MCB Bank (MCB) held its conference call to discuss its financial performance for 9M2019. To recall, the bank posted an EPS of Rs4.8; up by 38%YoY for 3Q2019, while cumulative EPS for 9M2019 rose to Rs13.6 up by 19%YoY.
IFRS-9 implementation will begin from 1st January 2021. Based on impact assessment on 2017 balance sheet, the bank expects a one-time provision of Rs5.9 billion. The management has also highlighted some issues regarding implementation of IFRS-9 which the management expects to be resolved by next year. The problems include FSV benefit, taxation related impact and practical issues with respect to repayment days pertaining to corporate clients.
Average overall PIBs yield were reported around 12.13%, while floating PIBs yield settled at 14.1%. The PIBs amounting to Rs34 billion are scheduled to mature in 1Q2020, which will yield an average of 7.5%. The bank’s total PIB to investment base clocks around 30%.
The management anticipates deposit growth of around 10% over the next 2 years, while advances are expected to accrete by up to 6% during this period.
The bank’s cost to income ratio settled at 45.8% as compared to 51% in the corresponding period last year.
The bank has recovered Rs4.5 billion out of Rs29 billion during 9M2019.
The bank eyes strong fee income growth beginning 2Q2020, after the implementation of new card management system.
Operating expenses increased by 6%YoY to Rs9.8 billion, which were lower than the budget. The bank anticipates this expense to grow by 5%YoY during 2020.