Meezan Bank, Pakistan's first Islamic bank and the market leader in the Islamic Banking industry in Pakistan started operations in 2002 and since then has maintained a record of consistent growth and profitability. Results for the half-year ending June 30 have been announced and a review of the accounts shows that the Bank's financial performance continues to steadily improve.
The bank has adopted a strategy of aggressively growing its branch network and the geographical diversity thus achieved has helped it capture a large customer base and consequently, has substantially contributed towards its deposits growth. Total assets increased from Rs 124 billion to Rs 136 billion over the last six months. This 10 percent increase in assets over 6 months was largely fuelled by a strong growth in deposits which increased by Rs 14 billion, from Rs 100 billion on 31st December to Rs 114 billion on 30th June.
The increase in deposits and prudent management also contributed to growth in the Bank's income. Profit-after-tax increased to Rs 719 million for the 6-months ended 30th June 2010 from Rs 509 million in the corresponding period last year; a significant increase of 41 percent. Total revenues for the half-year increased by 23 percent.
This impressive increase in revenues and profit has been achieved despite the fact that the bank continues to maintain its cautious financing strategy as a result of which it has been very liquid during the period with a low Advances to Deposits Ratio of 40 percent. Although the low ADR has a direct impact on profitability, but the liquidity of the bank greatly improves-which in the current economic environment is extremely prudent. Furthermore, core banking business of the bank grew by 17%, which clearly demonstrates that the Bank has maintained a strong growth momentum in its primary line of business. Administrative expenses have increased sharply, primarily on account of costs associated with new branches added to the Bank's network over the last two years. Meezan Bank opened 100 branches in the last two years and now has a network of 201 branches spread across 54 cities. -PR