MCB Bank Limited has reported a decline of 15.5 percent in its profit after taxation for the nine-month period ended September 30, 2025, reflecting a challenging interest rate environment and rising operational costs. According to the bank’s financial results, net profit stood at Rs44.63 billion, down from Rs52.82 billion recorded in the same period last year. Earnings per share fell to Rs37.42 from Rs44.47 a year earlier.
The bank also announced a cash dividend of Rs9 per share for the period under review.
Total mark-up, return, and interest earned dropped 23.7 percent year-on-year to Rs244.39 billion compared to Rs320.34 billion in the corresponding period of 2024. Meanwhile, mark-up and interest expenses fell by 35.1 percent to Rs124.23 billion from Rs191.30 billion. This resulted in net interest income contracting by 6.9 percent to Rs120.16 billion, down from Rs129.04 billion in the previous year.
On the non-markup income side, fee and commission income declined by 4.9 percent to Rs17.81 billion, while dividend income surged by 34.7 percent to Rs2.72 billion. Foreign exchange income increased 6.3 percent to Rs8.34 billion, reflecting stronger transaction volumes. Gains on securities jumped significantly, rising 3.7 times to Rs819.5 million from Rs174.3 million, while income from derivatives more than doubled. Other income grew 17.4 percent to Rs486.7 million, pushing total non-markup income up 3.5 percent to Rs30.18 billion from Rs29.17 billion a year ago.
However, these gains were overshadowed by a substantial increase in operating costs. Operating expenses rose 15.5 percent to Rs60.79 billion, driven by higher administrative and technology-related expenses. Workers Welfare Fund declined 8.9 percent to Rs1.88 billion, while other charges increased 7.2 percent to Rs376 million. As a result, total non-markup expenses climbed 14.5 percent to Rs63.04 billion, compared to Rs55.04 billion in 2024.
The bank’s share of profit from associates increased by 37.8 percent to Rs2.23 billion, reflecting improved performance from affiliated businesses. Profit before credit loss allowance stood at Rs89.52 billion, down 14.6 percent from Rs104.79 billion in the prior year.
Profit before taxation fell 8.7 percent to Rs94.88 billion from Rs103.97 billion, while taxation declined slightly by 1.7 percent to Rs50.25 billion.
The net profit after taxation closed at Rs44.63 billion for 9MFY25. This performance reflects a combination of compressed net interest income, higher credit loss provisions, and rising operating costs, partially offset by improved non-markup income and a stronger contribution from associates.
The decline highlights the pressure faced by the banking sector amid a shifting interest rate environment, tighter margins, and increased credit risk provisioning. While the bank managed to maintain non-interest income growth, it was not sufficient to fully counterbalance the contraction in core earnings.
Market analysts note that the bank’s profitability trajectory reflects broader sectoral headwinds, particularly following a period of monetary easing that impacted net interest margins. The coming quarters will be crucial in determining how the bank navigates these macroeconomic pressures while managing its cost base and credit portfolio.
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