MCB’s 1H2009 net income expected at PRs7.8bn (EPS PRs11.30)
MCB’s board meeting is scheduled on August 8, 2009 to consider 1H2009
financials, while the announcement notice will be posted on August 10, 2009. The
bank’s profitability for the period is likely to be at PRs7.81bn (EPS PRs11.30), a
meager growth of ~2% as against PRs7.67bn (EPS PRs11.11) in 1H2008. While on
quarterly basis, during 2Q2009, profitability is expected to remain at PRs3.68bn
(EPS PRs5.32) or 3% higher on Y-o-Y basis, however will be 11% lower on Q-o-Q
basis. Furthermore, the result is also expected to accompany a second interim
cash dividend of PRs2.0-2.5/share to cumulate the year-to-date payout at 45-
For the period, Net Interest Income (NII) of the bank is likely to witness a notable
growth of 42% at PRs17.87bn on the back of an impressive jump in Net Interest
Margin (NIM) of the bank to 9.5% versus 7.6% during the same period last year.
For 2Q2009, NII is expected at PRs8.78bn with an increase of 37% over the
2Q2008 while down by 4% on sequential quarter basis. Importantly, the bank’s
NIM peaked in 1Q2009 at 9.9%, and thereon we anticipate softening in the
margins at 9.2% in 2Q2009 as lending rates fallen inline with the decline in
KIBOR while cost of deposits to remain almost flat due to abundance of saving
accounts. And by regulation, all banks are bound to pay a minimum 5% profit on
saving accounts from June 2008.
Despite impressive growth in net mark-up income, a surge in provisions and administrative expenses is likely to
impede the growth in net interest income of the bank. During 1H2009, provisions are expected to grow at a rate of
2.6x to PRs3.85bn as against PRs1.24bn in the same period of last year. Along with higher provisions, administrative
expenses are also anticipated to increase by 63% to PRs5.03bn due to lower gain on pension fund amid subdued
equity market performance.