MCB Group Limited Reports 46.7% Increase in Profits, Driven by Improved Core Earnings and Increased Income

Published On: October 4, 2023Company: MCB Group Limited (MCBG.mu)
What were the key drivers of MCB Group's strong financial performance for the year ended June 2023?
The key drivers were an improvement in core earnings across operating entities, especially from international activities, increased interest and non-interest income, improved performance in trade financing and payment activities as well as foreign currency dealings, and fair value gains from equity financial instruments. Additionally, the Group also saw improvements in its cost-to-income ratio despite increased operational expenses.

Summary

  • The MCB Group has seen a strong financial performance, with profits attributable to ordinary shareholders increasing by 46.7% to Rs 14,133 million in the year ending June 2023.
  • Operating income grew by 33.3% to Rs 31,792 million, and net interest income rose by 30.3% due to increased interest rates and expanded foreign loan book and investment securities portfolio.
  • However, interest margins on assets denominated in rupees dropped slightly.
  • Non-interest income saw a significant increase of 38.7% to Rs 12,002 million, driven by higher revenue from trade financing and payment activities, as well as profits from foreign currency dealings and fair value gains from equity financial instruments.
  • Operating expenses increased by 23.3%, reflecting investments in human capital and technology.
  • Despite increased expenditure, the cost-to-income ratio improved to 35.4%, compared to 38.3% for the same period year earlier.
  • Impairment charges rose by 4.7% to Rs 3,644 million due to an increase in the specific provision coverage.
  • The share of profit of associates grew by 8.5% due to improved performance of BFCOI.
  • The Group demonstrated financial soundness with a decrease in the gross NPL ratio to 3.2%.
  • The Group remains well-capitalised with CAR and Tier 1 ratios of 19.2% and 16.7% respectively.
  • Despite a volatile global economic environment and persistent inflation, the Group is optimistic due to encouraging momentum in tourism.
  • The Group intends to continue monitoring challenging contexts while implementing strategic initiatives and improving internal capabilities.

Useful links

About MCB Group Limited (MCBG.mu)

MCB Group Limited is a financial holdings company that, together with the several subsidiaries running under it, operates in three clusters; banking, non-banking financial and other investments. The non-banking financial sector is involved in factoring and leasing while the MCB Capital Markets Limited offers services such as corporate finance advisory, asset management, stockbroking, private equity and registry. The Group also assists micro and small entrepreneurs. The services offered by the company include, offers current, savings, and foreign currency accounts; fixed and term deposits; personal, educational, motor, green, and housing loans; term loans; and working capital finance, term funding¸ structured finance, private equity finance, and leasing services, as well as credit and prepaid cards.

Giri, AfricanFinancials’ Artificial Intelligence (AI) Analyst, sourced this article from the attached or linked document. We cannot guarantee the accuracy or completeness of Giri’s article and we disclaim any liability arising from reliance on information provided in the article. This article is not a recommendation to buy or sell the securities mentioned therein and should be read in conjunction with the original PDF or link to this article. Other sources should be consulted for verification and additional context. Please seek investment advice from an authorised stockbroker or advisor.

Giri

Giri, our AfricanFinancials AInalyst, was born in 2006. She publishes investor, ESG, sustainability and corporate earnings reports of our African stock exchange listed companies simply and quickly, so investors have a view of investment value and opportunity.

She sticks her neck out by telling companies' stories plainly to retail and professional investors looking to better understand investing in African stock exchange listed companies. She helps retail investors, analysts and researchers find lower for lower risk investments at higher returns.

So "See the bigger picture" by reading her top-down views. Go long on African equities. Invest for higher returns. Stay on top and tower above the rest.

Related articles