April 20, 2021 (MLN): Meezan Bank Limited (MEBL) has witnessed a 24% YoY increase in net profits to Rs6.12bn (EPS: Rs4.28/sh) during 1QCY21, compared to the profits of Rs4.94bn (EPS: Rs3.55/sh) in the corresponding quarter last year.
Alongside results, the bank announced a cash dividend of Rs1.5/share for the quarter mentioned above.
The upsurge in MEBL’s profitability was largely due to Rs284mn of provision charges which were 82.8% lower than the provision of Rs1.63bn in 1QCY20.
During the quarter, Profit earned on deposits and profits earned on Islamic financing and related assets both declined by 39.3% YoY and 19% YoY respectively, as a result, the net spread earned by the bank increased by a mere 2.3 % YoY.
Non-markup income has reported a strong 11% YoY growth. Under the non-markup head, the fee income of the bank surged by 50.5% YoY on the back of normalization of branch operations post lockdown. The dividend income and Other income segments have also grown by 15.5% and 86% YoY respectively, while income from foreign exchange operations dipped by 14% YoY.
On the expense side, due to the branch expansion strategy, the other expenses of the bank jumped by 15% YoY. Operating expenses were up by 16% YoY to Rs7.99bn. Therefore, despite strong revenues, the Cost to Income ratio of the bank has risen to 42% vs. 38% in the same period of last year.
MEBL has reported a loss from associates of Rs48mn in 1QCY21, vs. Rs907mn loss in the same quarter last year, on account of its subsidiary Al Meezan Investments, a report by Intermarket Securities said.
|
Consolidated Profit and Loss Account for the quarter ended March 31, 2021 ('000 Rupees) |
|||
|---|---|---|---|
|
|
Mar-21 |
Mar-20 |
% Change |
|
Profit/return earned on Islamic financing and related assets. Investments and placements |
24,229,777 |
29,835,539 |
-18.79% |
|
Profits on deposits and other dues expensed |
9,174,644 |
15,122,738 |
-39.33% |
|
Net spread earned |
15,055,133 |
14,712,801 |
2.33% |
|
OTHER INCOME |
|
|
– |
|
Fee and commission income |
2,443,004 |
1,622,601 |
50.56% |
|
Dividend income |
68,812 |
59,577 |
15.50% |
|
Foreign exchange income |
821,533 |
963,128 |
-14.70% |
|
(Loss) / gain on securities-net |
309,116 |
722,838 |
– |
|
Other income |
250,376 |
134,454 |
86.22% |
|
|
3,892,841 |
3,502,598 |
11.14% |
|
Total income |
18,941,818 |
18,215,399 |
3.99% |
|
|
|
|
– |
|
OTHER EXPENSES |
|
|
– |
|
Operating expenses |
7,989,753 |
6,864,312 |
16.40% |
|
Workers' Welfare Fund |
260,396 |
220,949 |
17.85% |
|
Other charges |
1,382 |
83,179 |
-98.34% |
|
Total other expenses |
8,251,531 |
7,168,440 |
15.11% |
|
Share of results of associates before taxation |
(48,133) |
(907,151) |
|
|
Profit before provisions |
10,690,287 |
11,046,959 |
-3.23% |
|
Provisions and write offs -net |
284,571 |
1,637,731 |
-82.62% |
|
Extraordinary / unusual items |
– |
– |
– |
|
Profit before taxation |
10,357,583 |
8,502,077 |
21.82% |
|
Taxation |
4,230,676 |
3,558,836 |
18.88% |
|
Profit after taxation |
6,126,907 |
4,943,241 |
23.95% |
|
Basic and diluted earnings per share (Rupees) |
4.28 |
3.55 |
20.56% |
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