Meezan Bank Limited (Meezan Bank) has been incorporated in Pakistan on January 27, 1997 as a public limited company under the Companies Ordinance, 1984 and its shares are quoted on the Karachi Stock Exchange. It started operations as an investment bank in August of the same year. Meezan Bank's main shareholders are leading local and international financial institutions, including Pak-Kuwait Investment Company (26%), the Islamic Development Bank of Jeddah (9%), the Shamil Bank of Bahrain (26%), Kuwait Awqaf Public Foundation (9%) and general public/others (30%).
Meezan Bank was granted a 'Scheduled Islamic Commercial Bank' licence on January 31, 2002 and formally commenced operations as a scheduled Islamic commercial bank with effect from March 20, 2002 on receiving notification in this regard from the State Bank of Pakistan under section 37 of SBP Act, 1956.
Meezan Bank is operating through 10 branches as at June 30, 2004 (2003: eight). With a current platform of 10 branches, Meezan Bank is well positioned to serve the varied banking needs of corporate and consumer customers across the nation.
Explaining the Basis of Presentation in the notes to the financial statements, it has been stated that Meezan Bank provides financing mainly through Murahaba, Ijarah and export finance under Islamic export finance scheme.
Under Murahaba the goods are purchased and are then sold to the customers on credit. The purchase and sale arising under these arrangements are not reflected in these financial statements but are restricted to the amount of facility actually utilised and the appropriate profit thereon.
During the half year ended June 30, 2004 Meezan Bank has been able to achieve a post tax profit of Rs 111 million as compared to Rs 92 million in the corresponding period last year reflecting an increase of 21%.
The balance sheet has also shown a growth of 25% from Rs 11 billion to Rs 14 billion. JCR VIS Credit Rating agency has reaffirmed the long term credit rating of Meezan Bank as A+ and short term rating as A1+. It's NPLs under control (at 1%) and are fully provided.
Performance statistics of the bank are given below. Profit after tax to equity for the six months ended June 30, 2004 is 5.8% as against 5.3% for the corresponding period last year. The operating results are impressive.
The banking sector is showing a significant paradigm shift away from traditional means of business and is catering to an increasingly astute and demanding financial consumer who is also becoming keenly aware of Islamic Banking.
Meezan Bank bears the responsibility of leading the way in establishing a stable and dynamic Islamic Banking system full of dynamic and cutting-edge products and services. The members of the Shariah Board of Meezan Bank are internationally renowned scholars serving on the boards of many Islamic banks operating in different countries.
Meezan Bank offers a wide range of products to meet the customers' working capital requirements through various Shariah compliant modes of financing such as Murabaha, Musharakah, Modaraba, Istisna and Salam.
It specialises in offering unique project financing solutions, which have been developed using a wide array of product offerings, which include Diminishing Musharakah, Ijarah, Modaraba, Istijrar, Murabaha and Istisna forms of financing and derivatives thereof.
Meezan Bank claims to enjoy a distinction vis-à-vis its competitors, as it is the only Bank in Pakistan to offer a Shariah compliant "Islamic Export Refinance Scheme (IERS)" approved by the State Bank of Pakistan (SBP).
The scheme is said to be available in both Part-I and Part-II as per the original Export Refinance Scheme (ERF) of SBP. Besides, it provides a range of Advisory services integrating industry, product and regional specialisation to help businesses address their strategic issues and formulate and execute dynamic business strategies.
Meezan Banks aims to be a premier Islamic bank, offering a one-stop shop for innovative value added products and services to customers within the bounds of Shariah, while optimising the stakeholders' value through an organisational culture based on learning, fairness, respect for individual enterprise and performance. The task by no means is easy but with full commitment the stakeholders can overcome the obstacles.
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Performance Statistics (Rs in million)
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Balance sheet (As on)
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June 30 December 31
2004 2003
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Total Assets: 13,891 11,102
Cash, balances with banks: 2,168 1,726
Investments-Net: 1,250 1,212
Advances Net: 9,647 7,397
Deposits, Other Accounts: 9,436 7,757
Total Liabilities: 11,973 9,354
Share Capital: 1,170 1,064
Reserves, Retained earnings: 577 572
Surplus on Revaluation of Assets: 171 112
Total Equity: 1,918 1,748
Subordinated Loan: 0 0
Equity and Sub. Loans: 1,918 1,748
Contingencies and Commitments: 17,699 11,791
Ratios:
Cash and Bank/Total Assets: 16% 16%
Investments/Total Assets: 9% 11%
Advance/Total Assets: 69% 67%
NPLs/Advances: 1% 1%
Provisions/Advances: 1% 1%
Deposits/Total Assets: 68% 70%
Total Liabilities/Total Assets: 86% 84%
Total Equity/Total Assets: 13.8% 15.7%
Equity and Sub. Loans/Total Assets: 13.8% 15.7%
Deposits/(Equity + Sub Loans)-X: 4.9 4.4
Advances/Deposits: 102% 95%
Investments/Deposits: 13% 16%
Contin. & Comm./(Equity + SL) -X: 9.23 6.75
Share Price Rs (13-4-05): 14.75 -
Book Value per Share: 16.39 16.43
Price/Book Value ratio: 0.90 -
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Income Statement (6 M - June 30): 2004 2003
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Markup/Interest Earned: 218 192
Markup/Interest Expensed: 101 97
Net Markup/Interest Income: 117 95
Total Non-Markup Income: 179 95
Admin Expenses: 169 112
Profit Before Taxation: 117 101
Profit After Taxation: 111 92
Ratios:
Net Markup Income/Total Assets: 0.8% 0.9%
Non-Markup Income/Total Assets: 1.3% 0.9%
Admin expenses/Total Assets: 1.2% 1.0%
Profit Before Taxation/Total Assets: 0.8% 0.9%
Profit After Taxation/Total Assets: 0.8% 0.8%
Profit After Tax/Total Equity: 5.8% 5.3%
EPS After Tax Rs: 0.95 0.86
Price/Earning Ratio: 15.55 -
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COMPANY INFORMATION: Chairman: H.E. Sheikh Ebrahim bin Khalifa Al-Khalifa;
Vice Chairman: Naser Abdul Mohsen Al-Marri; President and CEO: Irfan Siddiqui;
Director: Zaigham Mahmood Rizvi; Shariah Board: Former Justice Muhammad Taqi Usmani; Chairman; Dr Abdul Sattar Abu Ghuddah; Sheikh Essam M. Ishaq Dr Muhammad Imran Usmani; Advisory: Dr Muhammad Imran Usmani Shariah Advisor; Zafar Aziz Usmani: Human Resource Advisor; Chief Operating Officer: Ariful Islam
Company Secretary: Gohar Iqbal Shaikh; Registered Office: 3rd Floor, PNSC Building, Moulvi Tamizuddin Khan Road, Karachi-74000; Auditors: A.F. Ferguson & Co, Chartered Accountants; Legal Advisors: Rizvi, Isa, Afridi & Angell
Web Address: www.meezanbank.com
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