Rs 25 billion profits for 2014: MCB Bank shareholders get Rs four per share interim dividend

MCB Bank Thursday said its consolidated profits for 2014 rose by 13 percent to Rs 24.7 billion from Rs 21.8 billion in 2013. The bank's earning per share (EPS) for the year under review stood at Rs 22.15 compared to Rs 19.6 of the preceding year. Also, the bank declared for its shareholders a per share interim cash dividend of Rs 4 in addition to Rs 10 per share already announced during the year.
MCB's Net Interest Income (NII) increased by 15 percent, Year-on-Year, to Rs 43.6 billion in 2014. This, analysts at Topline said, was due to the bank's improving Net Interest Margins (NIMs). "NIMs of MCB got support from higher yield on increasing PIB portfolio and volumetric growth in earnings assets," they said. Along with higher core income, higher Non-Interest Income also supported the bottom line of the bank, they added.
While the bank's non-interest income grew by 20 percent, its non-interest expenses also increased by 10 percent. The year 2014 saw the bank booking provisioning reversals worth Rs 1.4 billion compared to Rs 2.8 billion in 2013. A quarterly account shows that in 4Q2014 the MCB's profits surged by 46 percent to Rs 6.2 billion (EPS Rs 5.6) against Rs 4.2 billion (EPS Rs 3.8) in 4Q2013. In the said quarter, the bank's NII and non-interest income increased by 23 and 47 percent, respectively.
The non-interest expenses of the bank slid by four percent during 4Q2014. The bank's earnings declined by six percent due to what analysts said higher provisioning charge and higher admin expense. Its NII increased by nine percent, whereas non-interest expense increased by 15 percent in 4Q2014. At current levels the stock is trading at 2015F PE and PBV of 12.50x and 2.69x, respectively.