PR LAHORE - The Board of Directors of MCB Bank Limited met under the chairmanship of Mian Mohammad Mansha on Tuesday to review the performance of the Bank and approve the financial statements for the nine months ended September 30, 2015.
The Bank continued with its strong performance on account of low cost deposits base, improved quality of advances and significant contribution from non-markup income. Controlled operating expenses and provision recoveries remained the hallmark of the period under review.
MCB Bank Limited posted a healthy increase of 24% in profit before tax (PBT) which stood at Rs. 34.1 billion. With profit after tax of Rs. 20.2 billion, the Bank showed an increase of 12% over corresponding period last year. Increase in PBT is mainly contributed by a healthy increase in non-markup income (+41%) and Net Markup Income (+15%). Prime contributors in Non-markup income block were Capital Gains which increased by Rs. 3.1 Billion and fee & commission income that increased by Rs. 1.2 Billion over last year. On the gross markup income side, the Bank recorded an increase of Rs. 4.8 billion with major contribution from investment income. This growth in investment income was achieved through prudent placements and timely shift in concentration levels of investments.
The BoD declared 3rd interim cash dividend of Rs. 4.0 per share for the period ended September 30, 2015 which is in addition to Rs. 8.0 per share interim dividends already paid to the shareholders. On the interest expense side, the Bank registered a decrease of Rs. 84 million over corresponding period last year, which is commensurate with the decreasing interest rate environment. The Bank has also strategically tapered off its high cost deposits during the period under review. The administrative expense base (excluding pension fund reversal) recorded an increase of 11% on account of increased operational and infrastructural outreach.

Effective risk management framework ensured that there was no non-performing loan accretion in the books of the Bank. Resultantly, the Bank continued with its provision reversal in the third quarter of 2015.
The total asset base of MCB Bank Limited grew by 11% over December 2014 and was reported at Rs. 1.04 trillion. Increase in asset base is mainly contributed by 20% increase in investment with 1% increase in gross advances portfolio. The quality of asset base registered continuous improvement as NPLs of the Bank decreased by Rs. 1.1 billion during the nine months period and closed at Rs. 20.8 Billion. Coverage ratio of the Bank was reported at 85.16% with infection ratio improving to 6.40% as compared to 6.80% as at December 2014. On the liabilities side, the Bank’s deposits increased by 3% to Rs. 712.2 Billion as on September 30, 2015 from Rs. 688.3 Billion as of December 31, 2014. On the deposit mix front, current deposits increased by 10% to Rs. 260.3 billion improving the CASA ratio to an all-time high of 93.35% as on September 30, 2015.
Third quarter of the calendar year remained challenging for the banking industry in terms of deposits. Tax on transactions introduced for non-filers had an impact on the deposit growth rate registered in the preceding quarters. However, overall deposit growth remained satisfactory despite the reduction in high cost deposits.
Return on Assets and Return on Equity were reported at 2.74% and 24.55% respectively whereas Book value per share stood at Rs. 101.20.