The Muslim Commercial Bank (MCB) announced unconsolidated profit of Rs5.8bn (EPS Rs5.7) up 35 per cent in first quarter of current fiscal year after tax as against Rs4.3bn (EPS Rs4.22) in 4Q2012 and 4 per cent as against Rs 5.6b (EPS Rs5.5) in 1Q2012.
The result is also accompanies by Rs 3.5 per share cash dividend. Although declining banking spreads has impacted Net Interest Income (NII) of MCB, reversal of provisioning and controlled administrative costs were the profitability drivers in 1Q2013.
As compared to 1Q2012, interest income declined by 5 per cent to Rs 16.7bn while interest expense rose by 2 per cent to Rs 7.0 in 1Q2013. Resultantly, NII declined by 9 per cent to Rs 9.7bn. Further 3 per cent decline in non-markup income to Rs 2.4bn also depressed profitability.
However, Rs 840m reversal of provisions as against provision charge of Rs 75mn in 1Q2012 and 6 per cent decline in non-markup expense to Rs 4.2b helped MCB to post 4percent YoY increase in profitability.
On sequential basis, though NII improved by marginal 1per cent but reversal of Rs840mn as against Rs 424mn provision charged in 4Q2012 resulted in 15 percent improvement in NII (After provisions). Further 6per cent increase in non-markup income and 12 per cent decline in non-markup expense resulted in 35 per cent increase in the profitability.