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EUR 8.90 For Business Accounts Only

MCB_CY20 Result Review, (AKD, Off the Analyst's Desk, Feb 10, 2021)

AKD Research ‐ Off the Analyst's Desk February 10, 2021
MCB: CY20 Result Review (Inline)
MCB announced its CY20 result today, where the bank reported an earnings of PkR29.5bn (EPS: PkR24.8/sh) vs. PkR23.9bn (EPS: PkR20.1) in the same period last
year, in line with our expectation. Moreover, the bank announced a dividend of PkR15/sh, taking cumulative payout for the year to PkR20/sh.
For 4QCY20, earnings of the bank clocked in at PkR5.1/sh, down 39.7%QoQ/22.6%YoY courtesy 17.1%QoQ/3.7%YoY decline in net interest income. Gross yield stood
at 54.5% for the current quarter compared to 60.2% in the previous quarter attributable to hefty treasury bills maturity in Oct'20 and normalization in asset yields.
Non‐interest income declined 32.4%QoQ on account of lower capital gains, pulling non interest income contribution to total income to 21.8% vs. 25.5% in the
previous quarter.
Provisioning expense turned on the higher side (PkR2.1bn in 4QCY20 vs. PkR1.1bn in the previous quarter) potentially to increase loss reserves.
We have a buy call on MCB with Dec'20TP of PkR223.4/sh, offering an upside of 18.1% from last close.

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Hamza Kamal

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