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October 18, 2019

MCB profit up 19pc to Rs16.162 billion in January-September

Business

October 18, 2019

KARACHI: MCB profit increased 19 percent to Rs16.162 billion for the nine months period ended September 30, 2019, translating into earnings per share (EPS) of Rs13.63, a bourse filing said on Thursday.

MCB earned Rs13.623 billion with EPS of Rs11.46 in the corresponding period earlier. The Board of Directors of MCB Bank declared third interim cash dividend of Rs4.0/share for the quarter ended September 30, 2019, equivalent to 40 percent. This was in addition to interim dividend already paid at Rs8/share, equivalent to 80 percent, a notice to the Pakistan Stock Exchange (PSX) showed.

This brought the total cash dividend for the year ending 2019 to 120 percent, continuing with its highest in the industry dividend payout trend.

Net interest income (NII) of the bank settled at Rs46 billion depicting an impressive 31 percent YoY jump, while on a sequential basis the bank’s NII recorded an 8.0 percent jump QoQ. The key highlights of the performance were impressive increase in net interest margins through gradual shift in the maturity profiling of investment base along with an efficient cost base.

Net foreign income of the bank faced a downturn of 4.0 percent YoY primarily owing to losses on sale of securities (Rs187 million for nine months) continuing this quarter (poor stock market performance in addition to higher rates eroding gains on PIBs).

The bank’s foreign exchange income and income from derivatives portrayed an impressive jump of 18 percent YoY, while dividend income also jumped up 14 YoY, during the nine month period this calendar year.

Cost/income for the bank declined to 52 percent during January-September 2019 vis-à-vis 56 percent same period last year with operational expenditure growth restricted to a nominal 3.0 percent YoY.

The bank booked a net provisioning expense worth Rs1.8 billion during January-September with Rs916 million being booked during Q3CY19.

Analysis of the assets mix highlights that net investments have increased by Rs115.1 billion (+15percent) whereas net advances have decreased by Rs13.3 billion over December 31, 2018, a statement said.

The deposit base of the Bank has registered a healthy increase of Rs96.1 billion and stood at Rs1,145.14 billion, a growth of 9.0 percent over December 2018.

The bank remains well capitalised with the Capital Adequacy Ratio at 18.15 percent against the requirement of 11.90 percent (including capital conservation buffer of 1.90 percent. The bank enjoys highest local credit ratings of AAA / A1+ categories for long-term and short-term respectively, based on PACRA notification dated June 27, 2019, the statement added.

ABL profit falls 4.6pc in nine months

Allied Bank Limited (ABL) profit declined 4.6 percent to Rs9.637 billion for the nine months period ended September 30, 2019, translating into EPS of Rs8.42, a bourse filing said.

The bank earned Rs10.108 billion with EPS of Rs8.83 in the corresponding period earlier.

The bank announced interim cash dividend for the quarter ended September 30, 2019 at Rs2/share, equivalent to 20 percent. This was in addition to interim cash dividend already paid at Rs4/share, equivalent to 40 percent, the PSX notice said.

NII of the bank settled at Rs28.8 billion for January-September 2019, increasing 22 percent YoY while increasing 10 percent QoQ with interest expense going up 35 percent against increase of 26 percent in mark-up income.

As per industry trend, nominal capital gains during the year remained the primary reason behind a 9.0 percent YoY fall in NFI. Dividend income also declined 33 percent YoY as payouts of listed companies faced constraints. Albeit, foreign exchange income provided support increasing 53 percent YoY.

Recovery pipeline for the bank has continued with net reversals settling at Rs67 million during 3Q (-21 percent QoQ).

A staggering decline has been witnessed on a yearly basis with net reversals contracting 73 percent YoY.

Operating expenses for the bank witnessed a jump of 18 percent YoY while remaining stagnant QoQ. Cost/income declined to 57 percent for Q3 vis-à-vis 60 percent last quarter.

Arif Habib Limited in their analysis said, “Effective tax rate was set at 43 percent during 9MCY19 compared to 39 percent same period last year, owing to additional super tax charge booked during the first quarter (on CY17 profits).”

Analyst Karim Punjani from Topline Securities marked some key risks for the bank which included lower than expected advances and deposit growth, higher than expected operating expenses, and deterioration in Pakistan macros.

Lotte Chemical Q1 profit down 19pc to Rs1.682 billion

Lotte Chemical Pakistan profit declined 19 percent to Rs1.682 billion for the quarter ended September 30, 2019, translating into EPS of Rs1.11, a bourse filing said.

The company earned Rs2.062 billion with EPS of Rs1.36 in the corresponding period earlier.

It announced interim cash dividend for the quarter ended September 30, 2019 at Rs1.5/share which is equivalent to 15 percent.

During Q3CY19, net sales went down by 12 percent YoY to Rs14,428 million, majorly due to lower volumetric sales and lower PTA prices (-27 percent YoY).

Gross margins of the company decreased by 139bps YoY to 16.5 percent in the quarter, which was attributable to 5.0 percent decrease in international PTA margins. However, a 21 percent YoY depreciation in rupee cushioned the dip in Q3CY19.

Arif Habib Limited in their analysis said, “Other income went up by 206 percent YoY to Rs373 million during Q3CY19 due to increased level of short-term fixed deposits to Rs9,997 million as of June 19.”

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