Meezan Bank Limited. · PSX:MEBL
Meezan Bank — HY21 Earnings Presentation
43 slides from Meezan Bank's earnings presentation, Aug 16, 2021
Slide 1: Unlocking the True Potential of Islamic Banking: Corporate Briefing
Meezan Bank Limited Unlocking the True Potential of Islamic Banking Corporate Briefing June 2021 Entity Rating - VIS August 16, 2021
Slide 2: Schedule of the Event
Corporate Briefing – August 16, 2021: 2 Schedule of the Event I. Tilawat e Quran Opening Remarks by Mr. Irfan Siddiqui – President II. and CEO Presentation by Mr. Shabbir Hamza Khandwala III. CFO and Group Head Finance 30 Mins IV. Q & A Session - Mr. Ariful Islam – Deputy CEO
Slide 3: Opening Remarks by Mr. Irfan Siddiqui
Opening Remarks by: Mr. Irfan Siddiqui President and CEO
Slide 4: Highest possible credit rating
Wa Cites Itsthe highest possible credit rating in the finance industry, But to us, itis somuch more, Alhamdulillah, Itis the affirmation of our vision to make Islamic Banking the Banking of First Choice, Itis the evidence of our success in ensuring the delivery of the best service standards to our c
Slide 5: Credit rating history
Long Short Year Term Term 2021 AAA A-1+ 2018 AA+ A-1+ 2013 AA A-1+ 2010 AA- A-1 2005 A+ A-1
Slide 6: Highest Market Capitalization
Highest Market Capitalization August 12, 2021 Market Cap Number Closing S No. Bank of Shares Price Rs in mn $ in mn (mn) (Rs) 1 MEEZAN BANK 1,415 140.13 198,322 1,209 2 MCB BANK 1,185 163.98 194,326 1,185 3 HABIB BANK 1,467 129.31 189,685 1,157 4 UNITED BANK 1,224 129.20 158,167 964 5 ALLIED BANK 1,
Slide 7: Awards and Recognitions
AWARDS AND RECOGNITIONS RDA Awards - SBP Given by Honorable Prime Minister of Pakistan • Best Performing Bank (1st position) • Fastest Growing Bank Asiamoney • Most Outstanding Company in Pakistan – Banking Sector World Finance Magazine • Best Banking Group 2021 - Pakistan • Best Retail Bank 2021 -
Slide 8: The Asian Banker: strongest bank in Pakistan
THE ASIAN BANKER’ 5" STRONGEST ISLAMIC BANK THE ASIAN BANKER rk THE WORLD 2020 by balance sheet Meezan Bank is the strongest bank in Pakistan in 2020 Strength Rank 36 63 83 100 102 119 123 123 132 183 Bank Meezan Bank Allied Bank Strength Score Qucw JA Allied Bank 3.30 Standard Chartered Bank (Pokst
Slide 9: 5th Strongest Islamic Bank in the World
THE ASIAN BANKER® 5" STRONGEST ISLAMIC BANK m IN THE WORLD 2020 —s STRATEGIC BUSINESS INTELLIGENCE FOR ASIATE FINANCIAL SERVICES COMMUNITY by balance sheet Meezan Bank is the 5th strongest Islamic Bank in the World in 2020 Strength Bank Strength Score Rank 1 AV Raji Bank 4.04 2 Kuwait Finance House
Slide 10: Pakistan's Largest COVID-19 Drive-Through Vaccination Centre
INAUGURATION OF PAKISTAN’S LARGEST COVID-19 DRIVE-THROUGH VACCINATION CENTRE ORGANIZED BY MEEZAN BANK & _ COVERS Mal OF NOs Barrister Murtaza Wahab - Spokesman Government of Sindh & Administrator Karachi & Mr. Irfan Siddiqui - Founding President & CEO, Meezan Bank at the Inauguration
Slide 11: Financial Presentation by Mr. Shabbir Hamza Khandwala
Financial Presentation by: Mr. Shabbir Hamza Khandwala CFO & Group Head Finance
Slide 12: Q2'2021: Highest Ever Quarterly Profit
Q2’ 2021: Highest Ever Quarterly Profit 12 (Unconsolidated) Rs in bn Quarterwise Profit After Tax 6.2 6.4 6.1 6.5 5.5 4.2 4.3 4.1 3.9 2.8 Q1' 19 Q2' 19 Q3' 19 Q4' 19 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q2' 21
Slide 13: Profit and Loss – Q2'2021 vs Q1'2021
Profit and Loss – Q2’ 2021 Vs Q1’ 2021 13 (Unconsolidated) Rs in mn Profit & Loss Account Q2'21 Q1'21 Growth % Policy Rate 7.00% 7.00% Return on financings, investments and placements 25,886 24,230 7% Return on deposits and other dues expensed (9,736) (9,175) 6% Net spread earned 16,150 15,055 7% No
Slide 14: Policy Rate decline mitigated by growth in Earning Assets
Policy Rate decline mitigated by growth in 14 Earning Assets : PAT up by 8% Rs in mn Profit & Loss Account HY21 HY20 Growth % Policy Rate 7.00% 10.92% (36%) Return on financings, investments and placements 50,116 57,829 (13%) Return on deposits and other dues expensed (18,911) (25,474) (26%) Net spr
Slide 15: Profit After Tax Grew by 8% to Rs 12.6 bn
15 Profit After Tax Grew by 8% to Rs 12.6 bn PROFITABILITY: • Profit After Tax (PAT) - HY21: Rs 12.61 bn ($ 80 mn) vs Rs 11.68 bn ($74 mn) – a growth of 8%. • Earnings Per Share - Rs 8.91 in HY21 vs Rs 8.25 in HY20 on enhanced share capital of Rs 14.15 bn; • Return on Average Equity - 34.73% vs 38.3
Slide 16: Profit After Tax & Key Ratios At a Glance
Profit After Tax & Key Ratios At a Glance 16 PROFIT AFTER TAX - Rs in bn ROE - % 22.17 34.6% 34.7% 15.23 30.7% 12.61 8.96 23.8% 5.56 6.31 20.0% 19.6% 5.02 19.3% CY15 CY16 CY17 CY18 CY19 CY20 HY21 CY15 CY16 CY17 CY18 CY19 CY20 HY21 ROA - % Income Efficiency Ratio - % 1.7% 1.6% 62.9% 1.5% 59.7% 59.3%
Slide 17: Expansion in Asset Base Contributing to Higher Profits
HY21 v HY20: Expansion in Asset Base – 17 Contributing to Higher Profits Rs in mn Balance Sheet HY21 HY20 Growth % Islamic Financing and related assets 570,222 478,442 91,780 19 Investments 472,124 306,510 165,614 54 Due from FIs 380,251 274,357 105,894 39 Cash and Bank Balance 161,155 121,683 39,47
Slide 18: HY21 Results – Total Assets up by 10%
HY21 Results – Total Assets up by 10% 18 (Unconsolidated) Rs in mn Balance Sheet HY21 CY20 Growth % Islamic Financing and related assets 570,222 512,532 11% Investments 472,124 434,208 9% Due from FIs 380,251 342,069 11% Cash and Bank Balance 161,155 155,689 4% Others 90,141 77,062 17% Total Assets
Slide 19: Fastest Growing Bank - CAGR 36% since inception
Fastest Growing Bank - 19 CAGR 36% inception Rs in Bn Rupees 1.37 Trillion Deposit; Market Share: 7% 1,370 1,254 933 785 667 559 468 379 288 230 169 100 131 55 70 5 8 14 23 34 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 HY21 Fastest Bank to Achieve
Slide 20: Strong Growth in Current Account
Strong Growth in Current Account 20 Contributing to Net Spread CAGR based on CY20 Rs in mn Current Account Rs 576 bn with 42% Deposit Mix 575,935 504,599 339,040 289,419 235,908 195,679 148,701 CY15 CY16 CY17 CY18 CY19 CY20 HY21
Slide 21: Strong Growth in CASA – HY21 vs HY20
Strong Growth in CASA Contributing to 21 Net Spread – HY21 vs HY20 Current Account Grew by 45% - HY 21 v HY 20 Rs in bn HY21 HY20 Growth CA 576 42% 397 38% 179 45% SA 514 38% 390 37% 124 32% CASA 1,090 80% 787 75% 303 39% TD 280 20% 258 25% 22 (5%) Total 1,370 100% 1,045 100% 325 31%
Slide 22: Leading the Islamic Banking Industry with 36% deposit share
Leading the Islamic Banking Industry with 22 market share of 36% in deposits – Q1’21 Rs in Bn Share of Islamic Banking Industry Bank's Growth in Comparison with Islamic Meezan Bank Banking Industry 36% 4,000 44% (16) Islamic Windows of 3,500 40% Conventional 36% Banks 3,000 41% 32% 2,500 28% 2,000 2
Slide 23: Total Assets of Rs 1.7 trillion expanding continuously
Total Assets of Rs 1.7 trillion ($10.6 bn) 23 expanding continuously Rs in Bn ASSETS: GoP Ijarah GoP Ijarah • Total Assets: Rs 1.7 tn ($ 10.6 Bn) Sukuk: 212 bn 41% Sukuk: 179 bn INVESTMENTS 45% vs Rs 1.5 tn ($ 9.6 Bn) in CY20 - a growth of 10% (Rs 152 bn); Energy Sukuk: 27% Energy Sukuk: 25% 119 bn
Slide 24: Financings Rs 570 bn with Superior Asset Quality
Financings Rs 570 bn vs Rs 513 bn with 24 Superior Asset Quality Rs in Bn Asset Quality NPL / Infection Ratio 20 128% 136% 160% 700 6.0% 139% 142% 18 133% 600 5.0% 140% 16 116% 118% 500 120% 3.3% 4.0% 14 400 2.8% 12 100% 2.1% 2.4% 3.0% 300 1.5% 1.8% 10 80% 1.3% 2.0% 8 200 60% 1.0% 6 100 4 40% - 0.0%
Slide 25: NPL Coverage Ratio: 136%
Increasing Buffers through 25 Higher Coverage Rs in mn HY 2021: Specific Provision – net of Rs 60 million (Charge of Rs 1.23 bn and Reversals of Rs 1.17 bn). The Bank also booked General provision Rs 300 million in view of ongoing Covid-19 outbreak. Loss 13,133 Specific General Total 13,193 Charge 1
Slide 26: Heads up for IFRS 9
26 Heads up for IFRS 9 General Provision of Rs 5.8 bn 5,350 Consumer General Provision - under PR + General Provision 440 The Bank is geared up for IFRS 9 adoption.
Slide 27: Trade Business Volumes: Robust Increase of 77%
Trade Business Volumes: 27 Robust Increase of 77% Rs in bn HY21 HY20 +77% 542 255 Rs. 793 Bn Rs. 447 Bn 251 192 Import Export Import Export
Slide 28: 76% Growth in Fee and Commission
76% Growth in Fee and Commission : 28 Delivering in all fronts Rs in Bn Fee, commission and other income HY21 HY20 % Trade & guarantee commissions 1,671 1,198 39 Debit card fees 1,156 424 173 Branch banking fees 764 350 118 Investment banking fees 151 84 80 Home remittance fees 128 103 24 Credit pro
Slide 29: Top Rated Mobile App & Digital Transaction Growth
Top Rated Mobile App in Industry & 29 Digital Transaction Growth Mobile App & Internet Banking Financial Transactions (IBFT, Bill Payment & FT) 37 mn Transactions Count - mn 15 mn Transactions Value – Rs in bn 430 1,199 HY20 HY21
Slide 30: Digitizing the Banking Transactions
Digitizing the Banking Transactions 30 No of Transactions in 000’s
Slide 31: Leading the Banking Industry – Overall 1Link Grid
Leading the Banking Industry - 31 Overall 1Link Grid 1st Position • Overall Transactions over 1Link grid (by Count) • Overall Transactions through 1Link grid (by Value)
Slide 32: Digital Acceleration
Digital Acceleration 32 No in 000’s No of transactions in 000’s POS & E-Commerce 2 Million + Total Cards 11,428 2,086 1,991 9,441 8,222 1,505 5,337 1,305 1,175 3,034 CY 17 CY18 CY 19 CY 20 HY 21 CY 17 CY18 CY 19 CY 20 HY 21
Slide 33: 835 Branches in 258 cities; Administrative expenses up by 12%
835 Branches in 258 cities; 33 Administrative expenses up by 12% Branch Network – in 258 cities • Operating Expenses - Rs 16.7 bn vs Rs 14.8 bn in HY20 (12% up) due to full year impact 55 20 of 55 new branches opened in CY20 and 100 partial impact of opening of 20 new branches 59 123 30 of HY21; 20
Slide 34: CAR Comfortable at 18.67%; Unbroken Dividend Payout History
CAR Comfortable at 18.67% 34 Unbroken Dividend Payout History Interim Cash dividend of 15% for Q2’21. The Board also approved 15% bonus shares bringing the total payout for the half year to 45% (30% cash & 15% bonus shares). CAR % 18.7% 17.8% 16.6% 14.5% Min Req HY21 CY20 12.9% 12.9% Total CAR 11.50
Slide 35: Consolidated Profit After Tax Grew by 10%
Consolidated Profit After Tax Grew by 35 10% of Rs 12.73 Billion Rs in mn Profit & Loss account HY21 HY20 Growth % PSX - 100 Index 47,356 34,421 38 Net spread earned 31,194 32,346 (4) Fee, commission and other income 5,294 3,209 65 Income from dealing in foreign currencies 1,605 1,298 24 Dividend in
Slide 36: Consolidated Balance Sheet - Total Assets Grew by 10%
Consolidated Balance Sheet - Total 36 Assets Grew by 10% Rs in mn Balance Sheet HY21 CY20 Growth % Islamic Financing and related assets 570,222 512,532 11 Investments 476,935 438,796 9 Due from FIs 380,251 342,069 11 Cash and Bank Balance 161,174 155,722 4 Fixed Assets and Other Assets 90,722 77,442
Slide 37: Performance Over Last 6 Years
Performance Over Last 6 years
Slide 38: Key Ratios: CY15 – HY21
Key Ratios: CY15 – HY21 38 Key Ratios - % CY15 CY16 CY17 CY18 CY19 CY20 HY21 Policy rate 9.50% - 6.00% 6.00% - 5.75% 5.75% 5.75% - 10.00% 10.00% - 13.25% 13.25%-7.00% 7.00% Income Efficiency Ratio 59.7 62.9 59.3 55.2 45.7 39.7 44.1 Branches opened 123 20 30 59 100 55 20 Total no of branches 551 571
Slide 39: Unconsolidated Balance Sheet: CY15 – HY21
Unconsolidated Balance Sheet: 39 CY15 – HY21 Rs in mn Balance Sheet CY15 CY16 CY17 CY18 CY19 CY20 HY21 Cash and Bank Balance 54,861 68,058 69,452 73,277 107,566 155,689 161,155 Due from FIs 101,079 129,115 147,229 184,815 223,689 342,069 380,251 Investments 146,305 130,156 119,238 123,743 225,646 43
Slide 40: Unconsolidated Profit And Loss Account: CY15 – HY21
Unconsolidated Profit And Loss Account: 40 CY15 – HY21 Rs in mn P&L Statement CY15 CY16 CY17 CY18 CY19 CY20 HY21 Policy rate 9.50% - 6.00% 6.00% - 5.75% 5.75% 5.75% - 10.00% 10.00% - 13.25% 13.25% -7.00% 7.00% Policy rate - Average 7.13% 5.85% 5.75% 7.10% 11.99% 8.95% 7.00% Profit / return earned 32
Slide 41: Performance of Subsidiary – Al Meezan Investments Management Limited
Performance of Subsidiary – 41 Al Meezan Investments Management Limited Largest Asset Management Company Jun Dec ∆% 2021 2020 Longest track record of over 26 years; AUMs discretionary 204 176 16% One of the largest investor base of 144,857 portfolio – Rs Bn investors Funds –Incl. plans (No.) 3
Slide 42: Q & A Session: Mr. Ariful Islam
Q & A Session: Mr. Ariful Islam Deputy CEO
Slide 43: Thank You
Thank You