Home / Brokerage / Morning Briefing for Feb 21, 2012 – Standard Capital

Morning Briefing for Feb 21, 2012 – Standard Capital

Karachi: Meezan Bank’s profit jumps 106% Bank’s assets crosses Rs200bn mark Meezan Bank Limited (MEBL) reported Rs3.39 billion (EPS: Rs4.22) for CY11, thus showing growth of 106 % as compared to Rs1.65 billion (EPS: Rs2.05) in the same period of last year.

According to Standard Capital, the company did not announce a payout and instead issued bonus shares of 12.5% which pumped up the paid up capital base of Rs 10bn. Standard Capital considers this to be a good sign since now MEBL can count themselves as among better banks in Pakistan.

Asset size propelling 106% profit growth

As per newspaper reports, the profitability is propelled by core asset growth since bank’s earnings on financing increased by 46.7 % to Rs18.03bn as against Rs12.29 billion in the same period of last year.

Some of the key determinant in this core earnings growth includes

•           Nearly 65% net spread earned to Rs 9.4bn;

•           Lower provisions of 7.2 % and;

•           1.2 % surge in other income.

Since banking branches are increasing (branch led growth) and hence bank is having better deposit base. In return, expenses on deposits also increased by 31.2% to Rs8.66 billion compared to Rs6.60 billion in CY10.

The Bank recorded Rs1.38 billion as non‐performing loan against advances for CY11 versus Rs1.49 billion in 2010, depicting decline of 7.2 % while operating expenditure increased by 35.06 % to Rs6.12 billion for the period ended CY11. As per the MEBL management, the bank has completed 10 years of operation and its total asset base increases to Rs 200bn which Standard Capital considers a good sign. Standard Capital thinks that MEBL business model is better one since it is fostering asset growth in the country by promoting Sharia’h based financing.

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