Meezan Bank reports Rs22bn profit, EPS down 12% YoY

KARACHI: Meezan Bank Limited (MEBL), Pakistan’s leading Islamic bank, reported a profit of Rs22 billion for the first quarter of 2025, translating into earnings per share (EPS) of Rs12.3. The result marked a 12 per cent year-on-year (YoY) decline and an 8.0 per cent quarter-on-quarter (QoQ) dip.

According to Topline Securities, the earnings remained in line with industry expectations. The bank declared the first interim cash dividend of Rs7 per share alongside the results.

Net spread earned during the quarter fell 8.0 per cent YoY and 15 per cent QoQ to Rs62 billion, primarily due to lower interest rates and the implementation of the minimum deposit rate (MDR) on individual deposits. Provisioning expenses rose sharply to Rs1.85 billion from Rs263 million in 1Q2024, although down significantly from Rs7.3 billion in the previous quarter. Despite pressure on spreads, Meezan’s other income rose 29 per cent YoY to Rs8.2 billion, driven by a 10 per cent YoY increase in fee and commission income to Rs5.5 billion and a 3.3x surge in foreign exchange income to Rs1.6 billion.

Operating expenses stood at Rs19.6 billion, down 7 per cent YoY but up 9 per cent QoQ, reflecting network expansion and inflationary impact. The bank’s effective tax rate was 55 per cent. On the balance sheet side, deposits grew 11 per cent QoQ to Rs2.9 trillion, investments rose 10 per cent to Rs2.1 trillion, while advances declined 8.0 per cent to Rs1.4 trillion.