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JS Bank Announces Stellar Financial Performance for 2023, Records Significant GrowthMCB Bank Poised for Higher Dividend Payouts Amid Strong Yield Performance

Karachi, JS Bank, a leading financial institution in Pakistan, has unveiled its financial results for the year 2023, showcasing substantial growth in its operations and financial metrics. The bank reported a consolidated Profit Before Tax (PBT) of PKR 18.3 billion, an eightfold increase from the previous year, and an unconsolidated PBT of PKR 8.5 billion, a fourfold increase from the previous year. The consolidated Earnings per Share (EPS) for the period stood at PKR 5.99, while the unconsolidated EPS saw a growth of over 270% to PKR 2.75.

According to JS Bank Limited, the institution's success is attributed to its customer-first approach, which has solidified its position as one of the fastest-growing banks in the country. The bank also reported significant growth in deposits and total assets, with consolidated deposits surpassing PKR 1 trillion and consolidated total assets reaching PKR 1.2 trillion. Unconsolidated figures also showed robust growth, with deposits at PKR 486 billion and total assets at PKR 589 billion.

Basir Shamsie, President and CEO of JS Bank, expressed satisfaction with the bank's performance, highlighting the trust and confidence placed in the bank by its customers and shareholders. Shamsie emphasized the bank's commitment to navigating the dynamic market conditions and continuing to deliver top-quality products and services.

A major development in 2023 was JS Bank's successful acquisition of BankIslami Pakistan Limited (BIPL), allowing the bank to offer a more diversified portfolio of products and services to a broader customer base. This strategic move has enabled JS Bank to strengthen its presence in both conventional and Islamic banking sectors.

The bank also achieved significant milestones in its digital and trade operations. The foreign trade volume grew by more than 80%, and the bank onboarded several prominent local and multinational corporates. Furthermore, 80% of JS Bank's branches now feature digital account opening capabilities, and the digital customer base expanded by 46% from the previous year. The bank's digital banking platform, Zindgi, witnessed a surge in downloads to 10 million, with 4.8 million accounts opened. Zindigi distinguished itself by offering AI-driven micro-lending and comprehensive Raast P2M services.

JS Bank's achievements in 2023 underscore its role as a catalyst for Pakistan's prosperity, with a commitment to providing innovative financial solutions in the conventional and digital banking sectors in the years ahead.

Islamabad, MCB Bank is positioned to offer high dividend yields with the potential for increased payouts, as per a recent analysis by JS Global. The bank, known for its robust dividend performance, currently boasts an 18% annual dividend yield (D/Y), even after delivering a more than 100% total return on its stock over the past 12 months. With a payout ratio of 60% for the calendar year 2024, up from an average of around 75% over the last decade, MCB is expected to maintain its quarterly dividend per share (DPS) at Rs9, culminating in an annual payout of Rs36 per share.

According to JS Global, the financial institution's strong dividend yield remains intact despite significant stock performance gains. The analysis suggests that an increase in the payout ratio is feasible, given MCB's comfortable Total Capital Adequacy Ratio (CAR) of 20.4%, well above the minimum requirement of 11.5%. The report includes a sensitivity analysis of dividend yields based on varying payout ratios for the year 2024, indicating that yields could reach as high as 23% if the bank decides to revert to its historical payout trends.

The bank's management, in a corporate briefing session, highlighted a strategic focus on lowering deposit costs and preparing for potential interest rate reductions in the latter half of the year. Expectations are set for a 200 to 300 basis points drop in the policy rate during CY24, which could impact earnings in the following years. Nonetheless, the bank's emphasis on increasing zero-cost deposit mobilizations and improving transaction banking services is expected to support its financial stability.

MCB's investment strategy, with a significant portion of its portfolio in T-Bills and Floating PIBs, demonstrates a cautious approach to asset allocation. The bank maintains a Gross Infection ratio at 8%, with a substantial investment increase year-over-year, signaling a prudent management of its asset quality amid challenging economic conditions.

JS Global's disclosure clarifies the unbiased, independent nature of its analysis, based on a comprehensive review of various information sources. The research report underscores the potential for MCB Bank to sustain, if not increase, its dividend payouts, contributing to its attractiveness as a dividend yield play within the financial sector. This optimistic outlook is contingent upon the bank's continued management efficiency and macroeconomic factors, including interest rate movements and overall market dynamics.