Meezan Bank fell short in achieving the asset base target of Rs. 954 billion in 2018, however, it surpassed the profit target of Rs. 8.84 billion set for the same year.
According to the financial statement released by the bank, the assets of Meezan Bank grew to Rs. 938 billion. The leading bank registered a profit of Rs. 8.96 billion in 2018 showing a marked growth of 42 percent in 2018 from the previous year.
The management of the bank decided a business plan two years ago and set some financial targets for the bank for the next three years.
Accordingly, the bank will now move forward to achieve the asset value of Rs. 1 trillion in 2019 and a profit of Rs. 9 billion by the end of 2019. The bank showed tremendous growth in the past few years despite challenges of low-profit rates, limited investment, and financing opportunities.
The bank’s return on average equity increased to 23.77% while Earnings Per Share – on enhanced capital clocked at Rs. 7.67 per share.
The bank’s net spread grew by 36% primarily due to their focus on increasing volume of high yield earning assets, and re-pricing of earning assets pursuant to an increase in target rate.
On an overall basis, fee and commission income of the bank grew by 26% and increased to Rs. 5.3 billion with a major contribution from trade finance commissions. The trade business volume handled by the bank crossed the trillion rupee benchmark and grew by 43%.
Other contributors to the increase in fee and commission income were debit card related fee and branch banking income which grew by 39% and 25% respectively over the last year.
Operating and other expenses increased to Rs. 19.7 billion from Rs. 16.8 billion, primarily due to rising inflation, rupee devaluation and an increase in costs associated with new branches, however, the rise in expenses was sufficiently absorbed by the growth in the bank’s income resulting in an improvement in income efficiency ratio by 4% from last year.
The Finance Act, 2018 has further extended the applicability of one-time Super Tax, initially levied for the tax year 2015, at 4% of the taxable income of the Bank. This Super Tax has resulted in an additional charge of Rs. 660 million for the year 2018.
The bank successfully issued an Additional Tier I Sukuk of Rs. 7 billion that further strengthened the Bank’s Capital Adequacy Ratio. The bank’s deposits base grew to Rs. 785 billion by the end of 2018.
Meezan Bank is now the 7th largest bank in terms of deposits and the 8th largest in terms of branch network. It is operating through 660 branches in 180 cities of Pakistan.
