Meezan Bank, which saw its profit after tax ballooning by 106 per cent to Rs3.4 billion during the year ended on December 31, 2011, would manage the Term Finance Certificates (TFCs) worth Rs15 billion for the cash-starved federal government to address the lingering and economy-crippling circular debt issue. Also, the bank is all set to establish a separate Agri Finance Department which would extend advances to the farmers to buy crop seeds, fertiliser and other agricultural inputs.
“We are in a dialogue with the ministry of finance on the issuance of Sukuk (Islamic bonds) by the power holdings,” said Ariful Islam, Chief Operating Officer and Executive Director of the country’s leading Shariah-compliant bank during a briefing here at a local hotel Monday.
The banker said the amount would constitute around 10 per cent of the total Rs150 billion the federal government would be arranging through Islamic banks to clear the massive circular debts. Earlier, Irfan Siddiqui, President and CEO of Meezan Bank said the Board of Directors of the bank, in its Feb 19thmeeting here, approved the financial statements of the bank for 2011. He said the bank’s total assets crossed the landmark figure of Rs200 billion at December 2011, while deposits increased by 30 per cent over the last year to Rs170 billion. While it recorded 106 per cent growth in its profit-after-tax which increased to Rs3.4 billion for 2011 as compared to Rs1.650 billion in 2010.
The banks’ Earning Per Share (EPS) increased to Rs4.22 from Rs2.05 recorded last year, Irfan said. He said the board recommended the issue of 12.5 per cent bonus shares (2010: 15 per cent) for year 2011. This declaration, together with the earlier cash dividend of 10 per cent paid in July 2011, brings the total payout for the year to 22.5 per cent and maintains the bank’s unbroken payout record since its date of listing on the Stock Exchange. The bonus issue will increase the bank’s paid up capital to Rs9 billion and the bank will meet the SBP’s minimum capital requirement for 2012 of Rs9 billion a year in advance.
“The bank’s excellent deposit growth is a result of the rapidly growing demand for Islamic financial products,” the CEO said. To a query, Irfan said the bank was setting up a dedicated department for agri financing to tap the waste potential the country had in the face of farming and that finances would be extended to the farmers to buy crop seeds, fertiliser and other agri inputs.
In his address, Chairman of the Bank’s Board, Sheikh Ebrahim Bin Khalifa Al Khalifa said Meezan Bank would be completing 10 years of Islamic commercial banking operations this year. The bank has achieved growth in all business segments and maintained its position as the leading Islamic bank in Pakistan where, he said, investing capital or working was a “viable exercise”. “The investment here is secured and that during 2012, we would expand our branch network to 3,000 (from present 275 in 83 cities of Pakistan),” he said.
