Meezan Bank Limited

Unlocking the True Potential

of Islamic Banking

ANALYST BRIEFING -
2018
 2
Meezan Bank: Performance At a Glance –
Balance Sheet Grew by 19% in 2018

• Total Assets of the Bank increased to Rs 938 bn vs Rs 789 bn last year - a growth of 19% (Rs 149 bn)

• Bank’s Financing crossed half a trillion grew to Rs 513 bn vs Rs 420 bn last year – a growth of 22%;

• The growth in financings was in all segments i.e. Corporate:14%, SME/Comm:44% & Consumer :41%;

• ADR of the Bank – 65% vs 63% last year;

• NPL infection ratio dropped to 1.3% vs 1.5% in 2017 and banking industry average of 8%;

• NPL Coverage ratio increased to 139% vs 133% in 2017

• Investments and placements grew to Rs 309 bn vs 266 bn last year – a growth of 16%

• Bank’s Deposits grew to Rs 785 bn vs Rs 667 bn last year – a growth of 18% vs industry growth of 8%;

• Current account deposits grew by 23% YoY;

• Equity grew by 15% to Rs 40 bn vs Rs 35 bn in 2017.

 3
Meezan Bank: Performance At a Glance – Profit
After Tax Grew by 42% in 2018

• PAT 2018: Rs 8.96 bn ($ 64.5 mn) vs Rs 6.31 bn ($ 45.5 mn) – a growth of 42% (Rs 2.6 bn);

• EPS – on enhanced share capital of Rs 11.7 bn - Rs 7.67 vs Rs 5.56 last year;

• Return on Average Equity – 23.77% vs 19.26% last year;

• Net spread : Rs 28 bn vs Rs 21 bn last year due to higher volume of earning assets & its re-pricing;

• Fee , commission and other income increased to Rs 5.6 bn vs Rs 4.4 bn in 2017– a growth of 26%;

• Trade Business Volume crossed Rs 1 Trillion vs Rs 710 bn – a growth of 43%;

• Admin expenses - Rs 19.7 bn (17% up from last year) mainly due to opening of 59 new branches;

• No of Branches: Opened 59 new branches reaching 660 vs 601 last year (181 cities vs 159 cities);

• Cost to income ratio: Improved by 4% to 55% vs 59% last year.

 Meezan Bank: Deposit Increased by 18% in 4
2018 as against 8% growth in Banking Industry

Rs in Bn
Deposit Composition Current Account Deposits
1% 2%
350,000
4 YR - CAGR 25% 289,421
2% 300,000
250,000 235,908
195,679
200,000
148,701
28% 150,000 117,930
100,000
50,000
-
CY14 CY15 CY16 CY17 CY18

67% Deposit Mix

Fixed Savings Current
100%

80% 31% 32% 35% 35% 37%

60%
Individuals - 67% 41% 40% 40% 40% 36%
Private Sector - 28% 40%

Government - 2% 20%
28% 28% 25% 25% 27%
NBFIs - 1%
0%
Others - 2% CY14 CY15 CY16 CY17 CY18
 Meezan Bank: Leading the Islamic Banking 5
Industry with 35% share of deposit– 9M’2018

Rs in Bn

Share of Islamic Banking Industry Bank's Growth in Comparison with Islamic

16 Islamic
Windows of Banking Industry
Meezan Bank
Conventional 35%
Banks 2,500 36%
38%
35%
2,000

34%
1,500
33%
1,000
32%

500
31%

0 30%
4 Other CY14 CY15 CY16 CY17 CY 9M'18
Islamic Banks
27% Total Islamic Banking Deposits
Meezan Bank Deposits
Meezan Bank as % of Islamic deposits

• In an industry of Rs. 2.0 trillion deposits, Meezan Bank is at a leading position with 35% share of total
deposits of Islamic Banking Industry
CY18 Industry data not available
 Meezan Bank: Financings crossed Half a Trillion 6
– 22% Growth YoY

Financing Mix
ADR - %
63 65 1
70 12
56
60 46 44 Corporate
50
40 19 SME / Commercial
30
Consumer
20
10 68 Staff
-
CY14 CY15 CY16 CY17 CY18

12 Asset Quality 160%

133% 139%
Non Performing Loans & Infection Ratio
140%
10 118% 600 4.0%
120% 3.8%
110% 3.5%
500
8 116% 3.3%
100% 3.0%
400
2.5%
6 80%
300 2.1% 2.0%
60%
4 1.5%
200 1.5%
40% 1.3% 1.0%
2 100
20% 0.5%
- 0.0%
- 0% CY14 CY15 CY16 CY17 CY18
CY14 CY15 CY16 CY17 CY18
Non Performing Loans Advances Infection Ratio
Provisions held Non Performing Loans NPL Coverage
 Meezan Bank: Fee income Grew by 26% with 7
Trade Business Volume over Rs 1 Trillion

Rs in Bn

Non - funded Income CY18 CY17 Growth %

Trade Business Volume Rs 1 Trillion Rs 710 Billion 43
Non Funded Income
Trade related fees & guarantee commissions 1,913 1,356 41
Branch banking fees 1,483 1,189 25
Debit card fees 1,123 809 39
Investment banking fees 233 304 (23)
Home remittance fees 151 100 52
Credit processing fees 123 85 44
Cash management fees 45 26 74
Others 499 542 (8)
5,569 4,412 26
 8
Meezan Bank: 2018 Results – 42% Growth in
Profitability
Rs in Mn

Profit & Loss Account 2018 2017 Growth %

Net spread earned 28,168 20,743 36%
Fee and commission and other income 5,569 4,412 26%
Foreign exchange income 1,318 1,211 9%
Dividend income and capital gain 575 2,001 (71%)
Operating income 35,630 28,367 26%
Administrative and other expenses (19,670) (16,832) 17%
Profit before tax and provisions 15,960 11,535 38%
Total Provisions (1,168) (1,283) (9%)
Profit before tax 14,792 10,252 44%
Taxation (5,830) (3,939) 48%
Profit after tax 8,962 6,313 42%
Earnings per share - on enhanced capital – Rs 7.67 5.56 38%
Number of branches 660 601 10%
Meezan Bank: 2018 Results – 18% Deposit 9
Growth vs Banking Industry Growth of 8%

Rs in Mn
Balance Sheet CY18 CY17 Growth %
Cash and Bank Balance 73,277 69,451 6
Due from FI under Bai Muajjal 184,815 147,229 26
Investments 123,743 119,238 4
Financings 512,565 420,029 22
Fixed and Intangible Assets 13,753 11,876 16
Other Assets 29,763 20,984 42
Total Assets 937,915 788,807 19
Bills Payable 23,751 17,175 38
Due to FIs 36,408 36,813 (1)
Deposits 785,477 667,181 18
Sub-ordinated Tier II Sukuk 7,000 7,000 -
Additional Tier I Sukuk 7,000 - 100
Other Liabilities 37,947 25,561 48
Total Liabilities 897,583 753,730 19

Net Assets 40,333 35,077 15

Paid-up Capital 11,692 10,629 10

Reserves/Retained Profit 28,687 23,709 21
Revaluation Surplus (46) 739 (106)
Total Equity 40,333 35,077 15
 Meezan Bank: Key Ratios 2018 vs 2017 with 10
ROE of 24%

Profit and Loss Account CY18 CY17

Islamic Financings as % of deposits (ADR) 65.26 62.96

Non-performing financing to Gross Islamic financing - % 1.34 1.54

NPL Coverage Ratio - % 139 133

Tier I CAR - % 12.09 9.94

Total CAR - % 14.55 12.89

Book value per Share - on enhanced capital- as at Dec 31, - Rs 34.50 30.00

Expense to gross income ratio - Total - % 55.21 59.34

Earnings per share - on enhanced capital after Bonus Issue - Rs 7.67 5.56

Return on Average Equity - (ROAE) - % 23.77 19.26

Return on Average Assets - (ROAA) - % 1.04 0.87

Dividend Payout - % 45 30

Cash Dividend - % 35 30

Bonus Issue - % 10 -
 Meezan Bank: Unconsolidated Profit And 11
Loss Account - 2014 - 2018
Rs in million

P&L Statement CY14 CY15 CY16 CY17 CY18

Target rate 10.0% - 9.5% 9.5% - 6.0% 6.0% - 5.75% 5.75% 7.11%

Profit / return earned 28,487 32,894 31,027 36,427 48,624

Profit on deposits & others (15,539) (15,181) (13,238) (15,684) (20,457)
Net Spread earned 12,948 17,713 17,789 20,743 28,167
Other income 4,819 4,588 5,723 7,624 7,463
Total Revenue 17,767 22,301 23,512 28,367 35,630
Operating Expense (10,402) (13,314) (14,787) (16,832) (19,670)
Profit Before Provisions 7,365 8,987 8,725 11,535 15,960
Provisions and write offs - net (467) (535) 218 (1,283) (1,168)
Profit Before Provisions 6,898 8,452 8,943 10,252 14,792
Taxation (2,328) (3,429) (3,381) (3,939) (5,830)
Profit After Tax 4,570 5,023 5,562 6,313 8,962
YoY Growth 15% 10% 11% 14% 42%

Earnings per share - Rs 4.56 5.01 5.45 5.56 7.67

Dividend per share - Rs 27.5%(C) 30%(C) 30%(C) 30%(C) 35%(C) & 10%(B)
 Meezan Bank: Unconsolidated Balance 12
Sheet – 2014 - 2018
Rs in million
Balance Sheet CY14 CY15 CY16 CY17 CY18
Cash and Bank Balance 35,230 54,861 68,058 69,451 73,277
Due from FIs 90,766 101,079 129,115 147,229 184,815
Investments 114,089 146,305 130,156 119,238 123,743
Advances 175,712 207,569 311,530 420,029 512,565
Fixed and Intangible Assets 6,273 8,057 8,925 11,876 13,753
Other Assets 18,079 17,993 14,271 20,984 29,763
Total Assets 440,149 535,864 662,055 788,807 937,915
Bills Payable 7,298 10,100 13,757 17,175 23,751
Due to FIs 15,465 13,610 32,006 36,813 36,408
Deposits 378,744 468,281 559,398 667,181 785,477
Sub-ordinated Sukuk - - 7,000 7,000 14,000
Other Liabilities 14,752 17,526 19,421 25,561 37,947
Total Liabilities 416,259 509,517 631,581 753,730 897,583

Net Assets 23,890 26,347 30,474 35,077 40,333

Paid-up Capital 10,027 10,027 10,027 10,629 11,692

Reserves/Retained Profit 13,247 15,530 18,122 23,709 28,687
Revaluation Surplus 616 790 2,325 739 (46)
Total Equity 23,890 26,347 30,474 35,077 40,333
Meezan Bank: Consolidated Profit After Tax 13
Grew by 59% of Rs 8.96 Billion

Rs in Bn
Profit & Loss account CY18 CY17 Growth %
PSX - 100 Index 37,067 40,471 (8)
Net spread earned 28,176 20,753 36
Fee, commission, forex & other income 8,454 7,627 11
Div idend income and capital gain 203 1,227 (83)
8,657 8,854 (2)
GROSS BANKING INCOME 36,833 29,607 24
Administrativ e and other expenses (20,187) (17,427) 16
16,646 12,180 37
Share of result of associates before taxation (298) (963) (69)
PROFIT BEFORE PROVISIONS 16,348 11,217 46
Total prov isions - net (1,168) (1,284) (9)
PROFIT BEFORE TAX 15,180 9,933 53
Taxation (6,046) (4,153) 46
PROFIT AFTER TAX 9,134 5,780 58
Non Controlling I nterest (176) (161) 9
PROFIT AFTER TAX AND NON CONTROLLING INTEREST 8,958 5,619 59
EPS - on enhanced capital - Rs. 7.66 4.95 55
 About Bank’s Subsidiary-Al Meezan 14
Investments

Since its inception in 1995, it has the distinction of being the only AMC in Pakistan with the exclusive mandate of providing
1 Shariah compliant investment solutions to its investors

2 Shariah Board consists of members who are playing the leading role in the development of Islamic Finance worldwide

One of the largest private sector AMCs currently managing over Rs. 102 Bn with longest track record of over 23 years of
3 experience in Asset Management and Investment Advisory

Manages the largest Open end Equity fund & Voluntary Pension Fund (VPS) in the private sector with AUM of Rs. 33 Bn and
4 Rs. 9 Bn respectively

Has one of the largest investor base of over 91,615 investors along with the consistently high performing funds providing
5 competitive returns

6 AM1 Rating (from JCR-VIS), the first AMC to be awarded the highest possible management quality rating

Longest track record of managing discretionary portfolios along with advisory services to the renowned local and
7 international clients

8 Developed the first Shariah Compliant Index (KMI-30) in collaboration with KSE (now PSX)
 Meezan Bank: Performance of its 15
Subsidiary

Al Meezan Investments Management Ltd

Unit CY18 CY17 ∆%
Assets Under Management –incl.
discretionary portfolio Rs Bn 102 100 2%

Number of Funds # 16 14 14%

Number of Funds -including plans # 28 25 12%

Number of Branches # 23 18 28%

Meezan Bank: Performance of its 16
Subsidiary

Break-down of AUMs by Investor Category

Thank You