Meezan Bank’s annual profit up 58 percent

KARACHI: Meezan Bank Limited’s profit increased 58 percent to Rs9.133 billion for the year ended December 31, translating into earnings per share (EPS) of Rs7.66, a bourse filing said on Wednesday.

Meezan Bank earned Rs5.779 billion with EPS of Rs4.95 a year earlier. The bank announced cash dividend of Rs2/share for the year, which was in addition to interim cash dividend of Rs1.50/share already paid. Brokerage Topline Securities said the primary reason for growth in income was the rise in net spread earned by 57 percent to Rs28.175 billion in 2018.

“We attribute this significant rise in net spread earned to the non-applicability of minimum deposit rate on Islamic banks which has resulted in higher sensitivity of income to the tightening monetary policy (policy rate up by 425 basis points in 2018), where profit earned has grown by 58 percent,” the brokerage said in a flash note.

“Key risks for the bank include deterioration in economic indicators, uptick in provisioning charge, lack of investment avenues and lower than expected rate hike in policy rate.”