Meezan Bank posts over Rs28 billion annual profit

KARACHI: The profit after tax of Meezan Bank Limited (MEBL) recorded a growth of 26 per cent to Rs28.23 billion for the year 2021, compared with a profit of Rs22.24 billion in the preceding year.

The bank announced the earnings per share (EPS) Rs17.35 for the year ended December 31, 2021, as compared with the EPS of Rs13.77 in the previous year.

The bank also announced a final dividend per share of Rs1.50 taking the total payout to Rs6.00 for the full year. The bank also announced a 15 per cent bonus issue in the first half.

Analysts at Arif Habib Limited said that the earnings posted a sequential uptick led by higher net spread earned, higher non-fee income (NFI) and lower provisioning.

The net spread earned by the bank settled at Rs68.9 billion, marking an uptick of 6 per cent on a year-on-year basis, on the back of improved interest income and lower interest expense. Sequentially the net spread was up 18 per cent on a quarter-on-quarter basis.

The NFI of the bank posted a healthy surge of 44 per cent on a yearly basis led by an impressive increase in the fee income by 58 per cent.

The dividend income and foreign exchange income also posted a jump of 91 per cent on a year-on-year basis and 45 per cent respectively. On a quarter-on-quarter basis, the NFI increased by 18 per cent.

The bank’s provisioning expenses were significantly down during the year, declining 88 per cent to settle at Rs993 million during 2021.

Operating expenses for the bank were up 19 per cent on a year-on-year and 10 per cent on a quarter-on-quarter basis, while the cost and income ratio clocked in at 42 per cent during 2021 against 40 per cent in the same period last year. The effective tax rate settled at 40.6 per cent during 2021.