Meezan Bank Limited. · PSX:MEBL
Meezan Bank — HY2022 Earnings Presentation
40 slides from Meezan Bank's earnings presentation, Aug 15, 2022
Slide 1: Unlocking The True Potential of Islamic Banking
Unlocking The True Potential of Islamic Banking
Slide 2: Corporate Briefing August 15, 2022
CORPORATE BRIEFING 2 AUGUST 15, 2022 I. Tilawat e Quran II. Opening Remarks by Mr. Ariful Islam – Deputy CEO 05 Mins Presentation by Mr. Shabbir Hamza Khandwala – CFO and III. 15 Mins Group Head Finance 30 Mins IV. Q & A Session - Mr. Ariful Islam – Deputy CEO
Slide 3: Opening Remarks by Mr. Ariful Islam
3 Opening Remarks by: Mr. Ariful Islam Deputy CEO
Slide 4: Snapshot June 2022 vs June 2021
SNAPSHOT 4 JUNE 2022 vs JUNE 2021 36% 44% Rs. 17.1 billion Rs. 2.4 Plus trillion Rs. 10.52 per share 15% ADR Distribution to Shareholders 10% Rs. 1.5 Plus trillion 53% 35% Cash & 96 49 New Branches New Cities 10% Bonus 931 307
Slide 5: Key Highlights
KEY HIGHLIGHTS 5 AAA Over 3 million 14k +
Slide 6: Awards and Recognitions
AWARDS AND RECOGNITIONS 6 • Best Islamic Bank in Pakistan. • Most Outstanding Company in • Leadership Achievement – Best CEO • Most Innovative Deal of The Year. Pakistan – Banking Sector • Best Managed Bank 2022. • Syndicated Deal of The Year. • Euromoney Market Leaders - • Pakistan Deal of The Year
Slide 7: Financial Presentation by Mr. Shabbir Hamza Khandwala
7 Financial Presentation by: Mr. Shabbir Hamza Khandwala CFO & Group Head Finance
Slide 8: 36% Growth in PAT - HY'22 vs HY'21
36% Growth in PAT - HY’22 vs HY’21 8 Despite Higher Tax Charge of 49% Rs in mn Profit & Loss Account HY22 HY21 Growth % Average Policy Rate 11.23% 7.00% Return on financings, investments and placements 88,296 50,116 76% Return on deposits and other dues expensed (42,874) (18,911) 127% Net spread ear
Slide 9: Q2'2022: Profit Before Tax Doubled In Last Two Years
Q2’ 2022: Profit Before Tax Doubled In Last 9 Two Years (Unconsolidated) Rs in bn Quarterwise Profit Before Tax 18.5 14.8 15.1 11.8 10.7 10.6 10.2 10.2 9.2 6.9 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q2' 21 Q3' 21 Q4' 21 Q1' 22 Q2' 22
Slide 10: 22% Growth in PBT Q2'2022 vs Q1'2022
22% Growth in PBT 10 Q2’ 2022 Vs Q1’2022 - (Unconsolidated) Rs in mn Profit & Loss Account Q2 '22 Q1 '22 Growth % Policy Rate 12.68% 9.75% Return on financings, investments and placements 50,185 38,111 32% Return on deposits and other dues expensed (26,200) (16,674) 57% Net spread earned 23,985 21,4
Slide 11: Q2'2022: Quarter Profit After Tax
Q2’ 2022: Quarter Profit After Tax 11 Rs in bn Quarterwise Profit After Tax Tax :49 % 9.2 Tax :39 % 8.8 7.9 7.0 6.4 6.5 6.2 6.1 5.5 Tax :49 % Tax :39 % 4.1 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q2' 21 Q3' 21 Q4' 21 Q1' 22 Q2' 22
Slide 12: HY'22 v HY'21: Expansion in Asset Base
HY’22 v HY’21: Expansion in Asset Base – 12 Contributing to Higher Profits Rs in mn Balance Sheet HY22 HY21 Growth Rs in mn % Islamic Financing and related assets - Gross 827,477 589,288 238,189 40% Less: Provisions (19,939) (19,066) (873) 5% Islamic Financing and related assets - net 807,538 570,22
Slide 13: HY'22 v CY'21: Expansion in Asset Base
HY’22 v CY’21: Expansion in Asset Base – 13 Contributing to Higher Profits Rs in mn Balance Sheet HY22 CY21 Growth Rs in mn % Islamic Financing and related assets - Gross 827,477 777,295 50,182 6% Less: Provisions (19,939) (19,209) (730) 4% Islamic Financing and related assets - net 807,538 758,086
Slide 14: Key Profitability Ratios At a Glance
Key Profitability Ratios At a Glance 14 ROE - % ROA - % 38.3% 1.7% 1.7% 36.4% 1.6% 34.6% 1.5% 30.7% 23.8% 1.0% 0.9% 0.9% 19.6% 19.3% CY16 CY17 CY18 CY19 CY20 CY21 HY22 CY16 CY17 CY18 CY19 CY20 CY21 HY22 Income Efficiency Ratio - % Equity & Book Value / Share 94 Rs in mn 87 62.9% 59.3% 69 55.2% 59 57
Slide 15: Tax Efficient Strategy: Gross ADR Ratio at 50% Plus
GROSS ADR RATIO AT 50% PLUS CONTRIBUTED TO TAX EFFICIENCY 15 Rs in mn ~Rs 300 bn plus in Financing Tax Efficient Strategy in 1.5 years Gross ADR 53% 52% 53% Period Deposits Advances % Q4' 20 531,587 1,254,430 42% 46% Gross ADR (%) 43% 43% 42% Q1' 21 541,838 1,248,608 43% Q2' 21 589,287 1,369,974 43%
Slide 16: Financing Mix and Gross ADR
Financing Mix and Gross ADR – 53 % 16 Rs in Bn Strong NPL Coverage Ratio Corporate Leads the Financing Mix with 73% Share 24 22 139% 142% 139% 150% 133% 133% 140% 128% 20 130% 118% Consumer: Staff: 18 120% 16 10% 1% 110% 14 100% 12 Corporate: 90% 10 73% 8 80% 6 70% SME / 4 60% Commercial: 2 50% 16%
Slide 17: Increasing Buffers through Higher Coverage - IFRS 9
Increasing Buffers through Higher Coverage - 17 Heads up for IFRS 9 HY22: Specific Provision Reversal - net: Rs 105 mn (Charge: Rs 791 mn & Reversal: Rs 896 mn). General Provision Charge: Rs 835 mn. General Provision of Rs 6.7 bn 6,100 General Provision Consumer General Provision - under PR NPL Cove
Slide 18: Investments Portfolio - Rs 1.2 Trillion
Investments Portfolio – Rs 1.2 Trillion 18 Up by 100% Rs in bn INVESTMENTS MIX Investments HY22 CY21 Var. Rs 1.06 tn 86% GIS Rs 398 bn 64% GoP Ijarah Sukuk (GIS) 1,062 398 167% Energy Sukuk & Other Govt. (PES) 155 197 (21%) PES Rs 155 bn 12% GOP Bai- Muajjal matured Rs 42bn Rs 197 bn 32% Others (Sha
Slide 19: Strong Growth in CASA - HY'22 vs HY'21
Strong Growth in CASA Contributing to Net 19 Spread – HY’22 vs HY’21 HY22 HY21 Growth Current Account Grew by 30% Rs in bn Mix Rs in bn Mix Rs in bn % - HY22 vs HY21 CA 747 47% 576 42% 171 30% SA 560 36% 514 38% 46 9% TD, CASA 1,307 83% 1,090 80% 217 20% 17% TD 262 17% 280 20% (18) (6%) CA, Total 1,
Slide 20: Strong Growth in CASA - HY'22 vs CY'21
Strong Growth in CASA Contributing to Net 20 Spread – HY’22 vs CY’21 DEPOSIT COMPOSITION - HIGH Current Account Grew by 12% GRANULARITY - HY22 vs CY21 1% 65% HY22 CY21 Growth 1% Rs in bn Mix Rs in bn Mix Rs in bn % CA 747 47% 668 46% 79 12% SA 560 36% 541 37% 19 4% CASA 1,307 83% 1,209 83% 98 8% 33%
Slide 21: Continuous Growth in Current Account
Continuous Growth in Current Account 21 Contributing to Net Spread Rs in mn +29 new branches HY 22 931 Current Account Rs 747 bn +87 new branches with 47% Deposit Mix CY 21 902 746,860 +55 new branches CY 20 815 667,820 +100 new branches CY 19 760 +59 new branches 504,599 CY18 660 +30 new branches C
Slide 22: Fastest Growing Bank - CAGR 35%
Fastest Growing Bank - 22 CAGR 35% inception Rs in bn Over Rs 1.5 Trillion Deposits with 83% CASA Market Share: 6.9% 1,569 1,456 1,254 933 785 667 559 468 379 288 230 169 131 100 55 70 8 14 23 34 5 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 HY
Slide 23: Leading the Islamic Banking Industry
Leading the Islamic Banking Industry (IBI) with 23 market share of 34% in deposits – Q1’22 Rs in Bn Bank's Growth in Comparison with Islamic Banking Industry Meezan Share of IBI 4,500 44% 4,000 40% 36% 3,500 32% 34% 3,000 45% 28% 2,500 24% 2,000 21% 20% 1,500 16% 1,000 12% 500 8% 0 4% CY17 CY18 CY19
Slide 24: Branch Network As at June 30, 2022
As at June 30, 2022 As at June 30, 2022 Sindh: 272 Branches Punjab: 540 Branches Balochistan : 39 Branches KPK: 71 Branches AJK : 9 Branches Page # 14
Slide 25: 53% Growth in Fee and Commission
53% Growth in Fee and Commission : 25 Delivering in all fronts Rs in mn Fee, commission and other income HY22 HY21 Growth % Trade related fees & guarantee commissions 1,962 1,671 17 Debit card related fees 2,506 1,156 117 Branch banking fees 1,079 764 41 Investment banking fees 155 152 2 Home remitt
Slide 26: Trade Business Volumes up by 35%
Trade Business Volumes up by 35% Contributing to 26 Higher Fee, Forex Income & Current Account – HY22 HY21 702 Rs. 1.07 Tn 542 371 Rs. 793 billion 251 Import Export Import Export
Slide 27: Comfortable CAR at 17.86%
Comfortable CAR at 17.86%; Despite 27 Strong Balance Sheet Growth By 27% Minimum Req: CY21 HY22 CET – I : 8.50% Tier – I : 10.00% 17.81% 17.86% Total CAR: 12.50% CET – I: Tier I CAR: CET – I: 13.76% Tier I CAR: 12.89% 14.00% 14.81% Rs 80.9 bn Rs 91.8 bn ADT – I: 1.11% Rs 7 bn ADT – I: 1.05% - Rs 7 b
Slide 28: Digital Banking Highlights
DIGITAL BANKING 28 HIGHLIGHTS Launched Digital Acceptance Solution for Merchants in late 2021: POS Machines: 5300 Cities : 207
Slide 29: Digital Acceleration and Debit Card Fee Income
Higher Digital Acceleration contributed to 29 Growth in Debit Card Related Fee Income No in 000’s No of transactions in 000’s 2.6 Million Total Cards POS & E-Commerce 2,600 Transactions 23,474 2,326 1,991 15,648 1,505 1,305 1,175 11,248 8,222 5,337 3,034 CY17 CY18 CY19 CY20 CY21 HY 22 CY22 CY17 CY18
Slide 30: Digital Throughput reaching Rs 3.13 tn
Digital – Throughput breaking new barriers reaching 30 Rs 3.13 tn, up by 81% YoY Jan to June 2022 MB / IB - Volumes and Trans. doubled YoY. Digital throughput Jan to June 2022 composition 76% 70 mn (trxn) Rs 2.4 tn Rs 2.4 tn Rs. 3.1 tn 36 mn (trxn) 2% Rs 1.1 tn Rs 0.1 tn 22% HY - 21 HY - 22 Rs 0.6 t
Slide 31: Digitizing the Banking Transactions
Digitizing the Banking Transactions 31 No of Transactions in 000’s Digital Transfers (incl. IBFT) - Grew Cash Withdrawals Through 60% Growth in Digital Bill by 102% ATM Up By 34% Payments Service No of Transactions No of Transactions No of Transactions 55.76 34.11 15.53 25.48 27.64 9.70 10.12 (13%)
Slide 32: Leading the Banking Industry - Overall 1Link Grid
Leading the Banking Industry - Overall 32 1Link Grid
Slide 33: Consolidated Profit After Tax Grew by 34%
Consolidated Profit After Tax Grew by 33 34% of Rs 17 Billion Rs in mn Profit & Loss account HY22 HY21 Growth % PSX - 100 Index 41,541 47,336 (12) Net spread earned 45,485 31,194 46 Fee, commission, forex and other income 10,706 6,899 55 Dividend income and capital gain 409 644 (36) Non funded incom
Slide 34: Performance of Subsidiary - Al Meezan Investments Management
Performance of Subsidiary – 34 Al Meezan Investments Management Limited Largest Asset Management Company in Pakistan Longest track record of over 27 years One of the largest investor base of over 167,000* investors Jun Dec ∆% Manages the largest open-end Shariah Compliant 2022 2021 Income, M
Slide 35: Last Six Years Performance
35 Last Six Years Performance
Slide 36: Key Ratios: CY16 - HY22
36 Key Ratios: CY16 – HY22 Key Ratios - % CY16 CY17 CY18 CY19 CY20 CY21 HY22 Policy rate 6.00% - 5.75% 5.75% 5.75% - 10.00% 10.00% - 13.25% 13.25% -7.00% 7.00% - 9.75% 9.75% - 13.75% Income Efficiency Ratio 62.9 59.3 55.2 45.7 39.7 42.1 37.8 Branches opened 20 30 59 100 55 87 29 Total no of branches
Slide 37: Unconsolidated Balance Sheet: CY16 - HY22
Unconsolidated Balance Sheet: 37 CY16 – HY22 Rs in mn Balance Sheet CY16 CY17 CY18 CY19 CY20 CY21 HY22 Cash and Balances with Banks 68,058 69,452 73,277 107,566 155,689 186,921 178,927 Due from FIs 129,115 147,229 184,815 223,689 342,069 238,402 78,833 Investments 130,156 119,238 123,743 225,646 434
Slide 38: Unconsolidated Profit And Loss Account: CY16 - HY22
Unconsolidated Profit And Loss Account: 38 CY16 – HY22 Rs in mn P&L Statement CY16 CY17 CY18 CY19 CY20 CY21 HY22 Policy rate 6.00% - 5.75% 5.75% 5.75% - 10.00% 10.00% - 13.25% 13.25% -7.00% 7.00% - 9.75% 9.75% - 13.75% Policy rate - Average 5.85% 5.75% 7.10% 11.99% 8.95% 7.29% 11.23% Profit / return
Slide 39: Q & A Session: Mr. Ariful Islam
39 Q & A Session: Mr. Ariful Islam Deputy CEO
Slide 40: Jazak Allah & Thank you
40 Jazak Allah & Thank you