KARACHI: MCB Bank’s profit for the first three months, January to March, changed nominally because of lower fee and brokerage income.
MCB Bank is Pakistan’s biggest lender by market value, according to them. Their net income increased to Rs4.14 billion ($49.3 million), or Rs5.45 a share, for the quarter ended March 31. This was a slight increase from the Rs4.13 billion, or Rs5.44 per share, a year earlier, according to data released on the Karachi Stock Exchange Wednesday.
Total income fell to Rs14.5 billion from Rs14.7 billion a year ago. “Lower activity in the equity and foreign exchange markets led their fee income to decline,” said the head of research at Invest Capital & Securities Ltd, Khurram Shehzad, who recommends clients hold the stock.
The benchmark Karachi Stock Exchange (KSE) 100 index rose 8.4 per cent in the first quarter, compared with a 19 per cent increase in the same period a year ago. The rupee rose 0.3 per cent against the US dollar in the three months ended March 31, compared with a decline of 1.8 per cent a year ago. MCB’s interest income rose to Rs13.1 billion from Rs12.9 billion and income from fees, commission and brokerage fell to Rs1.4 billion from Rs1.68 billion, according to the statement.
Profit also rose because of lower provisions against delinquent loans, Shehzad said. MCB Bank’s provisions and write-offs fell to Rs1 billion in the first quarter, from Rs1.75 billion a year ago, according to the statement.
The State Bank began requiring lenders to set aside more funds to cover delinquent loans in October 2007, and then eased the rules last year. Banks are currently allowed to use 40 per cent of the value of assets provided as collateral to meet requirements for provisions against defaults. Shares of MCB Bank fell 0.2 per cent to Rs216.60 on the KSE at the close of trading. The stock advanced 8.5 per cent during the past year, missing the 13 per cent rise in the KSE-100 Index. BLOOMBERG