Commenting on the results, Pierre Guy Noël (Chief Executive - MCB Group Ltd) said: 

“Group attributable profits for the semester ended December 2019 grew by 23.2% to reach Rs 5,287 million, with the combined contribution from foreign sources and non-banking operations standing at 68% thereof. 

 

Operating income increased by 13.9% to reach Rs 10,945 million. Net interest income grew by 12.0%, reflecting an expansion in loans and advances across banking subsidiaries and higher investment in Government securities. Net fee and commission income edged up by 1.5%, driven p rimarily by higher revenues from payment activities. 

 

‘Other income’ went up by 41.3% to Rs 1,853 million, on account of a rise of some 50% in profit on exchange and fair value gains on financial instruments as well as increased revenues in some non-banking business lines. Growth in operating expenses was contained at 4.3% leading to our cost to income ratio falling to 36.5% as compared to 39.9% for the corresponding period in the previous year. 

 

Net impairment charges grew by Rs 81 million to reach Rs 874 million, resulting in an increase of the annualised cost of risk to 65 basis points of gross loans and advances while the gross non-performing loan ratio declined further to reach 4.0%. 

 

Our share of profit of associates grew by Rs 103 million, notably on the back of an improved performance at the level of BFCOI. 

 

Our capitalisation level remains comfortable with shareholders’ funds increasing to Rs 60.0 billion, contributing to a capital adequacy ratio of 17.4% as at December 2019, of which 15.9% in the form of Tier 1. 

 

Whilst the operating context remains difficult amidst adverse developments on the international scene, full year results for FY 2019/20 are projected to improve compared to last year given the current level of business activity. ”