Meezan Bank Limited (MEBL) announced consolidated earnings of Rs9,244mn for 1Q2022 translating into an EPS of Rs5.64 up 51% YoY and 9% QoQ.

Alongside the result, a dividend of Rs1.75/share was also announced.

Interest expense of the bank increased by 38% sequentially following the rate hikes in Nov (150bps) and Dec (100bps). The absence of a low duration investment instrument has not helped and the traditional lag on earning assets will take time. This is expected to bode well for the coming quarters.

Non funded income was largely stagnant sequentially but improved 17% YoY led by a 37% YoY increase in fee income.

The expansion strategy continues as the admin expenses depicted an increase of 28% YoY. To recall, 87 branches opened in 2021. Sequentially, 7% increase was seen and is expected to continue through the year.

That said the cost to income for the bank has remained under controlled increasing ever so slightly from 40% in 4Q2021 to 41% in 1Q2022.

The effective taxation was recorded at 39% down from 42% in the previous quarter.

Courtesy – AHCML Research