Meezan Bank Reports Massive Rs. 78.3 Billion Profit for First 9 Months-2024

Meezan Bank Reports Massive Rs. 78.3 Billion Profit

Meezan Bank Limited (PSX: MEBL) reported strong financial results for the nine months ending September 30, 2024 (9MCY24), with earnings reaching Rs. 78.3 billion, marking an impressive 34% year-on-year (YoY) growth. The rise in profitability was driven by a significant increase in total income, as highlighted by Arif Habib Limited.

For the third quarter of 2024 (3QCY24), the bank’s net earnings amounted to Rs. 26.2 billion, translating to earnings per share (EPS) of Rs. 14.6. This reflects a modest 1% YoY increase, though earnings were down 2% on a quarter-on-quarter (QoQ) basis.

In addition to the robust earnings, Meezan Bank announced a cash dividend of Rs. 7 per share for 3QCY24, bringing the total payout for the first nine months of the year to Rs. 21 per share.

Key Financial Highlights

  • Profit Earned: The bank’s profit earned during 3QCY24 amounted to Rs. 128.5 billion, up 6% YoY but down 1% QoQ. For the nine-month period, profit earned reached Rs. 214.8 billion, marking a 39% YoY increase.
  • Profit Expensed: Profit expensed declined by 9% YoY in 3QCY24, but increased 14% QoQ, totaling Rs. 163 billion for 9MCY24.
  • Net Profit Earned: The bank’s net profit for 3QCY24 clocked in at Rs. 76.9 billion, reflecting a 20% YoY increase and a 9% QoQ rise.
  • Non-Funded Income: Meezan Bank’s non-funded income declined by 6% YoY in 3QCY24, but grew 25% YoY for 9MCY24, totaling Rs. 20.6 billion. The rise was primarily driven by a 33% YoY increase in fee income, which reached Rs. 18.3 billion, and a boost in dividend income, which rose to Rs. 488 million from Rs. 441 million in the corresponding period last year.
  • Securities Gains: The bank posted a gain of Rs. 283 million from the sale of securities in 3QCY24, compared to a loss of Rs. 867 million during the same period last year.
  • Provisioning: Meezan Bank recorded a provisioning charge of Rs. 2.6 billion in 3QCY24, bringing the total provisioning for 9MCY24 to Rs. 1.9 billion, a significant decrease from Rs. 4.4 billion in 9MCY23.
  • Operating Expenses: Operating expenses (OPEX) increased by 19% YoY and 4% QoQ in 3QCY24, reaching Rs. 23.6 billion. The bank’s cost-to-income ratio stood at 28.3% for 3QCY24, compared to 27.9% in the same period last year.
  • Taxation: The effective tax rate for the quarter surged to 55.0%, up from 48.8% in the same period last year, likely due to incremental taxes related to the Advance-to-Deposit Ratio (ADR). Meezan Bank’s gross ADR stood at 44% as of 3QCY24.

Conclusion

Meezan Bank‘s solid performance in 9MCY24 highlights its ability to navigate the challenges of the banking sector while delivering consistent growth in earnings and maintaining shareholder returns. The bank’s focus on enhancing income streams, coupled with prudent cost management and reduced provisioning, has allowed it to maintain a strong financial position heading into the final quarter of the year.

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