Karachi: Meezan Bank’s management briefed analysts at the Pakistan Stock Exchange, stating that the bank recorded a profit of Rs23.4 billion on a year-on-year basis, with earnings per share (EPS) reported at Rs13.
The management highlighted that the increase in profitability during the January March 2026 quarter was primarily driven by a 26% rise in fee income, a 58% increase in dividend income, and higher capital gains exceeding Rs950 million.
Net spread earned declined by 1% YoY to Rs61.4 billion, mainly due to a reduction in the policy rate by the State Bank. However, growth in assets largely offset the impact of lower interest rates.
Operating expenses increased by 18% to Rs23.3 billion, mainly due to higher salaries, marketing expenses, and expansion of the branch network. The bank added 10 new branches by March, taking the total number of branches to 1,115, while work is underway to open up to 150 more branches by the end of the current year.
As of March 2026, total deposits increased by 26% to Rs3,600 billion, driven primarily by a 31% growth in current accounts. The deposit base comprises 71% individuals, 27% private sector, and 2% public sector and non-bank financial institutions.
Investments grew by 31% to Rs2,700 billion, with 84% allocated to Government of Pakistan Ijara Sukuk (GIS). Of these, 74% are on variable rates while 26% are fixed-rate instruments. Fixed-rate sukuk are yielding approximately 11.8%, while variable-rate GIS remain close to their benchmark rates.
The bank’s non-performing loans (NPLs) stand at 2%, while NPL coverage has improved to 151%. The management expressed optimism that if the current trajectory continues, the bank may surpass its record profitability achieved in 2024.
On the monetary policy outlook, the management expects a potential increase of up to 50 basis points in the policy rate by the end of 2026. However, given the cautious stance of the State Bank, the possibility of maintaining the current rate in the upcoming policy announcement cannot be ruled out.
Meezan Bank has received approval from its Shariah Board for a credit card and plans to launch it next year.
The bank’s trade volume increased by 11% to $2.3 billion, with exports contributing 39% and imports accounting for 61%.
