AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi: Meezan Bank Ltd (MEBL) reported a 13% year-on-year decline in profit for the first nine months of the calendar year 2025, according to an analyst briefing held yesterday. The bank’s profit stood at PKR 67.2 billion, translating to earnings per share of PKR 37.4, primarily due to reduced net spread earned resulting from lower policy rates.
The bank’s return on financings, investments, and placements decreased by 18% year-on-year, amounting to PKR 312.1 billion during the same period, compared to PKR 378.3 billion in the previous year. This decline was attributed to falling yields.
Conversely, the bank’s total other income increased by 42% year-on-year, reaching PKR 25.8 billion. This rise was driven by significant growth in fee and commission income, foreign exchange income, and gains on securities.
Operating expenses saw a reduction of 6% year-on-year, decreasing to PKR 59.4 billion. This drop was mainly due to a one-off reversal of excess variable compensation amounting to approximately PKR 10.9 billion in previous years.
Return on equity for the bank declined to 35% in 9MCY25, down from 49% in the same period last year. However, the bank’s capital adequacy ratio improved to 23.4%, up from 20.4% in December 2024.
Total deposits grew by 23% from December 2024, reaching PKR 3.2 trillion as of September 2025. The current and savings account (CASA) mix slightly increased to 94%, with current account deposits constituting 49% of total deposits. The management anticipates steady deposit growth in the future.
Investments by the bank rose to PKR 2.5 trillion from PKR 1.9 trillion in December 2024, with the Government of Pakistan Ijara Sukuk accounting for 86% of the investments. The fixed GIS portfolio is yielding around 12% with a maturity of 1.9 years, according to management.
The non-performing loan (NPL) ratio deteriorated to 2.6% in September 2025, up from 1.6% in December 2024, due to a reduction in the overall financing base. Simultaneously, the NPL coverage ratio declined to 146% from 165% in December 2024.
The effective tax rate stood at 53% for 9MCY25, but management expects it to drop in the future, with the third-quarter figure already at 45.2%.
Meezan Bank expanded its branch network by adding 22 new branches during 9MCY25, bringing the total to 1,073 branches. The management plans to open an additional 100-150 branches by 2026.
In the trade business, the bank handled PKR 1,300 billion in imports and PKR 838 billion in exports in 9MCY25, marking a 14% year-on-year increase in trade volume to PKR 2.1 trillion.
The bank’s total number of outstanding debit cards rose to 4.5 million, with internet and mobile banking accounting for 73% of the total digital transactions, amounting to PKR 19.8 trillion.
Al Meezan Investment contributed a profit after tax of PKR 3.4 billion, representing a return on equity of 83%.
AKD Securities Limited maintained a ‘Buy’ stance on Meezan Bank with a target price of PKR 588 per share by June 2026, citing strong deposit growth, a high CASA ratio, and robust asset and efficiency indicators as key factors.