KARACHI: Meezan Bank Limited on Tuesday announced healthy profit of 65 percent for nine-month period ended September 30, 2020.
According to financial results submitted to Pakistan Stock Exchange (PSX), the bank declared profit after tax of Rs18 billion for the nine-month period ended September 30, 2020 as compared with Rs10.94 billion in the corresponding period of the last year.
The bank also declared earnings per share of Rs12.78 for the period under review as compared with Rs7.73 in the corresponding period of the last year.
Total income of the bank registered 43 percent increase to Rs56.92 billion during the period as compared with Rs39.88 billion in the same period of the last year.
Operating expenses of the bank grew by 22.43 percent to Rs21.88 billion for the period ended September 2020 as compared with Rs17.87 billion in the same period of the last year.
The gross profit of the bank witnessed a growth of 58 percent to Rs30 billion for the nine-month period as compared with Rs19 billion in the same period of the last year.
Alongside result, the bank announced a cash dividend of Rs4.0 share.
Analysts at Topline said that the result came in higher than our expectations due to lower than expected profit expensed on deposits, which is most likely driven by continued focus on Current Account growth and possible re-pricing of maturing Term Deposits.
Profit earned on assets depicted a decline of 9 percent Quarter on Quarter (QoQ). Along with lower interest rates, 1 percent QoQ decline in industry loans amidst slowdown in economic activity has been the cause of the decline.
Profit expensed on deposits substantially declined by 22 percent QoQ amidst re-pricing of liabilities to lower interest/profit rates, where non applicability of Minimum Deposit Rate (MDR) on Islamic banks would have also contributed.
As a result, Net Spread Earned declined by just 1 percent QoQ.
Other Income showed resurgence with a jump of 17 percent QoQ driven by increase in Fee Income growth of 49 percent QoQ as branch operation resumed after lifting of COVID-19 lockdown.
Despite the branch expansion strategy, other expenses were kept in check (down 0.1 percent QoQ). Cost to Income for the quarter stood at 40 percent.