Meezan Bank

Sovereign Sukuk great for Meezan's fortunes

Meezan Bank had a huge influx of funds this year and Muhammad Asad, executive vice president and chief investment officer of Al Meezan Investment Management, stated that it is because of the Government of Pakistan's Sukuk program, which has enjoyed enormous local demand. He added that the sukuk enjoyed high levels of demand because it is tradable and offers competitive returns to the investors.
At this point Al Meezan is Pakistan's largest private sector asset management company.

Meezan Bank becomes advisor to first-ever Islamic Short-term Sukuk

Meezan Bank is the first Advisor and Lead Arranger for the first ever short-term Sukuk for Kot Addu Power Company Limited (KAPCO), bringing another "first" to Pakistan’s Islamic Banking Industry.
The introduction of short-term Sukuk by Meezan Bank imprints the opening of another much needed avenue for Islamic Mutual Funds which faces a scarcity of short-term tradable instruments. The Sukuk collected an overwhelming response from investors, mainly consisting of Islamic mutual funds.

Meezan Bank 1H profits double

Meezan banks bottom-line almost doubled during 1HCY11.
Since the returns from investments accounted for 57% of the top-line in 1HCY11, the bank has benefited from higher investment in Ijarah Sukuk.
But beginning with June 30, the banks financing portfolio fell to Rs48 billion.

Meezan Bank: A Role Model

Meezan Bank Ltd (MBL) has emerged as the tenth largest bank in terms of branches. She is the first full-service Islamic bank of Pakistan. Its subsidiary, Al Meezan Investment has also attained the status of the largest private sector asset management company with Rs25 billion assets under management.
Globally and locally Islamic banking in one of the fastest growing segments of the banking sector and without being prejudiced towards conventional banks, it is evident that during difficult times globally Islamic banks have performed better as compared to conventional banks mainly because each transaction in Islamic banking is backed by assets and is designed to cater a real economic transaction. On top of this more prudent risk evaluation and willingness to help the client avoiding a default in difficult times keeps the delinquency rate low.

Banking, Islamic style

Muhammad Raza, Head of Commercial Banking at Meezan Bank, outlines the difference succinctly by using an often-quoted reference from the Quran that allows trade but forbids ‘riba’ or usury. He explains that riba is a form of a transaction that is impermissible in Islam.
The transaction is straightforward: the lender extends a certain amount of money to the borrower and the two enter a contract that obligates the borrower to return the principal amount and additional interest payments.
In the Islamic version of a loan, the lender can only claim the amount extended to the borrower and not more, while a gift, or donation, is a unilateral transfer or irreversible promise of transfer of asset.
Furthermore, he emphasises that the sale of an asset or claiming periodic payments for renting an asset is within the boundaries prescribed by Islamic law.
By using combinations of sale contracts, rental contracts, unilateral promises and equity contracts, Islamic finance has managed to mirror the cash flows of most conventional banking products. To stay competitive, Raza acknowledges that rental payments are linked to the more conventional interbank interest rate.



Local currency government sukuk in Pakistan

Reuters reported on 7 April that Pakistan has shortlisted six banks to manage a local currency sukuk to be mandated according to sources Reuters spoke with, those are ABN Amro Pakistan, Dubai Islamic Bank, Meezan Bank, MCB Bank, Standard Chartered Bank Pakistan, United Bank Ltd. Last month the finance minster, Salman Shah, indicated the issuance till 30 June, the end of the fiscal year. A banker familiar with the plans estimates the size at least to be Rps 20 bn (USD 318 mn).


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