In 1HCY23, the bank reported a remarkable profit of PKR 32.6 billion (EPS: PKR 18.20), reflecting an impressive 90% YoY increase compared to PKR 17.1 billion (EPS: PKR 9.57) in the SPLY. This substantial growth was supported by a 30% increase in volumes.
Pre-tax profit also surged by 92% YoY, reaching PKR 64.6 billion during the same period. The total income of the bank witnessed substantial growth, increasing by 78% YoY to PKR 99.5 billion in the first half of CY23, compared to PKR 56.1 billion in SPLY.
Pre-tax profit also surged by 92% YoY, reaching PKR 64.6 billion during the same period. The total income of the bank witnessed substantial growth, increasing by 78% YoY to PKR 99.5 billion in the first half of CY23, compared to PKR 56.1 billion in SPLY.
However, the bank experienced a 16% YoY decline in other income, primarily due to lower exchange and dividend earnings.
The net profit of the bank doubled in 1HCY23, reaching PKR 90.6 billion from PKR 45.4 billion in SPLY. The bank achieved a net spread that was 99% higher YoY than the previous year.
Additionally, operating income and operating expenses increased by 78% YoY and 48% YoY during the stated period. Branch expansion and inflationary pressure increased the total expenses of the bank.
Total provisions and taxes also increased significantly by 205% YoY and 93% YoY. Total assets of MEBL grew by 16% YoY to reach PKR 2.8 trillion in the first half of CY23. In contrast, total liabilities of the bank increased by 14% to PKR 2.7 trillion in the same period.
Investments in Ijarah sukuks increased by 13% YoY in 1HCY23. According to management, the average yield on the investment portfolio is approximately 16-17%, with 21% of the total investment allocated to Ijarah sukuks.
Gross financing and gross Advance to Deposit Ratio (ADR) increased by 26% YoY and 3% YoY, respectively, in 1HCY23. The NPL ratio and coverage ratio were reported at 1.5% and 172% YoY. The financing composition consisted of corporate (78%), commercial/SME (14%), consumer (7%), and staff (1%).
During the same period, the bank reported ROE, ROA, income efficiency ratio, and CAR at 52.2%, 2.4%, 31.5%, and 21.01%, respectively.
Total deposits of the bank increased by 23% YoY to PKR 1.92 trillion, compared to PKR 1.57 trillion in SPLY. CASA deposits and CASA mix increased by 30% YoY and 6% YoY, respectively, during the period under review.
The deposit composition of the bank consists of individual deposits (70%), private sector (27%), public sector (2%), and non- banking financial institutions (1%).
The deposit mix comprises current accounts (49%), savings accounts (39%), and term deposits (12%).
MEBL made provisions of PKR 3.6 billion in 1HCY23, including PKR 2.5 billion in general provisions. Management anticipates that these general provisions are sufficient to cover IFRS-9 charges beginning in January next year.
Furthermore, the bank added 20 new branches in 1HCY23, bringing the total branch network to 982 branches.
The volume of trade business declined by 9% YoY due to challenging economic conditions in the country.
Going forward, the bank plans to focus on digital banking to enhance efficiency and customer experience. Management anticipates continued deposit growth and aims to maintain a CASA ratio of around 90% in the future. In terms of the Islamic banking market share, management aims to capture a market share of 30% in the upcoming periods.
Important Disclosures
Disclaimer: This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.
