MCB Bank announces financial results for the year ended December 31, 2018.

The Board of Directors of MCB Bank Limited, met under the Chairmanship of Mian Mohammad Mansha, on February 20, 2019 to review the performance of the Bank and approve the financial statements for the year ended December 31, 2018.

Unconsolidated Profit Before Tax (PBT) of the Bank for the year ended December 31, 2018 increased by 3% and was reported at Rs. 32.06 billion as compared to Rs. 31.01 billion for 2017, whereas Profit After Tax (PAT) for 2018 was reported at Rs. 21.36 billion.

During the calendar year 2018, the changing macro-economic factors made the operating environment more challenging with discount rate registering a steep increase of 425 bps in absolute terms. Based on the anticipated interest rate movement, the Bank focused on asset base with shorter maturities, resulting in 8% increase in net interest income over last year. On the gross markup income side, the Bank reported an increase of Rs. 9.2 billion over last year. Analysis of the interest earning assets highlights that income on advances increased by Rs. 10 billion, primarily on account of improved average advances volume of Rs. 83 billion coupled with increased yield of 92bps. On the investment side, gross markup income decreased by Rs. 2.2 billion, due to decreased average volume of Rs. 66 billion.

On the interest bearing liabilities side, the cost of deposits increased by 69bps over last year, to corroborate to the increasing interest rates. The Bank increased its average deposits by Rs. 123 billion when compared with last year. Average borrowings volume registered a significant decline of Rs. 84 billion over last year.

The non-markup income block of the Bank was reported at Rs 17.2 billion with major contributions coming in from fee, commission income and income from dealing in foreign currencies. Fee income increased by 10% with major contributions from card related fee, remittances, commission on trade and bancassurance. On the capital market front, the Bank recorded capital gains amounting to Rs, 1 billion as compared to Rs. 3.8 billion in last year. Foreign exchange income reflected a healthy increase of Rs. 1.8 billion (+109%) over last year.

On the administrative expenses side excluding pension fund, despite the surge in inflationary pressures coupled with significant devaluation and increase in operational outreach, the Bank was able to contain the growth percentage to 10%. The increase includes the premium cost amounting to Rs. 559 million on account of...