Equity Analysis /
Pakistan

MCB Bank (Pakistan): MCB BANK: Q1 18 profit in line after adjusting for surprise one-off pension expense; maintain Hold

    Rohit Kumar
    Rohit Kumar

    Global Financials/Thematics

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    Tellimer Research
    26 April 2018
    Published byTellimer Research
    Profit after tax clocked in at PKR4.7bn (EPS PKR4.0), down 20% yoy and 15% lower than our expectations. The weakness was due to the surprise recognition of a one-off pension expense of PKR2.0bn. Excluding this one-off, profits were in-line with our expectations. The pension cost of PKR2.0bn is surprising for two reasons: First, the bank was not part of the private banks’ pension case; and second, it had an overfunded pension fund. We maintain our HOLD rating with a target price of PKR210.