Meezan Bank Limited reported consolidated earnings per share of PKR 12.28 in 1QCY25, down 12% from PKR 13.87 in 1QCY24. This translates into profit after tax of PKR 22.1 Bn compared to PKR 25.0 Bn in SPLY.
The bank declared a dividend of PKR 7 per share in 1QCY25 same as in 1QCY24. Total revenue in 1QCY25 reached PKR 71.4 Bn against PKR Bn in 1QCY24, a decrease of 4%. This was primarily driven by a 8% decrease in mark-up income from PKR 67.3 Bn in 1QCY24 to PKR 61.8 Bn in 1QCY25 owing to a declining policy rate.
The bank saw its total deposits rise from PKR 2.58 Trn at the end of CY24 to PKR 2.88 Trn at the end of 1QCY25, an increase of 11.4%. This increase was primarily due to CASA deposits and a 14% increase in current account deposits. Going forward, the management expects historical deposit growth of 15-20% year on year will resume. It is pertinent to note that since there is no longer ADR based taxation banks are adequately incentivized to grow their deposit base. Investments stood at PKR 2.06 Trn, up 9.6% from PKR 1.88 Trn at the end of CY24. Islamic financing was down 6.7%, reaching PKR 1.4 Trn, compared to PKR 1.5 Trn at the end of CY24.
Management highlighted that out of its portfolio of investments of PKR 2.05 Trn, PKR 1.9 Trn was invested in GOP Ijarah Sukuks. Out of this total portfolio of govt securities, 20% is fixed rate instruments with a return of 12.3% and a duration of 1.5 years. The bank’s cost to income ratio for 1QCY25 stood at 28.1% compared to 28.8% in 4QCY24. Management expects this to remain stable for CY25. Capital Adequacy Ratio stood at 23.21% up from 20.35% at the end of CY24. Advances to deposit ratio stood at 50% in Mar-25 down from 60% at the end of CY24.
Moving forward, the management believes that the SBP has space for a rate cut due to favorable inflation readings. However, the management ruled out the possibility of a large cut soon due to pressures from the external account.
Important Disclosures
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