Meezan Bank Limited (MEBL) announced its CY21 results today where the bank reported NPAT of PkR28.4bn (EPS: PkR17.35) compared to PkR22.7bn (EPS: PkR13.77) in the same period last year. The result came in above our expectations.

· Deviation in earnings occurred as a result of the bank posting higher than expected ‘net spread earned’ in 4QCY21.

· Together with the result, the bank announced a dividend of PkR1.5/sh taking cumulative payout for the year to PkR6.0/sh.

· For 4QCY21, the bank posted an EPS of PkR5.2/sh, +20.1%QoQ/2xYoY where the sequential growth is driven by core income (+18.0%QoQ). We attribute the increase to potentially strong balance sheet growth since gross yields remained stable at 63.0% in 4QCY21.

· As a result of strong performance at the core level, non-funded income contribution fell to 39.6% in 4QCY21 vs. 42.6% in the previous quarter.

· Effective tax rate for the quarter stood at 42.0% vs. 41.0% in the previous quarter.

Courtesy – AKD Research