Meezan Bank Ltd.

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MEBL posted 4QCY22 consolidated EPS of PKR9.08, up a sharp 92% YoY and 40% QoQ – an impressive earnings beat. This is led primarily by a massive 40% QoQ jump in net spread income – offsetting a fresh general provisioning charge. MEBL is top banking p...

Pakistan banks may report sequentially flat profit in 4QCY22 (up 19% YoY). There is room for minor dividend misses. NII growth should be offset by normalized fx income and high opex. Asset quality is not a concern, for now. Valuations are very cheap....

SBP has reduced the additional CET-1 requirements for systemically important banks by 50bps. This is beneficial for HBL, NBP and MEBL, allowing more breathing room on capital. This is likely motivated by recent mark-to-market hits on bonds and IFRS-9...

Strong core business performance leads to earnings beat. Margin expansion theme remains intact. Robust deposit franchise together with superior asset quality round up our liking.

Normalized tax to lead to strong lift in earnings in 3Q. Expect margin expansion to continue alongside swift balance sheet growth. Best-in-class names are MEBL and UBL.

The outlook for banks has improved, margins are rising and asset quality is resilient. Valuations are already much below normal cyclical troughs with significant room for ROE lift off. Our top picks are UBL (high c 20% D/Y), BAFL (strong growth prosp...