MCB Bank declares Rs31.1 billion annual profit

KARACHI: The MCB Bank net profit showed a growth of 6 per cent to Rs31.1 billion for the year 2021, compared with the earnings of Rs29.56 in the preceding year, a bourse filing said.

Analysts at Arif Habib Limited said that the earnings increased on a year-on-year basis on the back of reversals in provisioning charges booked during the year.

The bank announced a cash dividend of Rs5, in-line with the expectations taking full year payout to Rs19 per cent share.

The net interest income of the bank settled at Rs68.3 billion during the year 2021, portraying a decline of 10 per cent on a year-on-year basis, primarily led by a higher interest expense on the back of recent rate hikes. On a sequential basis, however, the net interest income remained flat.

The non-funded income posted a 7 per cent jump on a year-on-year basis, led by 102 per cent increase in dividend income on a year-on-year basis.

Further, the fee income posted a 14 per cent growth on a year-on-year basis due to an increase in the economic activities and the foreign exchange income posted a 41 per cent jump on a year-on-year basis due to rupee depreciation.

On the other hand, a decline of 92 per cent was witnessed on a year-on-year basis in the capital gains to Rs262 million during the year.

The bank booked Rs1.9 billion reversal in the provisioning charger this quarter taking total reversals to Rs5.4 billion during 2021.These reversals could signal improved outlook on the asset quality following the rebound in economic activity across the country.

The operating expenses of the bank were up 8 per cent on a year-on-year basis during 2021, and a 3 per cent increase on a quarter-on-quarter basis.

The cost and income of the bank settled at 47 per cent during the year under review, up from 41 per cent from the previous year, while the effective tax rate was 41 per cent during the year 2021.