Profits of Rs 10 billion for first semester of FY 2024/25

“The Group recorded a strong performance, with profit attributable to ordinary shareholders increasing by 28.8% to Rs 10.0 billion, corresponding to a return on equity of 18.4%. In line with the strengthening of both our domestic and international franchises, the Group’s balance sheet exceeded the one-trillion rupee mark in December 2024. Our risk profile remains strong and this contributed to the affirmation of MCB Ltd’s investment grade credit rating although the rating outlook has changed to negative in line with rating action at country level. Asset quality metrics improved and the Group continues to maintain solid capital and liquidity buffers, which provide us with ample headroom to continue growing our business.”

Financial Performance

• Operating income grew by 18.1% supported by the growth of both domestic and foreign banking activities.  

• Net interest income increased by 16.7%, reflecting growth in interest earning assets in both rupee and foreign currency, along with improved interest margins principally on rupee denominated investment securities. 

• Net fee and commission income rose by 12.4%, driven by payment, lending and trade finance activities. 

• ‘Other income’ grew by 30.9%, driven by increased foreign exchange transaction volumes and higher fair value gains on equity financial instruments. Of note, the Visa and MasterCard shares held by MCB Ltd were acquired by MCB Group Ltd in November 2024 and going forward any change in fair value of these securities will be accounted for in Other Comprehensive Income.
  

• Non-interest expense increased by 8.9% in line with the Group’s continued investment in human capital and technology.

• Net impairment charges declined by 9.9% to Rs 1,620 million as a result of higher recoveries made during the period under review. Consequently, the cost of risk for the period was 0.67%, 13 basis points lower than the corresponding period last year. Gross NPL ratio stood at 2.9% for the period.

• Share of profit of associates dropped by Rs 75 million due to the subdued performance of both BFCOI and Fincorp.
  

• Tax charge for the period increased by 27.8% to Rs 2,462 million in line with growth in profits.

• Profit attributable to ordinary shareholders were up by 28.8% to Rs 10,015 million, with the contribution from foreign-sourced activities of MCB Ltd standing at 59% of Group profits. 

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