Karachi: The Board of Directors of Meezan Bank Limited has released its condensed interim unaudited financial statements for the first quarter of 2025, highlighting a resilient performance amidst a backdrop of improving macroeconomic conditions in Pakistan. The bank's profit after tax for the quarter was reported at Rs 22.0 billion, a decrease of 12% compared to Rs 24.9 billion in the same period last year, a decline attributed to a significantly lower policy rate and a higher tax regime.
On March 31, 2025, the report notes that Pakistan's economy is on a path of recovery, fortified by the federal government's fiscal and monetary policies, structural reforms, and initiatives aimed at bolstering investor and market confidence. In fiscal year 2024, Pakistan's Gross Domestic Product (GDP) recorded a growth of 2.4%, rebounding from a contraction of 0.2% in the previous year. This recovery was propelled by enhanced industrial output, robust agricultural performance, reduced inflationary pressures, and an improved current account position.
The Consumer Price Index (CPI) inflation stood at 0.7% as of March 2025, the lowest since December 1965. This significant reduction allowed the State Bank of Pakistan (SBP) to adopt an accommodative monetary policy, reducing the Policy Rate from 22% in June 2024 to 12% by January 2025. This 1,000 basis point reduction is anticipated to stimulate private sector credit growth and domestic investment.
Capital markets have reflected these positive developments, with the Pakistan Stock Exchange (PSX) reaching 117,807 points by March 2025, a year-to-date increase of 2.3%. According to information available from the Pakistan Stock Exchange (PSX), this surge has been driven by improved investor sentiment, declining interest rates, enhanced corporate earnings, and ongoing structural economic reforms.
Meezan Bank, categorized under the Islamic Banking Industry (IBI), maintained its position as the second most valuable bank in Pakistan, with a market capitalization of $1.58 billion and a quarter-end valuation of Rs 444 billion. The bank's Basic Earnings per Share were Rs 12.28, down from Rs 13.92 in the previous year. Return on Equity (ROE) was reported at 36.2%, while Return on Assets (ROA) stood at 2.3% for the quarter.
The bank announced an interim cash dividend of Rs 7.00 per share for the first quarter of 2025, continuing its tradition of consistent dividend payouts since listing on the PSX. The total asset base reached Rs 4 trillion, a 3% increase over December 2024, with a 10% expansion in the investments portfolio to Rs 2.05 trillion, attributed to regular Sukuk auctions by the Government of Pakistan.
Despite a 7% decrease in the gross financing portfolio to Rs 1.44 trillion, Meezan Bank achieved strong fee, commission, and other income growth of 29%, totaling Rs 8.2 billion. Core fee and commission income rose 10% to Rs 5.5 billion, with growth driven by debit card, branch banking, and trade-related income. The debit card portfolio grew to 3.9 million, a 16% increase from March 2024, with card spending rising 35% to Rs 95 billion in the first quarter of 2025.
Foreign exchange income increased significantly to Rs 1.6 billion, up from Rs 478 million in Q1 2024, primarily due to improved trade flows. Operating and other expenses fell from Rs 21.2 billion to Rs 19.6 billion, with a cost-to-income ratio of 28%.
Meezan Bank's deposits portfolio rose by 11% over December 2024 to Rs 2.88 trillion, with Current and Savings Account (CASA) deposits representing 93% of the total. The bank's Roshan Digital Account (RDA) saw inflows exceeding USD 2.75 billion, accounting for 27% of total industry inflows.
Meezan Bank is committed to furthering economic growth through Islamic Banking, aligning with the government's focus on Islamic Finance. The bank aims to overcome challenges posed by lower policy rates and regulatory changes by increasing core CASA deposits. With a network of 1,052 branches across 351 cities and over 1,200 ATMs nationwide, Meezan Bank continues its digital transformation strategy to enhance customer experiences and streamline operations.