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Meezan Bank profitability declined in the first half of 2025, as the bank posted a Profit After Tax (PAT) of Rs46.2bn, marking a 10% drop compared to Rs51.4bn in the same period last year. The decline was attributed to lower policy rates, the enforcement of a minimum deposit rate on Islamic banks, and an increase in the tax burden.
Meezan Bank’s half-yearly financial results revealed that profitability has come under pressure despite signs of resilience in non-funded income streams.
The bank’s Profit After Tax stood at Rs46.2bn in H1 2025, a 10% decline from Rs51.4bn a year earlier, highlighting the impact of monetary policy shifts and increased taxation. Basic Earnings Per Share also dropped to Rs25.72 compared to Rs28.72 in the corresponding period.
A key driver of the decline in Meezan Bank profitability was the fall in net spread earned, which slid 9% to Rs125.76bn. Profit and return on financing, investments, and placements also shrank by 16%, mainly due to a steep drop in the average policy rate, which stood at 11.8% versus 21.8% in June 2024.
Financial Highlights (H1 2025 vs H1 2024)
| Indicator | H1 2024 | H1 2025 | Change |
| Profit After Tax (PAT) | Rs51.4bn | Rs46.2bn | ▼ 10% |
| Earnings Per Share (EPS) | Rs28.72 | Rs25.72 | ▼ |
| Net Spread Earned | Rs137.49bn | Rs125.76bn | ▼ 9% |
| Profit/Return on Financing, Investments, Placements | Rs249.67bn | Rs209.53bn | ▼ 16% |
| Fee, Commission & Other Income | Rs11.68bn | Rs16.39bn | ▲ 40% |
| Core Fee & Commission Income | — | ▲ 15% | ▲ |
| Operating & Other Expenses | Rs43.57bn | Rs36.33bn | ▼ 17% |
| Taxation Expense | Rs54.83bn | Rs56.28bn | ▲ 3% |
On the positive side, non-funded income saw strong growth. Fee, commission, and other income surged 40% to Rs16.39bn, with core fee and commission income rising by 15%.
Cost management efforts also contributed positively, with operating and other expenses down 17% to Rs36.33bn, primarily due to reduced variable compensation expenses. However, taxation expenses edged higher by 3%, reaching Rs56.28bn.
Industry analysts noted that while fee-based income growth and expense control offer some relief, overall Meezan Bank profitability is likely to remain sensitive to interest rate trends and tax policies in the coming quarters.
