Meezan Bank Ltd.

Meezan Bank Limited. Meezan Bank Limited is an Islamic commercial bank. The Bank is engaged in corporate, commercial, consumer, investment and retail banking activities. It offers a range of Islamic banking products and services through a retail banking network of over 550 branches in approximately 140 cities to its corporate, commercial and small and medium-sized enterprise (SME) customers based on their financial requirements. It provides personal banking, business banking, premium banking and branchless banking. The Bank also offers Meezan Rupee Current Account, Karobari Munafa Account, Meezan Rupee Savings Account, Meezan Business Plus Account, Meezan Bachat Account, Meezan Kids Club Account, Meezan Teens Club Account, Meezan Asaan Current Account, Meezan Kafalah, Certificates of Islamic Investment, Meezan Amdan Certificate and Dollar Mudarabah Certificate. It has assets in agriculture, food, forestry and fishing; cement, and others. The Bank operates only in Pakistan.
  • TickerMEBL
  • ISINPK0077401013
  • ExchangePakistan Stock Exchange
  • SectorBanks
  • CountryPakistan

Pakistan Banks_May’20 spreads_Repricing factor in play, (AKD Daily, Jun 25, 2020)

Pakistan Banks: May’20 spreads_Repricing factor in play Banking sector spreads for May’20 stood at 5.64% (up 46bps MoM), buckling the declining trend in spreads since beginning of the year. The fresh move comes at the back of 200bps cut in interest rates in Apr’20 turning up repricing factor. 5MCY20 avg. outstanding spread stands at 5.42% as against 5.54% in the same period last year. Fresh spread during May’20 stands at 4.55%, flat MoM as credit spread (Fresh lending yield - 3M KIBOR) jumped to 2.2% compared to 1.6% in Apr’20, pinned by potential restructuring of loans, and higher risk ca...

MEBL_Natural antibodies to counter headwinds, (AKD Daily, May 29, 2020)

AKD Daily MEBL: Natural antibodies to counter headwinds Branch additions (159 branches added in the past two years), non-linkage of deposit cost to policy rate, and Govt.’s intent to tap Islamic banking resources to raise financing (PkR750bn Ijarah Sukuks targeted, PkR200bn Power Sukuk II bidding complete) should buttress MEBL’s bottom-line from steep decline in interest rates over the medium run. Smoothening of possible provisioning costs (PkR1bn general provision booked in Mar’20) in lieu of underline risks from COVID-19 and expiry of SBP relief period provide confidence on the future ...

Raza Jafri ...
  • Yusra Beg

Pakistan banks: Tough times ahead; downgrade sector to Marketweight

* We downgrade our stance on Pakistan banks to Marketweight following the acute impact of Covid-19 on the economy and the sector. There are significant risks on revenue, particularly from tighter margins after the 425bps rate cut, while asset quality headwinds may persist for the next few years. A step increase in digital banking is possible, but this will not offset the weak near-term outlook. * The SBP has acted quickly to protect borrowers, but stress on banks looks unavoidable. We cut C...

Yusra Beg

Meezan Bank Ltd.: 1QCY20 review – Solid spread income

MEBL has posted 1QCY20 consolidated NPAT of PKR5,024mn (EPS: PKR3.91), up a robust 69%yoy and 6%qoq. The result came slightly higher than our projected EPS of PKR3.75. The deviation stems from (i) net spread income of PKR14,713mn, above our estimates by 4%, and (ii) stronger than expected capital gains realization, which helped offset a major loss from associates. With the SBP announcing a 2-quarter moratorium on dividends, our expectation of a PKR1.0/sh first interim dividend was understanda...

Meezan Bank Limited (MEBL): 1Q2020 EPS at Rs3.91, up 69% YoY (higher than industry expectations)

Meezan Bank Limited (MEBL) posted 1Q2020 consolidated earnings of Rs3.91/share, up 69% YoY and 6% QoQ. The bank did not announce any payout with the result as per the guidance given by the Central Bank in April-2020. The result came in higher-than-industry expectations due to higher-than-expected Non funded income, which was led by Forex Income and Gain on Securities. Net Interest Income (NII) for the quarter settled at Rs14.7bn (up 66% YoY), owing to 64% YoY increase in Markup Earned. The bank’s Non Mark-up income increased by 53% YoY and 21% QoQ. The bank booked Gain on Securities of Rs7...

Ali Asghar Poonawala ...
  • Hamza Kamal

Pakistan Strategy_ Perfect storm of risks clouds fundamentals

Week to date decline of 6.1% cover a period of depressed price performance for stocks, with volumes and returns closely resembling FY08-09, a period of record weakness in equity market performance, highlighting the multi-faceted nature of the prevailing market sell-off We segment news reports and policy actions during the year into macro and sectoral items, while underlining the broad pressures at play on both fronts forcing investors to hunker down, refrain from building fresh positions and induce outflows from institutional investors Guiding market sentiment, these developments have broadl...

Raza Jafri ...
  • Yusra Beg

Pakistan Banks: Central bank announces relief package for borrowers

The State Bank of Pakistan (SBP), in collaboration with the Pakistan Bankers Association (PBA), has announced a relief package for stakeholders affected by the Covid-19 outbreak. Salient measures include the following: Reduction in Capital Conservation Buffer (CCB) to 1.5% In order to create additional liquidity for banks, the SBP has reduced the Capital Conservation Buffer (CCB) from 2.5% to 1.5%. This should enable banks to lend up to PKR800bn, or c10% of outstanding loans. We flag that mos...

Pakistan Banks_May’20 spreads_Repricing factor in play, (AKD Daily, Jun 25, 2020)

Pakistan Banks: May’20 spreads_Repricing factor in play Banking sector spreads for May’20 stood at 5.64% (up 46bps MoM), buckling the declining trend in spreads since beginning of the year. The fresh move comes at the back of 200bps cut in interest rates in Apr’20 turning up repricing factor. 5MCY20 avg. outstanding spread stands at 5.42% as against 5.54% in the same period last year. Fresh spread during May’20 stands at 4.55%, flat MoM as credit spread (Fresh lending yield - 3M KIBOR) jumped to 2.2% compared to 1.6% in Apr’20, pinned by potential restructuring of loans, and higher risk ca...

MEBL_Natural antibodies to counter headwinds, (AKD Daily, May 29, 2020)

AKD Daily MEBL: Natural antibodies to counter headwinds Branch additions (159 branches added in the past two years), non-linkage of deposit cost to policy rate, and Govt.’s intent to tap Islamic banking resources to raise financing (PkR750bn Ijarah Sukuks targeted, PkR200bn Power Sukuk II bidding complete) should buttress MEBL’s bottom-line from steep decline in interest rates over the medium run. Smoothening of possible provisioning costs (PkR1bn general provision booked in Mar’20) in lieu of underline risks from COVID-19 and expiry of SBP relief period provide confidence on the future ...

Raza Jafri ...
  • Yusra Beg

Pakistan banks: Tough times ahead; downgrade sector to Marketweight

* We downgrade our stance on Pakistan banks to Marketweight following the acute impact of Covid-19 on the economy and the sector. There are significant risks on revenue, particularly from tighter margins after the 425bps rate cut, while asset quality headwinds may persist for the next few years. A step increase in digital banking is possible, but this will not offset the weak near-term outlook. * The SBP has acted quickly to protect borrowers, but stress on banks looks unavoidable. We cut C...

Yusra Beg

Meezan Bank Ltd.: 1QCY20 review – Solid spread income

MEBL has posted 1QCY20 consolidated NPAT of PKR5,024mn (EPS: PKR3.91), up a robust 69%yoy and 6%qoq. The result came slightly higher than our projected EPS of PKR3.75. The deviation stems from (i) net spread income of PKR14,713mn, above our estimates by 4%, and (ii) stronger than expected capital gains realization, which helped offset a major loss from associates. With the SBP announcing a 2-quarter moratorium on dividends, our expectation of a PKR1.0/sh first interim dividend was understanda...

Meezan Bank Limited (MEBL): 1Q2020 EPS at Rs3.91, up 69% YoY (higher than industry expectations)

Meezan Bank Limited (MEBL) posted 1Q2020 consolidated earnings of Rs3.91/share, up 69% YoY and 6% QoQ. The bank did not announce any payout with the result as per the guidance given by the Central Bank in April-2020. The result came in higher-than-industry expectations due to higher-than-expected Non funded income, which was led by Forex Income and Gain on Securities. Net Interest Income (NII) for the quarter settled at Rs14.7bn (up 66% YoY), owing to 64% YoY increase in Markup Earned. The bank’s Non Mark-up income increased by 53% YoY and 21% QoQ. The bank booked Gain on Securities of Rs7...

Raza Jafri ...
  • Rohit Kumar
  • Yusra Beg

Pakistan: Central bank defers IFRS-9 implementation to January 2021

Keeping in view the initial impact and readiness assessment (eg impact on capital ratios) conducted by Pakistan’s banking industry, the State Bank of Pakistan (SBP) has issued a circular on reporting guidelines for IFRS-9 (financial instruments) and decided to defer roll-out to January 2021. Banks will have to perform a parallel run of IFRS 9 in their financials from 1 January 2020 to gauge the IFRS-9 affected outcomes. However, we understand this will not be disclosed in the published accounts and will be reported to SBP directly.

MEBL: ROE too hard to ignore, (AKD Daily, Sep 12, 2019)

We reiterate our ‘Buy’ stance on Meezan Bank Limited (MEBL) giving due salute to CY20-22F ROE of 28.2% (peaking in CY20F at 31.8%), rolling over our TP to Dec’20 – Current: PkR113.0/sh vs. Previous: PkR115.8/sh. The stock is currently trading at a CY20F P/B of 1.42x (Our universe’s CY20F P/B: 0.9x) where premium valuations are justified given 9.4ppt higher ROE (3y avg.) of the bank relative to our universe. MEBL reported a strong 1HCY19 results where the bank reported an NPAT of PkR7.0bn (EPS: PkR5.4), +63.3%YoY. On a quarterly basis, 2QCY19 NPAT clocked in at PkR3.9bn (EPS: PkR3.1, +26.0%Qo...

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind each recommendation and reflect the fundamental and price data as of the last trading day of the week...

ResearchPool Subscriptions

Get the most out of your insights

Get in touch