For the quarter ended September 2019, MCB Group has posted profits of Rs 2.5 billion, which represents an increase of 18.9% in comparison to the corresponding period last year.
Commenting on the results, Pierre Guy Noël (Chief Executive – MCB Group Ltd) said:
“Group attributable profits went up by 18.9% to reach Rs 2,533 million for the quarter ended September 2019, following a general improvement in performances across the banking and non-banking clusters of the Group. Operating income increased by 12.6% to reach Rs 5,259 million. Net interest income rose by 13.4%, driven by the expansion in the loans and advances portfolio as well as higher level of investment in Government securities, which also generated improved yields. Net fee and commission income grew by 5.7% on the back of enhanced contribution from the payment and wealth management activities. ‘Other income’ recorded a growth of 17.7%, mainly underpinned by a rise of 15.0% in profit on exchange and fair value gains on financial instruments.
Growth in operating expenses was contained to 5.7%, leading to a fall in the cost to income ratio to 37.4% compared to 39.8% for the corresponding period in the previous year. Net impairment charges rose by 5.7% to reach Rs 381 million, with the annualised cost of risk improving slightly to 57 basis points, while gross NPL ratio remained stable at 4.1%.
Our share of profit of associates increased by some Rs 43 million, driven primarily by an enhanced performance of BFCOI as a result of improved cost of risk. Tax charges rose by 20.9% to Rs 536 million reflecting a slight increase in the overall effective tax rate at the level of MCB Ltd following the change in the tax regime in the local banking sector.
Shareholders’ funds of the Group reached Rs 57 billion, resulting in an improvement in our capital adequacy ratio to 17.6%, of which 16.0% in the form of Tier 1.
Despite the uncertainties prevailing in the international environment, results for the semester to December 2019 are projected to improve over last year.”
Profits at a glance:
- Profit attributable to shareholders: Rs 2.5 BN (+18.9%)
- Operating income: Rs 5.3 BN (12.6%)
- Assets: Rs 477.1 BN (+17.2%)
- Rise of 13.4% in net interest income
- Growth of 5.7% in net fee and commission income
- Other income’ up by 17.7%
- Increase of 5.7% in operating expenses
- Rise of 5.7% in impairment charges, with gross NPL ratio standing at 4.1%
- Share of profit of associates higher by Rs 43 million
- Y-o-y growth of 13.6% in deposits and of 7.7% in gross loans