MCB announced earnings on Wednesday for CY18 above expectations, at PKR 20.3bn (EPS: PKR 17.17/share), depicting a YoY decline of 7%. Higher OPEX (+18% YoY) and pension liability of PKR 1.9bn led to the downturn. However strong growth in NII and impressive FX income provided respite.
The bank also announced a dividend of PKR 4.00/share for 4QCY18, taking total payout to PKR 16.00/share for CY18.
Net Interest Income of the bank settled at PKR 48bn, depicting a healthy 10% YoY improvement with mark-up income increasing 15% YoY while interest expense jumped by 21% YoY.
On a sequential basis the bank’s NII recorded an 8% QoQ.
NFI of the bank recorded an impressive 58% QoQ jump led by a 6.2x jump in FX income as the bank benefited majorly from the volatility in the currency markets.
On a yearly basis, fee income of the bank recorded a healthy jump of 11% YoY.
The bank booked net reversals worth PKR 822mn during CY18 which provided further respite to earnings.
That said the bank booked a net provisioning expense of PKR 792mn during 4Q, which is possibly an impairment charge on the equity book.
Effective tax rate was 34% during CY18 compared to 28% SPLY (hefty tax reversal was booked in 2QCY17).