Pakistan’s Meezan Bank Reports Highest Ever Quarterly Profit

Meezan Bank (MEBL) has reported its highest ever quarterly profit of Rs8.8 billion (EPS: Rs5.4) 4Q2021, up 115%YoY.

The earnings remained higher than industry expectation due to strong growth in Net spread earned and other income.

Net spread earned during 4Q2021 was reported at Rs20.4 billion, up 35%YoY led by strong deposit growth and increasing low cost deposits.

On QoQ basis, it recorded an increase of 18% which was considerably higher than the increase in Net Interest Income (NII) of other leading banks that have announced their results so far.

NII for MCB, BAHL, and BOP remained largely flat on QoQ basis whereas BAFL reported a 2% increase in NII.

Provisions of MEBL also declined by 89%YoY to Rs439 million in 4Q2021 due to improving Non Performing Loan (NPL) book of the bank and improved economic conditions.

Total Other Income of the Bank improved by 59% to Rs4.6 billion for 4Q2021 driven by higher fee, commission & brokerage income and foreign exchange income during the quarter.

Total Other Expenses of the Bank increased by 37% to Rs9.7 billion for 4Q2021.

Cost to Income ratio of the Bank remained stable at 39%.

In 2021, earnings of the Bank increased to Rs17.4/share, up 28%YoY.

Increase in Net spread by 6% and lower provisioning charge (down 88%) led this increase.