Meezan Bank has been recognized as the ‘Best Bank in Pakistan’ through Pakistan Banking Awards, and remains committed to contributing to the economic growth and stability of Pakistan by strengthening the Islamic Banking Industry (IBI) and helping the government to shift towards Shariah-compliant banking solutions in line with the State Bank of Pakistan’s (SBP) strategic vision to raise the market share of IBI to 30 percent by 2025 from its current level of around 20 percent.
No doubt, the bank offers a comprehensive range of Islamic banking products and services through retail banking in Pakistan. Backed by a state-of-the-art T-24 core banking system, the branch network is supported by 24/7 banking services that include over 950 ATMs, VISA and MasterCard Debit cards, a Call Center, Internet Banking, Mobile Application and SMS Banking facility. Meezan Bank operates strictly under the rules of Islamic Shariah and is well-recognized for its product development capability, Islamic banking research and advisory services. To ensure strict Shariah compliance in all its products and services, the Bank has organized a dedicated Product Development and Shariah Compliance department that operates under the supervision of the Bank’s in-house Resident Shariah Board Member and a Shariah Board comprising of internationally renowned Shariah scholars.
The Management of the Bank has calculated the strong financial results during the nine months ended September 30, 2022, where it has been recorded that the Profit after tax registered a growth of 46 percent to Rs 28.6 billion from Rs 19.6 billion in the same period the previous year. This was achieved despite the higher taxation charge levied under the Finance Act 2022 through the federal government – the effective tax rate for the period closing September 30, 2022, increased to 49 percent versus 40 percent in September 2021. The financial results of the Banks also identified that the basic earnings per share for the period under review, on the enhanced share capital of Rs 17.9 billion, grew to Rs 15.98 per share from Rs 10.93 per share in September 2021. The Bank remains sufficiently capitalized with a Capital Adequacy Ratio (CAR) of 19.19 percent – well above the minimum regulatory requirement. It is expected that the management will continue to strengthen its equity base in line with its future growth plans while maintaining adequate buffers over regulatory requirements.
In the financial statement of the bank, it is also recorded that the bank’s operating and other expenses also grew by 33 percent to Rs 34 billion from Rs 25.6 billion, mainly because of a rise in costs associated with the opening of 91 new branches since September 2021, a substantial rise in inflation, and a steep rupee devaluation. However, it is heartening to mention that notwithstanding the rise in operating and other expenses, the Bank’s income efficiency ratio enhanced to 37 percent from 44 percent in the same period last year on the back of its continued focus on cost rationalization and efficient operating cycle.
The experts of the Bank also recorded that the total assets of the Bank stood at Rs 2.45 trillion, after recording a growth of 29 percent (Rs 544 billion), from December 2021 levels of Rs 1.91 trillion. The investment portfolio of the Bank doubled, growing to Rs 1.2 trillion from Rs 620 billion the previous year, after an investment of more than Rs 600 billion in GoP Ijarah Sukuk. On an overall basis, statistics showed that the deposits of the Meezan bank increased by 14 percent or Rs 202 billion closing at Rs 1.66 trillion as of 30th September 2022 from Rs 1.46 trillion the previous year. The Management continues to sustain its leadership in Roshan Digital Accounts (RDA) with a market share of 25 percent in terms of total inflows by this channel, showing $1.2 billion in foreign remittances. The Management presently introduced Pakistan’s first digital supply chain financing platform ‘Wisaaq’ which digitizes business payments to enable a cashless and digital supply chain for distributors, enabling them to avail Shariah-compliant financing facilities to meet their working capital requirements.
The Bank’s acquiring business has also enlarged to 212 cities in Pakistan which would foster and accelerate the digital payments landscape of Pakistan. It is said that the Meezan Easy Remit is a state-of-the-art Home Remittance service that permits millions of non-resident Pakistanis to send money to their loved ones living in Pakistan in a simple, easy and convenient manner. Thereafter, beneficiaries in the country can immediately collect the money sent from abroad from Meezan Bank’s nationwide network of branches located in Pakistan.
The Financial statement of the Bank statistics showed that Meezan Bank was able to grow its gross financings book to Rs 873 billion – a rise of 12 percent over Rs 777 billion in December 2021. During the nine months that ended 30th September 2022, Meezan Bank made an extra general provision of Rs 1.75 billion against potential non-performing financings and a fall in borrowers’ repayment capacity given the present economic slowdown and the impact of the recent unprecedented floods.
The Bank’s non-performing financing ratio has slightly enhanced to 1.5 percent against an overall banking industry average of almost 7 percent. Furthermore in the financial statement statistics showed that the return on financings, investments and placements also grew by 98 percent to Rs 153.9 billion from Rs 77.6 billion in the same period the previous year, contributed by both a higher volume of earning assets and a higher benchmark Policy Rate which, on average, grew from 7.01 percent in the same period last year to 12.47 percent during the nine months ended September 2022. On the other hand, the return on deposits and other dues registered a rise of 164 percent closing at Rs 76.7 billion from Rs 29.1 billion in the corresponding period last year.