Meezan Bank to triple
Wednesday, May 30, 2007
KARACHI: Meezan Bank,
"We have received requests to set up
affiliate companies in Arab countries where we will keep a minority
shareholding and manage the banks," Irfan Siddiqui, the chief executive, said in an interview at the
bank's head office in
Meezan wants to extend its lead in
"Conventional banks have expanded
regionally into the Gulf to capture trade finance and remittances flow,"
said Yasir Syed, an investment analyst at AKD
Remittances from Pakistanis living overseas increased 23 percent to a record $4.45 billion in the 10 months that ended on April 30, central bank data show. Pakistani exports rose to a record high of $13.9 billion in the same period and imports climbed to a high of $25 billion, according to the Federal Bureau of Statistics.
"The market for Islamic finance is ripe in the most unexpected places across the country," said Siddiqui, who has been at the helm since the bank was licensed in 2002.
Meezan's shares, which have risen 33 percent this year, fell 1.1 percent to 26 rupees on the Karachi Stock Exchange on May 29.
Meezan will increase the number of branches to 95 by December, he said. The bank opened 34 branches in 2006.
The Islamic finance industry in
Islamic law bans the payment and receipt of
interest, prohibits investment in businesses like gambling and alcohol, and
stresses profit sharing.
Six companies, including Dubai Islamic Bank and Emirates Global Islamic Bank, hold Islamic banking licenses and operate 108 branches, according to central bank data.
Thirteen conventional banks, including
National Bank of
Meezan had 37.5 billion rupees in deposits as on March 31, accounting for almost half the total deposits at Islamic banks.
"We have had deposit growth of 60 percent a year without any major advertising and we expect this to continue," Siddiqui said.
Meezan will raise its capital to 6 billion rupees by December 2008 through "internal generation," from 4 billion rupees, Siddiqui said.
Plans to raise additional capital may be considered if "major overseas expansion plans" are finalized, he said, without giving details.
The bank's shareholders will be partners in the new ventures overseas, Siddiqui said.
Meezan Bank is 30 percent owned by Pak Kuwait Investment, an
alliance between the governments of
The bank's profit almost tripled to 604 million rupees in the year that ended on Dec. 31, from 223 million rupees in 2002, according to its annual report.
Lending to companies accounts for 65 percent of the bank's 28 billion rupees in loans, Siddiqui said. One-fifth of its loans are for cars and homes, and 15 percent are to small companies, he said.
The bank also hopes to introduce agriculture credit and microfinance products, he said.
"If we hadn't been supported by economic growth, we couldn't have achieved even half the growth we have," said Siddiqui.