Meezan Bank Limited (PSX: MEBL) announced its financial results for the year ended December 31, 2025, reporting a profit after tax of Rs92.18 billion, reflecting an 11.13% decline from Rs103.72 billion in CY24. Basic earnings per share (EPS) decreased to Rs50.47 from Rs57.28 in the previous year, highlighting the impact of a challenging operating environment on the bank’s core profitability.
The bank’s total income for CY25 fell 8.86% year-on-year to Rs290.65 billion, largely due to lower net mark-up/return income from Islamic financing and related assets, which dropped 14.94% to Rs420.48 billion. Similarly, profit/return on deposits decreased 18.93% to Rs168.03 billion. These declines were partially offset by growth in other income streams, including fee and commission income, which rose 15.14% to Rs29.75 billion, and foreign exchange gains, which surged 561.23% to Rs5.48 billion. Dividend income, however, fell sharply by 39.36% to Rs0.38 billion, limiting its contribution to overall profitability.
Profit before taxation declined 11.48% to Rs200.30 billion, as the positive impact of higher other income was counterbalanced by rising operating expenses and lower returns on Islamic financing. Operating expenses increased 4.59% to Rs85.41 billion, while total other expenses rose 3.46% to Rs89.85 billion. Notably, Meezan Bank’s credit loss allowance improved significantly, falling 57.87% year-on-year to Rs3.89 billion, reflecting effective risk management and improved asset quality amid challenging macroeconomic conditions.
The bank’s share of profit from associates remained stable at Rs3.39 billion, contributing marginally to overall earnings. Taxation for CY25 decreased slightly to Rs108.12 billion, resulting in a final profit after tax of Rs92.18 billion, with Rs90.72 billion attributable to equity holders of the holding company. Non-controlling interest accounted for Rs1.46 billion, showing a 41.83% increase compared to the previous year.
Meezan Bank has declared a final cash dividend of Rs7 per share (70%) for CY25, in addition to interim dividends of Rs21 per share (210%), demonstrating its continued commitment to delivering shareholder value despite pressures on profitability.
The bank’s performance underscores the resilience of its business model, supported by strong non-interest income streams and prudent credit risk management, even as lower returns on Islamic financing and higher operating costs weighed on overall profitability. Analysts note that the increase in foreign exchange gains and growth in fee-based income helped mitigate the impact of declining mark-up income, while capital buffers and asset quality measures remain robust.
Meezan Bank’s 2025 results reflect both the challenges and strengths of Pakistan’s Islamic banking sector, highlighting the importance of diversification in income streams, effective cost management, and strategic risk oversight to maintain sustainable profitability in a competitive and evolving financial landscape.
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