KARACHI: Meezan Bank recorded 18.7% growth in its quarterly earnings, as its after-tax profit increased to Rs1.3 billion for January-March 2015.

According to financial results posted on the stock exchange website on Wednesday, Meezan Bank’s earnings per share for the first quarter stood at Rs1.31 as opposed to Rs1.10 at the end of the same quarter last year.

Deposits of the bank rose to Rs391 billion as on March 31, up 2.9% from the end of 2014.

According to Topline Securities analyst Umair Naseer, net spread earned by the bank jumped by 54% to Rs4.2 billion led by a sharp growth in earning assets.

“The bank is likely to remain a key beneficiary of strong deposit growth and increased demand for Islamic banking products,” he said.

Naseer stated Meezan Bank has recorded deposit growth of 31% per annum during the last three years. Its plan to add 122 branches in 2015 (versus 67 in 2014) will continue to support deposit growth, he added.

The re-pricing of the return on savings deposits following a discount rate cut allowed Meezan Bank to enjoy higher net spread during the quarter, he said, noting re-pricing on investments and financing always occurs with a time lag.

The State Bank has cut the discount rate by a total of 200 basis points, or 2%, since November last year.

Total provisioning expense also declined by 34% to Rs325 million because of improving recoveries of non-performing loans. Other income of the bank declined 15% on a quarterly basis to Rs1.1 billion due to lower capital gains and dividend income.

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