You are on page 1of 17

MCB Bank Limited

FULL YEAR 2008 RESULTS PRESENTATION


5th March 2009

2008 Financial Highlights


Consolidated O (U) PKR PKR mm Net mark-up interest income Non-interest income Total Revenue Profit before Tax Net Income EPS Advances (gross) Market Share (Actual) Deposits Market Share (Actual) Equity (including Reval) ROE (1) ROA (2) NIM (3) 2008 28,457 5,930 34,386 21,887 15,323 24.4 273,221 8.7% 330,245 8.7% 60,132 30% 3.6% 8.4% 2007 4,524 (584) 3,939 (640) (1,118) (2) 43,489 8.7% 38,157 8.2% 2,585 Actual . 39% 4.3% 8.2%
(1) System Dec 08 = 27th Dec 08 Dec 07 = 29th Dec 07

Unconsolidated O (U) % 2007 19% (9%) 13% (3%) (7%) (7%) 19% 13% 2008 28,483 5,791 34,275 21,868 15,375 24.5 O (U) PKR 2007 4,562 (657) 3,905 560 109 0.2 O (U) % 2007 19% (10%) 13% 3% 1% 1%

4%

(1) ROAE = Net income / Average shareholder funds over period. Shareholder funds exclude revaluation reserve (2) ROAA = Net income / Average assets over period (3) NIM = Net interest income + capital markets income + dividend income / average earning assets over period (balance with other banks + lending to FI + investments + advances)

Operating Highlights
O (U) PKR Dec-07 Dec-08 Dec-07 O (U) % Dec-07

Branches (Total)
Online Branches Symbols Branches No of active accounts ATM Virtual Banking Users

1,026
669 227 2.9 Mn 349 39,525

1,047
836 663 3.1 Mn 370 47,686

21
167 436 0.2 Mn 21 8,161

2%
25% 192% 8% 6% 21%

POS Machine
ATM Cards VISA Cards Branches Renovated Employee (permanent) Credit Rating Long Term Short Term

4,345
715,042 64,809 53 9,721 AA+ A1+

7,160
895,317 74,111 69 10,160 AA+ A1+

2,815
180,275 9,302 16 439

65%
25% 14% 30% 5%

MCB Business Performance & Key Events


2008

Launched in Aug New branch sales model: Over 400 PBA / DSCs inducted Consumer 40 branches Commercial 56 branches Mobile banking SMS alerts, e-statements COSO framework compliance implementation First domestic bank in Pakistan to obtain ICFR certification by auditor Trade Products Division Launched in June Centralization of inward, outward clearing and bulk remittances Strengthening of Agri Division and hiring of Agricultural Marketing Officers (AMOs) in 2H08 Best Bank in Asia Award (July)

Launched in Nov Karachi, Lahore, Islamabad

Business cooperation with Maybank

Core banking system installed in 750+ branches by Dec whole network by 1H08

Oracle GL implemented in Dec Mini MCB: Electronic lobbies / van ATM, virtual and phone banking Business Continuity Planning tested throughout year for mission critical functions

REVIEW OF 2008 FINANCIALS

2008 - Consolidated Income Statement


O (U) PKR PKR mm Mark-up Interest Earned Mark-up Interest Expensed Net mark-up / interest income Non mark-up / interest income Total revenue Total Provisions 2008 40,050 11,593 28,457 5,930 34,386 4,019 2007 8,258 3,734 4,524 (584) 3,939 954 O (U) % 2007 26% 48% 19% (9%) 13% 31%

Provisions against loans and advances


Provision for impairment of investments Non-interest expense excluding PF Reversal PF Reversal Profit from associates Profit before tax Profit before tax excluding PF Reversal and Associate Income Taxation Net income EPS Effective tax rate

1,335
2,684 13,911 5,399 31 21,887 16,457 6,564 15,323 24.4 30%

(1,624)
2,579 2,062 (370) (1,193) (640) 923 479 (1,118) (2) 27%

(55%)
N/A 17% (6%) (97%) (3%) 6% 8% (7%) (7%)

Non Interest Income


Fee, Brokerage and Commission Income PKR Mm ATM/ Debit Card/ Visa FY08 538 O (U) PKR FY07 149 O (U) % FY07 38%

Utility Bill
Cash Management Commission on bill/ LC/ Gaurantee Commission on DD/ TT/ MT Others Total Fee, Brokerage & Commission Income

220
189 857 194 881 2,879

(23)
58 89 (71) (97) 106

(9%)
45% 12% (27%) (10%) 4%

Non Interest Income PKR Mm Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Other income Non Interest Income FY08 2,879 451 728 748 1,124 5,930

O (U) PKR FY07 106 (85) 34 (759) 119 (584)

O (U) % FY07 4% (16%) 5% (50%) 12% (9%)

Note: Others include Incidental charges, arrangement/ advisory fee, consumer finance, miscellaneous and difference of consoli dated and unconsolidated Fee income

2008 Non Interest Expenses - Consolidated


O (U) PKR PKR Mm Admin Expenses Salary allowances PF reversal Defined Plan and Provident Contribution Rents, taxes, utiltiies Communications Repair & maintenance Cash transportation charges Depreciation Amortisation Travelling and fuel FY08 6,680 (5,399) 208 1,045 850 510 399 823 143 621 FY07 871 370 (210) 201 193 133 37 219 (49) 300 O (U) % FY07 15% (6%) -50% 24% 29% 35% 10% 36% (25%) 93%

Other
Sub-total Sub-total excl. PF Other Charges SBP penalties WWF Others Sub-total Other Total Non-Interest Expenses Total Non - Interest Expenses without PF Reversal
Note: Car monetization cost of 290M in 08, against 141M in 07.

1,700
7,580 12,980

73
2,140 1,770

5%
39% 16%

300 437 184 921 10 8,511 13,911

(113) 437 (46) 278 14 2,432 2,062

(27%) N.M (20%) 43% (370%) 40% 17%

Deposit Base
% Total
PKR Bn Customers Fixed deposits 62 19% 11% 29 92% Dec-08 Dec-08 Dec-07

O (U) PKR
Dec-07

O (U) %
Dec-07

Savings deposits
Current deposits Margin Other

151
105 3 0 321

46%
32% 1% 0% 97%

52%
33% 1% 0% 97%

-1
9 1 0 39

0%
10% 21% (87%) 14%

Financial Institutions Remunerative Non-remunerative Total Deposits CASA 5 4 330 269 2% 1% 100% 81% 3% 0% 100% 89% -4 3 38 (44%) 619% 13%

System Growth (29th Dec 07 - 27th Dec 08) = 7%

Loan Portfolio
O (U) PKR PKR Bn Corporate Commercial Consumer Islamic Other Gross advances Dec 08 149 80 30 5 10 273 Dec 08 % of Total 54% 29% 11% 2% 4% 100% Dec 07 47 (6) 3 44 O (U) % Dec 07 46% (7%) 0% 0% 43% 19%

ADR (gross) % ADR (net) %

83% 79%

79% 75%

System Growth (29th Dec 07 - 27th Dec 08) = 18%

ADR = Gross Advances divided by Deposits

Loan Portfolio By Sector

O (U) PKR Advances Financial Power / utilities Textiles Transport, storage and communication Chemicals and pharma Cement Sugar Wholesale and retail Export/imports Individuals Other Dec 08 10,491 48,481 35,241 33,182 13,931 4,986 6,490 24,868 0 32,721 62,830 Dec 07 (4,879) 33,643 (501) 21,812 5,870 (324) 554 2,029 (184) 866 (15,398)

O (U) % Dec 07 -32% 227% -1% 192% 73% -6% 9% 9% -100% 3% -20%

% Total Dec 08 4% 18% 13% 12% 5% 2% 2% 9% 0% 12% 23%

Total

273,221

43,489

19%

100%

Asset Quality
O (U) PKR PKR mm Gross loans NPL Dec 08 273,221 18,269 Dec 07 229,732 10,725 Dec 07 43,489 7,544 O (U) % Dec 07 19% 70%

Total provision s

10,712

10,772

(60)

(1%)

NPL: Loans
Provisions: NPLs

6.69%
58.6%

4.67%
100.4%

Provisions
PKR Mn 2008

Specific Provisioning o/b Specific Provision charge to P&L General Provision transferred to Specific Provisions (1) Specific Provisions charge Amounts written off Exchange adjustments Specific Provision c/b

7,327 1,488 2,477 3,965 (1,600) 204 9.896

Total provisions o/b Total Provision c/b

10,772 10,712

(1) In 2008, management revised the estimate relating to General Provisions against unidentified losses to c.0.1% of advances (gross) from 1% as the bank does not utilize FSV benefit in its provisioning policy. The estimate of providing 1% provision was made when FSV benefit was in place and unidentified losses were not properly covered through provisions

Asset Quality By Sector


Specific Provision Coverage Dec 2008 6% 86% 79% 82% 51% 100% 35% 69% 91% 51% 52% 54%

Non Performing Advances PKR Mm Financial Power / utilities Textiles Transport, storage, comm. Chemicals and pharma Cement Sugar Wholesale and retail Export/imports Individuals Other Total Dec 2008 2,094 4 2,921 73 118 0 388 3,147 318 1,444 7,760 18,269

NPL O (U) PKR 2,041 2 1,642 38 96 (0) 367 (1,676) (36) 661 4,408 7,544

Capital Strength
Dec-08 Dec-07

Total assets Tier 1 Capital Tier 2 Capital Risk weighted assets Tier 1 Capital Ratio

445,286 52,493 580 330,372 15.9%

412,901 45,067 6,371 308,170 14.6%

Total Capital Adequacy

16.1%

16.7%

Outlook For 2009


Spreads Interest rate environment Credit spreads Cost of deposits Banking liquidity

NPLs and provisioning


Opex and Capex Deposit market Lending/ Advances

Thank you & Question & Answer Session