.020 billion with EPS of Rs1.31 a year earlier.

Aisha Steel did not announce any dividend for its shareholders. The company’s annual revenue increased 34 percent to Rs18.903 billion.

The finance cost increased 13.7 percent to Rs1.078 billion during the last financial year.

Brokerage Elixir Securities said revenue increased due to increase in dispatches and improvement in retention price.