The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha, on February 12, 2015 to review the performance of the Bank and approve the financial statements for the year ended December 31, 2014.
For MCB Bank 2014 has been an exceptional year as it reported the first three quarterly profits in excess of PKR 9 Billion. As of December 31, 2014 the Bank has created history by posting the highest ever annual profit before tax of PKR 36.7 Billion which in comparison to last year shows an exceptional growth of 14%. This increase is mainly contributed by a growth of 15% in Net Markup Income. Gross Markup Income of the Bank witnessed an increase of PKR 12.2 Billion, primarily on account of timely shift in high yielding investments coupled with substantial growth in lending portfolio. The interest expense registered an increase of PKR 6.6 Billion over last year. The significant impact of regulatory revision in minimum deposit rate was managed by increasing CASA deposit base and reducing high cost fixed deposits. On the Non-markup Income front, the Bank registered healthy contributions from fee income, dividend income, income from dealing in foreign currencies and other income. The administrative expense base (excluding pension fund reversal) recorded a nominal increase of approximately 5% which remains well below the inflationary trends. On the NPL front, MCB Bank Limited continued with its recovery trajectory and posted a reversal in provision against advances and investments of PKR 1.5 Billion. The reversal was primarily on account of strengthened risk management framework and rigorous efforts posted by the recovery units. This translated into Profit before Tax at PKR. 36.7 Billion and Profit after Tax at PKR 24.3 Billion, growing by 14% and 13% respectively.
The Bank’s total asset base was reported at an all-time high of PKR 934.6 Billion which increased by 15% over December 31, 2013. Analysis of the asset mix highlights that net advances have increased by PKR 55.3 Billion (+22%) and net investments have increased by PKR 62.1 Billion (+14%) over December 2013. The quality of assets saw considerable improvement as the Non-Performing Loans contracted by 6% to PKR 21.9 Billion. Coverage Ratio of the Bank was reported at 85.6% with infection ratio improving to 6.8%, primarily on account of increase in gross advances and corresponding decrease in NPL base. On the liabilities side, deposit base of the Bank recorded an increase of PKR 56.0 Billion (+9%).
MCB Bank Limited enjoys the highest CASA mix in the banking industry which has improved to approximately 91% with current and savings deposits increasing by 10% each with high cost term deposits decreasing by 4% over December 2013.
Earnings per share (EPS) for the year came to Rs. 21.85 compared to Rs. 19.31 for 2013. MCB Bank reported return on assets (ROA) of 2.78% (2013: 2.72%), whereas return on equity (ROE) improved to 23.83% (2013: 23.09%)
The Board of Directors declared final cash dividend of Rs. 4 per share for the year ended December 31, 2014, which is in addition to Rs. 10 per share interim dividends already paid to shareholders during the year.
