⏸️ MCB: HOLD Signal (6/10) – Presentation on Corporate Briefing Session of MCB Bank Limited

📌 Key Takeaways

• 🏦 PBT decreased by 8.0% YoY to PKR 87.5 billion.
• 📉 PAT declined by 15.2% YoY to PKR 41.1 billion.
• 📊 NIM saw a decrease of 5.8% YoY, landing at PKR 108.8 billion.
• ⬆️ Investments surged by 72.2% YTD to PKR 2.0 trillion, largely in government securities.
• 💰 Deposits increased by 16.1% YTD, reaching PKR 2.2 trillion.
• 💸 Advances plummeted by 37.8% YTD, registering at PKR 680.7 billion.
• 🏠 Home remittance inflows grew by 7.6% YoY, totaling USD 3.4 billion for 9M-2025.
• ✅ Capital Adequacy Ratio (CAR) stands at 19.88%, exceeding regulatory requirements.
• 💡 Current Deposits saw a robust increase of 28.8%, adding PKR 272 billion.
• 🤝 NPL (Stage-3) decreased by Rs. 3.4 billion, improves asset quality.
• 🎯 Recovery from NIB NPL stock amounts to Rs. 11.11 billion.
• 🌐 Network is one of the largest branch networks on consolidated basis with 1396 domestic branches.
• ✔️ The bank’s Cost to Income ratio stands at 37.65% as compared to 31.13% in the prior year period.
• ✔️ Domestic cost of deposits reduced to 5.01%, significantly down from 10.47% in SPLY.

🎯 Investment Thesis

MCB Bank presents a HOLD recommendation. While the bank has demonstrated growth in deposits and investments, the declining profitability metrics and economic uncertainty warrant a cautious approach. The bank’s strategic initiatives in digital transformation and sustainable growth are promising, but their impact on profitability needs to be closely monitored. A price target will be difficult to set since the briefing session did not provide enough forward looking guidance. The time horizon is medium term, as it will take time to see the success of the bank’s initiatives.