KARACHI, February 16, 2024 – Meezan Bank (MEBL) has set a new milestone by announcing its highest-ever quarterly earnings, reporting a robust profit of Rs 26.4 billion, with Earnings Per Share (EPS) standing at Rs 14.8.
This marks an impressive 61 percent Year-on-Year (YoY) growth and a 4 percent Quarter-on-Quarter (QoQ) increase for the fourth quarter of 2023 (4Q2023).
Analysts at Topline Securities expressed satisfaction with the results, stating, “The result came in line with our expectations.”
This outstanding performance contributes to the bank’s full-year 2023 earnings reaching an unprecedented Rs 84.5 billion, with an EPS of Rs 47.2, showcasing an impressive 88% YoY growth and establishing a historic high for Meezan Bank.
In conjunction with the remarkable financial results, the bank declared a final cash dividend of Rs 8 per share in 4Q2023, surpassing expectations set at Rs 5 per share. For the entire year 2023, Meezan Bank announced a total dividend of Rs 20 per share.
The Net Spread Earned witnessed substantial growth, rising by 61% YoY and 12% QoQ to reach Rs 72 billion in 4Q2023. This growth was propelled by increasing asset yields and the expansion of zero-cost current account deposits.
Meezan Bank’s Other Income also saw remarkable growth, recording a 71% YoY and 12% QoQ increase to Rs 6.9 billion in 4Q2023. This surge was primarily driven by a significant uptick in fee & commission income, which rose by 35% YoY to Rs 5 billion, and foreign exchange income of Rs 979 million in the same period.
Despite a 48% YoY and 7% QoQ increase in Other Expenses to Rs 20.9 billion, attributed to the growth of the branch network and inflationary pressures, the bank managed to improve its cost-to-income ratio to 27% in 4Q2023, compared to 29% in 4Q2022 and 28% in 3Q2023.
Meezan Bank recorded a provision of Rs 2.9 billion in 4Q2023, marking a 20% YoY increase and an impressive 274% QoQ surge. The full-year provision expense for 2023 reached Rs 7.3 billion, reflecting a substantial 76% YoY growth.
The effective tax rate of the bank remained on the higher side at 52% in 4Q2023, compared to 49% in 4Q2022 and 3Q2023. This increase is primarily attributed to the implementation of a 40% windfall levy tax on foreign exchange income for the years 2021 and 2022.
Meezan Bank’s exceptional financial performance in the face of challenging economic conditions reflects its resilience and strategic management, positioning it as a key player in the banking sector. The bank’s ability to navigate challenges and deliver record-breaking results underscores its commitment to excellence and value creation for its shareholders.
