On August 7, 2024, MCB Bank Limited (MCB) held a Board of Directors meeting chaired by Mian Mohammad Mansha, where they reviewed the bank’s performance and approved the condensed interim financial statements for the half-year ending June 30, 2024.
The Board declared a second interim cash dividend of Rs. 9.00 per share (90 percent), in addition to the previously paid 90 percent dividend, making the total cash dividend for the first half of 2024 amount to 180 percent.
MCB’s Profit Before Tax (PBT) for the first half of 2024 rose by 16 percent to Rs. 62.7 billion. Profit After Tax (PAT) grew 20 percent to Rs. 31.9 billion, resulting in an Earnings Per Share (EPS) of Rs. 26.95, up from Rs. 22.52 in the same period last year.
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The bank’s net interest income increased by 12 percent due to strong growth in average current deposits and strategic asset repositioning. Non-markup income also saw a significant rise to Rs. 18.3 billion (+30 percent), driven by fee commission income (Rs. 11.3 billion, +29 percent), foreign exchange income (Rs. 4.9 billion, +38 percent), and dividend income (Rs. 1.7 billion, +13 percent).
MCB reported robust growth in income from fee commissions, including a 50 percent increase in trade and guarantee-related business income, a 43 percent rise in card-related income, a 41 percent increase in credit-related fees, and a 20 percent growth in branch banking customer fees. The bank has also invested in digital transformation and service enhancements.
Operating expenses rose to Rs. 28.4 billion (+18 percent), attributed mainly to increases in staff costs (+15 percent), utility costs (+28 percent), and IT-related expenses (+22 percent). The cost-to-income ratio stands at 30.50 percent, up from 29.58 percent in the previous year.
MCB has focused on asset quality, with a reported Non-Performing Loans (NPLs) base of Rs. 57.0 billion as of June 30, 2024. The bank’s coverage ratio is 89.07 percent and the infection ratio is 8.64 percent. The total asset base increased by 10.1 percent to Rs. 2.67 trillion, driven by a 19 percent increase in investments and a 6 percent rise in gross advances.
The bank’s deposit base grew by Rs. 110 billion (+13 percent) to Rs. 1.99 trillion. Despite higher average policy rates, the domestic cost of deposits was managed at 10.76 percent, compared to 7.93 percent in the previous year.
Return on Assets (ROA) and Return on Equity (ROE) are maintained at 2.50 percent and 30.08 percent, respectively, with a book value per share of Rs. 184.04.
MCB attracted USD 1,973 million in home remittances (+23 percent) during the period, reinforcing its role in improving remittance flows into Pakistan.
The bank’s Capital Adequacy Ratio (CAR) improved to 20.68 percent, well above the regulatory requirement of 11.5 percent. The Common Equity Tier-1 (CET1) ratio stands at 17.09 percent, exceeding the requirement of 6.23 percent. The bank also reported a Leverage Ratio of 6.2 percent, surpassing the regulatory limit of 3.0 percent, a Liquidity Coverage Ratio (LCR) of 261.91 percent, and a Net Stable Funding Ratio (NSFR) of 164.85 percent.
Pakistan Credit Rating Agency reaffirmed MCB’s credit ratings at “AAA / A1+” for long-term and short-term, respectively, on June 22, 2024.
MCB operates the second-largest branch network in Pakistan, with over 1,650 branches, and remains one of the top stocks in the Pakistani equity market, ranking among the highest-capitalized banks in the industry.
