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. The 'certificate of commencement of business' was issued to the bank on September 29, 1997. Meezan Bank's main shareholders are leading local and international financial institutions, including Pak-Kuwait Investment Company, the Islamic Development Bank of Jeddah, the Shamil Bank of Bahrain, and Kuwait Awqaf Public Foundation. Nearly 30% of the shares are held by the general public. Meezan Bank maintains long term entity rating of A+ with stable outlook and short term rating as A1+, assessed by JCR VIS Credit Rating Co Limited.
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 16 branches as at March 31, 2005 (March 31, 2004: ten). With 16 branches, Meezan Bank is well positioned to provide finances under Islamic modes of finance to corporate and other customers across the nation. The bank is planning to open more branches during the year to develop a stronger network throughout Pakistan.
Meezan Bank has been attempting to lead 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 and are said to be serving on the boards of some other 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 claims specialising 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. Product-wise/sector-wise outstanding Financing as on March 31, 2005 has been fairly diversified as can be seen from the following data.
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31-Mar
Financing 2005
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Murabaha Financing: 5155 37%
Net Invest. in Ijarah: 3786 27%
Export refinance-Islamic: 2657 19%
Financing ag. Bills: 607 4%
Loans, Cash Credit, etc: 118 1%
Musharakah fin.: 941 7%
Housing fin.: 972 7%
Total Financing: 14236 101%
Less: Provision NPLs
- Specific: 60 -
- General: 55 -
Subtotal 115 1%
Net Financing: 14121 100%
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The bank has been able to grow in all areas of its business activities. Total Assets of the bank that stood at Rs 12.872 billion as on March 31, 2004 have increased to Rs 22.551 billion as on March 31, 2005. This has been an impressive increase. Deposits, Financing and Paid up Capital have also experienced similar increases in the meantime. Unlike many other banks, Investments in Securities by Meezan Bank is modest (7% of Total Assets); whereas Financings (Advances) are 63% of Total Assets. Its NPLs are under control (below 1%) and are fully provided. Total Equity, nearly 11% of Total Assets, reflects comfortable financial position.
Net Mark up spread almost doubled during the current quarter as against the corresponding quarter last year. The bank was able to increase Profit after Tax to Rs 124 million this quarter as against Rs 45 million for the corresponding quarter last year. This has been made possible by larger Fee and Commission and Capital Gain on sale of investments. Profit after Tax to Equity for three months ended March 31, 2005 is 5.2% as against 2.1% for the corresponding period last year. The operating results are impressive. Performance statistics of the bank are given below.
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Performance Statistics (Million Rupees)
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Balance Sheet (As on) 31-March 31-December
2005 2004
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Total Assets: 22,552 19,697
Cash, Balances with Banks: 5,653 4,374
Investments: 1,524 1,429
Financings: 14,121 12,340
Deposits, Other Accounts: 15,547 13,770
Total Liabilities: 20,176 17,599
Share Capital: 1,697 1,346
Reserves, Retained Earnings: 639 515
Surplus on Revaluation of Assets: 40 45
Total Equity: 2,376 2,098
Subordinated Loan: 0 0
Equity and Sub. Loans: 2,376 2,098
Contingencies and Commitments: 28,402 21,221
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Ratios:
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Cash and Bank/Total Assets: 25% 22%
Investments/Total Assets: 7% 7%
Financings/Total Assets: 63% 63%
NPLs/Financings: 0.4% 0.5%
Provisions/Financings: 0.8% 0.6%
Deposits/Total Assets: 69% 70%
Total Liabilities/Total Assets: 89% 89%
Total Equity/Total Assets: 10.5% 10.7%
Equity and S. Loans/Total Assets: 10.5% 10.7%
Deposits/(Equity + Sub. Loans)-X: 6.5 6.6
Financings/Deposits: 91% 90%
Investments/Deposits: 10% 10%
Conting. & Comm./(Equity +SL)-X: 11.95 10.11
Share Price Rs (09-05-05): 14.80 -
Book Value Per Share: 14.00 15.59
Price/Book Value Ratio: 1.06 -
Income Statement (3 M, March 31): 2005 2004
Markup/Interest Earned: 239 102
Markup/Interest Expensed: 113 47
Net Markup/Interest Income: 126 55
Total Non-Markup Income: 200 69
Admin Expenses: 142 72
Profit Before Taxation: 148 52
Profit After Taxation: 124 45
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Ratios:
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Net Markup Income/Total Assets: 0.6% 0.3%
Non-Markup Income/Total Assets: 0.9% 0.4%
Admin Expenses/Total Assets 0.6% 0.4%
Profit Before Taxation/Total Assets 0.7% 0.3%
Profit After Taxation/Total Assets: 0.5% 0.2%
Profit After Tax/Total Equity: 5.2% 2.1%
EPS-(Y end paid)- Quarterly Rs: 0.73 0.42
Price/Earning Ratio: 20.25 -
Cash Dividends: - -
Dividend Payout Ratio: - -
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COMPANY INFORMATION: Chairman: H.E. Sheikh Ebrahim bin Khalifa Al-Khalifa;
President and CEO: Irfan Siddiqui; Director: Ariful Islam; 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; Legal Advisors: Rizvi, Isa, Afridi & Angell; Web Address: www.meezanbank.com
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