Karachi: Meezan Bank has reported a 6% year-over-year increase in its earnings for the second quarter of 2026, achieving unconsolidated earnings of Rs25.5 billion, or an earnings per share (EPS) of Rs14.1. This marks a 9% rise from the previous quarter, with results aligning with market expectations.

According to JS Global, the bank's net spread increased by 5% from the previous year and 10% from the previous quarter, reaching Rs67.4 billion. This growth is attributed to a 100 basis points rise in interest rates in April 2026, along with an expansion in volume. Non-operating income increased by 28% year-over-year, driven by a 23% growth in fee and commission income, as well as higher dividend and foreign exchange income.

The bank's total other expenses rose by 32% year-over-year but decreased by 5% from the previous quarter, totaling Rs22.1 billion. The cost-to-income ratio was recorded at 28.4% for the quarter, compared to 23.1% in the same period last year and 31.9% in the first quarter of 2026. This change is partly due to a compensation reversal in the second quarter of 2025.

Meezan Bank also recorded a provision expense of Rs2.1 billion, marking a 42% increase year-over-year and a significant rise from the previous quarter. The effective tax rate for the bank was 52.4% in the second quarter, slightly lower than 55.3% in the same period last year.

On the balance sheet, the bank saw a 3% quarterly growth in deposits, reaching Rs3.7 trillion. Investments rose by 8% to Rs2.9 trillion, and advances increased by 7% to Rs1.6 trillion. Additionally, Meezan Bank announced a second interim cash dividend of Rs8.0 per share, surpassing the anticipated Rs7.5 per share.

Meezan Bank remains a preferred choice in the banking sector, trading at an estimated 2026 price-to-earnings ratio of 11.1x and a price-to-book value of 3.4x, with a dividend yield of 5%.