July 7th, 2025
VIS Credit Rating Company Limited has reaffirmed the entity ratings of Meezan Bank Limited (‘MEBL’ or the ‘Bank’) at ‘AAA/A-1+’ (Triple A/A-One Plus). Medium to long term rating of ‘AAA’ indicates highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short-term rating of ‘A1+’ denotes strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’ The rating of MBL’s Basel 3 Compliant Additional Tier-1 Instrument (Sukuk 2) and Tier-2 Instrument (Sukuk 4) have been reaffirmed at ‘AA+’ (Double A Plus) and ‘AAA’ (Triple A) respectively. Previous rating action was announced on June 28, 2024.
Meezan Bank Limited is the largest and strategically important Islamic commercial bank in Pakistan, which commenced operations in March 2002, after being issued the first ever Islamic commercial banking license by the State Bank of Pakistan (SBP). Noor Financial Investment Company Limited, Pakistan Kuwait Investment Company (Pvt.) Limited and Islamic Development Bank are the sponsor shareholders of MEBL.
The assigned ratings reflect MEBL’s position as the largest Islamic bank in Pakistan. The ratings are further supported by the Bank’s strong sponsor profile. The Bank’s Shariah governance framework ensures full alignment of its operations, products, and services with Islamic principles. Meezan Bank’s commitment to Shariah compliance is central to its identity and strengthens stakeholder trust across the Islamic finance ecosystem.
The Bank’s asset base has expanded significantly, with a well-diversified financing portfolio and a conservative investment strategy concentrated in government-backed securities. Credit risk remains well-managed, aided by disciplined underwriting, proactive provisioning, and low infection ratios relative to the industry. Although there has been a moderate rise in non-performing financings, these remain within manageable limits and are backed by sufficient provisioning.
The Bank’s deposit base remains granular and is characterized by an industry-leading low-cost current and savings accounts. Liquidity indicators are strong, reflecting sound structural buffers and ample availability of liquid assets. Funding diversity and low depositor concentration further enhance financial stability.
Meezan’s profitability has remained resilient despite a declining policy rate environment. While the easing monetary policy stance has compressed spreads, the Bank’s focus on non-markup income, particularly fee-based and forex revenues, provides an important cushion. Efficiency ratios remain favorable, benefiting from scale advantages and ongoing cost rationalization, even amid continued investments in technology and branch expansion.
Capitalization remains high, with strong internal capital generation and healthy Tier-1 and total capital adequacy ratios, which are comfortably above regulatory thresholds. Going forward, although margin pressures may continue amid low interest rates and regulatory pricing limitations, the Bank’s solid funding base, diversified sources of non-funded income, and sound risk management are expected to support profitability of the Bank.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at [email protected].
Source: https://vis.com.pk/Home/PressRelease?mRatingId=00438501024