Meezan Bank Limited (MEBL) has announced its financial results for the calendar year 2024, reporting a record-breaking profit of Rs. 101.5 billion (EPS: Rs. 56.5), reflecting a 20% year-on-year (YoY) growth. This marks the highest-ever annual profit in the bank’s history, likely positioning it as the most profitable bank in the sector.

In the fourth quarter of 2024 (4Q2024), the bank posted earnings of Rs. 23.9 billion (EPS: Rs. 13.36), representing a 9% YoY decline and a 7% quarter-on-quarter (QoQ) drop. The decline was attributed to higher provision expenses and other operational costs.

Meezan Bank announced an unprecedented total dividend payout of Rs. 28/share for 2024, including a fourth interim cash dividend of Rs. 7/share for 4Q2024. This reflects the bank’s strong commitment to rewarding its shareholders.

• Provisions: The bank recorded a provision expense of Rs. 7.3 billion in 4Q2024, significantly higher than Rs. 2.5 billion in 3Q2024 and Rs. 2.9 billion in 4Q2023. The increase was due to the implementation of IFRS-9.
• Net Spread: Net spread earned grew by 1% YoY to Rs. 72 billion in 4Q2024, driven by higher asset yields, a favorable asset repricing gap, and growth in zero-cost current account deposits. However, it declined 6% QoQ.
• Other Income: Other income declined by 7% YoY but increased by 4% QoQ in 4Q2024.
• Other Expenses: Operating expenses rose by 14% YoY and 22% QoQ to Rs. 18 billion in 4Q2024, primarily due to branch network expansion and inflationary pressures.
• Taxation: The effective tax rate for the bank stood at 58% in 4Q2024 and 54% for the full year.

According to Arif Habib Limited, Meezan Bank’s performance underscores its leadership in the banking sector. The stock remains a preferred pick, trading at a 2025E price-to-earnings (PE) ratio of 5.6x and a price-to-book value (PBV) of 1.5x, with an attractive dividend yield of 10.1%.

Meezan Bank’s record-breaking performance, coupled with its robust dividend payout, highlights its strong financial position and growth potential, making it a standout player in Pakistan’s banking sector.