Meezan Bank Surprises With Higher Than Projected Q2 Earnings

Islamabad: Meezan Bank Ltd (MEBL) has exceeded financial projections for the second quarter of the 2025 calendar year (2QCY25), reporting a net profit after tax (NPAT) of PkR24.1 billion (earnings per share (EPS): PkR13.4). This represents a 9% year-over-year (YoY) decline but a 9% quarter-over-quarter (QoQ) increase. The positive outcome is attributed to lower than anticipated profit on deposits and reduced administrative costs.

The bank also declared an interim cash dividend of PkR7.0 per share, aligning with forecasts, bringing the half-year payout to PkR14.0 per share. Net spread earned reached PkR64.0 billion in 2QCY25, marking a 9% YoY decrease and a 4% QoQ rise, influenced by growth in the investment portfolio sequentially.

Profit on Islamic financing stood at PkR101.9 billion, down 22% YoY and 5% QoQ, while profit on deposits was PkR37.9 billion (down 37% YoY and 17% QoQ). The bank’s estimated net interest margins (NIMs) improved to 7.2% in 2QCY25 from 7.1% in the preceding quarter.

Non-interest income totaled PkR8.2 billion in 2QCY25, a 54% YoY surge, yet remaining stable QoQ. This increase is linked to higher fee income (up 21% YoY, down 3% QoQ), amplified foreign exchange income (up significantly YoY and 3% QoQ), and increased gains on the sale of securities (up significantly both YoY and QoQ).

Operational expenditures were recorded at PkR16.7 billion, exhibiting a 25% YoY and 15% QoQ decline, leading to a cost-to-income ratio of 21.5% compared to 28.1% in 2QCY24 and 26.6% in 1QCY25.

Credit-allowance/provisioning expenditure amounted to PkR1.5 billion, contrasting with a reversal of PkR935 million in 2QCY24 and an outlay of PkR1.9 billion in 1QCY25. The effective tax rate for the quarter reached 55.3% (versus 51.0% in 2QCY24 and 54.5% in 1QCY25). AKD Securities Limited is currently reviewing the bank’s stock.