Meezan Bank’s Third Quarter Earnings Decline Amid Lower Investment Yields

Karachi: Meezan Bank Ltd reported its third-quarter financial results, revealing a net profit of PkR21.1 billion, marking an 18% decrease from the previous year. Despite the decline, the results are in line with projections, and the bank announced an interim cash payout of PkR7.0 per share.

The bank’s net spread earnings for the quarter fell to PkR62.4 billion, driven by reduced yields on investments and advances. This represented a 19% year-over-year decrease.

Meezan Bank’s profit from Islamic financing was recorded at PkR102.6 billion, showing a 20% drop from the same period last year. Meanwhile, profits on deposits amounted to PkR40.1 billion, down 23% from the prior year. The bank’s net interest margins were estimated to have decreased to 7.0%.

Non-interest income rose to PkR9.4 billion, a 44% increase from the previous year, largely attributed to a significant rise in foreign exchange income.

Operating expenses experienced a sharp increase, totaling PkR26.4 billion. This resulted in a higher cost-to-income ratio of 36.8%, compared to 28.0% from the same quarter last year.

Credit allowance and provisioning expenses were significantly reduced to PkR255 million. The effective tax rate for the quarter was reported at 53.4%.

AKD Securities Limited maintains a favorable outlook on Meezan Bank, citing strong deposit growth and a high CASA ratio. The firm has set a target price of PkR588.0 per share for June 2026.