Meezan Bank considering opening branches on Sundays

KARACHI: Meezan Bank is considering opening branches on Sundays in areas where Friday is observed as the weekly holiday.

The bank is also evaluating longer working hours for branches located in markets, including fruit and vegetable markets, which operate late into the night or early morning.

The announcement was made during the bank’s second quarter 2025 (2Q2025) corporate briefing session on Wednesday, where management discussed financial performance and outlook, according to a press release issued by Topline Securities.

On deposits, management noted that average deposits remained largely stable compared to the quarter ending June 2025 and currently stand above Rs3 trillion. Industry-wide deposits, however, have declined in the past 1.5 months due to the quarter-end effect in June, when deposits rose sharply from Rs32 trillion to Rs35 trillion in the final two weeks. Meezan expects its deposit growth to remain above 20 per cent in the foreseeable future.

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About 80 per cent of Meezan’s investment portfolio is placed in Sukuk (Shariah-compliant Islamic bonds) yielding 11.5 per cent. Most of these investments will be repriced in October–November 2025, which could lower yields by 60–70 basis points (bps).

The bank’s cost-to-income ratio (CIR) stood at 25.6 per cent in June 2025 compared to 29.2 per cent a year earlier, helped by a one-time reversal of Rs10.9 billion variable compensation expense.

Meezan reported a return on equity (ROE, profitability measure showing returns for shareholders) of 36.4 per cent in June 2025 and aims to keep ROE above 30 per cent going forward.

The management confirmed that the bank will continue paying a Rs7 per share quarterly dividend. Excess capital will be preserved for future growth. Rising private sector lending is also expected to bring down the bank’s currently high capital adequacy ratio (CAR, a measure of financial strength comparing capital to risk-weighted assets), which stood at 23.59 per cent in June 2025 against 20.35 per cent in June 2024.

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Meezan plans to expand its branch network in areas with strong business potential.

The management said the bank is not currently considering a stock split but may review the option if longer-term evidence supports it.

Regarding employee ownership, five per cent of share capital had been allocated to the Employee Stock Ownership Plan (ESOP). Half of these shares remain pending and may continue to be distributed over the next five to six years.

Topline Securities said it maintains a “BUY” stance on the bank’s stock, noting it is currently trading at a 2025E (estimated 2025) price-to-earnings ratio (PE) of 9.0 times and a price-to-book value (PBV) of 2.7 times, with a dividend yield (annual dividend plus share price) of 7 per cent.