Karachi, February 22, 2023 (PPI-OT): MEBL: Strong Deposit Growth Setting the Bank Apart

MEBL posted a stellar result for 4QCY22, with the bank reporting NPAT of PkR16.4bn (EPS: PkR9.2), higher by 43%QoQ and 87%YoY. The higher earnings in the last quarter was driven by expansion in the net profit earned, increasing by 40%QoQ.

The bank’s Current Accounts at the end of the year stood at ~49% of total deposits, compared to 45% at CY21 close. Furthermore, the bank’s CASA has improved to 88%, compared to 83% at the end of CY21.

MEBL’s deposits have grown at a CAGR of 19.8% over the past 5 years, while the industry deposits have grown at a substantially lower rate of 13% during the same period.

The bank’s ADR currently stands at 61%, keeping it shielded from the taxation measures. Furthermore, the bank has increased its coverage to 166%, protecting its book from economic shocks.

Our updated Dec’23 target price on the stock stands at PkR171/sh, which offers an upside potential of 78% to its last close and 12% higher than our earlier price target.