MEEZAN BANK - PIONEERS OF ISLAMIC BANKING

MARIAM NASIR
Mar 26 - Apr 01, 2007

ABOUT THE COMPANY

Meezan Bank Limited is a publicly listed company, first incorporated on January 27, 1997. It started operations as an investment bank in August of the same year. In January, 2002 in an historic initiative, Meezan Bank was granted the Nations first full-fledged commercial banking license dedicated to Islamic Banking, by the State Bank of Pakistan. MEBL started off its business with the acquisition of the Pakistan operations of Societe Generale, a French commercial bank. Pak Kuwait Investment Company (PKIC) holds 38.8% equity in the bank; whereas Shamil Bank of Bahrain and Islamic Development Bank has 25.9% and 9.3% equity stakes, respectively. At the end of February 2007, the bank has 62 branches it is aggressively pursuing branch network expansion where it plans to open up around 40 new branches in CY07. The Bank has an internationally renowned, very high caliber and pro-active Shariah Supervisory Board presided over by Justice (Retd.) Maulana Muhammad Taqi Usmani, a renowned figure in the field of Shariah, particularly Islamic Finance. He holds the position of Deputy Chairman at the Islamic Fiqh Academy, Jeddah and in his long and illustrious career has also served as a Judge in the Shariat Appellate Bench, Supreme Court of Pakistan.

TIMELINE

1997

Al-Meezan Investment Management was established.

2001

Shariah Supervisory Board was established.

2002

Islamic Banking License was issued to Meezan Bank.

2003

Musharika based export refinance was designed.

 

Shariah compliant mortgage facility was launched.

 

Meezan Islamic Fund was launched.

2004

Meezan Balance Fund was launched.

2005

Meezan Bank becomes first customer of Islamic Insurance.

AL MEEZAN INVESTMENT MANAGEMENT LIMITED - STRONG SUBSIDIARY

Al Meezan Investment Management Limited, the asset management and investment advisory arm of Meezan Bank Limited, specializes exclusively in the development and management of Shariah Compliant products. Al Meezan Investments has a successful track record of eleven years in managing mutual funds, which is one of the longest in the private sector. Al Meezan Investments is presently managing three funds i.e. Al Meezan Mutual Fund Limited (AMMF), a closed end equity fund; Meezan Islamic Fund (MIF), an open-end equity fund; and Meezan Balanced Fund, a closed end balanced scheme. The total size of the three funds under management as at December 31, 2006 was over PKR 7.0 billion as compared to PKR 6.5 billion in the corresponding period last year. Al Meezan Investments is ranked among the best performing asset management companies in Pakistan. The fund wise break up of net assets as at December 31, 2006 and as under:

NET ASSETS

Dec-06

Meezan Islamic Fund

3,512

Meezan Balance Fund

1,329

Al Meezan Mutual Fund

1,709

FINANCIAL HIGHLIGHTS OF MEEZAN BANK LIMITED

Meezan Bank declared net profit of Rs604m for the year ended December 2006 translating into an EPS of Rs1.60 as compared to Rs419m (EPS: Rs1.11) in CY05, a growth of 44% on y-o-y basis. Major factor contributing to the growth is core income based activities and Rs60.6m reversal in the deferred taxation. Non-interest income witnessed growth of 11% on the back of higher fee & commission income and gain from sale of securities.

(Rs m)

CY05

CY06

Chg %

Mark-up income

1,459

2,704

85%

Return to Depositors

690

1,464

112%

Net Spreads

769

1,240

61%

Fee, Com, Brok and Ex.Inc

253

418

65%

Core Banking Income

1,022

1,658

62%

Provision

39

123

215%

Other Income

369

273

-26%

Operating Expenditure

719

1,028

43%

Profit before taxation

633

780

23%

Taxation

214

176

-18%

Profit after taxation

419

604

44%

Earnings per share

1.11

1.60

44%

Source: KSE Notice

FUTURE OUTLOOK

Meezan Bank has firmly established its strong presence in the Islamic Banking Industry and is recognized as the pioneer in Islamic Banks of Pakistan. The bank has a continuous focus on capacity building and technology enhancement. Many initiatives were taken by the bank during the year. The bank believes in the theme of "Bottom-up Approach" by virtue of which every business unit and department is encouraged to come up with new ideas for further improvement. To effectively monitor the action steps taken to achieve the strategic objectives the Board of Directors of the Bank have implemented "Balanced Scorecard". The bank continues its strategy to build market share through an aggressive branch expansion plan supported by a strong technology backbone. The bank has planned to increase its branch network to 100 branches by the end of the year that will give it a comprehensive network through which to access customers all over Pakistan. The bank is well positioned to meet the challenges of the future and is confident to play its leadership role in the Islamic Banking Industry.