meezan bank limited · • eps –on enhanced share capital of rs 11.7 bn - rs 7.67 vs rs 5.56 last...

Meezan Bank LimitedUnlocking the True Potential of Islamic Banking

ANALYST BRIEFING -

2018

2Meezan Bank: Performance At a Glance –Balance Sheet Grew by 19% in 2018

• Total Assets of the Bank increased to Rs 938 bn vs Rs 789 bn last year - a growth of 19% (Rs 149 bn)

• Bank’s Financing crossed half a trillion grew to Rs 513 bn vs Rs 420 bn last year – a growth of 22%;

• The growth in financings was in all segments i.e. Corporate:14%, SME/Comm:44% & Consumer :41%;

• ADR of the Bank – 65% vs 63% last year;

• NPL infection ratio dropped to 1.3% vs 1.5% in 2017 and banking industry average of 8%;

• NPL Coverage ratio increased to 139% vs 133% in 2017

• Investments and placements grew to Rs 309 bn vs 266 bn last year – a growth of 16%

• Bank’s Deposits grew to Rs 785 bn vs Rs 667 bn last year – a growth of 18% vs industry growth of 8%;

• Current account deposits grew by 23% YoY;

• Equity grew by 15% to Rs 40 bn vs Rs 35 bn in 2017.

3Meezan Bank: Performance At a Glance – Profit After Tax Grew by 42% in 2018

• PAT 2018: Rs 8.96 bn ($ 64.5 mn) vs Rs 6.31 bn ($ 45.5 mn) – a growth of 42% (Rs 2.6 bn);

• EPS – on enhanced share capital of Rs 11.7 bn - Rs 7.67 vs Rs 5.56 last year;

• Return on Average Equity – 23.77% vs 19.26% last year;

• Net spread : Rs 28 bn vs Rs 21 bn last year due to higher volume of earning assets & its re-pricing;

• Fee , commission and other income increased to Rs 5.6 bn vs Rs 4.4 bn in 2017– a growth of 26%;

• Trade Business Volume crossed Rs 1 Trillion vs Rs 710 bn – a growth of 43%;

• Admin expenses - Rs 19.7 bn (17% up from last year) mainly due to opening of 59 new branches;

• No of Branches: Opened 59 new branches reaching 660 vs 601 last year (181 cities vs 159 cities);

• Cost to income ratio: Improved by 4% to 55% vs 59% last year.

Meezan Bank: Deposit Increased by 18% in 2018 as against 8% growth in Banking Industry

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Rs in Bn

117,930

148,701

195,679

235,908

289,421

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

CY14 CY15 CY16 CY17 CY18

Current Account Deposits

4 YR - CAGR 25%

67%

28%

2%1% 2%

Individuals - 67%

Private Sector - 28%

Government - 2%

NBFIs - 1%

Others - 2%

Deposit Composition

28% 28% 25% 25% 27%

41% 40% 40% 40% 36%

31% 32% 35% 35% 37%

0%

20%

40%

60%

80%

100%


Deposit Mix

Fixed Savings Current

Meezan Bank: Leading the Islamic Banking Industry with 35% share of deposit– 9M’2018

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• In an industry of Rs. 2.0 trillion deposits, Meezan Bank is at a leading position with 35% share of total deposits of Islamic Banking Industry

Rs in Bn

CY18 Industry data not available

30%

31%

32%

33%

34%

35%

36%

0

500

1,000

1,500

2,000

2,500

CY14 CY15 CY16 CY17 CY 9M'18

Bank's Growth in Comparison with Islamic

Banking Industry

Total Islamic Banking Deposits

Meezan Bank Deposits

Meezan Bank as % of Islamic deposits

Meezan Bank

35%

4 Other

Islamic Banks

27%

16 Islamic

Windows of

Conventional

Banks

38%

Share of Islamic Banking Industry

Meezan Bank: Financings crossed Half a Trillion – 22% Growth YoY

6

110%

116%

118%

133% 139%

0%

20%

40%

60%

80%

100%

120%

140%

160%

-

2

4

6

8

10

12


Asset Quality

Provisions held Non Performing Loans NPL Coverage

3.8%

3.3%

2.1%

1.5%

1.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

-

100

200

300

400

500

600


Non Performing Loans & Infection Ratio

Non Performing Loans Advances Infection Ratio

46 44

56 63 65

-

10

20

30

40

50

60

70


ADR - %

68

19

12 1

Financing Mix

Corporate

SME / Commercial

Consumer

Staff

Non - funded Income CY18 CY17 Growth %

Trade Business Volume Rs 1 Trillion Rs 710 Billion 43

Non Funded Income

Trade related fees & guarantee commissions 1,913 1,356 41

Branch banking fees 1,483 1,189 25

Debit card fees 1,123 809 39

Investment banking fees 233 304 (23)

Home remittance fees 151 100 52

Credit processing fees 123 85 44

Cash management fees 45 26 74

Others 499 542 (8)

5,569 4,412 26

Meezan Bank: Fee income Grew by 26% with Trade Business Volume over Rs 1 Trillion

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Rs in Bn

Profit & Loss Account 2018 2017 Growth %

Net spread earned 28,168 20,743 36%

Fee and commission and other income 5,569 4,412 26%

Foreign exchange income 1,318 1,211 9%

Dividend income and capital gain 575 2,001 (71%)

Operating income 35,630 28,367 26%

Administrative and other expenses (19,670) (16,832) 17%

Profit before tax and provisions 15,960 11,535 38%

Total Provisions (1,168) (1,283) (9%)

Profit before tax 14,792 10,252 44%

Taxation (5,830) (3,939) 48%

Profit after tax 8,962 6,313 42%

Earnings per share - on enhanced capital – Rs 7.67 5.56 38%

Number of branches 660 601 10%

8Meezan Bank: 2018 Results – 42% Growth in Profitability

Rs in Mn

Balance Sheet CY18 CY17 Growth %

Cash and Bank Balance 73,277 69,451 6

Due from FI under Bai Muajjal 184,815 147,229 26

Investments 123,743 119,238 4

Financings 512,565 420,029 22

Fixed and Intangible Assets 13,753 11,876 16

Other Assets 29,763 20,984 42

Total Assets 937,915 788,807 19

Bills Payable 23,751 17,175 38

Due to FIs 36,408 36,813 (1)

Deposits 785,477 667,181 18

Sub-ordinated Tier II Sukuk 7,000 7,000 -

Additional Tier I Sukuk 7,000 - 100

Other Liabilities 37,947 25,561 48

Total Liabilities 897,583 753,730 19

Net Assets 40,333 35,077 15

Paid-up Capital 11,692 10,629 10

Reserves/Retained Profit 28,687 23,709 21

Revaluation Surplus (46) 739 (106)

Total Equity 40,333 35,077 15

9Meezan Bank: 2018 Results – 18% Deposit Growth vs Banking Industry Growth of 8%

Rs in Mn

Profit and Loss Account CY18 CY17

Islamic Financings as % of deposits (ADR) 65.26 62.96

Non-performing financing to Gross Islamic financing - % 1.34 1.54

NPL Coverage Ratio - % 139 133

Tier I CAR - % 12.09 9.94

Total CAR - % 14.55 12.89

Book value per Share - on enhanced capital- as at Dec 31, - Rs 34.50 30.00

Expense to gross income ratio - Total - % 55.21 59.34

Earnings per share - on enhanced capital after Bonus Issue - Rs 7.67 5.56

Return on Average Equity - (ROAE) - % 23.77 19.26

Return on Average Assets - (ROAA) - % 1.04 0.87

Dividend Payout - % 45 30

Cash Dividend - % 35 30

Bonus Issue - % 10 -

10Meezan Bank: Key Ratios 2018 vs 2017 with ROE of 24%

Meezan Bank: Unconsolidated Profit And Loss Account - 2014 - 2018

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Rs in million

P&L Statement CY14 CY15 CY16 CY17 CY18

Target rate 10.0% - 9.5% 9.5% - 6.0% 6.0% - 5.75% 5.75% 7.11%

Profit / return earned 28,487 32,894 31,027 36,427 48,624

Profit on deposits & others (15,539) (15,181) (13,238) (15,684) (20,457)

Net Spread earned 12,948 17,713 17,789 20,743 28,167

Other income 4,819 4,588 5,723 7,624 7,463

Total Revenue 17,767 22,301 23,512 28,367 35,630

Operating Expense (10,402) (13,314) (14,787) (16,832) (19,670)

Profit Before Provisions 7,365 8,987 8,725 11,535 15,960

Provisions and write offs - net (467) (535) 218 (1,283) (1,168)

Profit Before Provisions 6,898 8,452 8,943 10,252 14,792

Taxation (2,328) (3,429) (3,381) (3,939) (5,830)

Profit After Tax 4,570 5,023 5,562 6,313 8,962

YoY Growth 15% 10% 11% 14% 42%

Earnings per share - Rs 4.56 5.01 5.45 5.56 7.67

Dividend per share - Rs 27.5%(C) 30%(C) 30%(C) 30%(C) 35%(C) & 10%(B)

Meezan Bank: Unconsolidated Balance Sheet – 2014 - 2018

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Rs in million

Balance Sheet CY14 CY15 CY16 CY17 CY18

Cash and Bank Balance 35,230 54,861 68,058 69,451 73,277

Due from FIs 90,766 101,079 129,115 147,229 184,815

Investments 114,089 146,305 130,156 119,238 123,743

Advances 175,712 207,569 311,530 420,029 512,565

Fixed and Intangible Assets 6,273 8,057 8,925 11,876 13,753

Other Assets 18,079 17,993 14,271 20,984 29,763

Total Assets 440,149 535,864 662,055 788,807 937,915

Bills Payable 7,298 10,100 13,757 17,175 23,751

Due to FIs 15,465 13,610 32,006 36,813 36,408

Deposits 378,744 468,281 559,398 667,181 785,477

Sub-ordinated Sukuk - - 7,000 7,000 14,000Other Liabilities 14,752 17,526 19,421 25,561 37,947

Total Liabilities 416,259 509,517 631,581 753,730 897,583

Net Assets 23,890 26,347 30,474 35,077 40,333

Paid-up Capital 10,027 10,027 10,027 10,629 11,692

Reserves/Retained Profit 13,247 15,530 18,122 23,709 28,687Revaluation Surplus 616 790 2,325 739 (46)

Total Equity 23,890 26,347 30,474 35,077 40,333

Meezan Bank: Consolidated Profit After Tax Grew by 59% of Rs 8.96 Billion

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Rs in Bn

Profit & Loss account CY18 CY17 Growth %

PSX - 100 Index 37,067 40,471 (8)

Net spread earned 28,176 20,753 36

Fee, commission, forex & other income 8,454 7,627 11

Div idend income and capital gain 203 1,227 (83)

8,657 8,854 (2)

GROSS BANKING INCOME 36,833 29,607 24

Administrative and other expenses (20,187) (17,427) 16

16,646 12,180 37

Share of result of associates before taxation (298) (963) (69)

PROFIT BEFORE PROVISIONS 16,348 11,217 46

Total provisions - net (1,168) (1,284) (9)

PROFIT BEFORE TAX 15,180 9,933 53

Taxation (6,046) (4,153) 46

PROFIT AFTER TAX 9,134 5,780 58

Non Controlling Interest (176) (161) 9

PROFIT AFTER TAX AND NON CONTROLLING INTEREST 8,958 5,619 59

EPS - on enhanced capital - Rs. 7.66 4.95 55

About Bank’s Subsidiary-Al Meezan Investments

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Since its inception in 1995, it has the distinction of being the only AMC in Pakistan with the exclusive mandate of providing Shariah compliant investment solutions to its investors

Shariah Board consists of members who are playing the leading role in the development of Islamic Finance worldwide

Manages the largest Open end Equity fund & Voluntary Pension Fund (VPS) in the private sector with AUM of Rs. 33 Bn and Rs. 9 Bn respectively

One of the largest private sector AMCs currently managing over Rs. 102 Bn with longest track record of over 23 years of experience in Asset Management and Investment Advisory

Has one of the largest investor base of over 91,615 investors along with the consistently high performing funds providing competitive returns

Longest track record of managing discretionary portfolios along with advisory services to the renowned local and international clients

AM1 Rating (from JCR-VIS), the first AMC to be awarded the highest possible management quality rating

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Developed the first Shariah Compliant Index (KMI-30) in collaboration with KSE (now PSX)8

Meezan Bank: Performance of its Subsidiary

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Al Meezan Investments Management Ltd Unit CY18 CY17 ∆ %

Assets Under Management –incl. discretionary portfolio Rs Bn 102 100 2%

Number of Funds # 16 14 14%

Number of Funds -including plans # 28 25 12%

Number of Branches # 23 18 28%

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Break-down of AUMs by Investor Category

Meezan Bank: Performance of its Subsidiary

Thank You

meezan bank limited · • eps –on enhanced share capital of rs 11.7 bn - rs 7.67 vs rs 5.56 last...

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