Meezan Bank’s gross Islamic financing and related assets declined 3% during the first half of 2026, falling to Rs1.64 trillion by June 30.
The contraction came alongside strong deposit growth, pushing the bank’s advances-to-deposits ratio (ADR) down to 43.8% from 51.1% at the end of December 2025.
Deposits Grow Faster Than Financing
Meezan Bank’s deposits increased 13% to Rs3.74 trillion during the period.
Current accounts represented slightly more than 49% of total deposits, while savings deposits grew 9%. Combined, current and savings accounts accounted for around 91% of the bank’s deposit base.
The faster growth in deposits compared with financing significantly changed the bank’s balance-sheet mix.
Financing Demand Remains Cautious
Management attributed the softer financing portfolio partly to a cautious lending approach amid an uncertain economic environment.
Higher energy prices and supply-side disruptions linked to Middle East tensions also affected credit demand.
The State Bank of Pakistan’s 100-basis-point policy rate increase to 11.5% in April 2026 added another factor influencing borrowing conditions.
Investment Portfolio Expands
While Islamic financing declined, Meezan Bank increased its investment portfolio by 12% to Rs2.90 trillion.
The expansion was supported by government Sukuk auctions, while total assets increased 7% to Rs5.14 trillion.
Equity also rose 3% to Rs288.7 billion.
Profit Rises Despite Lower Financing
The decline in financing did not prevent Meezan Bank from delivering stronger earnings.
Profit after tax increased 6% to Rs48.9 billion, compared with Rs46.2 billion during the corresponding period of 2025.
Basic earnings per share improved to Rs27.15 from Rs25.72, while return on equity remained strong at 34.7%.
Net spread earned increased 2% to Rs128.8 billion.
Fee Income Provides Additional Support
Fee, commission and other income jumped 36% to Rs21.6 billion, supported by stronger activity in areas including debit cards, trade and remittances.
Operating expenses, however, increased 26% to Rs45.3 billion.
The higher costs were linked to the opening of 93 new branches, increased staff and technology spending and broader inflationary pressures.
Despite the increase, the bank’s cost-to-income ratio remained low at around 30%.
Asset Quality And Capital Position Remain Strong
Meezan Bank continued to maintain strong asset quality.
The non-performing financing ratio stood at 1.8%, while the coverage ratio reached 152%.
The bank’s capital adequacy ratio remained above 19%, providing a substantial buffer over regulatory requirements.
By the end of June, Meezan Bank operated 1,150 branches across 372 cities, supported by more than 1,350 ATMs and other touchpoints.
Dividend And Credit Rating
The board approved an interim cash dividend of Rs8 per share for the second quarter, taking the total cash dividend for the first half of 2026 to Rs15.50 per share.
VIS Credit Rating Company also reaffirmed Meezan Bank’s long-term rating at AAA and short-term rating at A1+, both with a stable outlook.
Geopolitical Risks Remain
The bank continues to monitor risks arising from geopolitical tensions in the Middle East.
Potential disruptions could increase inflation, affect trade flows and put pressure on Pakistan’s current account and exchange rate.
Despite these risks, Meezan Bank’s strong capital position, diversified operations, deposit growth and prudent risk management provide support for its overall financial resilience.
The decline in Islamic financing and ADR shows that the bank has adopted a more cautious balance-sheet approach, while its growing deposits and investment portfolio have helped sustain profitability.