Meezan Bank has shown outstanding financial performance as the total assets of the bank crossed the Rs. 1 trillion mark for the first time in its history, while the profit after tax for the half-year crossed Rs 7 billion – a growth of 70% from the comparative period last year.
The Earnings per Share (EPS) – on enhanced capital were Rs 5.44 per share. The bank remains a well-capitalized institution with Capital Adequacy Ratio of 16.22%.
The board has approved a 10% interim cash dividend (Rs 1.0 per share) for the second quarter of 2019, bringing the total dividend payout for the half-year to Rs 2.0 per share (20%) as Re 1.0 per share i.e. 10% cash dividend along with 10% bonus shares which were approved in the last board meeting.
The bank has maintained an unbroken payout record since its listing on the Stock Exchange in the year 2000. The deposits of the bank grew by 7% to reach Rs 842. billion while its financing portfolio closed at Rs. 484 billion with an ADR of 57%. The NPL ratio and NPL coverage ratio stood at 1.60% and 130%.
The total operating income of the bank was increased by 55%, primarily due to continuous focus on maintaining the higher volume of earning assets portfolio and rise in the asset yields pursuant to increase in Target Rate.
The bank’s return on deposits also recorded a twofold rise mainly due to increase in depositors’ profit rates and volumetric growth. Fees and commission income of the bank grew by 26% primarily due to an increase in the trade business volume handled by the bank and other branch banking related income.
The operating expenses and other charges increased by 26% primarily due to the devaluation of Pakistani Rupee and increase in costs associated with new branches – an investment in future. The rise in expenses was sufficiently absorbed by the growth in the bank’s income, resulting in an improvement in income efficiency ratio by 11%. The bank added 18 new branches to its network during the half year, bringing the total number of branches to 678 in 189 cities.
The VIS Credit Rating Company Limited (formerly JCR-VIS Credit Rating Company Limited), has reaffirmed the Bank’s Entity Rating of ‘AA+’ (Double A Plus) for the Long Term and ‘A1+’ (A-One Plus) for the Short Term with a stable outlook. The VIS Credit Rating Company Limited has also reaffirmed the rating of Subordinated Tier II Sukuk and Additional Tier I Sukuk of the bank at ‘AA’ (Double A) and ‘AA-’ (Double A Minus) respectively. These ratings indicate the sound performance of the bank.