Meezan Bank’s solid performance in 2QCY24

Meezan Bank Limited (MEBL) has recently released its financial results for the second quarter of the calendar year 2024, showcasing a strong performance that aligns well with market expectations.

The bank reported an unconsolidated NPAT of PKR 26.6 billion, translating to an EPS of PKR 14.9.

Key financial highlights

One of the most notable aspects of Meezan Bank’s performance is the net spread earned, which reached PKR 70.3 billion.

This marks a 4% increase quarter-on-quarter and a remarkable 42% increase compared to the same quarter last year.

The net interest margins for the quarter stood at approximately 10.38%, although this is a slight decrease of 11 basis points from the previous quarter.

In terms of other income, the bank experienced a quarterly dip of 16%, primarily driven by a 12% fall in fee and commission income during the period.

Additionally, foreign exchange income was notably low, recorded at PKR 102 million—down 79% from the previous quarter.

However, the bank benefited from a provisioning reversal of PKR 935 million, which was 2.7 times higher than the previous quarter, providing some relief to the overall financial picture.

The cost-to-income ratio for MEBL remained stable at 29%, consistent with the previous quarter and the same quarter last year.

Non-markup expenses increased to PKR 22.1 billion, reflecting a 4% quarter-on-quarter rise and a 35% increase year-on-year.

The effective tax rate for the quarter was 51%, slightly lower than the previous quarter’s 52%.

Alongside these results, Meezan Bank announced a cash dividend of PKR 7 per share, bringing the total payout for the first half of 2024 to PKR 14 per share, compared to PKR 7 per share in the same period last year.

This dividend reflects a payout ratio of 47%, indicating the bank’s commitment to returning value to its shareholders.