MCB’s profits up by 31.0% to reach Rs 5.7 bn for the period ended June 2015; promises great result ahead for FY 2015/16
MCB Group Ltd profit level boosted by 31.0% to reach Rs 5.7 billion for the year period June 2015, on the back of higher net interest income, in spite of pressures on margins posed by excess liquidity and restrained demand for credit locally amidst subdued private investment and Net fee and commission income increased by 16.5%, driven by appreciable growth in revenues from regional trade finance.
Banking major MCB Group Ltd posted encouraging results for the period ended 30 June 2015, with profits reaching Rs 5.7 billion and representing a growth of 31.0 % against the corresponding period of 2014.
The positive performance of MCB was driven higher net interest income and fees and commission income derive during the period.
MCB, the biggest bank by market value in East Africa and the Indian Ocean region, net interest income increased by 12.4% to Rs 8.15 billion rupees in spite of pressures on margins posed by excess liquidity and restrained demand for credit locally amidst subdued private investment.
The earning per share rose from Rs 18.34 to Rs 24.04.
Growth in the loan book was in fact supported by the international financing activities, while the deposit base continued to expand by a notable margin both in rupee and foreign currency terms.
Net fee and commission income increased by 16.5%, driven by appreciable growth in revenues from regional trade finance, wealth management activities and the card business as well as activities within MCB Capital Markets.
Despite a strong growth in revenue from non-banking operations, ‘other income’ declined following a marginal fall in profit on exchange and the fact that FY 2013/14 figures included a non recurrent gain of some Rs 400 million on sale of securities.
With the growth in operating costs being contained at 4.4%, the cost to income ratio fell to 41.8% while the allowance for credit impairment dropped substantially from its peak in FY 2013/14 to stand at Rs 1,127 million, representing 0.65% of gross advances.
Capitalisation levels strengthened with the overall BIS ratio and Tier 1 ratio standing at 17.3% and 14.5% respectively while strong funding and liquidity positions were maintained.
Looking ahead, market conditions are set to stay challenging in the short term at least. Against this backdrop, the Group will pursue its business expansion agenda as per its set risk appetite, with regional diversification remaining a key axis thereof.
It will gear up its internal capabilities to effectively support its growth ambitions and position itself to tap into business opportunities that could emerge from potential improvements in the operating environment. As such, we are confident to grow the business further, which should result in higher profits for FY 2015/16.