Meezan Bank Limited (MEBL), the countrys largest Islamic bank and seventh largest mid-sized bank, cheered the market after it declared around Rs 3.4 billion in annual profits for CY11. The bottom-line has doubled on an account of a hefty growth in net spread earned. The banks top-line has largely benefited from a massive expansion in its asset base, with the asset base up by 30 percent during the year to nearly Rs200 billion at the end of CY11. This is due to a whopping growth in investment portfolio, which grew by around 79 percent during the year to Rs 98 billion as at 31 December 2011 relative to the same period last year. Hence, MEBLs investment to deposit ratio (IDR) improved by around 16 percentage points to 58 percent at the end of CY11. At the current level, MEBLs IDR is nearly seven percentage points higher than the industrys average. Although, the banks advances portfolio grew at a slower rate than investments, the rate of growth in advances surpassed that of the industrys average. MEBLs advances portfolio increased year-on-year by nine percent to Rs 59 billion as at 31 December 2011, when the industrys advances portfolio eased down by one percent. The bank also outdid the industry on as far as deposit growth is concerned, with MEBLs deposit base up by a whopping 30 percent during the year to Rs170 billion at the end of CY11, when the industrys deposit base increased by 15 percent relative to the previous year. Expansion in fixed deposits has put a slight strain on the deposit mix, with the CASA ratio down by a trivial 30 bps to 64.8 percent as at 31 December 2011. The banks gross spread ratio improved to 52 percent in CY11, nearly 5.7 percentage points higher compared to the last year. At the same time, other income stayed unchanged during the year, as lower income from dealing in foreign currencies has offset the impact of higher dividend income. On account of a higher inflationary pressures, along with expansion in business, the banks other expenses grew by 35 percent to around rupees six billion in CY11. The Bank added 53 new branches to its existing infrastructure in CY11, bringing the total branch network to 275 branches in 83 cities across the country. However, the good part is that the banks operating income to expense ratio improved to 1.94 in CY11, from 1.8 in CY10. NPLs grew by 7.6 percent during the year to Rs 4.6 billion as on 31st December, 2011, but the growth in NPLs has slowed down compared to the past few years. Despite the growth in NPLs, the banks infection ratio eased down by 23 bps to 7.2 percent as on December 31, 2011. The bank has largely outperformed the KSE-100 index since the start of the current, with its share price up by 32 percent, as opposed to the 10 percent gain registered by the benchmark index.
========================================================== Meezan Bank Limited ========================================================== (Rs mn) CY11 CY10 chg ========================================================== Profit earned 18,032 12,291 47% Return on deposits (8,666) (6,606) 31% Net spread earned 9,366 5,684 65% Provisioning (1,389) (1,496) -7% Net spread after provisions 7,977 4,188 90% Other income 2,505 2,475 1% Operating revenues 11,871 8,159 45% Other expenses (6,126) (4,536) 35% Profit before taxation 4,356 2,128 105% Profit after taxation 3,392 1,650 106% EPS (Rs) 4.22 2.05 ==========================================================
Source: Company Accounts
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