July 9th, 2024
VIS Credit Rating Company Limited has reaffirmed the entity ratings of Meezan Bank Limited (‘MEBL’ or the ‘Bank’) at ‘AAA/A-1+’ (Triple A/A-One Plus). Medium to long term rating of ‘AAA’ indicates highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short-term rating of ‘A-1+’ indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’ The rating of MBL’s Basel 3 compliant Additional Tier-1 Instrument (Sukuk 2) and Tier-II Instruments (Sukuk 3 and Sukuk 4) have been reaffirmed at ‘AA+’ (Double A Plus) and ‘AAA’ (Triple A) respectively. Previous rating action was announced on June 27, 2023.
Assigned ratings incorporate the Bank’s competitive position, being the largest Islamic commercial bank in Pakistan. Known for its pioneering role in providing riba-free financial solutions, supported by a highly respected Shariah Board, Meezan Bank has successfully built a strong brand identity. Over the past decade, it has significantly expanded its operations, ranking as the 4th largest bank in terms of deposits and the 3rd largest in terms of financings as of Mar’24.
The ratings reflect the Bank’s strong deposit growth over the years, further bolstered by its deposit composition, with 89% in CASA accounts, resulting in one of the lowest deposit cost in the sector, which provides the Bank with a competitive edge, wider spreads, and higher profitability.
The Bank maintains one of the industry’s lowest infection ratios highlighting its effective management of non-performing loans and strong provisioning coverage. This positions the Bank favorably compared to other large banks, supported by a strong client base and substantial provisioning coverage. The Bank’s capital adequacy remains robust with a CAR of 24% as of Mar’24, supported by strong profitability and robust credit quality indicators. Additionally, Meezan Bank’s digital presence is notable, with Meezan Bank leading the industry in debit card usage and digital fund transfers.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at [email protected].
Source: https://vis.com.pk/prFile.aspx?mRatingId=00438501023