Meezan Bank (MEBL) Best Positioned to Leverage Growing Shariah Banking Initiating coverage with a Buy. Pakistan Equity Banks Company Initiation

Transcription

1 Pakistan Equity Banks Company Initiation October 4, 2018 Prices as of Sep 28, 2018 REP 057 Meezan Bank (MEBL) Best Positioned to Leverage Growing Shariah Banking Initiating coverage with a Buy Syed Daniyal Adil AC daniyal@topline.com.pk li Tel: Topline Securities, Pakistan Best Local Brokerage House Brokers Poll , Best Local Brokerage House

2 Table of Contents Executive Summary Meezan Bank Best Positioned to Leverage Growing Shariah Banking Strong Brand Recognition Driving Growth Pakistan s s Largest Islamic Franchise Quality Management is One of the Biggest Strengths Faster Credit Growth & One of the Best Asset Quality Favorable Deposit Mix to Limit Cost of Deposits Best Positioned to Benefit from Monetary Tightening Cycle Higher NIMS to boost ROE and ROA Expanding Branch Network Supporting Growth Cost Efficiency to Kick in as Branch Expansion Normalizes Al-Meezan Inv. Mgmt. MEBL s Subsidiary & Largest Pvt. Sector AMC Good Prospects for Pakistan AMCs Addressing SME and Consumer Segments Digital Expansion the Way Forward Fee Income to Continue Supporting Bottom-line Competition Dwarfed by MEBL s Brand & Size Risks-Lack of Investment Avenues and CAR Limitation Meezan Bank (MEBL) 2

3 Table of Contents Valuation MEBL Rated Buy Al-Meezan Investment Management - Valuation MEBL Financial Snapshot Pakistan Banks Comp Sheet Pakistan Islamic Banking Sector Islamic Banking Sector An Overview Significant Pent-up Demand for Islamic Banking About the Bank Meezan Bank (MEBL) 3

4 Executive Summary Meezan Bank (MEBL) 4

5 Executive Summary Investment t Thesis: We initiateiti t coverageon Meezan Bank (MEBL), Pkit Pakistan s largest Shariah Bank, with a Buy call and target price of Rs123 offering 38% upside. MEBL is expected to outperform peers based on 1) strong brand recognition and market leadership in islamic banking fueling robust deposit growth, 2) expanding Net Interest Margins (NIMs) and rapid Current Account (CA) growth, 3) biggest beneficiary of rising interest rates among peers, 4) faster credit growth and one of the lowest NPLs to loans ratio and 5) improving cost efficiency. Strong brand fueling deposit growth: The Bank has managed to establish a unique brand for itself and is distinguished as the pioneer and leader in developing Islamic Banking industry of Pakistan. MEBL s strong brand recognition as a Shariah compliant bank with strong infrastructure will keep growth trajectory intact, in our view. The Bank is expected to deliver robust 5 Year ( ) deposits CAGR of 17% aided by growing awareness of Islamic Banking as well as continued branch expansion. This is in comparison to our forecasted banking sector deposits CAGR of 13%. 10% 0% Expanding NIMs and high CA growth: NIMs of the Bank will expand to ~3.9% -10% -20% in 2022 compared to 3.3% during 2017, as we expect CA to grow at 5 Year ( ) CAGR of 19% along with anticipated increase in interest rates. Resultantly, Net Interest Income (NII) of the bank will grow at a 5 Year ( ) CAGR of 21% compared to previous 5 Year ( ) CAGR of 15%. KATS Code MEBL Bloomberg Code MEBL PA Reuters Code AMZN.KA Market Price Rs89.18 Market Cap Rs104.3bn/US$839.3mn Free float Market Cap Rs20.9bn/US$167.8mn 1-Yr Avg. Daily Vol. (mn) Yr Avg. Daily Val. (mn) Rs25.8/US$ Yr High/ Low Rs95.15/61.93 Estimated free float 20% Share outstanding (mn) 1, Index weight 1.08% MEBL vs KSE-100 Index 30% 20% Sep-17 Nov-17 MEBL Jan-18 Mar-18 KSE-100 May-18 Source: Pakistan Stock Exchange (PSX) Jul-18 Sep-18 Meezan Honda Atlas Bank Cars (MEBL) (HCAR) 5

6 Executive Summary Major beneficiary of rising rates: MEBL has one of the highest proportion of Rate Sensitive Assets (RSA) as Advances (above average ADR of 62%) are floating while more than 70% of its investments in Sukuk certificates/bonds (IDR 18%) do not have a re pricing risk as they are linked with Kibor (or average 6M T bill rate). Combined with low sensitivity of MEBL s deposits to interest trates (no minimum i deposit rate requirement for Islamic Banks), we believe that MEBL will gain the most due to rising interest rates. Relatively faster credit growth and one of the lowest NPLs to Loans ratio: MEBL is also expected to deliver strong credit growth compared to its peers, wherein, we expect 5 Year ( ) advances CAGR at 15% compared to Topline Banking Universe advances CAGR of 13%. This is because MEBL has increased its penetration and is growing its foothold in consumer and SME segments. Further, MEBL s asset quality is one of the best amongst its peersdue to prudent lending practices. Its NPLs to loans ratio stands at 1.5% while its coverageratio is at 134% compared to banking sector average of ~8% and ~92% respectively. Notably, the bank is one amongst two Pakistani listed banks to have NPLs to Loans ratio of below 2% and coverage ratio of more than 100%. Improving cost efficiency: i MEBL is expected to reduce its cost to income ratio to average 51% for the period compared to average of 59% for the period We attribute decline in expenses growth to slower pace of branch expansion. Moreover, rapid branch expansion (291 added in five years ) in previous years will contribute t significantly ifi to the bottom line going forward. Similarly, il l investments t in ADC should add to profitability as well, along with higher interest rates. Honda Atlas Cars (HCAR) 6 Meezan Bank (MEBL)

7 Executive Summary Vl Valuation: We have a Buy stance on MEBL with ihatargetprice of Rs123/share. Thevalue of MEBL is based on Sum Of The Parts (SOTP) method where we value MEBL (unconsolidated) at Rs119/share and MEBL s share in its asset management company, Al Meezan Investment Management, at Rs4/share. MEBL is trading at 2019E PE and PBV of 9.1x and 2.2x with ROE of 26%. It offers the highest expected return (38%) in Topline Banking Universe and is cheaper than most of the other Topline Universe Banks on the basis of 2022F ROE (adjusted for PBV). We believe, MEBL will also witness the phase where it will trade at high PE & PBV multiples just the way MCB traded at an average PBV/PE of 2.7x/9.8x with average ROE of 20%+ during (high growth period). Key Risks: Key risks for the bank include 1) lack of shariah compliant investment avenues, 2) lower than expected uptick in interest rates, 3) faster uptick in NPLs due to economic slow down and 4) growth slowdown due to CAR concerns. MEBL: Key Numbers 2016A 2017A 2018E 2019F 2020F EPS (Rs) Earning Growth 11% 14% 32% 39% 16% PE at Rs Dividend Yield 3% 3% 4% 6% 6% ROE 21% 20% 22% 26% 26% PBV 37x 3.7x 30x 3.0x 26x 2.6x 22x 2.2x 19x 1.9x Honda Atlas Cars (HCAR) 7 Meezan Bank (MEBL)

8 Meezan Bank Best Positioned to Leverage Growing Shariah Banking Meezan Bank (MEBL) 8

9 Strong Brand Recognition Driving Growth MEBL s strong brand recognition and franchise value are key to its success. Being the oldest Islamic Bank, it has a large branch network (601 as of Dec 2017) and dependable customer base of about 1.8mn. The Brand of MEBL is synonymous with Shariah compliant banking due to its emphasis on ensuring Shariah compliance at all levels. The Bank s Shariah Advisory board gives credence to this claim. The board consists of eminent and learned islamic scholars which include Justice (Retd.) Mufti Muhammad Taqi Usmani as the Chairman who has more than 50 years of experience in teaching various subjects on Islam. The Board functions to ensure that the Bank complies with Shariah principles. The strength of its franchise value is also supported by the fact that more than 70% of its deposits are constituted of individuals. This also gives MEBL higher competitive advantage. Moreover, MEBL s brand is not only about Riba free banking but also about customer satisfaction and strong physical and digitalit infrastructure. t As per the lt latestsbp survey, 39% of the respondents gave the most weight ihtto customer satisfaction for using islamic banking. The Bank has established a good infrastructure as depicted by branch network of 601 and approximately 370,000 (as of 2017) downloads of the Bank s Mobile App (making it one of the most trending Apps inthecategory) to enhance customer convenience and experience. Similarly, on Google play store the App has more than 6K reviews. In addition to above, MEBL also has a strong network of around 1,000 agents. This workforce delivers various MEBL financiali products to customers which h has helped increase MEBL s penetration and resultantly l strengthen its franchise value. Meezan Bank (MEBL) 9

10 Pakistan s Largest Islamic Franchise MEBL is one of the fastest growing banks in Pakistan s s banking industry. The bank has grown its deposit base at 5 Year ( ) CAGR of 24% compared to banking sector CAGR of 13% and islamic banking CAGR of 22%. As of Jun 2018, MEBL is the 7 th largest commercial bank in Pakistan with a market share of 5.4% and the largest islamic bank with a market share of ~36%. In last 15 years of its operations, the bank s market share has surpassed eight listed banks which h started operations before MEBL including Bank of Punjab (BOP), Askari Bank (AKBL), Habib Metro (HMB) and Faysal Bank (FABL). The Bank is expected to deliver robust 5 Year ( ) deposits CAGR of 17% aided by growing awareness of islamic banking as well as continued branch expansion. This is in comparison to our forecasted banking sector deposits CAGR of 13%. Given the projected growth trajectory, we expect MEBL will surpass Rs1tn deposit mark and will become 6 th largest bank by 2020, over taking Bank Al Habib (BAHL). At the same time, the bank will maintain its market share in islamic banking at ~36% but will increase its market share in the banking sector to around 6.4%, in our view, owing to growing Islamic banking industry. Deposits 5-Year ( ) growth CAGR 25% 20% 15% 10% 5% 0% 23.9% 15.3% 13.8% 12.9% 12.6% 11.4% 10.7% 10.5% 7.4% MEBL BAHL BOP MCB UBL ABL NBP HBL BAFL 35.6% 35.9% 35.7% MEBL Market Share IB * Market share Banking Sector Market share 40% 34.8% 35.5% 33.6% 32.6% 32.6% 33.4% 34.3% 6.0% 30% 4.5% 20% 3.0% 10% 1.5% 0% 0.0% , *Islamic Banking Meezan Bank (MEBL) 10

11 Quality Management is One of the Biggest Strengths Management competence, knowledge and creativity are amongst the key ingredients to MEBL s success. The management has a proven track record and has guided the bank to become the 7th largest in Pakistan banking space in a span of 15 years. MEBL s management is led by one of the most senior and reputable banker, Mr. Irfan Siddqui, who is the founding President and Chief Executive Officer (CEO) of the Bank. He is a qualified Chartered Accountant from the Institute of Chartered Accountants in England and Wales (ICAEW). He has held several key management positions such as CEO at Al Meezan Investment Bank, General Manager at Pakistan Kuwait Investment Company and Advisor to the Managing Director at Kuwait Investment Authority. He has been with the Bank from the start and has been instrumental in developing the Meezan brand. The position of Executive Director and Deputy CEO is held by another senior banker, Mr. Ariful Islam, who was the first Chief Operating Officer of the Bank in He qualified as Chartered Accountant from Institute of Chartered Accountants in England and Wales (ICAEW) in He has more than 30 years of banking experience and has held senior management positions such as Vice President and Regional Manager South at Faysal bank. Management continuity has ensured smooth policy framework and implementation which has helped MEBL to achieve success. Unlike a typical family owned firm, MEBL s diversifiedifi d shareholders h have given full authority to the management. Resultantly, the performance of the Bank has outclassed other similar banks. Meezan Bank (MEBL) 11

12 Faster Credit Growth & One of the Best Asset Quality MEBL has had one of the fastest growing loan book where its 5 Year ( ) 17) advances CAGR stands at 35%. As the bank increases its penetration and also grows its foothold in consumer and SME segments, we expect MEBL s 5 Year ( ) advances CAGR at 15% compared to Topline Universe advances CAGR ( ) of 13%. The bank s asset quality is one of the best amongst its peers due to prudent lending practices. As of Dec 2017, its NPLs to loans ratio stands at 1.5% while its coverage ratio stands at 133% compared to banking gsector average aeageof~8% and ~92% respectively. e Notably, the bank is one amongst two Pakistani listed banks to have NPLs to loans ratio of below 2% and coverage ratio of more than 100%. In absolute terms, in the last 5 years the bank s NPL stock has increased by a meager Rs1.6bn compared to Rs331bn added in advances. With likely slowdown in economy, wherein we expect GDP growth in FY19 to clock in at 4.7% (5.8% in FY18), we foresee banking sector to again start accreting NPLs. Accordingly gywe expectmebl snplstoloansratiotoincreaseto2.3%by However, strong coverage ratio will keep provision charge in check, in our view. We attribute the expected low growth in NPLs to loans ratio to proven track record of the bank as well as the recent shift in composition of banks advances where the bank has reduced its proportion of lending in high NPLs to loans ratio sectors to lower ones. For example, the bank has reduced its exposure in textile sector by 2.7ppts where it hadnplstoloansratioof~6%andhasincreaseditsexposuretoagri sector by 12.8ppts where it has NPLs to loans ratio of ~0.1% as at Dec MEBL s NPLs to loans ratio of 1.5% is one of the lowest in banking sector (average of ~8% as of Dec 2017). Hence, despite rising interest rates we do not expect MEBL s asset quality to significantly hurt profitability. MEBL Advances Composition by Sector Advances NPLs to Loans Rti Ratio Advances 2016A 2017A 2017A Agri food forestry & fishing 12% 25% 0.10% Individuals 8% 8% 0.90% Power Oil Gas and Water 22% 17% 0.00% Textile 20% 17% 5.90% Others 38% 33% 1.40% Honda Atlas Cars (HCAR) 12 Meezan Bank (MEBL)

13 Advances, NPLs to Loans ratio & Coverage Ratio MEBL s Advances and ADR Rsbn Advances ADR 2015A 2016A 2017A 2018E 2019F 2020F 70% 60% 50% 40% MEBL s NPLs to Loans Ratio 4.0% 3.2% 2.4% 1.6% 0.8% 0.0% 3.3% 2.1% 2.0% 1.7% 1.5% 1.5% 2015A 2016A 2017A 2018E 2019F 2020F MEBL ADR vs. Topline Banking Universe (2017) MEBL NPLs to Loans Ratio vs. Topline Banking Universe (2017) 70% 60% 50% 40% 30% 20% 10% 0% 62.4% 61.3% 60.8% 50.0% 49.1% 47.0% 42.9% 42.6% 42.1% MEBL BAFL BOP MCB BAHL UBL NBP HBL ABL 16% 14% 12% 10% 8% 6% 4% 2% 0% 14.3% 14.4% 89% 8.9% 8.3% 7.7% 4.2% 4.6% 1.5% 1.5% BAHL MEBL BAFL ABL UBL HBL MCB NBP BOP Meezan Bank (MEBL) 13

14 Favorable Deposit Mix to Limit Cost of Deposits Bank s low cost of deposit is a result of its high Current Account Savings Account (CASA) ratio, and more importantly its non remunerative CA ratio that stand at ~75% and ~35% (as of Dec 2017) of deposits, respectively. CASA of the Bank has grown at a 5 Year ( ) CAGR of 27% compared to banking sector average of 19%. Similarly, MEBL s CA deposits have grown at a 5 Year ( ) CAGR of 32% compared to banking sector average of 18%. Notably, the growth in CASA and CA is also faster than MEBL s total deposit growth CAGR of 24% in the same period. We forecast CASA to increase to ~77% by 2022 (~75% as of Dec 2017), as we expect the bank to keep its focus on growing CA and increase them to ~39% of total deposits by MEBL has increased its CA ratio on average by 190bps per year in the period while for the period , we expect MEBL to increase CA ratio by 80bps per year on average in order to maintain its low cost of deposit and boost Net Interest Margins (NIMs). Moreover, non applicability of MDR regulation on islamic banking also supports MEBL to maintain a low cost of deposit. This is because islamic banks are not required to increase rates offered on savings account proportionate to the change in policy rates, which conventional banks are required to do. Capitalizing on this, MEBL has managed to maintain the lowest cost of deposit in the industry and as interest rates rise, MEBL has the potential to further increase the gap on cost of deposits with other conventional banks. During 2017, MEBLs average cost of deposit was ~2% compared to banking sector average of ~3.5%. CASA 5-Year ( ) CAGR vs Topline Banking Universe 30% 27.3% 35% 31.8% 25% 20% 15% 10% 5% 0% 21.4% 18.5% 16.9% 16.0% 15.7% 15.5% 14.7% 10.6% MEBL BOP BAHL NBP UBL HBL MCB ABL BAFL CA 5-Year ( ) CAGR vs Topline Banking Universe 30% 25% 20% 15% 10% 5% 0% 23.2% 2% 18.7% 16.9% 15.5% 14.6% 12.0% 11.0% Meezan Bank (MEBL) % MEBL BOP HBL UBL MCB BAHL NBP BAFL ABL

15 Best Positioned to Benefit from Monetary Tightening Cycle Interest rates in Pakistan have risen by 275bps since the beginning of calendar year 2018 and as external sector and fiscal woes continue, we expect the regulator to go ahead with further monetary tightening. As per our forecasts, we see a further 125bps hike by Dec 2019, taking the policy rate to 9.75%. In this rising interest rate environment, banks with high Rate Sensitive Assets (RSA) and low Rate Sensitive Liabilities (RSL), along with less long term bonds (to reduce repricing risk) will benefit most. However in case of falling interest rates, the inverse is true, that is, banks with less RSA and high RSL will be the winners. As of Dec 2017, MEBL has one of the highest proportion of RSA as its asset mix consists of high proportion of Advances (ADR of ~62%; mostly variable) and Bai Muajjal (~22% of deposits as of Dec 2017; an instrument yielding slightly less than T bills and used mostly in lending to FI). While significant proportion (~70%) of its investments in Sukuk certificates/bonds do not have a repricing risk as they are linked with ihkib Kibor (or average 6M T bill rate). BiM Bai Muajjal, isafinancial i instrument inwhich h bank sell Sukkukstoother k financiali institutioni i at an agreed credit price at the time of sale and such proceeds are received at the end of credit period. Combined with lowest cost of deposit and low sensitivity of MEBL s deposits to interest rates, we believe that the Bank is well protected from downside of monetary tightening. The said features make MEBL stand out in terms potential NIMs expansion (82bps during ) when compared with peer banks (average 52bps during ). 20). MEBL s Net Interest Margins (NIMs) 4.5% 4.0% 3.5% 3.0% 2.5% 35% 3.5% 35% 3.5% 3.3% 4.1% 4.1% 20% 2.0% 2016A 2017A 2018E 2019F 2020F Meezan Bank (MEBL) 15

16 Higher NIMs to Boost ROE and ROA Given monetary tightening, Net Interest Margins (NIMs) of the bank will expand to ~4.1% in 2020 compared to 3.3% during 2017, in our view. Resultantly, Net Interest Income (NII) of the Bank will grow at a 5 Year ( ) CAGR of 21% compared to previous 5 Year ( ) 17) CAGR of 15%. To recall, interest rates in Pakistan have been on a declining trend for the last three years, up until Rising NII of the Bank will boost Return on Equity (ROE) as well as Return on Assets (ROA). We expect ROE to average 25% during compared to average 21% during Similarly, ROA is expected to average 1.12% during compared to average 1.07% in period However, in case interest rates do not increase, we expect MEBL s ROE to average 23% ( ) assuming the policy rate stays at8.5%. MEBL Return on Equity vs Topline Banking Universe (Avg ) MEBL Return on Assets vs Topline Banking Universe (Avg ) 30% 25% 20% 15% 10% 5% 24.7% 21.1% 17.8% 16.7% 16.6% 16.3% 15.2% 12.2% 7.0% 2% 2% 1% 1% 0% 1.9% 1.4% 1.2% 1.1% 1.1% 1.1% 0.9% 0.7% 0.5% 0% MEBL BAHL MCB ABL BAFL BOP UBL HBL NBP 0% MCB ABL BAFL MEBL UBL BAHL HBL BOP NBP Meezan Bank (MEBL) 16

17 Expanding Branch Network Supporting Growth We believe continuous investment in branch network plays an important role in supporting MEBLs expanding deposit base. MEBL has added 291 branches in the last 5 years which translates into 58 branches per year on average third highest rate of increment among all the listed banks. As of Dec 2017, MEBL has the 8 th largest branch network among the listed banks, totaling 601 (~5% share in the banking sector), while we expect the bank to add close to 200 branches in the next 5 years. In percentage terms, branch network of MEBL has grown at a 5 Year ( ) CAGR of 14% compared to islamic banking and banking sector branch growth CAGR of 19% and 6% respectively. The faster growth in branches of islamic banking as a whole has been led by islamic banking branches of conventional banks which have depicted a 5 Year ( ) growth CAGR of 26%. We believe, going forward the emphasis of the bank will remain on branch network expansion because one of the impediments to growth in islamic banking is the lack of extensive branch network to cater to needs of customers, as per a State Bank of Pakistan (SBP) survey. Henceforth, MEBL is expected to add close to 200 branches in the next 5 years, to grow its network to approximately 800 branches by MEBL Number of Branches Deposits per Branch in Topline Banking Universe ( as of Jun, 2018) Rsmn 1,500 1, NBP MEBL BAHL HBL BOP BAFL UBL MCB ABL Meezan Bank (MEBL) 17

18 Cost Efficiencies to Kick in as Branch Expansion Normalizes Like similar growing banks, MEBL has exhibited hb rapid growth in expenses. 5 Year ( ) expense growth CAGR stands at 18% compared to industry average of 12%. Banks of a similar size, namely, BAHL, BAFL and AKBL have an expense growth CAGR ( ) of 18%, 10% and 10% respectively. The highh growth in expensescan be attributed t to bank s continuous branch expansion (291 added d in last five years) as well as investments in Alternative Delivery Channels (ADC). However, despite being one of the fastest growing banks, MEBL s cost to income ratio of 59% is just slightly above industry average of 56% in Amongst similar il sized dbanks, BAFL, BAHL and AKBL have cost to income ratios of 64%, 58% and 67%,respectively. With branch expansion estimated to slow down, we expect MEBL s admin expenses to grow at a 5 Year ( ) CAGR of 15%, slower than 18% witnessed in period Similarly, we expect cost to income ratio for the same period to go down to average 51% during compared to average of 59% in the period , despite our forecasts of higher inflation in the said period (Average ~7.8% compared to 5.2% in period ). Considering it takes around two years for a new branch to breakeven, we expect rapid branch expansion (291 added in five years ) in previous years to contribute significantly to the bottom line going forward. Similarly, investments in ADC should add to profitability as well. Notably, MEBL s MEBLs admin cost per branch of ~Rs28mn is also less than the banking sector average of ~Rs36mn making MEBL one of the most cost efficient banks in operating a branch. Meezan Bank (MEBL) 18

19 Admin Expenses per Branch & Cost to Income Ratio MEBL Admin Exp. per Branch vs Topline Banking Universe (2017) MEBL s Cost to Income Ratio Rsmn BAFL HBL BAHL NBP MEBL UBL BOP MCB ABL 65% 60% 55% 62.3% 58.4% 56.1% % 49.7% 50% 45% 40% 35% 30% 2016A 2017A 2018E 2019F 2020F Cost to Income Ratio of MEBL vs Topline Banking Universe (2017) Inflation Expectation 70% 60% 50% 40% 30% 20% 10% 64.1% 58.4% 58.2% 57.4% 53.4% 53.0% 48.8% 48.0% 46.7% 8.0% 7.0% 6.0% 50% 5.0% 4.0% 3.0% 2.0% 1.0% 2.9% 4.2% 4.0% 7.0% 7.5% 0% BAFL MEBL BAHL NBP HBL ABL BOP MCB UBL 0.0% FY16A FY17A 2018A 2019E 2020F Source: Topline Research Meezan Bank (MEBL) 19

20 Al Meezan Inv. Mgmt. MEBL s Subsidiary & Largest Pvt. Sector AMC MEBL holds ~65% of Al Meezan Investment Management, which h is Pakistan s largest private Asset Management Company with total assets under management of Rs93bn as of Jun It has the distinction of being the only AMC in Pakistan offering dedicated shariah compliant investment solutions with one of the largest investor base of around 80,000 investors. It also manages the largest Open End Equity Fund and Voluntary Pension Fund (VPS) in the private sector with Asset Under Management (AUMs) of Rs39bn and Rs9bn respectively. AUMs of Al Meezan have grown at a 5 Year ( ) CAGR of 16%. Moreover, just like its parent MEBL itself, Al Meezan also has a distinguished place in Pakistan's AMC with an exclusive mandate of providing shariah compliant investment solutions to its clients. As of Jun 2018, AL Meezan hd had amarket share of 15.4% of total industry AUMs. BasedonDCF,wevalueAl Meezan Investment Management at around ~Rs7.4bn against which MEBL has a share of 65% (~Rs4.1/share). This is significantly higher than the carrying value of Rs63mn on MEBL s books. Al-Meezan Investment t Management AUMs Rsbn FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Source: Topline Research Meezan Bank (MEBL) 20

21 Good prospects for Pakistan AMCs Pki Pakistan mutual funds industry isgrowingi rapidly. Industry s Assets Under Management (AUMs) have grown at a 5 Year ( ) 18) CAGR of 11% to reach Rs604bn as of FY18. The industry s growth has been riding on favorable macro economic tailwinds, as GDP growth increased from 3.7% in FY13 to 5.8% in FY18. Similarly, rising awareness of benefits of professional fund management has encouraged investments in mutual funds units offering superior return. As, we expect GDP growth to slow down to 4.7% in FY19 and expect a further 125bps hike in interest rates in 2019 combined with dull market sentiment, we expect AUMs growth to slow down to 10% which is slightly below our M2 growth assumption of 12%. Resultantly, we also forecast Al Meezan s AUMs growth at 5 Year CAGR ( ) of 10% during , compared to previous 5 Year ( ) CAGR of 16% as high base effect and industry dynamics normalize the high growth trajectory witnessed in prior years. Industry Assets Under Management (AUMs) Rsbn Source: Topline Research FY14 FY15 FY16 FY17 FY18 Meezan Bank (MEBL) 21

22 Addressing SME and Consumer Segments MEBL has been at the forefrontf of consumer financing, placing itself amongst top three in Auto financing and leader in Mortgage Financing. During 2017, active contracts in Auto financing increased by 5000 to 23000, with the portfolio growing by 45.6% to ~Rs27bn (~6% of Advances). Similarly, during 2017, the Bank grew its Mortgage financing portfolio by 28% to ~Rs12bn (~3% of Advances), the largest increase in absolute disbursement (~Rs2.6bn) for a single year. The Bank has also been striving to develop and grow its Small and Medium Enterprises (SME) portfolio. As of 2017 end, the Bank s outstanding SME portfolio amounted to Rs14.2bn depicting a 35% growth since last year. The Bank has sought advisory services from International Finance Corporation (IFC) to help MEBL revamp its existing SME financing segment into a robust business model. MEBL Mortgage and Auto Portfolio o o as a % of Industry Mortgage, SME, and Auto Financing Portfolio o o 20% 16% 18% % 14% 16% Rsbn Mortgage Financing SME Auto Loans % % 4% % Mortgage Auto Loans Meezan Bank (MEBL) 22

23 Digital Expansion the Way Forward Branchless Banking (BB) and Alternative Distributionib i Channels (ADC) are amongst the key areas of development that the bank is looking towards for potential growth opportunities. Apart from traditional branches, the bank also provides banking services via ADC which include ATM, Internet Banking, Mobile App, SMS Banking, etc. During 2017, the bank added 35 new ATMs taking the total to 580. Simultaneously, bank s internet and Mobile App subscribers doubled during the said year while with over 270,000 downloads MEBL s Mobile App is also one of the most trending apps in the category. Approximately 79% of Pakistan's adult population p is unbanked due to reasons that may include lack of physical branches and stringent KYC. Hence, providing banking service to the said segment offers significant growth potential. Therefore, being one of the twelve banks to have a branchless banking license enables MEBL to offer branchless banking services. MEBL intends to launch Branchless Banking proposition by 1Q2019. The Bank also intends to increase agent footprint via strategic partnerships and believes that Branchless Banking platform will enable onboarding of wallet accounts instantaneously. The Bank is also engaged with leading Fintech players of Pakistan and has acquired open banking platform to onboard new Fintechs. Bank has already provided complete incubation to two Fintechs, namely Fonepay and Foreepay. Other Fintechs that the Bank is working with include Batwa, Creditfix and Easypay. MEBL has already launched NetConnect Keenu, an e commerce payments gateway directly connected with Meezan Bank accounts via Internet Banking. Meezan Bank (MEBL) 23

24 Fee Income to Continue Supporting Bottom Line MEBL has been striving i to develop its digitali infrastructure, hence, we expect Fee Income of the bank to grow at a 5 Year ( ) CAGR of 12.5% as investments into Digital Banking front start to pay off. Within Fee Income, bank s ATM cards/other cards, Trade Commission and General banking/transactions contribute approximately 31%, 19% and17%, respectively. We expect income from ATM cards/other cards and income from general banking/transactions to increase in line with deposit growth as greater market share fuels growth in supplementary products. The bank had also taken several measures, such as imposing fee on Check Book issuance, which had boosted MEBL s fee income in prior years. With the high base effect from previous years, fee income growth will slow down to a 5 Year ( ) CAGR of 12.5% as against last 5 year ( ) CAGR of 34%. Fee Income Breakup (2017) 22% 17% General Banking 11% 19% 31% ATM/Other Cards Trade Commisions Commisions from FI Others Source: Topline Research, Company Accounts Meezan Bank (MEBL) 24

25 Competition Dwarfed by MEBL s Brand & Size MEBL leads islamic banking by a big margin, with its closest competitor, within fully fledged islamic banks (Bank Islami Pakistan ), having a market share of ~8.5% compared to MEBL s share of ~35%. In fact, the remaining four fully fledged Islamic Banks combined (Dubai Islamic, Bank Islami, Al Baraka,MCB Islamic Bank),occupya meager ~24%market share. Similarly, with 602 branches as compared to 764 branches for the rest of the four fully fledged Islamic Banks, MEBL commands a ~44% share in total branch network of fully fledged Islamic Banks. Furthermore, MEBL also commands an above average deposit per branch, wherein, MEBL has a deposit per branch of Rs1,175mn in Jun 2018 compared to average of Rs889mn in full fledged islamic banks and Rs688mn in islamic banking operations of conventional banks. In fact the bank has the third highest deposit per branch in Pakistan s banking sector. Additionally, as discussedd earlier, MEBL has established a brand for itself wherein it is not only considered d the primary shariah compliant bank of Pakistan. It caters to niche segment of society (giving it a competitive advantage over Islamic banking branches of conventional banks and Conventional banks as a whole). It is perceived as a bank providing great customer satisfaction through its robust physical and digital infrastructure giving it an edge over other fully fledged islamic banks which aremuch smaller. Branch Network of Full Fledge Islamic Banks (as of Jun 2018) Branches Market share MEBL % BIPL % DIB % Al Baraka* % MIB % Total 1,486, *1Q2018 Deposits of Full Fledge Islamic Bank (as of Jun 2018) Rsbn Deposits Market Share MEBL % DIB % BIPL % Al Baraka* 97 9% MIB 52 4% Total 1,204, *1Q2018 Meezan Bank (MEBL) 25

26 Risks Lack of Investment Avenues and CAR Limitation Being an islamic bank comes with its own risks. Islamic banks can not invest in regular risk free investment avenues (T bills, Govt. Bonds etc) which are not shariah complaint. This limits the investment vehicles available to islamic banks and is a significant drawback. Pakistan s government has been unable to offer considerable shariah compliant Ijarah Sukuk issues to support the growth in islamic banking. Resultantly, MEBL s Investment to Deposit Ratio (IDR) has fallen to 18% as opposed to commercial banks average of 67%. Going forward we do not expect any large issue of GOP Ijarah Sukuk and hence forecast IDR to average 20% in the next 5 years. Moreover,duetolackofavenuesofriskfreeinvestmentsandrapidgrowththebankhasbeenexperiencing,weflagregulations regarding Capital Adequacy Ratio (CAR) to be of particular concern. As of Dec 2017, CAR of the bank stands at 12.9% as against minimum required ratio of (as at Dec 2017). However, the bank recently issued a Tier 1 Capital and raised Rs7bn in order to strengthenitscapitalwhichisestimatedtoaddupto1.75pptstocar. Yet, given our growth projections, we believe that the bank will have to either arrange for more capital and/or curtail dividends in order for it to maintain its growth trajectory. Other key risks include 1) lower than expected interest rate hikes,2)fasterthanexpectednplaccretionand3)greaterthen expected slow down in economy. MEBL CAR vs. Topline Banking Universe (2017) 25% 20% 22.4% MEBL IDR vs. Topline Banking Universe (2017) 82.3% 79.1% 75.1% 68.8% 68.8% 16.5% 65.9% 16.3% 16.0% 61.3% 15.1% 1% 13.9% 15% 13.8% 60% 12.9% 47.8% 10% 5% 0% ABL NBP MCB HBL UBL BAHL BAFL MEBL Meezan Bank (MEBL) 26 90% 75% 45% 30% 15% 0% 17.7% UBL ABL NBP HBL BAHL MCB BAFL BOP MEBL

27 Valuation Meezan Bank (MEBL) 27

28 MEBL Rated Buy with a Price Target of Rs123/share We have a Buy stance on MEBL with a target price of Rs123/share. We have used a blend of JustifiedPBVandPEratioto arrive at our target price for valuing the unconsolidated bank at Rs119/share.On theotherhand,wehaveuseddiscountedcashflow (DCF) to value AL Meezan Investment Management which adds Rs4/share to our valuation. This implies a consolidated value of Rs123/share for MEBL. ForJustifiedPBVwehaveusedGordonGrowthModel(ROE g/k g), whereas for Justified PE ratio we have taken projected market PE and applied 17% premium (last 5 year historical premium over the market). For cost of equity, we have assumed a risk free rate of 10% equivalent to 10 year Pakistan Investment Bond (PIB) rate and a market risk premium of 7%. MEBL is growing at a robust trajectory, where we expect the bank to exhibit 3 Year ( ) profitability CAGR of 28% compared to Topline Banking Universe average CAGR of 14% for the period. Similar sized banks such as BAHL and BAFL also have a lower profitability CAGR of 20% for the period , highlighting superior performance of MEBL. MEBL 2019E ROE vs Topline Banking universe MEBL 3-Yr ( ) Prof. CAGR vs Topline Banking Universe 30% 28.0% 26.0% 25% 20% 15% 10% 5% 0% 22.5% 18.2% 17.3% 17.1% 16.6% 16.3% 12.7% 12.5% 30% 25% 20% 15% 10% 5% 21.8% 20.4% 19.6% 15.9% 15.5% 11.3% 8.8% 2.2% 0% MEBL BAHL MCB BAFL ABL UBL BOP HBL NBP MEBL ABL BAHL BAFL MCB NBP BOP HBL UBL Meezan Bank (MEBL) 28

29 MEBL Rated Buy with a Price Target of Rs123/share Valuation Assumption for Meezan Bank (Unconsolidated) Fair Value Weightage Rupees P/B* % 96 P/E** 92 25% 23 Target Price (Excluding Al Meezan Inv.) 119 Assumptions Sustainable ROE (Average 5 year; ) 25% Growth rate (Retention Ratio x ROE) 12% Cost of Equity (k; Using CAPM) 17% Average Book Value (Rs/share; ) 22) 48.3 Justified PBV (R0E g/k g) 2.6x Average Market PE ( ) 7.0x Average Premium to Market (5 Year historical) 17% Justified PE (Average ) 8.2x Average Earnings (Rs/share; ) 11.3 Source: Topline Research *Justified Price to book **Based on 5 year historical Premium to market PE Honda Atlas Cars (HCAR) 29 Meezan Bank (MEBL)

30 Premium Multiples Justified by Growth and Superior Returns MEBL s ROE is estimated to average 25% for the period In comparison, average ROE of Topline Banking Universe during is estimated to be considerably lower at 15%. In the same period, comparably sized banks, which include BAHL and BAFL, are also expected to generate average ROE of 21% and 17%, respectively, lower than MEBL s MEBLs average ROE. MEBL is amongst the cheapest banks in Topline Banking Universe (ex State Owned banks) on the basis of 2022F ROE adjusted for PBV. 2022F ROE Adjusted for PBV of Topline Universe (ex State Owned Banks) ROE 2022F PBV 2022F Adjusted ROE BAFL 15.0% % ABL 16.9% % MEBL 25.1% % BAHL 20.3% % UBL 15.1% % MCB 18.8% % HBL 11.5% %, PSX Notably, MCBs PBV/PE was on average 2.7x/9.8x during with average ROE of 20%+, which was considered to be a high growth period. We believe MEBL will also pass through the same phase where it will generate 20%+ ROE and will trade at high PE & PBV. Meezan Bank (MEBL) 30

31 MEBL Provides Highest Upside in Topline Banking Universe MEBL offers a potential upside of ~38%, highest expected return in the Topline Banking Universe. In addition to MEBL s unconsolidated value, we also include Al Meezan Investment Management and use sum of the parts valuation to value MEBL. MEBL Upside vs Topline Banking Universe Target Price Upside MEBL % BAFL 65 31% ABL % BAHL 95 18% MCB % BOP 12 1% UBL 156 1% HBL 152 0% NBP 47 10% Source: Company Accounts, PSX, Topline Research Honda Atlas Cars (HCAR) 31 Meezan Bank (MEBL)

32 Al Meezan Investment Management Valuation We have valued Al Meezan based on DCF. Our assumptions include agrowth rate of 10% in Al Meezan s AUMs which is slightly below our assumption of M2 growth. We have also used a discount rate of 17%. Valuation of Al Meezan Investment management is at around ~Rs7.4bn which includes Rs3.2bn in Cash and Investments. MEBL has a share of 65% in Al Meezan which implies a value of Rs4.8bn for the Bank. This is significantly higher than the carrying value of Rs63mn on MEBL s books. Thus, Al Meezan adds Rs4/share in SOTP value of MEBL which is around ~3% of its consolidated value. Al Meezan DCF Based Valuation Key Assumptions AUMs growth 10% Management Fee Growth 10% Discount Rate 17% Terminal Growth 2% DCF Value (Rsmn) 4,172 Investments (Rsmn) 3,159 Cash (Rsmn) 52 Total Value (Rsmn) 7,383 Value per share for MEBL (Rs) 4.1 Source: Topline Research Key Financial information of Al Meezan Investment Management Rsmn Assets 2,057 2,449 3,163 4,191 3,728 Liabilities NtA Net Assets 1,468 2,012 2,699 3,491 2,880 Revenue 1,115 1,347 1,415 2,346 1,646 Profit/Loss , Source: Company Accounts Meezan Bank (MEBL) 32

33 MEBL: Financial Snapshot Unconsolidated dincome Statement t t Assumptions Rsbn 2016A 2017A 2018E 2019F 2020F 2016A 2017A 2018E 2019F 2020F Interest Earned Discount Rate (year end) 5.75% 5.75% 8.50% 9.75% 9.75% Interest Expensed Deposit Growth 20.0% 19.0% 18.0% 18.0% 18.0% Net Interest Earned Advances Growth 48.0% 34.0% 11.0% 18.0% 18.0% Non Interest Income NIMs 3.5% 3.3% 3% 3.6% 4.1% 4.1% Gross Income Operating Expenses Key Ratio PBT Before Prov. & Taxes A 2017A 2018E 2019F 2020F Provisions/Reversals (0.18) Return on Loans 5.8% 5.9% 7.3% 9.4% 9.4% Profit Before Taxation Cost of Deposits 34% 3.4% 33% 3.3% 48% 4.8% 71% 7.1% 71% 7.1% Profit After Taxation Net Interest Margin (NIM) 3.5% 3.3% 3.6% 4.1% 4.1% EPS (Rs) NII/ Gross Income 76.0% 73.3% 78.5% 80.6% 81.1% Source: Company Account, Topline Research Cost / Income Ratio 62.3% 58.4% 56.1% 50.1% 49.7% Deposit Growth 19.5% 19.4% 18.2% 18.0% 17.8% Credit Growth 48.1% 34.2% 10.8% 18.0% 17.8% Investment Growth 69.2% 8.4% 11.5% 32.1% 24.0% Return on Equity (ROE) 20.7% 20.2% 22.2% 26.0% 25.8% Unconsolidated Balance Sheet Return on Assets (ROA) 0.9% 0.9% 1.0% 1.2% 1.2% Rsbn 2016A 2017A 2018E 2019F 2020F Advances to Deposit (ADR) 56.7% 63.7% 59.7% 59.7% 59.7% Paid up Capital Investment to Deposit to (IDR) 23.1% 17.7% 7% 16.7% 18.7% 19.7% Shareholders' Equity Due from FI as a % of Deposits 22.9% 21.9% 25.5% 23.0% 22.0% Total Equity CASA 74.9% 75.0% 76.1% 76.6% 77.1% Deposits , Gross Infection Ratio 2.1% 1.5% 1.5% 1.7% 2.0% Total Liabilities , , Net Infection Ratio 0.4% 0.5% 0.5% 0.4% 0.4% Net Advances CARTier % 9.94% 11.7% 11.5% 11.2% Net Investments CAR 12.9% 12.9% 14.2% 13.7% 13.2% Total Assets , , Number of Branches Source: Company Account, Topline Research Source: Company Account, Topline Research Honda Atlas Cars (HCAR) 33 Meezan Bank (MEBL)

34 Pakistan Banks: Comp Sheet Name Symbol Share Price (Rs) Sep 28, 2018 Market Cap. (US$mn) 2018E Quarter Ended Jun 2018 PE PBV Div. Yield ROAE* ROAA CA to Deposits NIMs** Total Coverage Ratio NPL to Loans CARⱶ Cost NII/ Loan Deposit to Growth Growth ADR IDR total Income income Branches Deposits (Rsbn) Advances (Rsbn) Investment (Rsbn) MCB Bank MCB 201 1, % 16% 15% 1.5% 38% 40% 4.0% 94% 8% 16% 52% 36% 17% 53% 65% 74% 1,360 1, Habib Bank HBL 151 1, % 10% 0.7% 37% 3.6% 92% 8% 16% 71% 12% 1% 46% 67% 78% 1,751 2, United Bank UBL 154 1, % 12% 0.8% 40% 3.7% 88% 8% 15% 49% 19% 5% 51% 60% 67% 1,381 1, Allied Bank ABL % 18% 1.1% 38% 2.8% 98% 4% 22% 52% 9% 9% 46% 93% 69% 1, National Bank NBP NM 0.6 0% NM NM 39% 3.2% 100% 14% 16% 52% 10% 10% 41% 71% 62% 1,523 1, Meezan Bank MEBL % 22% 1.0% 37% 3.8% 133% 2% 13% 55% 20% 19% 57% 18% 77% Bank AL Habib BAHL % 21% 0.9% 41% 3.8% 146% 1% 14% 59% 43% 15% 59% 59% 81% Bank AL Falah BAFL % 18% 1.1% 46% 4.0% 96% 3% 14% 59% 17% 2% 72% 53% 71% Stan. Chartered SCBPL % 19% 2.1% 46% 4.2% 101% 11% 19% 41% 7% 6% 38% 70% 67% Habib Metro Bank HMB % 14% 0.9% 27% 2.9% 93% 8% 17% 51% 14% 15% 38% 73% 72% Faysal Bank FABL % 15% 1.0% 33% 3.4% 89% 8% 16% 64% 38% 11% 75% 46% 69% Bank of Punjab BOP % 19% 0.9% 25% 3.1% 90% 12% 14% 58% 19% 12% 61% 37% 83% Askari Bank AKBL % 18% 0.8% 29% 3.3% 95% 8% 12% 61% 19% 9% 55% 52% 74% Soneri Bank SNBL % 13% 0.6% 29% 2.2% 78% 6% 13% 74% 12% 4% 69% 65% 70% Bankof Khyber BOK % 11% 0.6% 22% 2.8% 90% 5% 20% 62% 61% 12% 54% 57% 87% Bank Islami BIPL % 3% 0.2% 34% 3.5% 72% 4% 14% 117% 7% 5% 61% 27% 101% Silk Bank SILK % 12% 0.9% 23% 5.4% 78% 6% 11% 62% 20% 23% 75% 24% 67% JS Bank JSBL % 7% 0.3% 24% 2.4% 79% 2% 13% 77% 80% 19% 74% 47% 70% Samba Bank SBL % 7% 0.8% 25% 2.3% 97% 4% 20% 70% 50% 16% 83% 89% 88% Total Listed Banks 11, % 12% 0.8% 36% 3.4% 94% 7% 14% 57% 21% 9% 52% 61% 72% 12,265 13,009 6,815 7,936 *Excluding revaluation surplus ; **Average earning assets include advances, investments and lending to FI; ⱶlatest Reported as on Dec Meezan Bank (MEBL) 34

35 Pakistan Islamic Banking Sector Meezan Bank (MEBL) 35

36 Islamic Banking Sector An Overview First islamic i banking license in Pakistan was given in 2002 and since then four banks (Dubai Islamic, Bank Islami, Al Baraka, MCB Islamic bank) have been added to the list of fully fledged islamic banks. Among these banks, MEBL is the largest, commanding a total market share of ~36% in islamic banking. At the same time, sensing the growth potential in the industry, 16 conventional banks have also opened up islamic windows, grabbing a share of 40% in islamic banking deposits and taking share of islamic deposits to ~15% of total banking sector deposits. Islamic banking has grown its deposits at a 10 Year CAGR ( ) of 25%. Moving forward we expect the 3 Year CAGR ( ) for Islamic Banking deposit growth to be 17%, taking share of Islamic deposits to 18%, compared to SBP target of 20% share by Although lack of investment opportunities remains an issue, the introduction of Bai Muajjal (an instrument offering yield slightly less than a 6M T Bill) has given Islamic Banking sector an avenue to park their excess liquidity. The banks have been using this facility heavily as indicated by ~22% deposits parked in Bai Muajjal in addition to IDR of ~18% and ADR of ~62%. Islamic Banking Deposit Rsbn 2,000 1,600 1, Islamic Banking Advances Rsbn 1,300 1, Jun' Jun'-1 18 Meezan Bank (MEBL) 36

37 Significant Pent up Demand for Islamic Banking Il Islamic banking has huge potential ti for growth within Pkit Pakistan due to inherent religious i inclinations of populace. As perastudy conducted by SBP and Department for International Development in 2014, ~95% and ~98% of the of the banked and unbanked respondents, respectively, believed in prohibition of interest. Similarly, ~88% and ~93% of the banked and unbanked respondents, respectively, believed interest charged and given by the banks to be prohibited. Moreover, the study also showed that 74% of the banked respondents were willing to shift to Islamic Banking. However, major reason for not shifting was lack of Islamic banking branches in their vicinity. The same survey estimated effective demand for islamic products to be 65% for households and 26% for corporate. A considerable proportion of respondents even indicated paying more for shariah compliant products (62% of banked and 43% of unbanked respondents). Hence, the said survey proves that there is huge unmet demand for islamic banking in Pakistan. Financial inclusion in Pakistan remains very low with just 21% (as per recent available data) of adult population having accounts with formal financial institutions. SBP target is to increase the proportion of adult population with bank accounts to 50% by 2020 through both conventional and Islamic Banking opening up room for growth without having to cut competitors share. Respondents of SBP Survey Willing to Switch to Islamic Banking Not Sure 17% No 9% Yes 74% Islamic Banking Sector Branch Network 3,000 2,500 2,000 1,500 1, Jun'-18 Meezan Bank (MEBL) 37

38 About the Bank Meezan Bank (MEBL) 38

39 About the Bank MEBL was incorporated in 1997 as Islamic Investment Bank. In 2002, Bank was granted Pakistan s first ever Islamic Commercial Banking license by SBP and simultaneously the bank acquired Pakistan operations of Society General. The bank also acquired HSBC operations in Pakistan in MEBL is currently the 7th largest commercial bank and the largest Islamic Bank of Pakistan with a deposit base Rs673bn (as of Dec 2017) and total branch network of 601 (as of Dec 2017) branches in 151 cities. Key Shareholders of the Bank include Noor Financial Investment Co. Kuwait, Pakistan Kuwait Investment Company (Joint venture between government of Pakistan and Kuwait) and Islamic Development Bank with a share of 39%, 30% and 9%, respectively, as of Jun The Bank has a long term rating of AA and a short term rating of A1+. Shareholding Pattern (as of Jun 2018) IDB 9% others 21% Noor Financial 39% Pak Kuwait 30% Source: Company Presentation, Topline Research Honda Atlas Cars (HCAR) 39 Meezan Bank (MEBL)

40 About the Bank MEBL s total assets have grown at a 5 year CAGR of 23% whereas total branch network of the bank has grown from 310 branches in 2012 to 601 branches as of Dec Similarly, MEBL s deposits have grown at a 5 year CAGR of 24% much faster than industry growth of 13%. MEBL (as of Dec 2017) has a ~5.4% market share in Banking Sector deposits and 35.7% in Islamic banking. The Bank s ADR and IDR are currently at ~62% and ~18%, respectively. The Bank also has a customer base of over 1.8mn (as of Dec 2017) and is ranked as top bank for maximum number of point of sale transactions of 1 link. The Bank also owns 65% share in Al Meezan Investment Management Limited which is the largest private sector AMC in Pakistan with AUMs of ~Rs93bn. The banks has received various recognitions at local as well as international forums. Few important recognitions include Best Il Islamic Bank of Pkit Pakistan and Best Il Islamic RtilB Retail Bank in the world by institutes such as CFA society Pakistan, Pakistan Banking awards, Islamic Finance awards, The Banker and Asia money etc. Honda Atlas Cars (HCAR) 40 Meezan Bank (MEBL)