KARACHI: Meezan Bank Limited has declared 49 percent increase in profit after tax to Rs2.85 billion for the quarter ended March 31, 2019 as compared with Rs1.19 billion in the same period of the last fiscal year.
The Earnings per Share (EPS) – on enhanced capital increased to Rs. 2.44 per share, said a statement on Monday.
The Board of Directors of Meezan Bank Limited in its meeting approved the condensed interim unconsolidated financial statements of the Bank and its consolidated financial statements for the quarter ended March 31, 2019.
The meeting was presided by Mr. Riyadh S. A. A. Edrees – Chairman of the Board and Faisal A. A. A. Al – Nassar – Vice Chairman of the Board, was also present.
The Board has approved 10 percent interim cash dividend (Rs 1.00 per share) and 10 percent bonus shares in the meeting. Quarterly cash dividend has been approved for the first time in the history of the Bank and is in keeping with the Board desire to ensure that investors in Meezan Bank are well looked after. The Bank has maintained an unbroken payout record since the Bank’s listing on Stock Exchange in the year 2000.
The growth in profitability was driven by an increase of 57 percent in net spread primarily due to the Bank’s focus on maintaining a good quality high yield earning assets portfolio.
Profit paid to depositors also doubled, as a result of increase in deposits and increase in depositors’ profit rates. The fees and commission income of the bank grew by 18 percent driven by an increase in trade business volume handled by the bank.
Administrative and operating expenses increased by 24 percent primarily due to rising inflation, rupee devaluation and increase in costs associated with new branches – an investment in the future.
However, the rise in expenses was sufficiently absorbed by the growth in the bank’s income resulting in improvement in the banks income expense ratio. The bank added 16 new branches to its network during the quarter bringing the total number of branches to 676 in 189 cities.
The Bank is now the 7th largest bank in terms of branch network as well as in terms of deposit base.
The investments portfolio increased to Rs219 billion from Rs124 billion in December 2018 – a growth of 77 percent. During the quarter, a consortium led by Meezan Bank successfully closed Pakistan’s first-ever energy Sukuk issued by the Power Holding Private Limited, a company wholly owned by the Government of Pakistan (GoP).
The Sukuk is guaranteed by the GoP and is eligible for SLR for the purposes of the State Bank of Pakistan (SBP). The Bank is the largest investor in this Sukuk with a participation of Rs. 85 billion.
The Islamic financings and related assets portfolio closed at Rs494 billion with an ADR of 64 percent. The bank maintained its financing exposure in all sectors and continued to actively pursue growth in Small and Medium Enterprise (SME) / Commercial and Consumer segment.
The NPL ratio and NPL coverage ratio stood at 1.4 percent and 137 percent respectively. The bank remains a well-capitalized institution with Capital Adequacy Ratio of 15.5 percent.
The VIS Credit Rating Company Limited (formerly JCR-VIS Credit Rating Company Limited), in 2018, assigned the Bank an Entity Rating of ‘AA+’ (Double A Plus) for the Long Term and ‘A1+’ (A-One Plus) for the Short Term with stable outlook.
The Subordinated Tier II Sukuk and Additional Tier I Sukuk of the Bank has been assigned a credit rating of ‘AA’ (Double A) and ‘AA-’ (Double A Minus) respectively. These ratings represent sound performance indicators of the Bank.