Meezan bank posts Rs4.1 bln profit in 2QCY19

Karachi, August 28, 2019: Meezan Bank Limited (MBL) announced Profit After Tax (PAT) of Rs4.1 billion in second quarter of this calendar year (2Q2019). The earning per share of the bank was Rs3.2, up 88 percent year on year on the back of increase in net spread earned; up by 77 percent YoY. The bank also announced interim cash dividend of Rs1.0/share.

Cumulative earnings for 1H2019 of the bank clocked in at Rs5.4 per share; up by hefty 69 percent as compared to Rs3.2 in the corresponding period last year.

We attribute significant rise in net spread earned to the non-applicability of Minimum Deposit Rate (MDR) on Islamic banks which has resulted in higher sensitivity of income to the tightening monetary policy.

MEBL’s other income grew by 21 percent YoY to Rs2.5 billion, wherein fee & commission income and foreign income grew by 34 percent YoY and 57 percent YoY, respectively.

Other expenses during the outgoing quarter were up 27 percent YoY to Rs6.1 billion. This was on the back of 26 percent increase in operating expenses.

Effective tax rate of the bank clocked in at 40 percent as compared to 43 percent in the same period last year.

Key risks for the bank include deterioration in Pakistan macros, uptick in provisioning charge, & lack of investment avenues.