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MPS Preview: High for Longer

MEBL records highest ever profit of Rs86bn in 2023, declares additional dividend

MEBL earns over Rs25bn in 3QFY24
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February 15, 2024 (MLN): Meezan Bank Limited (PSX: MEBL) marked its most profitable year in 2023, achieving a profit of Rs58.91 billion [EPS: Rs47.72] by the end of the review period.

This reflects a growth of over 90% YoY compared to the bank’s reported earnings of Rs45.14bn [EPS: Rs25.11] recorded in the Same Period Last Year (SPLY),

To reward shareholders for this remarkable performance, the Board of Directors (BoD) of the bank has declared a final cash dividend of Rs8 per share i.e. 80%.

This is in addition to interim dividend(s) already paid at Rs12 per share i.e. 120 %.

Going by the income statement, the bank witnessed an increase of 85.93% YoY in its net spread earned to stand at Rs226.49bn, compared to Rs121.82bn in SPLY.

The surge in profit is attributed to an identical jump in profit earned on Islamic financing and related assets, investments, and placements (Rs431.82bn) in 2023.

Further contributing to the bank’s profits, the total other income increased by 19.19% YoY to Rs23.97bn, owing to a significant rise in Foreign Exchange Income to clock in at Rs19.64bn, up by 33.13% YoY.

On the expense side, the bank’s total other expenses expanded by 48.84% YoY to Rs72.73bn in 2023 compared to Rs48.86bn in 2022.

The increase was associated with a growth in operating expenses that were recorded at Rs68.77bn in 2023.

Similarly, MEBL’s expenses towards the Workers' welfare fund and other charges also went up during the review period.

Moving forward, MEBL’s result further shows that its share from associates converted to a profit of Rs1.67bn in 2023, in contrast to a loss of Rs87.37m in 2022.

In addition, the bank incurred a provision reversal of Rs7.34bn during the review period compared to the reversal of Rs4.18bn in the corresponding period last year.

On the tax front, the bank paid Rs86.04bn, 97.06% YoY higher than the amount paid in 9MCY22.

Consolidated Profit and Loss Account for the year ended December 31, 2023 ('000 Rupees)
  Dec-23 Dec-22 % Change
Profit/return earned on islamic financing and related assets. Investments and placements 431,820,608 232,245,452 85.93%
Profits on deposits and other dues expensed 205,327,453 110,426,062 85.94%
Net spread earned 226,493,155 121,819,390 85.93%
Fee and commission income 19,636,228 14,729,321 33.31%
Dividend income 635,019 629,478 0.88%
Foreign exchnage income 3,094,654 3,617,274 -14.45%
(Loss) / gain on securities-net -697,998 -100,184
Other income 1,306,765 1,238,374 5.52%
Total other income 23,974,668 20,114,263 19.19%
Total income 250,467,823 141,933,653 76.47%
Operating expenses 68,771,751 46,841,953 46.82%
Workers' Welfare Fund 3,655,940 1,927,520 89.67%
Other charges 304,830 95,150 220.37%
Total other expenses 72,732,521 48,864,623 48.84%
Share of results of associates before taxation 1,671,989 -87,366 -2013.78%
Profit before provisions 179,407,291 92,981,664 92.95%
Provisions and write-offs -net 7,340,411 4,176,661 75.75%
Extraordinary/unusual items
Profit before taxation 172,066,880 88,805,003 93.76%
Taxation 86,043,744 43,663,751 97.06%
Profit after taxation 86,023,136 45,141,252 90.56%
Basic earnings per share (Rupees) 47.72 25.11

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Posted on: 2024-02-15T13:06:03+05:00