MCB Bank Posts Highest-Ever Profit

MCB Bank has posted its highest-ever profit of Rs. 32.7 billion in 2022 with a growth of 6.3 percent from the last year’s profit of Rs. 30.8 billion, translating into Earnings Per Share (EPS) of Rs. 27.63 as compared to EPS of Rs. 26.00 reported in the previous year.

With a strong build-up in core earnings, MCB’s before-tax profit for the year ended December 31, 2022, posted an impressive growth of 37.3 percent to reach a historic high of Rs. 71.4 billion.

Retrospective application of tax amendments along with higher tax rates for the current year enacted through Finance Act, 2022 resulted in a 54 percent average tax rate for the year compared to an average tax rate of 41 percent for last year.

On the back of strong volumetric growth in the current account and favorable yield curve movements, net interest income for the year ended December 31, 2022, increased by 36 percent over last year. Average current deposits of the bank registered a highest-ever growth of Rs. 96.8 billion (+18 percent) in 2022, on the back of a strategically focused drive.

Non-markup income registered a growth of 23 percent and reported a base of Rs. 24.6 billion against Rs. 20.1 billion 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 lines, debit cards, trade businesses, and home remittances remained strong during the year.

The bank continues to manage an efficient operating expense base and manage costs prudently. Despite exceptionally high inflation, the impact of currency devaluation, and continued investments in human resources, branch network, and technological upgradation, the operating expenses of the bank were recorded at Rs. 41.8 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.

The non-performing loan (NPL) base of the bank was reported at Rs. 51.3 billion. The bank has not taken FSV benefit in the calculation of specific provisions against its NPLs. The coverage and infection ratios of the bank were reported at 86.17 percent and 6.43 percent, respectively.

MCB Assets Cross Rs. 2 Trillion Mark

The total asset base of the bank, on an unconsolidated basis, was reported at Rs. 2.1 trillion (+6 percent). The gross advances of the bank registered a historic growth of Rs. 162 billion (+25 percent), above the industry average, to close the year at Rs. 798 billion; improving the ADR of the bank to 58 percent. The corporate lending book grew by Rs. 161 billion (+36 percent) whereas the consumer loan portfolio increased by Rs. 4.5 billion (+12 percent).

On the liabilities side, the deposit base registered a complete transformation with current account growth gaining momentum quarter on quarter. The concentration level of the current account improved to 49 percent on the back of a strategic drive. Non-remunerative deposits grew by 21 percent to close at Rs. 680 billion as of December 31, 2022. CASA mix was reported at 95.9 percent whereas the total deposits of the bank were reported at Rs. 1.37 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 SBP’s cause for improving the flow of remittances into the country through banking channels.

The board of directors has declared a final cash dividend of Rs. 6.0 per share i.e. 60 percent, in addition to 140 percent already paid, bringing the total cash dividend for the year 2022 to 200 percent.

In 2022, while successfully completing 75 years of banking services to the nation, the Bank has transformed into a dynamic and innovative organization; overcoming a multitude of challenges along the way with resolve and fortitude. Recognition by the globally coveted Asia Money awards as ‘Pakistan’s Best Corporate Bank of the Year’ in 2022 is a testament to its legacy of posting consistent and exceptional performance for its stakeholders.

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 Rs. 144.17.

The bank on a consolidated basis is operating the 2nd largest network of more than 1,600 branches in Pakistan and remains one of the prime stocks traded in the Pakistani equity market, with 2nd highest market capitalization in the industry.

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