Meezan Bank Posts An Impressive Profit Growth of 30% in Half Year 2018

Continuing its upward trajectory, Meezan Bank has recorded a handsome profit of 30 percent which increased to Rs 4.126 billion in the first half of 2018 from Rs. 3.163 billion in the corresponding period last year.

The bank’s net spread before provision increased by 29% to Rs. 12.4 billion primarily due to the bank’s continuous focus on increasing financing portfolio and maintaining an optimal cost of funds through strong relationship management and enhanced customer experience.

During the period, the bank continued its proactive strategy to enhance its exposure in high yield financings in all sectors, particularly in SME / Commercial and Consumer sector while simultaneously ensuring all the risk parameters are met. Islamic financings and related assets grew by 20% from June 2017 and closed at Rs 405 billion.

The bank’s focus remains to build a high quality and diversified financing portfolio. The Bank has one of the lowest non-performing financing ratios in the banking industry – less than 2% as compared to an industry average of 8%. Provision against non-performing financing portfolio is also maintained at a very comfortable level with a coverage ratio of 133%.

The deposits of the bank crossed Rs. 700 billion and grew by 19% from June 2017.

Despite the intense competition in the banking industry, the bank not only expanded its deposit base but also successfully enhanced its CASA deposits that now comprise 77% of the total deposits. The bank maintained its position as the 7th largest Bank (amongst both Islamic as well as Conventional Banks) in terms of deposits in Pakistan with a branch network of more than 600 branches in 160 cities.

The bank’s fee and commission income increased by 23% which was mainly driven by growth in trade business which grew by an impressive 44% from the corresponding period last year. Administrative and operating expenses increased to Rs. 9.324 billion from Rs 8.100 billion primarily due to rising inflation and increase in staff expenses, rent and costs associated with new branches – an investment which has reaped fruits for the bank, as is evident from the strong growth in deposits and profits over the years. This rise in expenses is sufficiently absorbed by the growth in the Bank’s income resulting in an improvement in income efficiency ratio from the corresponding period last year.

The board has approved 15% (Rs 1.50 per share) interim cash dividend and 10% bonus shares.

JCR-VIS Credit Rating Company Limited, an affiliate of Japan Credit Rating Agency, Japan has upgraded the Bank’s long-term entity rating at AA+ (Double A Plus) from AA (Double AA). The JCR-VIS has maintained the Bank’s short-term rating at A1+ (A One Plus) with stable outlook which is the highest standard in short-term rating. The JCR-VIS Credit Rating Company Limited has also upgraded the rating of the Bank’s Subordinated (Tier II) sukuk rating at AA (Double-A) from AA- (Double A minus). The rating indicates sound performance indicators of the bank.



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