Meezan Bank Limited’s (MEBL) Half-Year 2025 Performance: What You Need to Know?

Meezan Bank Limited (MEBL), Pakistan’s largest Islamic bank, recently shared its financial performance for the first half of 2025 (1HCY25). Let’s break it down in simple terms for anyone who is not from a finance background but wants to understand what’s happening.

Profits take a dip

Meezan Bank reported a profit of PKR 46.2 billion in the first six months of 2025. While this is still a huge number, it’s actually 10% lower than the same period last year. The decline primarily occurred because the bank earned less on its financings and investments due to lower interest rates (yields) and also had to set aside funds as provisions.

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Strong deposit growth

On the positive side, deposits at the bank grew by 26% year-on-year to reach PKR 3 trillion. Even more impressive is that 94% of these deposits are in current and savings accounts (CASA). This is important because it keeps the bank’s funding costs low, making it more efficient.

Financing & investments

• The bank’s lending (financing) grew only slightly by 3%, as private businesses borrowed less due to a slow economy.
• On the other hand, investments jumped to PKR 2.4 trillion (from PKR 1.6 trillion last year), mostly in government Islamic bonds (Sukuk). This is a safe and steady income source for the bank.

Expenses under control

Meezan Bank kept its costs in check. Operating expenses went down by 17%, partly because of a one-time adjustment in staff compensation. This pushed the cost-to-income ratio down to 25.6%, which means the bank is very efficient compared to many others.

Asset quality, some pressure

Not everything was rosy. The ratio of non-performing loans (bad loans) went up from 1.5% to 2.5%, mainly because of stress in the textile sector (linked to US tariffs). Still, the bank has enough coverage (149%) to absorb these risks.

Other highlights

• Digital Banking: Internet and mobile banking transactions hit PKR 12.5 trillion, making up 72% of the bank’s total digital activity.
• Branches: The bank added 6 new branches, bringing the total to 1,057. It plans to cross 1,100 by year-end.
• Trade Business: The bank handled PKR 819bn in imports and PKR 547bn in exports, with a healthy 10.2% market share.
• Subsidiary: Al Meezan Investment contributed a profit of PKR 1.5bn, with a high return on equity of 56.5%.

What does it mean for investors?

Meezan Bank remains a strong player in Pakistan’s banking sector. Despite slightly lower profits, the bank’s huge deposit base, strong focus on Islamic finance, digital growth, and efficient cost management keep it in a solid position.

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The management also aims to keep dividends stable, using past profits to support payouts even when earnings dip. For long-term investors, MEBL continues to be a bank worth watching.

Source: AKD Securities

⚠️ 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 →