Meezan Bank declares 8% earnings growth

Staff Reporter BOL News

14th Oct, 2021. 06:25 pm
VIS upgrades entity ratings of Meezan Bank

A file photo of a Meezan Bank branch.

KARACHI: Meezan Bank on Thursday announced 8 per cent growth in earnings during the nine months (January–September) 2020 to Rs12/share, compared with the same period of the last year, a bourse filing said.

The bank also announced an interim cash dividend of Rs1.5/share in addition to Rs3/share already announced.

Analysts at Topline Securities said despite lower margins, amid lower policy rate in 2021, profitability of the bank remained strong due to sharp growth in deposits and uptick in the low-cost Current Account and Saving Account (CASA).

Net spread earned by the bank remained similar to the last year’s on a YoY basis, when most of the banks are likely to report a YoY decline due to margin contraction. On a quarter-on-quarter basis, net spreads increased 7 per cent.

The total provisioning expense of MEBL was down 89 per cent YoY to Rs121 million in the third quarter of 2021 and also remained lower-than-expected due to improvement in the non-performing loans ratio.

Other income of the bank also went up 62 per cent YoY to Rs3.5 billion in the third quarter of 2021 driven by strong growth in fee income and foreign exchange income.

The fee and commission income increased 61 per cent YoY to Rs2.5 billion during the quarter, whereas the foreign exchange income went up 78 per cent YoY to Rs544 billion.

Other expenses of the bank rose 14 per cent YoY to Rs8.8 billion in line with its historical trend. Hence, the cost-to-income ratio of the bank went up 300bps YoY to 43 per cent in the third quarter of 2021.

Adsence 300X250