[Lahore: October 26, 2023] The Board of Directors of MCB Bank Limited (MCB) in its
meeting under the Chairmanship of Mian Mohammad Mansha, on October 25, 2023,
reviewed performance of the Bank and approved the interim financial statements for the nine
months’ period ended September 30, 2023. The Board of Directors has declared a 3 rd interim
cash dividend of Rs. 8.0 per share i.e. 80%, in addition to 130% already paid, bringing the
total cash dividend for the nine months period ended September 30, 2023 to 210%.
Through focused efforts of the Bank’s management in building no-cost deposits and
optimizing its earning assets mix, MCB successfully sustained its growth momentum in core
earnings to post historically high nine months Profit Before Tax (PBT) of Rs. 88.1 billion;
registering an impressive increase of 71% on a year-on-year basis. The Profit After Tax
(PAT) was recorded at Rs. 44.1 billion (+122%) and translated into an Earning Per Share
(EPS) of Rs. 37.25 compared to an EPS of Rs. 16.75 reported in the corresponding period
last year.
Strong volumetric growth in current account and timely repositioning of the asset book
resulted in a 73% increase in net interest income for the period under review as compared
to corresponding period last year.
Non-markup income increased to Rs. 22.6 billion (+12%) against Rs. 20.3 billion in the
corresponding period last year with major contributions coming in from fee commission
income (Rs. 14.2 billion), income from dealing in foreign currency (Rs. 5.9 billion) and
dividend income (Rs. 2.0 billion).
Improving customer and interbank flows, diversification of revenue streams through
continuous enrichment of service suite, investments towards digital transformation and an
unrelenting focus on upholding high standards of service delivery supplemented a broad-
based growth of 38% in income from fee commission; with trade and guarantee related
business income growing by 95%, cards related income by 48%, branch banking customer
fees by 12% and income from home remittance by 18%.
The Bank continues to manage an efficient operating expense base and monitor costs
prudently. Amidst a persistently high inflationary environment, currency devaluation, rapidly
escalating commodity prices and continued investments in human resources and
technological upgradation, the operating expenses of the Bank were reported at Rs. 37.4
billion (+23%). The cost to income ratio of the Bank improved significantly to 29% from
37% reported in corresponding period last year.
Navigating a challenging operating and macroeconomic environment, the Bank has been
addressing asset quality issues by maintaining discipline in management of its risk return
decisions. Diversification of the loan book across customer segments and a robust credit
underwriting framework that encompasses structured assessment models, effective pre-
disbursement evaluation tools and an array of post disbursement monitoring systems has
Press Release
enabled MCB to effectively manage its credit risk; the Non-performing loan (NPLs) base of
the Bank was reported at Rs. 54.6 billion as at September 30, 2023. The coverage and
infection ratios of the Bank were reported at 82.86% and 8.45% respectively.
On the financial position side, the total asset base of the Bank grew by 15% and was
reported at Rs. 2.39 trillion. Analysis of the assets mix highlights that net investments
increased by Rs. 279 billion (+29%) whereas gross advances reported a decrease of Rs. 151
billion (-19%) over December 31, 2022.
The Bank continued its focus on building no cost deposits, leading to a robust growth of Rs.
190 billion (YoY: +30%) in average current deposits. The average current to total deposits
ratio improved to 51.5% during the period under review from 41.3% in corresponding
period last year. Despite the exceptional increase in interest rates during the period, the
domestic cost of deposits was contained at 8.63% as compared to 6.21% in the
corresponding period last year.
Return on Assets and Return on Equity significantly improved to 2.63% and 31.84%
respectively, whereas the book value per share was reported at Rs. 167.81.
During the period under review, MCB attracted home remittance inflows of USD 2,369
million to further consolidate its position as an active participant in SBP’s cause for
improving flow of remittances into the country through banking channels; with market share
improving to 12.3% compared to 11.4% in the corresponding period last year.
While complying with the regulatory capital requirements, the Bank’s total Capital Adequacy
Ratio (CAR) is 20.26% against the requirement of 11.5% (including capital conservation
buffer of 1.50% as reduced under the BPRD Circular Letter No. 12 of 2020). Quality of the
capital is evident from Bank’s Common Equity Tier-1 (CET1) to total risk weighted assets
ratio which comes to 17.74% against the requirement of 6%. Bank’s capitalization also
resulted in a Leverage Ratio of 6.05% which is well above the regulatory limit of 3.0%. The
Bank reported Liquidity Coverage Ratio (LCR) of 246.89% and Net Stable Funding Ratio
(NSFR) of 150.03% against requirement of 100%.
Pakistan Credit Rating Agency re-affirmed credit ratings of MCB at “AAA / A1+” for long
term and short term respectively, through its notification dated June 23, 2023.
