Meezan Bank profit up 9.9pc to Rs5 bil­lion

The Pak Banker - - FRONT PAGE -

KARACHI: Meezan Bank posted earn­ings of Rs5 bil­lion for 2015, up 9.9 pc from the profit of Rs4.5 bil­lion in the pre­ced­ing year. With the earn­ings per share of Rs5.01, Meezan Bank also an­nounced through a stock no­tice a cash div­i­dend of Rs1.25 per share that is in ad­di­tion to the in­terim div­i­dend al­ready paid at Rs1.75 per share.

The in­crease in the bank's prof­itabil­ity orig­i­nated from the widen­ing of its net spread af­ter pro­vi­sions. The Shariah-com­pli­ant term for net in­ter­est in­come, net spread af­ter pro­vi­sions stood at Rs17.6 bil­lion, up 36.8 pc from a year ago.

The ex­pan­sion in its spread was mainly on the back of a sig­nif­i­cant in­crease in the profit earned on Is­lamic fi­nanc­ing, in­vest­ments and place­ments. It rose al­most 15 pc year-on-year (YoY) to Rs33.1 bil­lion at the end of 2015.

In con­trast, other in­come of Meezan Bank reg­is­tered a YoY de­cline in 2015, hurt­ing its bot­tom line. It amounted to Rs4.6 bil­lion, down 3.3 pc from a year ago. The ma­jor rea­son for the de­crease in other in­come was the drop of 70.2 pc in the net gain on sale of se­cu­ri­ties in 2015.

In ad­di­tion, the bank's in­come from deal­ing in for­eign cur­ren­cies also de­creased 9.5 pc to Rs1.4 bil­lion.

Speak­ing to The Ex­press Tribune, Taurus Se­cu­ri­ties Head of Re­search Zee­shan Afzal said the bank's net profit for 2015 is largely in line with mar­ket ex­pec­ta­tions.

Growth in earn­ings could be bet­ter, Afzal added, had it not been for its rel­a­tively high ad­min­is­tra­tive ex­penses, es­pe­cially in the last quar­ter. Ad­min­is­tra­tive ex­penses clocked up at Rs13.5 bil­lion, up 29.6 pc from a year ago.

Af­ter in­creas­ing by 47.2 pc over the pre­ced­ing year, Meezan Bank's tax ex­pense in 2015 amounted to Rs3.4 bil­lion. The ef­fec­tive tax rate for Meezan Bank re­mained 40.5 pc last year as op­posed to 33.7 pc in 2014 be­cause of changes in the tax struc­ture of banks. As many as 8,000 shares of Meezan Bank were traded on Mon­day, with the stock los­ing 2.6 pc dur­ing the day to close at Rs42 per share

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