MCB Bank’s profits up 6%

Total dividend payout by MCB Bank increases to Rs8 per share.

KARACHI: MCB Bank’s net profit increased 5.93 per cent in the nine months of 2010 to Rs12.5 billion from last year’s Rs11.8 billion.

The company announced a quarterly dividend of Rs3 per share (30 per cent), taking total dividend payout to Rs8 per share for January to September 2010.

Higher cost of funds and administrative expenses were projected to depress profitability growth for the period, said BMA Capital analyst Abdul Shakur.

Total expenses went up four per cent to Rs25.47 billion compared with last year’s Rs24.56 billion.

However, improving non-interest based income, up by 16 per cent on a yearly basis, on the back of foreign currency dealing and equity market related gains supported the bottom-line.

Interest earned increased by five per cent to Rs40.24 billion in nine months as yields on assets improve. With government securities making a sizeable chunk of the investment portfolio, MCB will stand to gain on the back of an uptick in T-bill yields in the third quarter.

MCB’s profitability grew by 12.5 per cent to Rs4.55 billion in the third quarter of 2010.

Increasing investment yields during the quarter is expected to elevate the return on earning assets, said Shakur.

Aging factor together with relatively lower exposure to the agriculture sector helped avoid flood-related delinquencies, he added.

Published in The Express Tribune, October 27^th, 2010.