LAHORE: MCB Bank reported highest pretax quarterly profit of Rs9.4 billion in its history for the quarter ended June 30.
The bank’s board that met with its chairman Mian Mohammad Mansha in the chair approved its unaudited accounts on Tuesday, noting that the operational profitability from the bank’s core business had indicated significant improvement.
“The impact of regulatory revision in minimum deposit rate was managed by strategically increasing CASA deposit base and tapering off high cost fixed deposits,” an announcement said after the meeting.
This timely shift in the concentration of earning assets based on interest rate call resulted in improvement of interest margins by 14 per cent.
On gross markup income side, the bank recorded an increase of Rs4.6bn whereas markup expense registered an increase of Rs1.97bn.
Non-markup income block was reported at Rs5.45bn, primarily fuelled by an increase of 153pc in income from dealing in foreign currencies. The administrative expense base (excluding pension fund reversal) recorded an increase of approximately 11pc.
Recovery trajectory observed over last few years in the NPL base continued during the first half of 2014, resulting in a reversal of provision of Rs980 million.
This translated into profit before tax at Rs17.8bn and profit after tax at Rs11.72bn for the half year.
The bank’s total asset base was reported at an all-time high of Rs868.51bn, which rose by a healthy 6pc over December 31, 2013. An analysis of the asset mix highlights that net advances have increased by Rs35.8bn or 14pc over December 2013, whereas net investments have decreased by Rs4.9bn (1pc).
NPL base of the bank, following the trend set over last few quarters, has further decreased by Rs414m in the second quarter, taking the overall decrease to Rs1.167bn in the first half of 2014.
Coverage ratio was reported at 85.6pc with infection ratio improving to 7.29pc on account of significant increase in gross advances and corresponding decrease in the NPL base.
On the liabilities side, deposit base of the bank recorded an increase of Rs53.4bn (8pc) in six months.
CASA base was reported at 91pc with current deposits increasing by 23pc and savings deposits by 3pc. High cost term deposits decreased by 10pc.