KARACHI (February 17 2004): The profit of the Muslim Commercial Bank Limited (MCB) for the year ended December 31, 2003 recorded a growth of 28 percent after earnings from the stock investment, registered rise, and reduction in tax rate.
Its profit from January to December rose to Rs 2.230 billion as compared with Rs 1.738 billion of the previous year, according to the statement of the Bank faxed to the Karachi Stock Exchange on Monday. The board of directors of the Bank, in their meeting, announced the financial results for the period ended December 31, 2003.
The MCB has recommended bonus shares in the proportion of 10 shares for every 100 shares held ie 10 percent while it skipped the final cash dividend. The Bank earlier paid two interim dividends worth 27.5 percent. During the preceding year, the Bank announced a cash dividend of 25 percent and bonus 25 percent.
The bank's earnings from commission, exchange, brokerage houses, and other income rose by 75 percent to Rs 4.531 billion as compared with Rs 2.590 billion of the previous year.
Faisal Potrik, head of research at First Capital Equities, said the MCB benefited from the banking sector reform programme whereby its tax rates are gradually being brought at par with the corporate tax rate of 35 percent under the World Bank guidelines. For 2003, the effective tax rate was 42 percent as against 44 percent last year.
He said most of the Bank's investments were made up of fixed income securities, terms finance certificates, and Pakistan Investment Bonds. Moreover, with the record credit expansion in the second half of the 2003, the MCB's advances as loans must have jumped in the period, he said.
=================================================== Jan-Dec Jan-Dec Change 2003 2002 (%) --------------------------------------------------- Total income 14,901 17,976 -17 Profit paid on deposits 2,932 6,074 -52 Operating expenditure 8,356 8,800 -5 Net profit before tax 3,612 3,101 17 Profit after tax 2,230 1,738 28 ===================================================