Lahore April 25 2024: MCB Bank is converting operations of its 39 branches to Islamic banking branches by handing over its rights to MCB Islamic Bank Limited, according to company filing to the exchange.
Back in 2018, MCB transferred business of its 90 branches to MCB’s wholly owned subsidiary i.e. MCB Islamic Bank Limited and deposits amounting to PKR 21.9 billion were transferred under the de-merger scheme. Currently, MIB is operating through 226 branches including two sub branches in Pakistan.
The Board of Directors of MCB Bank Limited (MCB) in its meeting held on April 24, 2024 has approved the Scheme of Compromises, Arrangements and Reconstruction whereby the existing business, assets, liabilities and operations of the 39 branches of MCB along with all rights and obligations pertaining thereto, as detailed in the Scheme, shall be demerged from MCB, conversion into Islamic banking branches and the same shall be merged with and into MCB Islamic Bank Limited (MIB) on the Effective Date against payment of cash consideration.
The Scheme shall inter alia be subject to the No Objection Certificates of the State Bank of Pakistan. approval of the shareholders of MCB & MIB, sanction by the Honorable Lahore High Court, Lahore and other consents as may be directed by the Court and conditions attached thereto.
MCB Islamic Bank Limited, to meet requirements of a significant segment of society, for financial solutions that conform to Shari’ah rulings, and demonstrate our confidence in the potential of the Islamic Banking industry in the country.
MCB Islamic Bank reported a commendable profit before tax of PKR 10.57 billion for the year ending December 31, 2023.
As of December 31, 2023, the Bank’s Deposits surged to PKR 204 billion, reflecting an impressive 33% growth compared to Rs. 154 billion as of December 31, 2022. The Bank’s Current and Saving Account (CASA) mix stands at a healthy 74%, with non-remunerative Deposits comprising 31% of the total deposit mix. Notably, the Bank achieved substantial growth in Current Accounts by PKR 13.33 billion (27%) during the year. Emphasizing Islamic Banking, we continue to reach potential non banked customers through a diverse range of Islamic Banking products, ensuring service excellence
Total assets witnessed a significant 34% increase, reaching PKR 267 billion as of December 31, 2023, compared to Rs. 199.04 billion a year prior. The net Financing position closed at PKR 89.35 billion, demonstrating prudent financial management, while investments rose to PKR 132.54 billion. The Bank’s Capital Adequacy increased by 3.38% points, concluding at 23.79%. The management maintains unwavering focus on efficient capital management, superior asset quality, and a high yielding portfolio.
Throughout the year, the Bank generated an operating income of PKR 18.92 billion, achieving a return on earning assets at 17.69%, with a net spread of 8.51%. However, operating and other expenses rose by 27% due to heightened inflation and Rupee devaluation. This escalation is vigilantly monitored through effective management controls to sustain profitability.
In light of these developments, the Bank’s profit and loss statement sustained an after-tax profit of PKR 5.153 billion for the year, a notable improvement from PKR 1.548 billion in the previous year. Earnings per share after tax rose to PKR 3.314 for the year under review, compared to PKR 1.125 in the prior year.
