Meezan Bank’s Q1 Profit Declines by 12%

Meezan Bank (MEBL), Pakistan’s premier Islamic financial institution, has revealed a consolidated profit after tax (PAT) of Rs22.42 billion for the quarter concluding on March 31, 2025. This represents a decrease of 12% compared to the Rs25.08 billion recorded during the corresponding period last year.

A notification disseminated to the Pakistan Stock Exchange (PSX) on Monday indicated that the earnings per share (EPS) stood at Rs12.32 for the period, in contrast to Rs13.93 in the first quarter of the preceding calendar year.

The bank’s Board of Directors has also declared a cash dividend of Rs7 per share, equivalent to 70%, for the period that concluded on March 31, 2025.

The net profit/return generated by Meezan Bank on Islamic financing, associated assets, investments, and placements experienced a contraction of over 8%, settling at Rs61.78 billion.

Factors Contributing to Profit Decline

According to Topline Securities, a brokerage firm, “This compression in spread is attributable to a reduction in interest rates, coupled with the enforcement of the Minimum Deposit Rate (MDR) on individual portfolios.”

During the period, the bank’s fee and commission income reached Rs7.2 billion, marking an increase of over 22% compared to the Rs5.91 billion earned during the same period the previous year.

The company’s foreign exchange income demonstrated a substantial surge of over 230%, escalating from Rs478 million in the first quarter of the preceding calendar year to Rs1.60 billion in the first quarter of 2025.

Meezan Bank’s total income experienced a decrease of 4.3%, declining to Rs71.02 billion in the first quarter of 2025 from Rs74.22 billion in the first quarter of the preceding calendar year.

The bank’s operating expenses for the first quarter of 2025 amounted to Rs19.17 billion, reflecting a 7% reduction compared to the Rs20.60 billion recorded during the same period last year.