Research Analyst
Nov 10 - 16, 2008


Meezan Bank Ltd is a publicly listed company, first incorporated on January 27, 1997. It started operations as an Islamic 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. The commonly used Islamic banking products are Morabaha, Musharika, Ijara, TFC etc. While Morabaha is used by financial institutions for lending to business and industry, Musharika is used to raise business funds from individuals, AOPs and business entities. Ijara or Leasing is used to finance business and industrial assets.

Meezan Bank, stands today at a noteworthy point along the evolution of Islamic Banking in Pakistan. The Bank's main shareholders are leading local and international financial institutions, including "Pak Kuwait Investment Company", the only AAA rated financial entity in the country, the 'Islamic Development Bank of Jeddah', and the renown 'Shamil Bank of Bahrain'. The established position, reputation, strength and stability, of these institutions add significant value to the Bank through Board representation and applied synergies. JCR VIS Credit Rating Co. Ltd. has also re-affirmed the bank's credit rating for long-term entity rating of A+ with stable outlook and short-term rating of A1.


Meezan Bank Ltd, the first and largest Islamic Bank in Pakistan has achieved many milestones by successfully establishing over 125 branches spread over 35 major cities across Pakistan within a short span of 6 years. This growth in branch network is the fastest in the Banking history of Pakistan. The investment in the branch network is driven by the Bank's vision to "Establish Islamic Banking as the Banking of First Choice" so as to enable it to reach each and every citizen of Pakistan. There are currently six dedicated Islamic Banks operating in Pakistan with a total of 250 branches. Meezan Bank's share of branch network is over 50% of the total, therefore making it the largest Islamic Banking network in Pakistan by a significant margin. The Bank has a total deposit base of over Rs. 60 bn with more than 150,000 customers. Meezan Bank stands 17th among a club of 40 banks in Pakistan. Meezan bank continues to expand its branch network in 2008 with the addition of 35 more branches, thus targeting to establish a network of over 160 branches across Pakistan by the end of 2008 Meezan Bank has an extensive product menu offering a complete range of Islamic Banking products and services. All branches are on-line and are supported by state of the art 24/7 Banking services to all its customers, which includes a nation wide network of 103 off-site and in-branch ATMs, user friendly Internet Banking facility, a 24 hour Call Center and a comprehensive ATM/Debit Card that is accepted at over 3,000 outlets across Pakistan. The bank also offers SMS Alert service through which Meezan Bank customers get instant financial and non-financial alerts of their multiple accounts.



Rupees in '000

Deposits 61,391,753 54,582,353 12%
Financings 40,006,454 34,576,339 16%
Total Assets 76,421,834 67,178,559 14%
Share Capital 4,535,876 3,779,897 20%
Shareholders' Equity 6,246,685 5,719,910 9%
PROFIT & LOSS ACCOUNT Sep 30, 2008 Sep 30,2007 Growth %
Net Spread Earned 2,185,328 1,381,047 58%
Fee, Commission, Forex & Other Income 559,160 515,486 8%
Core Banking Income 2,744,488 1,896,533 45%
Profit after Tax 526,775 653,612 -19%
Earning per Share - Rupees 1.16 1.44 -19%
Number of Branches 122 75 63%
Source: Meezan Bank

Meezan Bank has performed well during the period under review. Total deposits increased by 12% during current year as the Income from core banking business increased by 45%, which reflects the increase in banking operations because of their aggressive branch expansion policy. The balance sheet has also shown a healthy growth of 14% over Dec 31, 2007 from Rs. 67 bn to Rs. 76 bn with financing increased by 16% last year. This is gratifying especially against the backdrop of the unprecedented meltdown of the financial markets internationally and the increased liquidity crunch that is being experienced locally. Despite the turbulent condition of the international financial markets, Noor Financial Investment Company, Kuwait (Noor), the major shareholder of the Bank increased its shareholding in the Bank from 34.6% to 45.5% reflecting the confidence it has on the future prospects of Meezan Bank.


Despite the difficult economic and political environment, Meezan Bank bears the critical responsibility of leading the way forward in establishing a stable and dynamic Islamic Banking system replete with dynamic and cutting edge products and services. The Bank also plans to target its branch expansion policy and plans to open 31 new branches and 12 sub branches by Dec 2008. This will increase the total number of branches from 100 at the start of the year to over 150 by the end of the year. The Bank has declared interim 8.6% stock dividend (Bonus shares) to the shareholders for the year 2008. Meezan Bank continues its strategy of maintaining a conservative policy and ensures that sufficient liquidity is maintained at all times to meet all eventualities. Therefore, we can expect Meezan Bank to show more profitability in the future as well.