{"id":8012,"date":"2025-03-07T01:52:35","date_gmt":"2025-03-06T20:52:35","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=8012"},"modified":"2025-03-07T01:52:37","modified_gmt":"2025-03-06T20:52:37","slug":"meezan-bank-mebl-cy24-analyst-briefing-takeaways","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/meezan-bank-mebl-cy24-analyst-briefing-takeaways\/","title":{"rendered":"Meezan Bank (MEBL) CY24 analyst briefing takeaways"},"content":{"rendered":"\n

Meezan Bank Limited (MEBL<\/a><\/strong>) held its analyst briefing recently, providing key insights into the bank\u2019s financial performance for CY24 and management\u2019s outlook for the future.<\/p>\n\n\n\n

Strong financial performance<\/h2>\n\n\n\n
    \n
  • Profit growth: <\/strong>The bank reported a CY24 profit of PKR 101.5 billion (EPS: PKR 56.6), reflecting a 20% YoY increase<\/strong> due to higher net profit earned and total other income.<\/li>\n\n\n\n
  • Dividend announcement:<\/strong> Along with the results, MEBL announced a final payout of PKR 7.0 per share<\/strong>, bringing the total annual dividend to PKR 28.0 per share<\/strong>.<\/li>\n\n\n\n
  • Return on financing & investments:<\/strong> The bank\u2019s financing, investments, and placements grew to PKR 494 billion<\/strong> from PKR 432 billion<\/strong> in CY23, driven by volumetric growth.<\/li>\n\n\n\n
  • Deposits & other dues:<\/strong> Total deposits increased 17.9% YoY<\/strong> to PKR 2.58 trillion, with CASA deposits increasing to PKR 2.41 trillion (+21.6% YoY<\/strong>), resulting in CASA mix rising to 93% in CY24<\/strong> from 89% in CY23. CASA deposits now represent 48% of total deposits.<\/li>\n\n\n\n
  • Other income:<\/strong> A significant 319% YoY<\/strong> jump in total other income to PKR 28.9 billion was recorded, primarily due to an increase in fee & commission income, dividend income, and gains on securities.<\/li>\n\n\n\n
  • Cost efficiency:<\/strong> Operating expenses stood at PKR 84.6 billion, up 18% YoY<\/strong>, leading to a cost-to-income ratio of 26.8%<\/strong>, an improvement from 28.9% in CY23.<\/li>\n\n\n\n
  • Return on Equity (ROE):<\/strong> Declined to<\/strong> 47%<\/strong> from 56.3% in CY23, still maintaining strong profitability levels.<\/li>\n\n\n\n
  • Financing book growth:<\/strong> Grew by 57.9% YoY<\/strong> to PKR 1.56 trillion, driven by corporate and SME\/commercial lending, accounting for lending mix of 74% and 20%, respectively.<\/li>\n<\/ul>\n\n\n\n

    Asset quality & investments<\/h2>\n\n\n\n
      \n
    • Investment Portfolio:<\/strong> Investments increased to PKR 1.87 trillion<\/strong>, compared to PKR 1.57 trillion in CY23. GoP Ijara Sukuk<\/strong> made up 91% of the investment portfolio<\/strong>, with 77% in variable-rate instruments and 23% in fixed-rate securities.<\/li>\n\n\n\n
    • NPL Ratio Improvement:<\/strong> The Non-Performing Loan (NPL) ratio improved to 1.6% in CY24<\/strong>, down from 1.7% in CY23. Meanwhile, the NPL coverage ratio declined slightly to 165%<\/strong> from 179% in CY23.<\/li>\n<\/ul>\n\n\n\n

      Branch expansion & market presence<\/h2>\n\n\n\n
        \n
      • Branch Network Growth:<\/strong> MEBL added 47 new branches<\/strong> in CY24, bringing its total branch network to 1,051<\/strong> compared to 1,004<\/strong> in CY23, with plans for further expansion into high-growth areas.<\/li>\n\n\n\n
      • Market Share:<\/strong> The bank handled PKR 1.6 trillion in deposits and PKR 1.1 trillion in imports and exports, maintaining a 5.4% market share<\/strong>.<\/li>\n<\/ul>\n\n\n\n

        Future outlook & investment case<\/h2>\n\n\n\n
          \n
        • Interest rate expectations:<\/strong> Management expects the policy rate to remain in the range of 11%-12%<\/strong> in the near term.<\/li>\n\n\n\n
        • Dividend policy:<\/strong> The bank aims to maintain its dividend levels, but future payouts will depend on interest rate policies and asset growth.<\/li>\n\n\n\n
        • Capital adequacy:<\/strong> The t<\/strong>otal Capital Adequacy Ratio (CAR) weakened to 20.4%<\/strong>, down from 22.4% in CY23, primarily due to expansion in the financing portfolio.<\/li>\n\n\n\n
        • Digital banking growth:<\/strong> The number of MEBL debit card users increased to 3.99 million<\/strong>, up from 3.27 million in CY23, with mobile\/internet banking accounting for 78% of total digital throughput<\/strong>, which amounts to PKR 23.7 trillion.<\/li>\n\n\n\n
        • Circular debt exposure:<\/strong> The bank\u2019s exposure to circular debt through government entities remained minimal, and management expects this issue to phase out in the medium to long term.<\/li>\n\n\n\n
        • Investment recommendation:<\/strong> Given MEBL\u2019s strong ROE generation (expected average of 25.5% for CY25-CY27), <\/strong>solid asset growth, and disciplined allocation strategy, AKD Research maintains a BUY<\/strong> stance on the stock with a December 2025 target price of PKR 356 per share<\/strong>, indicating a 50% upside potential<\/strong> with a CY25 dividend yield (DY) of 10.6%<\/strong>.<\/li>\n<\/ul>\n\n\n\n

          Meezan Bank continues to solidify its position as the leading Islamic bank in Pakistan, driven by robust deposit growth, improved cost efficiencies, and a strong investment portfolio. The bank\u2019s commitment to digital transformation, network expansion, and disciplined capital allocation makes it an attractive investment for the long term.<\/p>\n\n\n\n

          Source:<\/strong> AKD Research & Company Accounts<\/p>\n","protected":false},"excerpt":{"rendered":"

          Meezan Bank Limited (MEBL) held its analyst briefing recently, providing key insights into the bank\u2019s financial performance for CY24 and management\u2019s outlook for the future.<\/p>\n","protected":false},"author":9252,"featured_media":6909,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,155],"tags":[28],"class_list":["post-8012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-fundamental-analysis","tag-mebl"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/MEBL-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/MEBL-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/MEBL-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/MEBL-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/8012","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=8012"}],"version-history":[{"count":0,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/8012\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/6909"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=8012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=8012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=8012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}