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Report Date : |
15.03.2014 |
IDENTIFICATION DETAILS
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Name : |
MEEZAN BANK LIMITED |
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Registered Office : |
Meezan House, C-25 Estate Avenue, SITE, Karachi |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2013 |
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Date of Incorporation : |
1997 |
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Com. Reg. No.: |
0037618 |
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Legal Form : |
Public Limited
Company |
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Line of Business : |
Subject is engaged in retail banking, corporate banking and treasury
related activities |
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No. of Employees : |
2,000 – 3,000 |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2013
|
Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
|
High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
PAKISTAN - ECONOMIC OVERVIEW
Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment was 6.6% in 2013, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in the following two years, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.
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Source
: CIA |
MEEZAN BANK LIMITED
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Registered
Address |
|
Meezan House, C-25 Estate Avenue, SITE, Karachi, Pakistan |
|
Tel # |
92 (21) 38103500 |
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Fax # |
92 (21) 36406049 |
Operative Address
Pnsc Building, Floor 3, Moulvi Tamizuddin Khan Road, 74000, Karachi,
Pakistan
|
a. |
Nature of Business |
The Bank was registered
as an ‘Investment Finance Company’ on August 8, 1997, and carried on the
business of investment bank as permitted under SRO 585(I)/87 dated July 13,
1987, in accordance and in conformity with the principles of Islamic Shariah. |
|
b. |
Year Established |
1997 |
|
c. |
Registration # |
0037618 |
The Bank was
operating through three hundred and fifty one branches as at December 31, 2013 (2012: three hundred and ten branches)
|
A.F. Ferguson & Co. (Chartered Accountants) |
|
Meezan Bank
Limited (the Bank) was incorporated in Pakistan on January 27, 1997, as a
public limited company under the Companies Ordinance, 1984, and its shares
are quoted on the Karachi Stock Exchange. The Bank was registered as an ‘Investment
Finance Company’ on August 8, 1997, and carried on the business of investment
banking as permitted under SRO 585(I)/87 dated July 13, 1987, in accordance
and in conformity with the principles of Islamic Shariah. A ‘Certificate of
Commencement of Business' was issued to the Bank on September 29, 1997. The
Bank was granted a ‘Scheduled Islamic Commercial Bank’ license on January 31,
2002 and formally commenced operations as a Scheduled Islamic Commercial Bank
with effect from March 20, 2002. |
|
Names |
Designation |
|
H.E. Sheikh Ebrahim Bin Khalifa Al-Khalifa Mr. Abdullateef A. Al-Asfour Mr. Rana Ahmed Humayun Mr. Riyadh S.A. A. Edrees Mr. Mohammed Azzaroog Rajab Mr. Alaa A. Al-Sarawi Mr. Mohammad Abdul Aleem Mr. Shaharyar Ahmad Mr. Noorur Rehman Abid Mr. Irfan Siddiqui Mr. Ariful Islam |
Chairman Vice Chairman Director Director Director Director Director Director Director Director Director |
|
Shareholders |
Shareholding (%) |
|
Directors, Chief Executive Officer, and their spouse and minor
children Associated Companies, undertakings and related parties Banks, Development Financial Institutions, Non Banking Financial
Institution Insurance Companies Modarabas & Mutual Funds General Public Others |
1.19 89.35 0.06 0.82 1.43 3.92 3.23 |
Principally engaged in retail banking, corporate banking and treasury
related activities.
2,000 – 3,000
Notwithstanding
these economic challenges, Meezan Bank consolidated its position as a leading
commercial bank in Pakistan and recorded good all round results for the year
ended December 31, 2013. The Bank's profit after tax increased to Rs. 3.96
billion from Rs. 3.51 billion in the previous year, reflecting an increase of
Rs. 448 million while the Bank's total assets reached Rs. 330 billion, up 20%
from Rs. 274 billion in 2012. Deposit of the Bank grew by 26%, closing the year
at Rs. 289 billion from Rs. 230 billion a year ago; this is significantly
higher than the banking industry that grew by only 13% during 2013. This
performance is especially impressive in light of the fact that the average cost
of deposits for the year has been contained at 4.52%. Deposit mix also improved
with CASA contributing 68% to the mix as against 66% last year. The investment
portfolio remained constant at Rs. 152 billion. The Bank has used its resources
aggressively to grow its financing portfolio, which jumped by 44% to Rs. 128
billion from Rs. 89 billion last year. This growth is significantly higher than
the banking industry's financing growth of 6%. The Bank has achieved this
growth despite challenging economic circumstances and crowding out of private sector
financing due to government borrowing. The Bank’s focus has been on building a
high quality and well diversified portfolio. The Bank also made substantial
recovery efforts during the year on its non-performing financing portfolio.
These efforts resulted in cash recoveries of Rs. 358 million, as a result of
which, NPL charge for the year was only Rs. 93 million, compared to Rs. 451
million provided in the previous year. The ratio of nonperforming financings to
total financing (NPL ratio) fell from 5.3% to 3.6% in 2013. The Bank maintains
a comfortable level of provisions against its non-performing financings with a
coverage ratio of 121%. The Bank's total revenues increased to Rs. 26.7 billion
from Rs. 24.2 billion, a growth of 10%. Funded revenues increased from Rs. 21.8
billion in 2012 to Rs. 23.2 billion in 2013, a growth of 6%. This increase is
mainly due to incremental earning assets, although profit rates have been lower
than previous years. Non Fund based income increased by 46% from Rs. 2.4 billion
to Rs. 3.5 billion, mainly due to higher volume of ancillary business handled
during the year. Fee income increased by 30% to Rs. 1.25 billion as against Rs.
969 million last year. The Trade Finance business volume handled by the Bank
also grew by 57% to Rs. 315 billion in 2013. The Trade business is supported by
the Bank's growing network of correspondent banking relationships around the
world. The income from core banking business grew to Rs. 14.1 billion from Rs.
12.4 billion, posting an increase of 13%, mainly on account of concerted
efforts by the Bank to increase its asset portfolio without compromising on
quality. Administrative and operating expenses increased to Rs. 8.4 billion
from Rs. 7.2 billion, a rise of 17%. The rise in expenses is primarily due to
higher staff expenses, rent and costs associated with branch expansion - an
investment which has borne fruit for the Bank, as is evident from the strong
growth in deposits and profits over the years.
Our focus will be
on maintaining the growth momentum and asset quality due to the aforementioned
improvements in the economy. Efforts are also underway to target new market
segments and improve efficiency and productivity by leveraging on the
substantial investment in technology made by the Bank in recent years.
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 99.75 |
|
UK Pound |
1 |
Rs. 165.10 |
|
Euro |
1 |
Rs. 137.50 |
Meezan Bank Limited enjoys good
reputation in Pakistan. Management comprises of professional experts and
overall staff is highly skilled. Subject can be considered for moderate
business engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.52 |
|
|
1 |
Rs.102.22 |
|
Euro |
1 |
Rs.85.23 |
INFORMATION DETAILS
|
Report Prepared
by : |
NNA |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and principal
sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major sections
of this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.