Meezan Bank Limited (PSX: MEBL) announced its highest-ever profit of Rs. 58.6 billion for the first nine months that ended on September 30, 2023, up by 104.6 percent from Rs. 28.6 billion in the same period last year.
According to Arif Habib Limited, the bank’s earnings were driven by record total income and a historic payout of Rs. 12 per share during the period in review.
MEBL's highest-ever Profitability & payout
MEBL achieved its highest-ever Profitability (PKR 58.6 bn), driven by record total income and a historic dividend payout (PKR 12/share) in 9MCY23.@Pakstockexgltd @StateBank_Pak @MeezanBankLtd#KSE100 #PSX #MEBL #Equities #Pakista pic.twitter.com/x8TJd2zrgf
— Arif Habib Limited (@ArifHabibLtd) October 19, 2023
Along with the result, MEBL announced an interim cash dividend of Rs. 5 per share which is in addition to the interim dividend(s) of Rs. 7 per share already paid to the shareholders.
According to Topline Securities, MEBL’s earnings came slightly higher than industry expectations due to higher than expected Net Spread Earned which grew by 102 percent YoY and 29 percent QoQ to Rs. 64 billion in 3Q2023. This growth in Net Spread was led by rising asset yields and growth zero cost current account deposits.
Resultantly, profit earned by the bank grew by 84 percent YoY to Rs. 121 billion whereas the cost of deposit was up 68 percent YoY to Rs. 57 billion in 3Q2023.
Other income of the MEBL was up 41 percent YoY to Rs. 6.2 billion in 3Q2023 primarily due to an increase in fee & commission income (+34 percent YoY to Rs. 4.6 billion) and foreign exchange income (+114 percent YoY to Rs. 1.6 billion) in 3Q2023.
Other expenses of the bank increased by 52 percent YoY and 19 percent QoQ to Rs. 19.5 billion which was driven by growth in the branch network and inflationary pressures. Despite the increase in other expenses, the cost-to-income ratio of the bank improved to 28 percent in 3Q2023 versus 36 percent in 3Q2022 and 30 percent in 2Q2023.
The effective tax rate of the bank remained at 49 percent in 3Q2023, similar to the rate recorded in the same period last year. However, it is down from 53 percent in 2Q2023, primarily due to the Super Tax recorded last quarter. The bank’s earnings per share clocked in at Rs. 14.43 for 3QCY23 and Rs. 32.72 for 9MCY23.
MEBL’s scrip at the bourse closed at Rs. 132.65, up 2.29 percent or Rs. 2.97 with a turnover of 4,569,550 shares on Thursday.