Islamabad, Feb 13: Meezan Bank (MEBL) reported a strong performance for the calendar year 2024, posting earnings of Rs. 101.5 billion, a 20 percent year-on-year (YoY) increase, translating to an earnings per share (EPS) of Rs. 56.5.
This marks the highest-ever annual profit for the bank, positioning it as one of the most profitable players in the sector. In addition to the stellar financial performance, the bank declared a record dividend payout of Rs. 28 per share.
However, the bank’s performance in the fourth quarter of 2024 showed a decline in earnings. The bank recorded earnings of Rs. 23.9 billion, with an EPS of Rs. 13.36, reflecting a 9 percent YoY decrease and a 7 percent quarter-on-quarter (QoQ) decline.
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The dip in 4Q2024 earnings was primarily attributed to an increased provision expense of Rs. 7.3 billion, compared to Rs. 2.5 billion in the previous quarter and Rs. 2.9 billion in 4Q2023. The higher provision expense is linked to the implementation of IFRS-9, which resulted in a higher-than-usual provisioning.
Despite the decline in 4Q2024, Meezan Bank’s net spread grew marginally by 1 percent YoY to Rs. 72 billion. However, it was down by 6 percent QoQ in the fourth quarter. This growth in net spread was supported by higher asset yields, a favorable asset repricing gap, and growth in low-cost current account deposits. On the other hand, the bank’s other income declined by 7 percent YoY but showed a 4 percent improvement QoQ in 4Q2024.
Operating expenses also saw an uptick, with other expenses rising 22 percent QoQ and 14 percent YoY to Rs. 18 billion, driven by the expansion of the branch network and inflationary pressures. The bank’s tax rate for the fourth quarter stood at 58 percent, while the effective tax rate for 2024 was 54 percent. Despite the slight dip in the fourth quarter, Meezan Bank remains a top pick in the banking sector, offering an attractive 2025 estimated PE of 5.6x, PBV of 1.5x, and a healthy dividend yield of 10.1 percent.
