MCB Bank Limited (MCB): 2Q2020 EPS at Rs5.7, up 25% YoY (lower than industry expectations)
- MCB Bank Limited (MCB) posted 2Q2020 consolidated earnings of Rs5.7/share, up 25% YoY and 3% QoQ.
- The result came in below industry and our expectations primarily due to higher provisions.
- The big surprise came in the form of 2Q2020 charge of Rs3.3bn in provisions. To recall 1Q2020 charge was of Rs780mn. It is likely that the bank has booked general provision in light of COVID-19 as we have seen in other banks, however of a higher quantum.
- We await detailed accounts for further clarity but feel that the general provision may have overshadowed reversals on investments as the market had returned 18% in 2Q2020.
- On the core front, a 27% QoQ decline interest expense was enough to propel the Net interest earned by 21% QoQ. Interest earned declined by 7% QoQ possibly due to early re-pricing of certain assets.
- Given the Rs21.9bn surplus on investments in 1Q2020, absence of capital gains was somewhat contrary to what we have seen with peer banks. Non funded income declined by 17% QoQ.
Cost to Income remains strong at 39% down from 46% in 1Q2020.
Muslim Commercial Bank, and its subsidiaries, are engaged in commercial banking and the floating, administration and management of modaraba companies, modaraba funds and modarabas.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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