Karachi: Meezan Bank has announced its earnings for the fourth quarter of 2025, reporting a 10% year-over-year decline in earnings per share (EPS) to Rs12.1, while showing a 4% quarter-over-quarter increase. According to JS Global, the bank's unconsolidated earnings reached Rs21.8 billion for the quarter, aligning with market expectations. The total unconsolidated profit for 2025 amounted to Rs89 billion, marking a 12% decrease from the previous year.

The bank also declared a final cash dividend of Rs7.0 per share for the fourth quarter, consistent with expectations, bringing the total dividend for 2025 to Rs28.0 per share. The net spread earned by the bank fell by 11% year-over-year but rose by 3% quarter-over-quarter to Rs64 billion, attributed to volumetric growth.

Expenses increased by 35% year-over-year but decreased by 9% quarter-over-quarter to Rs26.1 billion. The cost-to-income ratio stood at 34% for the fourth quarter, an improvement from 37% in the third quarter, due to the reversal of variable compensation expenses earlier in the year, which adjusted the annual cost-to-income ratio to 30%.

Provision expenses were significantly lower at Rs0.3 billion, compared to Rs7.3 billion in the same quarter last year. Other income decreased by 36% year-over-year and 27% quarter-over-quarter to Rs6.9 billion, primarily due to the absence of gains on securities and a loss in foreign exchange income.

The bank's effective tax rate was 53.4% for the quarter, a decrease from 58.0% in the fourth quarter of 2024. On the balance sheet, deposits grew by 4% quarter-over-quarter to Rs3.3 trillion, and investments increased by 3% to Rs2.6 trillion, while advances declined by 45% to Rs1.64 trillion.

Meezan Bank remains a favored choice in the banking sector, trading at a 2026 estimated price-to-earnings ratio of 9.8x and a price-to-book value of 2.7x, with a dividend yield of 6%.