MCB Bank posts Rs20.1 billion profit

KARACHI: MCB Bank posted consolidated earnings of Rs20.1 billion for the first three quarters of 2015, which is up 8.8% on a year-on-year basis.

According to an official filing on Tuesday, Pakistan’s fourth largest commercial bank by assets recorded a net profit of Rs6.6 billion in the quarter ending on September 30, up 21% from the same three-month period of 2014.

MCB also announced a dividend of Rs4 per share, which brings cumulative pay-out to Rs12 per share since the beginning of the calendar year.

Net interest income surged 15% in Jan-Sept to Rs36.9 billion. While interest expense remained flat year on year, gross interest income surged 8% over the nine-month period, the bank’s profit-and-loss statement showed.

According to AKD Securities, the quarter-on-quarter increase of 21% in earnings was mainly on the back of the normalisation of the tax rate. It was down to 37% in the third quarter following the adjustment of one-time super tax in the preceding quarter that had resulted in the effective tax rate of 55%.

Other key highlights of MCB Bank’s nine-month financial results include provision reversals worth over Rs1 billion as opposed to the reversals of Rs1.4 billion in Jan-Sept along with annual growth of 39% in non-interest income.

MCB Islamic Bank

MCB Bank formally informed its shareholders on Tuesday about the regulatory approval of the demerger of Islamic Banking Group from MCB Bank.

“The State Bank of Pakistan (SBP) has issued a formal Certificate of Commencement of Business to newly established MCB Islamic Bank (MCBIB) and notified it as a scheduled bank,” MCB Bank said in a stock notice.

All existing operations of Islamic Banking Group within MCB Bank will be merged into MCBIB with effect from September 30, 2015, it said.

Meezan Bank’s earnings up 10%

Meezan Bank announced a profit of Rs3.9 billion for the first three quarters of 2015, up 10% from a year ago.

The country’s largest Islamic bank recorded earnings amounting to Rs1.2 billion in the third quarter alone, which is 4% less than the comparable figure for Jul-Sept 2014.

According to Topline Securities, the quarterly results are below the market expectation. Although the bank’s net spread improved 25% year on year to Rs4.3 billion in the third quarter because of growth in deposits and earning assets, 36% rise in ‘other expenses’ to Rs3.5 billion dragged quarterly earnings down.

Topline Securities expects deposits of Meezan Bank to have grown 15% to Rs439 billion in Jan-Sept as opposed to the industry-wide growth rate of 8%.

“We flag the absence of adequate Shariah-compliant investment opportunities, declining interest rates and increasing competition from conventional banks entering Islamic banking as key risks for Meezan Bank,” it said in its commentary on the financial accounts of the bank.