MCB_ Higher than anticipated admin cost lead to earning miss , (AKD Off the Analyst's Desk Aug 17, 2022)
AKD, Off the Analyst's Desk
MCB: Higher than anticipated admin cost lead to earning miss
MCB Bank Limited (MCB) announced its 1HCY22 results today where the bank posted consolidated NPAT of PkR11.4bn (EPS: PkR9.59) compared to PkR14.9bn (EPS: PkR12.6) during SPLY. The result came in below our expectations on account of higher than expected admin expenses. Along with the result, MCB announced a DPS of PkR4.0 which took the cumulative payout during 1HCY22 to PkR9.0/sh. The payout was however much higher than our expectations. Here are key takeaways from the result.
- MCB’s NII was recorded at PkR45.3bn in 1HCY22 with the reversal of interest rate. The funded income rose by 25%YoY during 1HCY22 owing to bank’s attractive investment portfolio and heavy leveraging of books.
- The bank recorded a provisioning expense of PkR71mn during the outgoing quarter as against a reversal of PkR1.7bn during same quarter last year. MCB continues to maintain high asset quality and is able to keep provisioning cost in check.
- PBT rose by 30%YoY, while PAT reported a decline of 24%YoY during 1HCY22 as the impact on 10% super tax was recognized in the quarter under review. Consequently, ETR came in at 87%. This along with higher than expected admin expense contained the profits.
- We have a BUY rating on the stock with a TP of PkR160/sh and offers an upside of 22% on the last close .
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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