Pakistan’s largest Islamic bank, Meezan Bank, posted an after-tax profit of Rs3.5 billion for the first nine months of 2014, up 24.3% from the same period of the preceding year.

According to the financial results for the first three quarter of 2014 released on Tuesday, Meezan Bank’s net spread after provisions remained Rs9.5 billion in January-September, which is 19% higher than the comparable figure for the same period of 2013.  There was a notable increase in fee, brokerage and commission income, as it increased 34.6% to Rs1.2 billion during the nine-month period. However, the bank’s dividend income declined almost 59% in January-September to Rs116.1 million over the nine-month period.

The company did not make any announcement about cash dividend and bonus shares.

It should be mentioned that Meezan Bank has recently acquired Pakistan operations of HSBC Bank Middle East. As a result, all customers of HSBC Bank in Pakistan have become customers of Meezan Bank.

MCB’s profits up 5.4%

MCB Bank posted a profit of Rs18.1 billion for the first nine-month period of 2014, up 5.4% from the same period of the preceding year.

According to its financial results released on the KSE, Pakistan’s second largest bank in terms of pre-tax profit reported a core income of Rs33.4 billion, up 10.2% on an annual basis in January-September.

BMA Capital attributed the increase in core earnings to the rise in interest income by 17.2% on a year-on-year basis due to increased holdings of Pakistan Investment Bonds (PIBs) as well as higher six-month Karachi Inter Bank Offer Rate (KIBOR).

The bank’s non-interest income increased 11.7% to Rs9.5 billion in January-September compared to the same nine months of 2013. The increase was on the back of a higher fee income of Rs5.1 billion and foreign exchange income of Rs1.1 billion. BMA Capital added that lower capital gains of Rs1.3 billion, down 39% on an yearly basis, partially limited the growth in non-funded income.

Notable increase of 16.8% year-on-year in administrative expenses to Rs14.8 billion from Rs12.6 billion in January-September further restricted income growth, it said.

The MCB’s board also announced its third interim cash dividend of Rs3.5 per share, bringing cumulative January-September dividend to Rs10 per share.

“At our target price of Rs310 per share, MCB offers an upside of 9% with a dividend yield of 5%,” BMA Capital advised its clients, while recommending accumulating MCB shares.

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