MCB Bank Limited reported consolidated earnings per share of PKR 12.36 in 1QCY25, down 18% from PKR 15.04 in 1QCY24. This translates into profit after tax of PKR 14.7 Bn compared to PKR 17.9 Bn in SPLY. The bank declared a dividend of PKR 9 per share in 1QCY25 same as in 1QCY24. Total revenue in 1QCY25 reached PKR 50.1 Bn against PKR 52.5 Bn in 1QCY24, a decrease of 5%. This was primarily driven by an 8% decrease in mark-up income from PKR 42.4 Bn in 1QCY24 to PKR 39.1 Bn in 1QCY25 owing to a declining policy rate.
The bank saw its total deposits rise from PKR 1.9 Trn at the end of CY24 to PKR 2.1 Trn at the end of 1QCY25, an increase of 8.8%. Current accounts now contribute 51% to the deposit base and the management is targeting 25% growth in current account deposits for CY25.
Going forward, the management expects historical deposit growth of 15-20% year on year will resume. It is pertinent to note that since there is no longer ADR based taxation banks are adequately incentivized to grow their deposit base. The management hopes to focus on Current Account deposit growth. Investments stood at PKR 1.83 Trn, up 56% from PKR 1.17 Trn at the end of CY24.
Management highlighted that out of its portfolio of investments of PKR 1.83 Trn, PKR 1.25 Trn was invested in PIB Floaters. Out of the remaining, PKR 275 Bn is allocated to fixed rate PIBs with a weighted average rate of 13% and maturity of 2.5 years. The bank also holds PKR 135 Bn in T-bills with an average rate of 12.6%. The bank’s cost to income ratio for 1QCY25 stood at 38.2% compared to 29.5% in 1QCY24. Management expects this to remain stable at around 40% for CY25. Capital Adequacy Ratio stood at 19.1% down from 19.35% at the end of CY24. Advances to deposit ratio stood at 36% in Mar-25 down from 54% at the end of CY24. The management expects ADR to remain near 40% in the future
Moving forward, the management believes that the SBP will maintain the status quo in its next monetary policy meeting. The bank aims to continue to working on its low-cost deposit base to drive profitability in the years to come
Important Disclosures
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