AKD Research has analyzed Meezan Bank Limited’s (MEBL) performance for 1HCY25 during an analyst briefing. Key highlights include:

1. MEBL reported a profit of PKR 46.2 billion (EPS: PKR 25.7), down 10% year-over-year due to lower net spread and provision expenses.

2. Return on financings, investments, and placements dropped to PKR 210 billion, influenced by declining yields.

3. Other income rose 40% year-over-year to PKR 16.4 billion, driven by growth in fees, foreign exchange, and securities.

4. Operating expenses fell 17% to PKR 36.3 billion. This led to a reduction in the cost-to-income ratio to 25.6%.

5. The Capital Adequacy Ratio (CAR) declined to 23.6%, down from 24.7%.

6. Return on equity decreased to 36.4%.

7. Total deposits grew 26% year-over-year to PKR 3.0 trillion, with CASA deposits rising to PKR 2.9 trillion.

8. Gross financing increased by 3% to PKR 1.2 trillion, primarily from corporate lending, with a target Advances-to-Deposits Ratio (ADR) of 50%.

9. Investments surged to PKR 2.4 trillion, with Government Ijara Sukuk making up most of the portfolio.

10. The Non-Performing Loan (NPL) ratio worsened to 2.5%, with the coverage ratio declining to 149%.

11. Six new branches were added, raising the total to 1,057, with a target of 1,100 by year-end.

12. MEBL managed PKR PKR 819 billion in imports and PKR PKR 547 billion in exports, achieving a 10.2% market share.

13. Outstanding debit cards reached 4.2 million, with digital transactions totaling PKR 12.5 trillion.

14. Al Meezan Investment posted a PAT of PKR 1.5 billion and ROE of 56.5%.

15. Management plans to maintain dividends while adhering to regulatory CAR requirements.

Courtesy- AKDResearch