Meezan Bank Reports 10.6% Profit Decline to Rs22.42 Billion in Q1CY25

Meezan Bank Limited (PSX: MEBL), Pakistan’s leading Islamic bank, reported a consolidated after-tax profit of Rs22.42 billion for the quarter ending March 31, 2025, reflecting a 10.6% year-on-year decline, according to a notice sent to the Pakistan Stock Exchange (PSX). The bank declared a cash dividend of Rs7 per share, maintaining its commitment to shareholders despite the downturn.

The profit drop was driven by a 9.7% decrease in profit from Islamic financing and related assets, compounded by reduced investment returns. Net profit/return fell 8.1% to Rs61.78 billion, with total income contracting 4.3% to Rs71.02 billion, signaling pressures from tighter banking sector spreads and lower investment yields. Analysts noted that the decline in spreads stemmed from falling interest rates and the imposition of the Minimum Deposit Rate (MDR) on individual portfolios.

However, fee and commission income surged by 22%, and foreign exchange gains skyrocketed over threefold to Rs1.6 billion, providing a critical buffer to the topline. In contrast, dividend income plummeted 69%, and gains on securities crashed 81%, weighing heavily on results. Operating expenses dropped 6.8% to Rs19.17 billion, and other charges fell a striking 93%, reflecting cost discipline. Pre-tax profit declined 6.1% to Rs49.27 billion, with taxation slightly lower at Rs26.87 billion.

Despite the challenges, Meezan Bank remains a dominant force in Pakistan’s Islamic banking sector, leveraging fee-based income and treasury operations to bolster its financial resilience amid a tough economic environment.