MCB - Muslim Commercial Bank limited

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  • تین چیزیں نیکی کی بنیاد ہیں، تواضع بے توقع, سخاوت بے منت اور خدمت بے طلبِ مکافات
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Apr 11, 2017
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MCB Bank Ltd. (MCB): Leveraging its value via low-cost CASA base

11 April 2018
Al Habib Capital Markets (Pvt.) Limited



  • We initiate our investment case for MCB Bank Ltd. (MCB) with an ‘ACCUMULATE’ rating and Dec ‘18 Target Price (TP) of PKR245/- offering 12% upside, trading at a CY18 P/B (Excl. NCI & SoR) of 1.85x and P/E of 11.02x with a CY18 forward dividend yield of 7% (overall expected return of 20%).
  • Our ‘ACCUMULATE’ stance for the MCB Bank stock stems from: (i) Forecasted surge in deposits with CASA foreseen at 93%; (ii) Decent growth in advances with focus on high-yielding Consumer Banking & SME portfolios; (iii) Maturing PIBs investment coupled with heavy investment in T-Bills in a rising interest rates scenario; (iv) Our anticipation of improvement in NIMs; (v) Projection of recoveries against PKR29.8bn NPL book of NIB Bank coupled with no further provision against equity investment in CY18 and beyond; (vi) Anticipated surge in fee, commission & brokerage income; (vii) Cost rationalization efforts; and (viii) Adequate capitalization thus allowing MCB to maintain its existing dividend payout ratio.
 
Apr 11, 2017
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#3

MCB Bank Limited (MCB): Lower cap. gains & higher Op. exp to weigh on 1QCY18 EPS


23 April 2018
Pearl Securities Limited




  • The board meeting of MCB Bank Limited (MCB) is scheduled to take place on April 25th, 2018 to unveil its 1QCY18 financial results.
  • We expect MCB to post consolidated net earnings of PKR5.18bn (EPS PKR4.36) as compared to PKR5.93bn (EPS PKR4.98) registered in 1QCY17, exhibiting a decline of 13%YoY. The double-digit decline in bank’s bottom-line is anticipated primarily due to lower capital gains and considerable rise in operating expenses.
  • In-line with its payout pattern, we expect the bank to declare an interim cash dividend of PKR4.0/share.
  • Interest income of the bank is estimated to increment 12%YoY primarily due to notable growth in bank’s loan portfolio (+35%YoY) whereas interest expense is anticipated to rise by a slender 4%YoY due to overwhelming majority of bank’s deposit volumes concentrated in zero/low cost deposits (CASA/CA ratio +90%/+38%), thereby resulting in 17%YoY expansion in bank’s net interest income.
 
Apr 11, 2017
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#4
MCB Bank (MCB): 1Q2018 EPS of Rs4, -20% YoY (+61% QoQ); DPS Rs4/share (In-line with expectations)


25 April 2018
Topline Securities (Private) Limited




  • MCB announced 1Q2018 earnings of Rs4/share, down 20% YoY primarily due to a one time pension cost of Rs2bn (Rs1.1/share). To recall, Supreme Court had ordered top four banks to increase minimum monthly pensions of the pensioners to Rs8,000/month with an annual increase of 5%. In line with the above orders, MCB bank charged a one time pension cost based on the present value of the future expected expenses against the same. UBL and ABL has also charged a one-off pension cost of Rs6bn and 265mn respectively during 1Q2018
  • Earnings excluding pension charge would have clocked in at Rs5.1/share vs. Rs5/share in 1Q2017.
  • Net Interest Income (NII) of the bank clocked in 14% higher compared to previous year. This was mainly led by higher interest income post merger with NIB bank during 3Q2017.
 
Apr 11, 2017
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#5
MCB Bank Limited (MCB): Budgetary measures warrant revision in earnings estimates, ‘Buy’ with TP of Rs230


10 May 2018
JS Global Capital Limited



  • We revise our earnings estimates downwards for MCB Bank (MCB) by 1%-20% for 2018E-2020F as we incorporate 4% and 3% additional Super Tax to be accounted for during 2018, along with 2%/1% Super Tax during 2019/2020, respectively
  • As a result, our Dec-2018 Target Price cuts down to Rs230 (Rs245 previously)
  • The stock currently trades at 2018E P/B of 1.55x, vis-à-vis our estimated justified P/B of 1.73x, offering 12% upside on current market price.
  • Though CASA declined during 1Q2018, we bring investors’ attention towards increase in zero-cost deposit mix, contributing to overall decline in cost of deposits.
 
Apr 11, 2017
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#6
MCB Bank Limited (MCB): Higher cost dents profitability


07 June 2018
Azee Securities (Pvt.) Ltd.




  • In our today's morning briefing we would discuss the performance of MCB Bank Limited (MCB) in 1QCY18.
  • Despite higher core income, the profit after taxation (PAT) of MCB fell by 22% YoY in 1QCY18 to Rs 4.77 billion (EPS: Rs 4.03) as against a PAT of Rs 6.14 billion (EPS: Rs 5.19) owing to decline in non-interest income and one-off charge of pension related expense. The bank had to bear a one-off charge of pension related expense amounting to Rs 2.03 billion in compliance with the Honorable Supreme Court's order, raising minimum pension to Rs8,000/month. On QoQ basis, the bottom-line of the bank posted an impressive hike of 44% in 1QCY18 on back of multiple factors which include; reversal in provisions, surge in non-interest income, and lower non-interest expenses. The corporate results were accompanied with a first interim cash dividend of Rs 4/share.
  • The net interest income (NII) of the bank totaled Rs 10.99 billion in 1QCY18 which is 13% YoY up from a NII of Rs 9.73 billion in 1QCY17 as the bank remained focused on increasing its low cost deposit base and ventured in higher yielding assets. The interest income grew by 5% YoY in 1QCY18 to Rs 18.21 billion while interest expenses came down by 4% YoY in 1QCY18 to Rs 7.21 billion. The non-interest income of the bank fell by 17% YoY in 1QCY18 to Rs 4.29 million as against Rs 5.18 billion in 1QCY17 primarily owing to decline in capital gain on sale of securities.
 

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