Meezan Bank announced a cash dividend of PKR 7.0 per share,

Meezan Bank Limited (MEBL) has released its financial performance results for the third quarter of the fiscal year 2025, showing a notable decline in profitability alongside ambitious plans for future growth. In an analyst briefing held by senior management, the bank reported earnings of PKR 22.7 billion, translating to earnings per share (EPS) of PKR 12.65, marking a 13% year-on-year decline. The bank’s profitability for the first nine months of the year stood at PKR 69.3 billion, down 11% compared to the same period last year.

Despite the drop in profits, Meezan Bank announced a cash dividend of PKR 7.0 per share, bringing the total distribution for the first nine months of 2025 to PKR 21.0 per share. The bank’s fee and commission income experienced a 9% year-on-year growth, driven by strong performance in branch banking, trade finance, and investment banking.

Notably, foreign exchange (FX) income increased tenfold to PKR 6 billion from PKR 600 million, driven by higher transaction volumes and improved spreads. Additionally, customer deposits increased by 23% year-over-year, reaching PKR 3.18 trillion, primarily driven by a 27% rise in current accounts. As a result, the bank’s Current Account Savings Account (CASA) ratio strengthened to 94%, with 49% in current accounts and 45% in savings.

MEBL’s management expressed optimism regarding the bank’s ability to achieve a 20–25% year-on-year deposit growth moving forward, aiming to expand its current accounts through enhanced branch services and innovations in its digital platform. Total assets also witnessed substantial growth, expanding by 25% year-on-year to reach PKR 4.24 trillion.

While the bank’s interest margins were affected by changes in the minimum deposit rate, management noted that the rapid growth in current accounts had helped mitigate the impact due to increased balance sheet volume. MEBL remains committed to maintaining the regulatory minimum payout of 75% of the weighted average yield across all pools.

However, the bank faced challenges, with the Asset-to-Deposit Ratio (ADR) falling to 37% in September 2025 from 60% in December 2024 following the removal of ADR-related taxation. MEBL also reported a rise in the Non-Performing Loan (NPL) ratio to 2.63%, up from 1.62% in December 2024, attributed to a decrease in the gross financing book.

Notably, the bank’s Capital Adequacy Ratio (CAR) improved to 23.36%, and management expects it to remain above 20% after year-end adjustments. While MEBL does not set a specific target for its capital ratios, it plans to maintain a buffer above the regulatory minimum preferred by rating agencies.

In line with its growth strategy, Meezan Bank has expanded its branch network by adding 22 new locations, bringing the total number of branches to 1,070. The bank aims to exceed 1,100 branches by the end of 2025 and plans to open an additional 150 branches in 2026.

As Meezan Bank navigates through challenging market conditions, its emphasis on growth, digital transformation, and customer service positions it favorably for the future.

Courtesy- AHL Research