Meezan Bank (MEBL) announced its 2025 unconsolidated profit today which clocked in at Rs. 89 billion, down 12 percent year-on-year (YoY) while up 4 percent quarter-on-quarter (QoQ).
For 4Q2025, the bank recorded unconsolidated earnings of Rs. 21.8 billion (EPS of Rs. 12.1), which is down 10 percent YoY while up 4 percent QoQ.
Alongside the result, the bank also announced a final cash dividend of Rs. 7.0/share in 4Q2025, taking the 2025 dividend to Rs. 28.0/share.
Net spread earned fell by 11 percent YoY while increased 3 percent QoQ to Rs. 64 billion in 4Q2025. According to Topline Securities, this increase in spread on a QoQ basis is due to volumetric growth.
Expenses of the bank increased 35 percent YoY while down 9 percent QoQ to Rs. 26.1 billion in 4Q2025.
The cost-to-income ratio remained at 34 percent in 4Q2025 vs. 37 percent in 3Q2025. To highlight, the bank has recorded a reversal of some variable compensation expenses of close to Rs. 11 billion in 1H2025 due to which cost to income ratio for 2025 clocked in at 30 percent.
MEBL recorded provision expense of Rs. 0.3 billion in 4Q2025 compared to the expense of Rs. 7.3 billion in 4Q2024 and an expense of Rs. 0.3 billion in 3Q2025.
Other income of the bank decreased by 36 percent YoY and 27 percent QoQ to Rs. 6.9 billion in 4Q2025. The YoY decline is due to the absence of gain on securities. While QoQ decline is due to a loss in FX income of Rs. 0.5 billion in the outgoing quarter.
Effective tax rate of bank clocked in at 53.4 percent in 4Q2025 compared to 58.0 percent in 4Q2024 and 53.4 percent in 3Q2024.
On the balance sheet side, deposits grew by 4.0 percent QoQ to Rs. 3.3 trillion, Investments are up by 3 percent QoQ to Rs. 2.6 trillion, while advances down by 45 percent QoQ to Rs. 1.64 trillion in 4Q2025.
MEBL’s stock currently trades at a 2026E PE of 9.8x and PBV of 2.7x with a dividend yield of 6 percent.