MCB Bank delivers Rs58.06bn PBT in H1CY25
The Board declared a second interim cash dividend of Rs 9.00 per share (90pc), in addition to the 90 percent dividend paid earlier, bringing the total cash dividend for H1 2025 to 180 percent.
MCB Bank reported a profit before tax (PBT) of Rs 58.06 billion for the six months ended June 30, 2025. Profit after tax (PAT) stood at Rs 27.31 billion, translating into earnings per share (EPS) of Rs 23.04 versus Rs 26.95 in H1 2024. The decline in net profitability also reflects a four percent increase in the effective tax rate compared to H1 2024. On a consolidated basis, the Bank posted a PBT of Rs 62.5 billion. These results highlight MCB's prudent balance sheet management, focus on core banking operations, and commitment to disciplined risk governance.
Net interest income declined by 5 percent year-on-year, primarily due to margin compression following a downward revision in the policy rate. However, this impact was partially offset by the Bank's strategic focus on no-cost deposit mobilization, which led to a strong 27 percent growth in current deposits.
Non-markup income decreased by 4 percent to Rs 17.5 billion. Fee and commission income declined by 13 percent to Rs 9.8 billion, primarily due to intensified competition in the routing of foreign currency remittances through MCB's channels. Foreign exchange income remained stable at Rs 4.9 billion, while dividend income posted a significant increase of 55 percent, reaching Rs 2.6 billion. The Bank continued to benefit from the momentum gained in digital banking, with card-related income rising by 18 percent.
Operating expenses increased by 18 percent year-on-year, primarily driven by investments in talent, technology and marketing. However, the cost-to-income ratio summed at 38.05 percent, reflecting disciplined financial management while continuing to invest in innovation and talent development.
On the balance sheet side, MCB Bank's total assets grew by 25 percent to Rs 3.38 trillion, supported by a 78 percent increase in investments. Gross advances declined by 36 percent, reflecting a prudent lending approach in response to prevailing macroeconomic challenges. Asset quality remained strong, with non-performing loans at Rs 52.0 billion, infection ratio at 7.42 percent, and coverage ratio maintained at 91.71 percent.
Deposits grew to Rs 2.23 trillion, with a historic Rs 256 billion increase in current deposits, reflecting the Bank's continued focus on cost-effective deposit mobilization. This shift in deposit mix helped reduce the domestic cost of deposits to 5.23 percent, down significantly from 10.76 percent in H1 2024. The Bank reported Return on Assets (RoA) of 1.80 percent and Return on Equity (RoE) of 23.66 percent, with Book Value per Share at Rs 197.84.
MCB continued to play a leading role in the remittance business, processing USD 2,303 million in home remittances during H1 2025, an increase of 16.7 percent over the corresponding period last year. The Bank remains a key partner in supporting the State Bank of Pakistan's efforts to promote formal remittance channels and drive financial inclusion across the country.
The Bank maintained a strong capital position, with Capital Adequacy Ratio (CAR) at 19.61 percent and Common Equity Tier-1 (CET1) at 15.26 percent, well above the regulatory thresholds. Liquidity buffers also remained robust, with Liquidity Coverage Ratio (LCR) at 260.71 percent and Net Stable Funding Ratio (NSFR) at 155.73 percent.
The Bank's credit ratings were reaffirmed by the Pakistan Credit Rating Agency (PACRA) at 'AAA' for long-term and 'A1+' for short-term through its notification dated June 23, 2025.
Despite external challenges, MCB Bank remains firmly positioned for long-term growth, backed by its prudent risk management practices, strong capital and liquidity buffers, and a continued emphasis on digital transformation and customer-centric innovation. The Bank's strategic focus on operational excellence, cost efficiency, and value creation for all stakeholders remains unchanged.
Copyright Business Recorder, 2025
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