Karachi: MCB Limited has disclosed its financial results for the first half of 2024, reporting a 20% increase in profit before tax, which amounted to PKR 31.9 billion. The results reflect strong gains in net markup and non-interest income despite economic pressures.
According to AKD Securities Limited, the bank’s performance was buoyed by a 12% increase in net markup income, which reached PKR 74.9 billion, and a 30% rise in non-interest income to PKR 18.3 billion, largely driven by fee commission income and foreign exchange income. The board of directors has declared an interim dividend of PKR 9 per share, resulting in a total payout of PKR 18.0 per share for the first half of the year.
The bank’s strategic focus on maintaining no-cost deposits and optimizing its earning asset mix has paid dividends. Additionally, the significant growth in investments, which saw an 18.6% increase year-over-year to PKR 1.48 trillion, was primarily fueled by an increase in floating Pakistan Investment Bonds (PIBs) and fixed PIBs.
MCB’s gross advances also saw a notable increase of PKR 37.0 billion, translating into an advance-to-deposit ratio (ADR) of 33.1%, with the bank targeting an ADR of 50% by year’s end to mitigate higher taxation risks. The non-performing loans (NPLs) stood at PKR 57.0 billion, with the bank achieving a coverage ratio of 89.07% and an infection ratio of 8.64%.
Deposits grew by 10.4% year-over-year to PKR 1.99 trillion, with a substantial increase in current accounts, which helped boost the current account mix to 49% and the CASA ratio to 97.1%. The bank’s Islamic banking segment also showed robust growth, with deposits up by 23% year-over-year to PKR 252 billion and advances growing by 16%.
Despite a challenging economic environment characterized by high inflation and sharp currency devaluation, MCB has maintained a solid capital adequacy ratio (CAR) of 20.68%, well above the regulatory requirement. The bank anticipates further policy rate cuts in the coming months, which could impact financial performance positively.