Meezan Bank posts 16 percent growth in net profit

Meezan BankPakistan’s first and the largest Islamic full service bank, Meezan Bank has announced its financial results for year 2014 (CY14). The Bank posted profit after tax of Rs4.57 billion for CY13 as compared to Rs3.96 billion for CY13; a growth of 16%YoY. The increase in net profit can be attributed to higher profit/revenue earned by the Bank from its primary activities which grew to Rs28.8 billion for CY14 as compared to Rs23.171 billion for CY13; up by 24%YoY. It is believed that the increased revenues can be accounted for by growing financing to clients and depositing the available funds with other financial institutions. Return to depositors increased by 23%YoY. The net spread earned by the Meezan increased to Rs13.4 billion for CY14 as compared to Rs10.6 billion for CY13; growth of 26%YoY. Provision against Islamic financing spiked to Rs546 million for CY14 from Rs128 million for CY13; up by 328%YoY. The high growth in provisions can raise questions on the credit quality of the lending. A major portion of other income of the bank came from dealing in foreign currencies which increased to Rs1.63 billion for CY14 from Rs603 million for CY13 witnessing a growth of 170%YoY. The bank announced a final cash dividend of Rs1.25/share in addition to Rs1.5/share already paid as interim dividend.

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