Pakistan’s premier Islamic bank, Meezan Bank Limited announ-ced its 9MCY12 financial results on Friday, registering a decent 16 percent year-on-growth in net profits. The splendid performance came on the back of a very strong deposit growth of 22 percent in the calendar year-to-date, as the Bank maintained its rich history of beating the market deposit growth. Meezan Bank (MEBL) added a remarkable 26 new branches to its network in the first three quarters, making it the 8th largest bank in the country in terms of branch network. MEBL further consolidated its position as its deposits base in the 3QCY12 alone grew by nearly 7 percent, way above the industry trend, where the overall deposits fell by 7 percent. The Bank’s core mark-up income surged by 21 percent year-on-year. Mark-up income on investments continued to have the lion’s share of 61 percent, whereas the share of return on advances was restricted to 39 percent of the mark-up earned. The trend is a result of massive increase in investments in the overall asset size, which grew by 49 percent versus a 5 percent decrease in advances, in the year-to-date period. Whether it is the banks’ reluctance to lend or a genuine lack of appetite for advances is anybody’s guess. MEBL’s investment to deposit ratio shot up to a massive 71 percent, whereas the advance to deposit ratio slashed to 27 percent. The declining interest rate scenario adversely impacted the gross spread ratio which squeezed to 27 percent, down from 35 percent in the same period of last year. MEBL continued to make aggressive provisioning for NPLs as the coverage ratio went up to as high as 113 percent. That said provision charges for the period were still considerably lower than the same period of last year. Going forward, the spreads are likely to squeeze further following massive reduction in interest rates in the last nine months. The Bank plans to counter the situation with effective deposit mobilisation, however, MEBL’s CASA ratio stands at a low 63 percent. Administrative expense is likely to remain on the higher side, as nine more branches are planned to be added to the network by the end of CY12.
============================================================== MEEZAN BANK LIMITED ============================================================== (Rs mn) 9MCY12 9MCY11 chg ============================================================== Mark-up Earned 16,075 13,257 21% Mark-up Expensed (8,235) (6,368) 29% Net Markup Income 7,840 6,890 14% Provisioning (511) (1,159) -56% Net Mark-up income after provisions 7,329 5,731 28% Other income 1,878 1,968 -5% Operating revenues 9,718 8,857 10% Other expenses (5,272) (4,421) 19% Profit before taxation 3,934 3,278 20% Profit after taxation 2,663 2,292 16% EPS (Rs) 2.95 2.54 -------------------------------------------------------------- Source: Company Accounts ==============================================================
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