MCB Group: net profit up 5.5% to Rs 10.6bn in first half 

Banking 

MCB Group Limited recorded a 5.5% rise in profit attributable to ordinary shareholders to Rs 10.6 billion for the six months ended 31 December 2025. The Group delivered a 15.4% increase in profit before tax, supported by improved debt recovery and stronger core income, while absorbing a 54.5% surge in tax charges following new fiscal measures.

MCB Group Limited has announced its unaudited financial results for the first half of FY 2025/26, reporting profit before tax of Rs 14,450 million, up 15.4% year-on-year. Operating income rose by 7.7% to Rs 23.0 billion, reflecting improved performance across its operating clusters.

Higher tax burden, continued earnings growth

Tax charges increased by 54.5% to Rs 3,803 million, resulting in an effective tax rate of 26.3%, compared to 19.7% in the corresponding period last year. The rise follows fiscal measures introduced at the beginning of the financial year.

Despite this increase, profit attributable to ordinary shareholders grew by 5.5% to Rs 10,561 million. MCB Ltd’s foreign-sourced income accounted for 58% of Group profits.

Commenting on the results, Jean Michel Ng Tseung, Chief Executive of MCB Group Ltd, stated: “Group profit before tax for the six months to December 2025 increased by 15.4% reflecting the Group’s resilience in a challenging and uncertain market environment. This performance was also supported by a marked improvement in debt recovery during the period. Although the tax charges increased by 54.5% following the new fiscal measures introduced at the start of the financial year, profit attributable to ordinary shareholders grew by 5.5% to Rs 10.6 billion. We are seeing good momentum across our business lines, both in our home and international markets, and this is driving steady balance sheet growth. Asset quality continues to strengthen, with the gross NPL ratio falling to 2.1% and the cost of risk trending downward. Our robust capital and liquidity position further reinforces our ability to grow responsibly and deliver on our Vision 2030 ambitions.”

Core income streams show steady growth

Net interest income increased by 4.1%, supported by the continued expansion of the Group’s interest-earning assets portfolio, despite a decline in margins due to lower foreign currency customer margins, partly offset by improved margins on liquid assets.

Non-interest income rose by 13.9%. Net fee and commission income grew by 6.0%, reflecting stronger payments and wealth management activity and higher revenues from non-banking operations. Net trading income surged by 47.9%, driven by foreign exchange and fixed income transactions.

Net gain on equity financial instruments declined by 89.6% following a change in accounting treatment: fair value gains on Visa and Mastercard shares are no longer recognised in the income statement but recorded in other comprehensive income as from November 2024. The impact was partly mitigated by fair value gains from MCB Equity Fund.

Rising operating costs

Non-interest expenses increased by 17.1%, reflecting higher staff costs to support expansion, increased technology-related expenditure and a higher contribution to the deposit insurance scheme in Mauritius.

The cost-to-income ratio rose to 37.8%, compared to 34.8% in the same period last year.

Asset quality and risk indicators improve

Impairment charges fell by 83.2%, mainly due to the release of specific provisions and successful recoveries during the first half of the financial year. The annualised cost of risk declined to 11 basis points, 78 basis points lower than last year.

The gross non-performing loan (NPL) ratio stood at 2.1% as at December 2025, while there is a strong improvement in doubtful loans and cost of risk metrics.

The share of profit of associates increased by 89.6% to Rs 436 million, supported by improved performance at Promotion and Development Ltd and BFCOI.

Balance sheet expansion and funding diversification

Gross loans and advances, including corporate notes, grew by 8.1% year-on-year to Rs 534.2 billion as at 31 December 2025. Growth was driven mainly by domestic retail and corporate lending, alongside activity in the Global and International Corporates and Power and Infrastructure segments, partly offset by reduced funded exposures in Commodity and Trade Finance.

Total deposits increased by 6.9% to Rs 822.3 billion. Other borrowed funds rose by 22.4%, following the successful raising of a USD 350 million syndicated loan facility by MCB Ltd to diversify its funding base and support international activities.

The net customer loan-to-deposit ratio stood at 60.1%, while the net customer loan-to-funding ratio was 52.0% as at December 2025.

Shareholders’ funds increased by 13.0% to Rs 126.9 billion, driven by higher retained earnings and the issuance of shares under the scrip dividend scheme. The capital adequacy ratio and Tier 1 ratio stood at 20.9% and 18.7%, respectively, remaining well above regulatory requirements.

Return on equity reached 17.1%, while total assets stood at Rs 1,089.5 billion.

Outlook

According to the Group, the global economy continues to demonstrate resilience to tariff disruptions while inflation gradually declines. However, policy uncertainty, geopolitical tensions and fiscal vulnerabilities remain areas of concern. Growth in sub-Saharan Africa is expected to pick up, supported by reform efforts in key economies, while domestic markets are anticipated to remain resilient.

In this context, MCB Group states that it will remain disciplined in executing its strategy and committed to delivering sustainable value to stakeholders in line with its Vision 2030 objectives.