Is MEBL’s Balance Sheet Growth Hiding Margin Pressure?

Posted by: Aamir Hayat Like: 71 Post Date: April 27, 2026

Is MEBL’s Balance Sheet Growth Hiding Margin Pressure?

Ticker: Meezan Bank Limited MEBL
Analyst Briefing Date: February 17, 2026

This article summarizes Meezan Bank Limited’s corporate briefing, focusing on CY25 earnings decline, strong deposit and investment growth, balance sheet expansion, and forward outlook on margins, digital investment, and asset quality. It highlights a divergence between scale growth and profitability pressure.

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What did the management say?

Management stated that Meezan Bank continues to strengthen its position as Pakistan’s leading Islamic bank, with a focus on expanding its footprint and maintaining leadership in Shariah-compliant banking. The bank emphasized that its strong brand continues to support mobilization of low-cost deposits in a shifting interest rate environment. They highlighted ongoing efforts to optimize the balance between investment portfolio and financing assets to manage margins effectively. Digital banking investment remains a key strategic priority to improve customer access and reduce operational costs. Maintaining strong asset quality and a resilient financing portfolio was also emphasized as central to managing macroeconomic volatility.

What did the numbers say?

Meezan Bank reported profit after tax of PKR 89.0 billion for CY25, down 12% from PKR 101.5 billion in CY24. Earnings per share also declined 12% to PKR 49.23, driven primarily by lower net interest income, which fell to PKR 252.5 billion from PKR 287.0 billion. Despite earnings pressure, the balance sheet expanded strongly. Total deposits increased 28% to PKR 3.3 trillion, led by 29% growth in current accounts and 21% in savings deposits. Investments rose 39% to PKR 2.6 trillion, reflecting significant asset expansion even as profitability contracted.

What should investors expect going forward?

Investors should expect continued balance sheet growth supported by strong deposit mobilization, particularly in low-cost current accounts. However, earnings will remain sensitive to net interest margin pressure if income growth does not keep pace with asset expansion. Future performance will depend on successful optimization of the investment and financing mix to stabilize margins. Digital investments may improve efficiency over time, while strong asset quality will remain a key stabilizing factor in a volatile macroeconomic environment.

What are analysts saying about MEBL stock?

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According to the KSEStocks Database, MEBL is covered by 12 analysts in Pakistan and they have an average price rating of PKR 546. This average price target suggests an upside of 10.5% from the last close of PKR 494.48. According to EPS estimates from 17 different brokers, MEBL has an average 2026 EPS expectation of 48.7. This suggests the stock is now trading at a forward PE of 10.2.

Why do we compile research firms’ forecasts? Broker research is fragmented across different houses. Compiling it in one place helps investors see consensus, identify divergence, and think independently rather than relying on a single view.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →