Meezan Bank announces 26% growth in annual profit

Meezan Bank announces 26% growth in annual profit

Meezan Bank Limited (MEBL) has unveiled robust financial results for the fiscal year 2021, showcasing a remarkable 26% growth in profit.

The bank declared a profit after tax of Rs28.23 billion for the year, a substantial increase compared to Rs22.24 billion in the preceding year.

The announcement was accompanied by an earnings per share (EPS) of Rs17.35 for the year ended December 31, 2021, compared to an EPS of Rs13.77 in the previous year. Analysts at Arif Habib Limited attribute this impressive growth to several factors, including a sequential uptick in earnings driven by higher net spread, increased non-fee income (NFI), and reduced provisioning.

Meezan Bank’s net spread earned stood at Rs68.9 billion, reflecting a 6% year-on-year increase, attributed to improved interest income and lower interest expenses. On a quarterly basis, the net spread witnessed a significant 18% increase.

Non-fee income (NFI) saw a substantial 44% yearly surge, propelled by a remarkable 58% increase in fee income. Dividend income and foreign exchange income also experienced notable jumps of 91% and 45% year-on-year, respectively. Quarter on quarter, NFI increased by a commendable 18%.

To reward its shareholders, Meezan Bank declared a final dividend per share of Rs1.50, bringing the total payout for the full year to Rs6.00. Notably, the bank had previously announced a 15% bonus issue in the first half of the fiscal year.

In terms of provisioning, the bank demonstrated prudent financial management with provisioning expenses experiencing an 88% year-on-year decline, settling at Rs993 million during the calendar year 2021.

Operating expenses for the bank increased by 19% year-on-year and 10% quarter-on-quarter. The cost-to-income ratio stood at 42% during the calendar year 2021, slightly higher than the 40% reported in the same period last year. The effective tax rate for the year settled at 40.6%.

The positive financial results are indicative of Meezan Bank’s strategic focus on enhancing its core operations, managing costs effectively, and diversifying its income streams. The bank’s consistent growth and profitability are likely to bolster investor confidence and contribute to the overall stability of the banking sector in Pakistan.

As Meezan Bank continues to navigate the dynamic financial landscape, the institution’s commitment to delivering value to its shareholders and maintaining a robust financial position positions it favorably in the evolving banking industry. The bank’s performance for the fiscal year 2021 underscores its resilience and strategic acumen in the face of economic challenges.