Meezan Bank profit up 24pc; UBL's down 25pc

KARACHI - Meezan Bank Limited, the largest Islamic bank in Pakistan, has recorded 24 per cent growth in its profit after tax, which stood at Rs 654 million for the nine months period ended on September 30, 2009 compared to Rs 527 million in the corresponding period last year.
This was announced after the 46th Meeting of the Board of Directors of Meezan Bank Limited held in Dubai.
A statement issued here on Monday said the Board noted with satisfaction the excellent performance of the Bank despite difficult market conditions and approved the financial results of the Bank for the third quarter ended September 30, 2009. It said that the Chairman of the Board, Sheikh Ebrahim Bin Khalifa Al Khalifa, presided over the meeting.
The statement pointed out that in the face of challenging economic circumstances, Meezan Bank has performed well during the period under review and total assets crossed the important milestone of Rs 100 billion.
This growth has been spurred by the increase in the Banks branch network as a result of which deposits increased from Rs. 70.2 billion to Rs 87.7 billion, an increase of 33pc on an annualized basis which is substantially higher than the annualized deposit growth of 12.65pc recorded by the banking industry.
This reflects the strong brand equity of Meezan Bank, the statement added.
Meanwhile, UBL has posted a consolidated profit before tax of Rs.10.6 billion for the 9 months ending September 2009, which is 25pc lower than in the corresponding period last year, mainly due to higher provisions against advances and impairment loss on investments. However, UBL Q3 2009 profit after tax (PAT) came in at Rs2.34 billion, which is 28pc above that of the last quarter.
During the period under review, the bank followed a deliberate strategy to strengthen the low-cost deposits base whilst making concerted efforts to reduce high-cost deposits. As a consequence, the domestic current and saving accounts (CASA) ratio grew from 68pc as at December 31, 2008 to 75pc at the close of Q3 2009. Low cost deposits grew 5pc to Rs.274 billion while expensive deposits declined by 20pc. However, total deposits dropped 6pc compared to last year to Rs.464 billion.
Consolidated profit after tax amounted to at Rs.6.9 billion translating into lower earning per share (EPS) of Rs.6.22 compared to Rs.8.06 at Q3 2008. Higher provisions significantly impacted results, dampening the advantage of 10pc higher pre-provision operating profit earned, compared to last year.
Net interest income before provisions grew 15pc due to higher Kibor rates and 9pc increase in average advances. Non-interest income of Rs.9.1 billion was 5pc lower than last year, mainly due to lower commission on consumer loans and reduced foreign exchange earnings. However, operating revenue ended 9pc higher at Rs.34 billion. Net interest margins (NIMs) remained strong at 6.4pc due to higher interest rates and higher ROI. However, year-on-year, they ended lower on account of higher cost of deposits resulting from the 5pc minimum interest on saving accounts enforced by SBP in June 2008.
Administrative expenses grew by only 8pc over the same period last year. Devaluation of the Pak Rupee impacted the calculation of expenses incurred in international operations. Excluding devaluation, administrative expenses increased only 5pc despite higher inflation because of higher cost efficiencies achieved.
Total consolidated assets declined by Rs.6 billion to Rs.614 billion at the close of Q3, 2009 mainly due to lower advances amounting to Rs.362 billion in Q3 2009.
Overall, the bank has a more positive outlook at the close of Q3, 2009. Even though provisions on a year on year basis remain high, the reduction in charge from that of the last quarter denotes that new additions to the non-performing portfolio are now declining. Reduction in interest rate is also expected to help ease pressure on corporate and retail borrowers. Finally the continuing focus on more structured and effective recoveries is also expected to improve the banks asset quality going forward.
APP: Allied Bank of Pakistan (ABL) has posted a profit after tax of Rs 5.013 billion for nine months ending Sept 30, 2009. According to financial results of the bank despatched to KSE here Monday, the pre-tax profit surged to Rs 7.475b as earning per share jumped to Rs 7.05 during the period under review.
Habib Bank Ltd (HBL) has posted a profit after tax of Rs 10.443b for nine months ending Sept 30, 2009 and did not declare dividend.
According to financial results of the bank despatched to KSE, the pre-tax profit has fallen to Rs 16.539b as earning per share also went down to Rs 11.39 for the period under review.