Bank with the Best

Annual Report 2018

From the First Islamic Bank in Pakistan

On January 31, 2002, Meezan Bank was granted the first ever Islamic Commercial
Banking license by the State Bank of Pakistan.

Mr. Irfan Siddiqui, Founding President & CEO, received the license from Dr. Ishrat
Hussain, then Governor of State Bank of Pakistan. Meezan Bank became the pioneer
of Islamic Banking in the country, adding a new chapter to the history of the
financial industry.
 To the Best Bank in Pakistan

Alhamdulillah, on November 9, 2018, Meezan Bank was recognized as the Best Bank
in Pakistan by Pakistan Banking Awards - the most prestigious banking recognition in
the country. Our journey from Pakistan’s first Islamic Bank and the smallest bank in
the country to Pakistan’s Best Bank spanned just 16 years. The guidance of Allah ( )
and the trust and confidence of our shareholders and customers have propelled us
on this journey, for which we are grateful.

Our foundations have been built on absolute compliance to Shariah and a focus on
customer service through which we endeavour to deliver the best banking experience
to our customers.

We would like to reflect, through these pages, on our strengths, direction and
purpose. Today, Meezan Bank stands on the threshold of exciting changes to the
way our customers bank with us and we invite you to join us in appreciating our past
and looking forward to an exciting future.

ABOUT PAKISTAN BANKING AWARDS

Pakistan Banking Awards are recognized as the most credible and prestigious
awards in the banking industry of Pakistan. The initiative was launched in 2016 by the
Institute of Bankers Pakistan, in partnership with The DAWN Media Group and
A. F. Ferguson & Co., under the patronage of the State Bank of Pakistan.

A prestigious jury reviews the award submissions and decides on the winner for each
award category. The jury for 2018 comprised
Dr. Ishrat Hussain, Advisor to the Prime Minister on Institutional Reforms & Austerity,
Government of Pakistan, Head of Jury;
Mr. Atif Bajwa, Former President & CEO, Bank Alfalah;
Mr. Atif R. Bukhari, Former President & CEO, UBL Bank;
Dr. Farrukh Iqbal, Dean and Director, IBA;
Mr. Naveed A. Khan, Former President & CEO, Faysal Bank;
Mr. Ehsan Ali Malik, Director & CEO, Pakistan Business Council;
Dr. Zeelaf Munir, Managing Director & CEO, English Biscuit Manufacturers Pvt Ltd.
Contents
Vision 04 Report of the Board Audit Committee 133
Mission 04 Shariah Supervisory Board Report 134
Our Culture 07 Shariah Supervisory Board Report (Urdu) 141
Quaid’s Concept of Islamic Banking 09 Statement of Sources and Uses
Key Figures at a Glance 22 of Charity Fund 142
Six Years’ Horizontal Analysis 24 Review Report to the Members 143
Six Years’ Vertical Analysis 25 Statement of Compliance with
Financial Analysis 26 Listed Companies Code of Corporate
Cashflow Statement 28 Governance Regulations, 2017 144
Summary of Cashflow 29 Statement of Internal Controls 146
Calendar of Major Events 30 Notice of Annual General Meeting 147
Monthly Market Statistics of
Unconsolidated Financial Statements
Meezan Bank’s Share 30
Auditors’ Report to the Members 152
Our Institution Statement of Financial Position 157
Corporate Profile 34 Profit and Loss Account 158
Credit Rating 34 Statement of Comprehensive Income 159
Shareholders 35 Statement of Changes in Equity 160
Awards & Recognition 36 Cash Flow Statement 161
History of Meezan Bank 38 Notes to and forming part of the
Board of Directors 44 Financial Statements 162
Shariah Supervisory Board 47 Statement showing
Corporate Information 49 written-off loans (Annexure 1) 229
Board Committees 50
Organization Structure 52
Management Team 53
Management Committees 54
Corporate Governance 56
SWOT Analysis 59
Strategy and Resource Allocation 60
Risk & Opportunity Report 61
Business Continuity Plan 63
Products & Services 64

The Year in Review

Chairman’s Review 74
Directors’ Report to the Members 76
Directors’ Report to the Members (Urdu) 93
Annexure to the Directors’ Report 94
Statement of Value Added and Distributed 95
Allocation of Income and Expenses to
Remunerative Depositors’ Pool 96
Statement of Inventory 97
Statement of Financing Portfolio Income 97
Business and Operations Review 98
Marketing & Corporate Communication 120
Corporate Social Responsibility 122
Sustainability Report 125
Consolidated Financial Statements Additional Information
Auditors’ Report to the Members 232 Pattern of Shareholding 318
Statement of Financial Position 237 Categories of Shareholders 319
Profit and Loss Account 238 Guidelines and Policies 320
Statement of Comprehensive Income 239 Correspondent Banking Network 326
Statement of Changes in Equity 240 Branch Network 332
Cash Flow Statement 241 Glossary 346
Notes to and forming part of the Dividend Mandate Form 355
Financial Statements 242 Proxy Form 357
Statement showing
written-off loans (Annexure 1) 314
Vision
Establish Islamic banking as banking of
first choice...

Mission
To be a premier Islamic bank, offering a
one-stop shop for innovative value-added
products and services to our customer
within the bounds of Shariah...
Our Culture
Core Values: Shariah compliance, Integrity, Professionalism, Innovation, Service
Excellence, Social Responsibility.
Staff: Committed, motivated and professionally trained employees who
are empathic to their customers’ needs.
Brand Personality: A sober and established, strong, empathic, professional
person; who is an extremely loyal and dependable friend and business
partner, and is committed to offering comprehensive value-based
Shariah-compliant financial solutions.
Relationships: Our relationships are long-term. We recognize and value
our customers’ needs above all and strive to ensure their fulfillment. All
customers are treated with professionalism and in a friendly manner. It
is our endeavour to ensure that they receive efficient and timely service.
The Meezan Bank experience is a unique one.
Quaid’s Concept
of Islamic Banking
“I shall watch with keenness the work of your Research Organization in evolving
banking practices compatible with Islamic ideas of social and economic life. The
economic system of the West has created almost insoluble problems for humanity and
to many of us it appears that only a miracle can save it from disaster that is now facing
the world. It has failed to do justice between man and a man and to eradicate friction
from the international field. On the contrary, it was largely responsible for the two
world wars in the last half century. The Western world, inspite of its advantages of
mechanisation and industrial efficiency is today in a worse mess than ever before in
history. The adoption of Western economic theory and practice will not help us in
achieving our goal of creating a happy and contended people.

We must work our destiny in our own way and present to the world an economic
system based on true Islamic concept of equality of manhood and social justice. We
will thereby be fulfilling our mission as Muslims and giving to humanity the message of
peace which alone can save it and secure the welfare, happiness and prosperity of
mankind.”

Quaid-e-Azam Mohammad Ali Jinnah

Founder of the Islamic Republic of Pakistan

On the occasion of the Opening Ceremony of The State Bank of Pakistan on July 1, 1948.
HIGHLIGHTS - YEAR 2018
PAKISTAN BANKING AWARDS - 2018 LARGEST DEDICATED ISLAMIC BANKING NETWORK

66O BRANCHES
BEST BANK IN MORE THAN
IN PAKISTAN 18O CITIES

2,219,500
CUSTOMERS
*
Years of
Meezan Bank
in Pakistan
2002 - 2018

* TOTAL NUMBER OF CUSTOMERS AS OF DECEMBER 31, 2018

EMPLOYEES AND GLOBALLY RECOGNIZED AS

AMBASSADORS OF ISLAMIC BANKING
+ BEST ISLAMIC BANK

10,000
FOR TREASURY MANAGEMENT
BY ISLAMIC FINANCE NEWS (IFN) MALAYSIA

HIGHEST NUMBER
OF MASTERCARD AND VISA
2IBFT RECEIVING
nd
LARGEST BANK
POS TRANSACTIONS
IN PAKISTAN
AMONG
1LINK
MEMBER BANKS
 8.96 785 938
PROFIT AFTER TAX DEPOSITS TOTAL ASSETS
Rs. Rs. Rs.

BILLION BILLION BILLION

DEPOSIT GROWTH

7.67 18
EARNINGS PER SHARE
Rs.
%

GROWTH IN DIGITAL PRESENCE

1
TRADE BUSINESS VOLUME
Rs. LARGEST FOLLOWING ON
TRILLION IN PAKISTAN’S BANKING INDUSTRY

ENTITY CREDIT RATINGS 1st DEDICATED ISLAMIC BANKING YOUTUBE CHANNEL

IN THE COUNTRY

AA+/A1+ BY JCR - VIS 194 %

GROWTH
SINCE 2017
What makes us the Best
Being a Strong Retail Bank
Meezan Bank has always maintained a strong focus on
developing its Retail Banking network and services. We
realize that to achieve our Vision of establishing ‘Islamic
banking as banking of first choice...’ – we must provide
access to Islamic banking to the people of Pakistan
through a large and geographically diverse branch
network and a wide range of Shariah-compliant
products and services. This belief and strategy has
resulted in exemplary growth in our Retail Banking
portfolio and the Bank has grown into a prominent and
successful High Street Bank over the years.

Meezan Bank’s retail offerings range from deposit

products that cater to individual customers, ranging
from teenagers to senior citizens, as well as large
corporates and small businesses. Our Consumer
Finance proposition is the strongest and most diverse in
the industry; we provide financing for household
durables, motorcycles, private and commercial vehicles,
housing and even Hajj and Umrah – all focused on
providing ‘a one-stop shop for innovative value-added
products and services to our customers within the
bounds of Shariah’ - a key element of our Mission
statement.

Our Alternate Distribution Channels include a very

user-friendly Internet banking facility, a top-of-the-line
Mobile Banking App, a range of debit cards offering
discounts and privileges for all categories of customers
and a country-wide network of over 600 ATMs - all
geared to give our customers a superior banking
experience.
What makes us the Best

Our Unfailing Service

We exist for and because of our customers. The quality
of our service is the first indication of how much we care
for them. With banking becoming increasingly competitive
and all banks offering similar products - the differentiating
factor among organizations that excel and those that
don’t, lies in how much they care for their customers and
this mindset reflects in their service.

Meezan Bank has put systems and a service culture in

place that ensure consistent delivery of a superior
banking experience to its customers across all banking
channels. A Service Board, chaired by the Bank’s
President & CEO, monitors the quality of service being
provided to both internal and external customers across
the network. Evaluation techniques such as Mystery
Shopping and Customer Satisfaction Surveys provide
direct feedback to the Service Board.

Customer service isn’t just about being courteous to

your customers – it is also about providing them a
professional experience of the highest standard. At
Meezan Bank, we strongly believe that our customers
have every right to expect us to be competent,
courteous and thorough and that we should give them
an even better experience, something that we would
expect if we were standing on the other side of the
counter.
What makes us the Best

Being the Fastest Growing

Bank In Pakistan
With a Vision to ‘Establish Islamic banking as banking of
first choice…’, Meezan Bank started operations in 2002
as the first Islamic Commercial Bank in Pakistan and, at
that time, was the smallest among the 36 banks
operating in the country. Over the last 16 years, our
network has grown from 4 branches to 660 branches in
over 180 cities across the country - a CAGR of 38% p.a.
and our deposits have grown from Rs 5 Billion to Rs 785
Billion - a CAGR of 37% p.a. This is the fastest any bank
has ever grown in the country and Meezan Bank has
achieved this while maintaining strong profitability.

Meezan Bank is now the 7th largest bank in terms of

deposits and the 8th largest in terms of branch network.
We also have one of the highest ‘Deposits per branch’ in
the banking industry. The Bank has grown from strength
to strength and has now been recognized as the Best
Bank in Pakistan. We respect and value the trust of our
customers and stakeholders and are constantly striving
to meet and exceed their expectations.
What makes us the Best

Shariah Compliance
Meezan Bank maintains the highest levels of Shariah
compliance in all its products, processes, services and
management practices. We are the first Islamic Bank in
Pakistan to establish a dedicated and independent
Shariah Audit Department to ensure Shariah compliance
in our operations as prescribed by our Shariah
Supervisory Board and State Bank of Pakistan.

Meezan Bank has developed its own risk based Shariah

audit rating models, in-depth audit programs, manuals
and checklists – and these have gained global recognition
– to the extent that the prestigious standard setting body
for Islamic Financial Institutions, AAOIFI, has selected
Meezan Bank to establish a regional working group for
revamping and redrafting of its global standard on
Internal Shariah Review and Audit.

At Meezan Bank, Shariah compliance is not a business

need, but part of our belief system. We feel, very
strongly, that our customers trust us to ensure that we
invest their money in a Shariah-compliant manner and
give them halal returns. For us, complete adherence to
Shariah principles in all that we do is simply a way of life.
What makes us the Best
Embracing Technology
At Meezan Bank, we continuously strive to capitalize on
technology to improve the convenience, security and
quality of banking experience of our customers. The
Bank is continuously working on improving its
technology backbone and platforms - not only to secure
and streamline our banking operations but also to
provide our customers with banking solutions that give
them secure and seamless accessibility to the Bank’s
products and services across all touchpoints.

Meezan Bank has introduced a variety of banking

conveniences that have transformed the user
experience. We have one of the widest range of debit
cards that generate the highest number of transactions
of any bank in Pakistan. By focusing on technology to
make banking easier, we are able to ensure that from our
extremely user-friendly Internet banking service to the
class-leading Mobile Banking App and from instant
biometric verification on ATM machines to the fastest
debit card activation, our customers get the best
technology, from the Best Bank in Pakistan.
 Key Figures at a Glance
2018 2017 2016 2015
2018 2014
2017 2013 2016 2015 2014
Profit and Loss Account Profit and Loss Account
Profit on financing, investments and placementsReturn on financing, investments
48,625 36,427 and placements
31,027 48,625
32,893 36,427
28,487 31,027
23,016 32,893 28,487
Profit on deposits and other dues expensedReturn on deposits and other15,684
20,457 dues expensed 13,239 20,457
15,181 15,684
15,539 13,239
12,658 15,181 15,539
Net Spread earned Net Spread earned 28,168 20,743 17,788 28,168
17,712 20,743
12,948 17,788
10,358 17,712 12,948
Fee, commission, forex and other income Fee, commission, forex
6,887and other5,622
income 4,102 6,887
3,617 5,622
3,387 1,971 4,102 3,617 3,387
Dividend income and gain / (loss) on securitiesDividend income and575 gain / (loss)2,002
on securities 1,622 971 575 2,002
1,432 1,539 1,622 971 1,432
Total income Total income 35,630 28,367 23,512 35,630
22,300 28,367
17,767 23,512
13,868 22,300 17,767
Operating and other expenses Operating and other
19,670expenses 16,832 14,787 19,670
13,313 16,832
10,402 14,787
8,128 13,313 10,402
Profit before Provisions Profit before Provisions
15,960 11,535 8,725 15,960
8,987 11,535
7,365 5,7408,725 8,987 7,365
Provisions and write offs - net Provisions and write offs - net1,283
1,168 (218) 1,168
535 1,283
467 93 (218) 535 467
Profit before Taxation Profit before Taxation
14,792 10,252 8,943 14,792
8,452 10,252
6,898 5,6478,943 8,452 6,898
Taxation Taxation 5,830 3,939 3,381 5,830
3,429 3,939
2,328 1,6903,381 3,429 2,328
Profit after Taxation Profit after Taxation
8,962 6,313 5,562 8,962
5,023 6,313
4,570 3,9575,562 5,023 4,570

Statement of Financial Position Statement of Financial Position

Islamic Financing and Related Assets Islamic Financing and Related
512,564 Assets
420,029 311,530 512,564 175,712
207,569 420,029127,623
311,530 207,569 175,712
Total Assets Total Assets 937,915 788,808 662,055 937,915 440,149
535,864 788,808332,095
662,055 535,864 440,149
Total Deposits Total Deposits 785,477 667,181 559,398 785,477 378,744
468,281 667,181288,433
559,398 468,281 378,744
Share Capital Share Capital 11,692 10,629 10,027 11,692 10,027
10,027 10,629 10,027
10,027 10,027 10,027
Sub-ordinated sukuk Sub-ordinated sukuk
14,000 7,000 7,000 14,000
- 7,000
- - 7,000 - -
Total Shareholders Equity Total Shareholders Equity 35,077
40,333 30,474 40,333 23,890
26,347 35,077 18,913
30,474 26,347 23,890
Market Capitalization Market Capitalization
108,022 71,321 67,422 108,022 47,129
45,875 71,321 39,488
67,422 45,875 47,129
Number of Staff Number of Staff 10,069 9,551 9,168 10,069 7,429
8,581 9,551 6,2489,168 8,581 7,429
Number of Branches Number of Branches 660 601 571 551 660 428601 351 571 551 428

Ratios Ratios
Book Value (Rs) Break up Value (Rs)
34.50 32.31 28.07 34.54
25.49 32.31 17.8628.07
23.21 25.49 23.21
Market Value per Share (Rs) Market Value per 92.39
Share (Rs) 67.10 67.24 92.39
45.75 67.10 39.3867.24
47.00 45.75 47.00
Price to Book Value Ratio Price to Book Value2.68
Ratio 2.08 2.40 1.792.67 2.08 2.20 2.40
2.02 1.79 2.02
Cash Dividend (%) Cash Dividend (%)35.00 30.00 30.00 35.00
30.00 30.00 20.0030.00
27.50 30.00 27.50
Stock Dividend (%) Stock Dividend (%)
10.00 - - -10.00 - - - - - -
Right Shares at par (%) Right Shares at par (%)- 6.00 - - - -6.00 - - - -
Price Earning Ratio Price Earning Ratio
12.05 12.07 12.34 12.05
9.13 12.07 9.9712.34
10.31 9.13 10.31

Earning per Share (Rs) Earning per Share 7.67

(Rs) 5.56 5.45 5.017.67 5.56 3.95 5.45
4.56 5.01 4.56
Net Spread to Gross Return (%) Net Spread to Gross Return (%)
57.93 56.94 57.33 57.93
53.85 56.94 45.0057.33
45.45 53.85 45.45
Profit Before Tax to Gross Income (%) Net Profit Before Tax to Gross23.27
26.37 Income (%) 24.33 26.37
22.55 23.27 21.2924.33
20.71 22.55 20.71
Profit After Tax to Gross Income (%) Net Profit After Tax to Gross Income
15.98 14.33 (%) 15.13 15.98
13.40 14.33 14.9215.13
13.72 13.40 13.72
Operating & Other Expenses to Operating & Other Expenses to
Income before provisions (%) Income before provisions
55.21 (%)
59.34 62.89 55.21
59.70 59.34 58.6162.89
58.55 59.70 58.55

Financing / Advances to Deposit Ratio-ADRFinancing

(%) / Advances
65.3to Deposit Ratio-ADR 55.7
63.0 (%) 44.365.3 63.0 44.2 55.7
46.4 44.3 46.4
Investment to Deposit Ratio - IDR (%) Investment to Deposit
15.75Ratio - 17.87
IDR (%) 23.27 15.75
31.24 17.87 52.5623.27
30.12 31.24 30.12
Capital Adequacy Ratio (%) Capital Adequacy14.55
Ratio (%) 12.89 12.91 14.55
10.98 12.89 12.4812.91
11.88 10.98 11.88
Return on Average Assets (%) Return on Average1.04
Assets (%) 0.87 0.93 1.031.04 0.87 1.30 0.93
1.18 1.03 1.18
Return on Average Equity (%) Return on Average Equity (%)19.26
23.77 19.58 23.77
20.00 19.26 22.3119.58
21.35 20.00 21.35

(Comparitive information has been reclassified / rearranged for better presentation)

22 ANNUAL REPORT 2018

 Rupees in Million Profit After Taxation
Rupees in Million
2011 2010 2009
2012 20082011 2010 2009 2008 8,962
9,100

8,400

17,809 12,094 9,911

21,592 6,605
17,809 12,094 9,911 6,605 7,700

8,666 6,606 4,970

11,385 3,0888,666 6,606 4,970 3,088
7,000
6,313
6,300
5,562
9,143 5,488 4,941
10,207 3,5179,143 5,488 4,941 3,517 5,600
4,570
5,023
4,900
1,347 2,056 1,332
1,413 8021,347 2,056 1,332 802 4,200
3,957

1,158 419 266986 (95)

1,158 419 266 (95)
3,500
2,800

11,648 7,963 6,539

12,606 4,224
11,648 7,963 6,539 4,224 2,100
1,400
5,903 4,340 3,267
6,925 2,5155,903 4,340 3,267 2,515 700

5,745 3,623 3,272

5,681 1,7095,745 3,623 3,272 1,709 0
2013 2014 2015 2016 2017 2018

1,389 1,497 1,532

451 7171,389 1,497 1,532 717
4,356 2,126 1,740
5,230 9924,356 2,126 1,740 992 Total Deposits
Rupees in Million
965 477 715
1,722 371 965 477 715 371
845,000
3,391 1,649 1,025
3,508 6213,391 1,649 1,025 621 785,477
780,000

715,000
667,181
650,000

70,377 60,265 46,985

88,678 41,521
70,377 60,265 46,985 41,521 585,000
559,398

203,439 157,389 126,677

278,084 88,110
203,439 157,389 126,677 88,110 520,000
468,281
169,429 131,070 100,333
229,892 70,234
169,429 131,070 100,333 70,234 455,000

8,030 6,983 6,650

9,034 4,9268,030 6,983 6,650 4,926 390,000
378,744

- - - - - - - - - 325,000
288,433

13,781 11,080 9,184

16,563 5,975
13,781 11,080 9,184 5,975 260,000

13,956 11,801 10,467

27,147 10,581
13,956 11,801 10,467 10,581 195,000

4,900 4,364 3,669

5,953 3,1704,900 4,364 3,669 3,170 130,000

275 222 201

310 166 275 222 201 166 65,000

0
2013 2014 2015 2016 2017 2018

Total Assets
16.60 15.38 13.67
17.14 12.87
16.60 15.38 13.67 12.87
Rupees in Million
17.38 16.90 15.74
30.05 21.48
17.38 16.90 15.74 21.48 960,000
937,915

1.05 1.10 1.15

1.75 1.671.05 1.10 1.15 1.67 900,000

840,000

10.00 - -
15.00 -10.00 - - - 780,000
788,808

12.50 15.00 5.00

11.00 8.60
12.50 15.00 5.00 8.60 720,000
662,055
660,000
- - - - 35.00 - - - 35.00 600,000

4.63 8.24 9.72

8.59 17.614.63 8.24 9.72 17.61
535,864
540,000

480,000
440,149
420,000

3.75 2.05 1.62

3.50 1.223.75 2.05 1.62 1.22 360,000
332,095
300,000
51.34 45.38 49.85
47.27 53.25
51.34 45.38 49.85 53.25 240,000

21.44 14.59 15.12

21.80 13.57
21.44 14.59 15.12 13.57 180,000

120,000
16.69 11.32 8.91
14.62 8.49
16.69 11.32 8.91 8.49 60,000

0
2013 2014 2015 2016 2017 2018

50.68 54.50 49.96

54.93 59.54
50.68 54.50 49.96 59.54
Share Capital
Rupees in Million
41.5 46.0 46.8
38.6 59.141.5 46.0 46.8 59.1 12,000 11,692

58.13 41.94 23.21

66.32 20.68
58.13 41.94 23.21 20.68 10,027 10,027 10,027 10,027
10,629
10,000
14.89 12.41 12.77
14.08 9.58
14.89 12.41 12.77 9.58
1.88 1.16 0.95
1.46 0.801.88 1.16 0.95 0.80
8,000

27.28 16.28 13.52

23.12 10.62
27.28 16.28 13.52 10.62 6,000

4,000

2,000

0
2013 2014 2015 2016 2017 2018

ANNUAL REPORT 2018 23

 Six Years’ Horizontal Analysis
Statement of Financial Position / Profit & Loss Account

Rupees in Million
Statement of Financial Position
2018 18 Vs 17 2017 17 Vs 16 2016 16 Vs 15 2015 15 Vs 14 2014 14 Vs 13 2013 13 Vs 12
Assets % % % % % %
Cash and balances with treasury banks 65,022 1 64,556 15 56,037 28 43,686 47 29,729 4 28,583 49
Balances with other banks 8,255 69 4,896 (59) 12,021 8 11,175 103 5,501 55 3,554 (8)
Due from financial institutions 184,815 26 147,229 14 129,115 28 101,079 11 90,766 1,119 7,443 1,389
Investments 123,743 4 119,238 (8) 130,156 (11) 146,305 28 114,089 (25) 151,614 (1)
Islamic financing and related assets 512,564 22 420,029 35 311,530 50 207,569 18 175,712 38 127,623 44
Fixed assets 13,129 16 11,364 34 8,470 11 7,596 32 5,748 8 5,327 13
Intangible assets 625 22 512 13 455 (1) 461 (12) 525 96 268 59
Deferred tax asset 983 - - - - - - (100) 815 522 131 (76)
Other assets 28,779 37 20,984 47 14,271 (21) 17,993 4 17,264 129 7,552 (6)
937,915 19 788,808 19 662,055 24 535,864 22 440,149 33 332,095 19
Liabilities
Bills payable 23,751 38 17,175 25 13,757 36 10,100 38 7,298 46 4,993 63
Due to financial institutions 36,408 (1) 36,813 15 32,006 135 13,610 (12) 15,465 36 11,375 (38)
Deposits and other accounts 785,477 18 667,181 19 559,398 19 468,281 24 378,744 31 288,433 25
Sub-ordinated Sukuk 14,000 100 7,000 - 7,000 - - - - - - -
Deferred tax liabilities - (100) 8 (99) 1,362 247 393 - - - - -
Other liabilities 37,946 48 25,554 42 18,058 5 17,133 16 14,752 76 8,381 (12)
897,582 19 753,731 19 631,581 24 509,517 22 416,259 33 313,182 20

Net Assets 40,333 15 35,077 15 30,474 16 26,347 10 23,890 26 18,913 14

Represented by:
Share capital 11,692 10 10,629 6 10,027 - 10,027 - 10,027 - 10,027 11
Reserves 15,161 13 13,369 38 9,700 13 8,588 18 7,289 105 3,551 29
Unappropriated profit 13,526 31 10,340 23 8,422 21 6,942 17 5,958 38 4,330 17
(Deficit) / Surplus on revaluation
of assets (46) (106) 739 (68) 2,325 194 790 28 616 (39) 1,005 (6)
40,333 15 35,077 15 30,474 16 26,347 10 23,890 26 18,913 14
Profit & Loss Account

2018 18 Vs 17 2017 17 Vs 16 2016 16 Vs 15 2015 15 Vs 14 2014 14 Vs 13 2013 13 Vs 12

% % % % % %
Profit on financing, investments
and placements 48,625 33 36,427 17 31,027 (6) 32,893 15 28,487 24 23,016 7
Profit on deposits and other
dues expensed (20,457) 30 (15,684) 18 (13,239) (13) (15,181) (2) (15,539) 23 (12,658) 11
Net spread earned 28,168 36 20,743 17 17,788 - 17,712 37 12,948 25 10,358 1
Fee, commission, forex and
other income 6,887 23 5,622 37 4,102 13 3,617 7 3,387 72 1,971 39
Dividend income and gain on securities 575 (71) 2,002 23 1,622 67 971 (32) 1,432 (7) 1,539 56

Total income 35,630 26 28,367 21 23,512 5 22,300 26 17,767 28 13,868 10

Operating and other expenses (19,670) 17 (16,832) 14 (14,787) 11 (13,313) 28 (10,402) 28 (8,128) 17
Profit before Provisions 15,960 38 11,535 32 8,725 (3) 8,987 22 7,365 28 5,740 1
Provisions and write offs - net (1,168) (9) (1,283) (689) 218 (141) (535) 15 (467) 402 (93) (79)
Profit before taxation 14,792 44 10,252 15 8,943 6 8,452 23 6,898 22 5,647 8
Taxation (5,830) 48 (3,939) 17 (3,381) (1) (3,429) 47 (2,328) 38 (1,690) (2)
Profit after taxation 8,962 42 6,313 14 5,562 11 5,023 10 4,570 15 3,957 13

(Comparitive information has been reclassified / rearranged for better presentation)

24 ANNUAL REPORT 2018

Six Years’ Vertical Analysis
Statement of Financial Position / Profit & Loss Account

Rupees in Million
Statement of Financial Position
Assets 2018 % 2017 % 2016 % 2015 % 2014 % 2013 %

Cash and balances with treasury banks 65,022 7 64,556 8 56,037 8 43,686 8 29,729 7 28,583 9
Balances with other banks 8,255 1 4,896 1 12,021 2 11,175 2 5,501 1 3,554 1
Due from financial institutions 184,815 20 147,229 19 129,115 20 101,079 19 90,766 21 7,443 2
Investments 123,743 13 119,238 15 130,156 20 146,305 27 114,089 26 151,614 46
Islamic financing and related assets 512,564 55 420,029 53 311,530 47 207,569 39 175,712 40 127,623 38
Fixed assets 13,129 1 11,364 1 8,470 1 7,596 2 5,748 1 5,327 2
Intangible assets 625 - 512 - 455 - 461 - 525 - 268 1
Deferred tax asset 983 - - - - - - - 815 - 131 -
Other assets 28,779 3 20,984 3 14,271 2 17,993 3 17,264 4 7,552 1
937,915 100 788,808 100 662,055 100 535,864 100 440,149 100 332,095 100
Liabilities
Bills payable 23,751 3 17,175 3 13,757 2 10,100 2 7,298 2 4,993 2
Due to financial institutions 36,408 4 36,813 5 32,006 5 13,610 3 15,465 4 11,375 4
Deposits and other accounts 785,477 84 667,181 84 559,398 84 468,281 87 378,744 86 288,433 86
Sub-ordinated Sukuk 14,000 1 7,000 1 7,000 1 - - - - - -
Deferred tax liabilities - - 8 - 1,362 - 393 - - - - -
Other liabilities 37,946 4 25,554 3 18,058 3 17,133 3 14,752 3 8,381 3
897,582 96 753,731 96 631,581 95 509,517 95 416,259 95 313,182 95
Net Assets 40,333 4 35,077 4 30,474 5 26,347 5 23,890 5 18,913 5

Represented by:
Share capital 11,692 1 10,629 1 10,027 2 10,027 2 10,027 2 10,027 3
Reserves 15,161 2 13,369 2 9,700 2 8,588 2 7,289 2 3,551 1
Unappropriated profit 13,526 1 10,340 1 8,422 1 6,942 1 5,958 1 4,330 1
(Deficit) / Surplus on revaluation
of assets (46) - 739 - 2,325 - 790 - 616 - 1,005 -
40,333 4 35,077 4 30,474 5 26,347 5 23,890 5 18,913 5
Profit & Loss Account
2018 % 2017 % 2016 % 2015 % 2014 % 2013 %
Profit on financing, investments
and placements 48,625 87 36,427 82 31,027 85 32,893 87 28,487 86 23,016 87
Profit on deposits
and other dues expensed (20,457) (37) (15,684) (36) (13,239) (35) (15,181) (41) (15,539) (47) (12,658) (48)
Net spread earned 28,168 50 20,743 47 17,788 48 17,712 47 12,948 39 10,358 39
Fee, Commission, forex and
other income 6,887 12 5,622 13 4,102 11 3,617 10 3,387 10 1,971 7
Dividend income
and gain on securities 575 1 2,002 5 1,622 4 971 3 1,432 4 1,539 6
Total income 35,630 63 28,367 64 23,512 64 22,300 59 17,767 53 13,868 52
Operating and other expenses (19,670) (35) (16,832) (38) (14,787) (40) (13,313) (36) (10,402) (31) (8,128) (31)
Profit before Provisions 15,960 28 11,535 26 8,725 24 8,987 24 7,365 22 5,740 22
Provisions and write offs - net (1,168) (2) (1,283) (3) 218 1 (535) (1) (467) (1) (93) -
Profit before taxation 14,792 26 10,252 23 8,943 24 8,452 23 6,898 21 5,647 21
Taxation (5,830) (10) (3,939) (9) (3,381) (9) (3,429) (9) (2,328) (7) (1,690) (6)
Profit after taxation 8,962 16 6,313 14 5,562 15 5,023 13 4,570 14 3,957 15

(Comparitive information has been reclassified / rearranged for better presentation)

ANNUAL REPORT 2018 25

 Financial Analysis
Statement of Financial Position
2018 was the year of significant achievements for the Bank. The The Bank’s equity also increased to Rs 40 billion as compared to
total assets of the Bank crossed Rs 900 billion and grew by 19% to Rs 35 billion last year. The Board has recommended the final cash
reach Rs 938 billion in 2018 from Rs 789 in 2017. dividend of Rs 2.00 per share ( 20%) bringing the total payout to
Rs 3.50 per share (35%) as Rs 1.50 per share i.e. 15% interim cash
Financing portfolio of the Bank crossed half a trillion benchmark dividend was paid alongwith issuance of 10% Bonus Shares.
closing at Rs 513 billion – a growth of 22%. The Bank increased its
financing exposure in all sectors. The Bank’s Corporate, SME / Another milestone during the year was the successful issuance of
Commercial and Consumer financing increased by 14%, 44% & Additional Tier I Sukuk of Rs 7 billion that further strengthened the
41% respectively. Advance to deposits ratio (ADR) of the Bank Bank’s Capital Adequacy Ratio. The Bank’s CAR now stands at
grew to 65%, with all the risk acceptance parameters well within 14.55% - well above the minimum mandatory level of 11.90%.
limits. The Bank has one of the lowest infection ratio of 1.3%. The
Bank’s coverage ratio stood at 139% in 2018 - one of the highest During the year, the Bank further expanded its foot prints and
in the Banking industry in Pakistan. opened 59 new branches bringing the total number of branches to
660 in 181 cities. The Bank remains committed to continuously
The Bank’s investments and placements (under Bai-Muajjal) raise service quality standards and set new benchmarks in
increased to Rs 309 billion as compared to Rs 266 billion in 2018. customer care to ensure service delivery across all channels.
Although, there has been no fresh issue of GOP Ijarah Sukuk, the
Bank managed its liquidity position efficiently through inter bank Statement of Financial Position
placements and the Open Market Operation (OMO) conducted by
the SBP using Bai-Muajjal Structure. 40,333 Rupees in Million

Another commendable achievement during the year was the 18% Equity
growth in deposits - twice the average banking industry growth of Assets
8%, closing at Rs 785 billion. The average current account Liabilities
deposits of the Bank grew by 24% from last year. The Bank’s
8
201

market share of deposits grew to 5.9% as compared to 5.4% in 201

7 35,077
2017. The Bank’s market share for the Islamic Banking Industry as
753,731
a whole including Islamic Banking windows of conventional banks
in Pakistan is 35%. 897,582 788,808
937,915

Islamic Financing and Related Assets (Gross)

2018 2017
8% 10%
5% 19% 5%
23%
6% 5%
Agriculture, food, forestry and fishing
3% Automobile and transportation equipment
Cement
1%
3% Chemical and pharmaceuticals
Construction
2% Individuals
17%
Power (electricity), oil, gas and water
15% 7% Textile
6%
Transport, storage and communication
3% 3% Wholesale and retail trade
Others

21%
10% 19% 9%

Deposits
2018 2017
1% 2% 1% 1%

28% 27%

Government
Individuals
Public Sector Entities
Private Sector
2% 2% Others

67% 69%

26 ANNUAL REPORT 2018

Profit and Loss Account CASA to Total Deposit
Year-wise trend in %
The Bank’s Profit after tax grew by 42% to Rs 8.96 billion as 80
compared to Rs 6.31 billion in 2017. The return on average equity 72
75 75 73
71
increased to 23.77% while Earnings Per Share – on enhanced 70 68
capital clocked at Rs 7.67 per share. The Bank’s net spread grew
by 36% primarily due to our continued focus on increasing 60
volume of high yield earning assets, and re-pricing of earning
assets pursuant to increase in Target Rate. The Bank maintained 50
optimal cost of funds through strong relationship management
and better customer experience. 40

30
On an overall basis, fee and commission income of the Bank grew
by 26% and increased to Rs 5.3 billion with major contribution
20
from trade finance commissions. The trade business volume
handled by the Bank crossed a trillion rupee benchmark and 10
grew by 43%. Other contributors to the increase in fee and
commission income were debit card related fee and branch 0
banking income which grew by 39% and 25% respectively over 2013 2014 2015 2016 2017 2018
last year.
NPL and Coverage Ratios
Operating and other expenses increased to Rs 19.7 billion from
139%
Rs 16.8 billion primarily due to rising inflation, rupee devaluation 10
133%
140
and increase in costs associated with new branches, however, 9 130
the rise in expenses is sufficiently absorbed by the growth in the 121%
118%
Bank’s income resulting in improvement in income efficiency ratio 8 116% 120
by 4% from last year. 110%
7 110

Coverage Ratio
The Finance Act, 2018 has further extended the applicability of 6 100
one-time Super Tax, initially levied for tax year 2015, at 4% of the
NPL Ratio

5 90
taxable income of the Bank. This Super Tax has resulted in
additional charge of Rs 660 million for the year 2018. 4 3.60%
80
3.30%
3.80%
3 70
2.14%
2 60
1.34%
1.54%
1 50
2013 2014 2015 2016 2017 2018

Profit and Loss

2018 2017 Rupees in Million
Profit Profit
before tax Profit after tax
after tax Profit
14,792 before tax 6,313
8,962
10,252

Provisions
Provisions 1,283
1,168

Net spread
20,743
Net spread Operating
Operating 28,168 Expense
Expense 16,832
19,670

Non funded Non funded

income income
7,462 7,624

DuPont Analysis
Description 2018 2017 2016 2015 2014 2013

Profit Margin - % 16.0% 14.3% 15.1% 13.4% 13.7% 14.9%

Asset Turnover 0.06 0.06 0.06 0.08 0.09 0.09

Equity Multiplier - Times 22.90 22.13 21.08 19.43 18.04 17.20

Return on Equity (ROE) - % 23.77% 19.26% 19.58% 20.00% 21.35% 22.31%

ANNUAL REPORT 2018 27

 Cash Flow
Direct Method
For the year ended December 31, 2018 2018 2017
Rupees in Million

Profit / return and other income received 52,066 39,364

Profit / return paid (19,380) (15,425)
Payment to employees, suppliers and others (16,555) (14,599)
16,131 9,340
(Increase) / decrease in operating assets
Due from financial institutions (37,585) (18,114)
Islamic financing and related assets (93,412) (109,195)
Other assets (4,322) (343)
(135,319) (127,652)
Increase / (decrease) in operating liabilities
Bills payable 6,576 2,037
Due to financial institutions (405) 4,808
Deposits and other accounts 118,296 109,164
Other liabilities 8,604 2,991
133,071 119,000
Income tax paid (5,151) (3,837)
Net cash flow from / (used in) operating activities 8,732 (3,149)

CASH FLOW FROM INVESTING ACTIVITIES

Net (investments) / redemption in
- available for sale securities (7,113) 7,887
- associated entities 1,060 7
Dividends received 589 1,164
Investments in fixed assets (3,338) (4,424)
Investments in intangible assets (332) (230)
Proceeds from sale of fixed assets 140 139
Net cash (used in) / flow from investing activities (8,994) 4,543

CASH FLOW FROM FINANCING ACTIVITIES

Issuance of Right Shares - 3,008
Issuance of Sub-ordinated Sukuk - Additional Tier I 7,000 -
Dividend paid (2,913) (3,008)
Net cash flow from financing activities 4,087 -

Increase in cash and cash equivalents 3,825 1,394

Cash and cash equivalents at the beginning of the year 69,452 68,058
Cash and cash equivalents at the end of the year 73,277 69,452

Cash Flow statement in annual financial statements has been prepared in line with the format prescribed by the State Bank of
Pakistan vide its BPRD Circular No. 02 dated January 25, 2018, 'Revised Forms of Annual Financial Statements'.

28 ANNUAL REPORT 2018

Summary of Cash Flow
Rupees in Million

2018 2017 2016 2015 2014 2013

Cash flow from / (used in) operating activities 8,732 (3,149) (7,741) 52,687 (44,417) 10,928

Cash (used in) / flow from investing activities (8,994) 4,543 16,945 (30,048) 49,515 (262)

Cash flow from / (used in) financing activities 4,087 - 3,993 (3,008) (2,005) (1,506)

Cash and cash equivalents at beginning of year 69,452 68,058 54,861 35,230 32,137 22,977

Cash and cash equivalents at end of year 73,277 69,452 68,058 54,861 35,230 32,137

Rupees in Million
60,000 52,687 49,515

40,000

16,945
20,000
10,928
8,732 4,543
4,087 3,993
0
(3,008) (2,005) (262)
(3,149) (1,506)
(8,994) (7,741)
(20,000)

(30,048)
(40,000)

(44,417)
(60,000)
2018 2017 2016 2015 2014 2013

Operating activities Investing activities Financing activities

ANNUAL REPORT 2018 29

 Calendar of Major Events
Date of Incorporation January 27, 1997
Date of Commencement of Business September 29, 1997
Issuance of Scheduled Islamic Commercial Bank license January 31, 2002
Commencement of Operations as Scheduled Islamic Commercial Bank March 20, 2002

Financial Calendar

2018

1st Quarter Results Issued on April 19, 2018

2nd Quarter Results Issued on August 29, 2018
3rd Quarter Results Issued on October 24, 2018
Annual Results issued on February 21, 2019
23rd Annual General Meeting Scheduled on March 28, 2019

2017

1st Quarter Results issued on April 20, 2017

2nd Quarter Results issued on July 26, 2017
3rd Quarter Results issued on October 25, 2017
Annual Results issued on February 14, 2018
22nd Annual General Meeting March 28, 2018

Details of the Board meetings held outside Pakistan

A total of four meetings were held during the year 2018, and all were held in Pakistan.

Issues raised in last AGM

The Annual General Meeting was held on March 28, 2018 at Meezan House, the Bank’s Head Office in Karachi. None of
the participants raised any issues, and as such, there was no need for any further action in this matter.

Monthly Market Statistics of Meezan Bank’s Share during 2018

Market Capitalisation Share Price Sensitivity

Rupees in Billion Share Price KSE 100 Index

105.00 52000
140
102.00 50000
99.00 48000
120
Share Price (Rupees)

96.00 46000
93.00 44000
KSE 100 Index

100 90.00 42000

87.00 40000
80 84.00 38000
81.00 36000

60 78.00 34000
75.00 32000
72.00 30000
40
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

30 ANNUAL REPORT 2018

 As an Islamic Bank aiming to offer Islamic banking as banking of
first choice, Alhumdulillah, we have successfully instilled
Shariah-compliance in the financial system of this country.

Follow us on
Our Institution
Corporate Profile 34
Credit Rating 34
Shareholders 35
Awards & Recognition 36
History of Meezan Bank 38
Board of Directors 44
Shariah Supervisory Board 47
Corporate Information 49
Board Committees 50
Organization Structure 52
Management Team 53
Management Committees 54
Corporate Governance 56
SWOT Analysis 59
Strategy and
Resource Allocation 60
Risk & Opportunity Report 61
Business Continuity Plan 63
Products & Services 64
 Corporate Profile
Founded with the Vision to establish ‘Islamic banking as banking of first choice...’, the Bank commenced operations in 1997 as
Al Meezan Investment Bank Limited. It converted to Meezan Bank Limited, a full-fledged Islamic commercial bank in 2002,
when the State Bank of Pakistan issued it Pakistan’s first Islamic Commercial Banking license. Concurrently, the Bank acquired
the Pakistan operations of Societe Generale, and started commercial banking with a small network of four branches, that has
now grown to become one of the largest banking networks in the country with 660 branches in over 180 cities.
Meezan Bank is a publicly listed company sponsored by leading financial institutions from Pakistan and the Middle East. The
Bank offers a complete range of Islamic banking products and services through an extensive retail banking network.
Meezan Bank has a strong Shariah compliance setup that comprises of a dedicated Shariah Compliance Department, a
Resident Shariah Board Member and a Shariah Supervisory Board comprising of internationally renowned Shariah scholars.
The Bank is well-recognized for its product development capability, Islamic banking research and advisory services, at both
national and international levels.

Credit Rating
2018 2017

Long Term AA+ AA

Short Term A1+ A1+

The JCR-VIS Credit Rating Company Limited, an

affiliate of Japan Credit Rating Agency, Japan, has
upgraded the Bank’s long-term entity rating to AA+
(Double A Plus) and short-term rating at A1+ (A One
Plus) with stable outlook. The short-term rating of
A1+ is the highest standard in short-term rating. The
rating indicates sound performance indicators of
the Bank.

Meezan Bank is the only full-fledged Islamic bank

with AA+ credit rating in the Islamic banking
industry of Pakistan.

34 ANNUAL REPORT 2018

Shareholders
Shareholding Structure Rs. in Million %

Noor Financial Investment Co. Kuwait 4,464 38.18

Pakistan Kuwait Investment Company (Pvt.) Ltd 3,507 30.00
Islamic Development Bank Jeddah 1,090 9.32
Others 2,630 22.50
Paid up Capital 11,691 100.00

Noor Financial Investment Company is a Kuwaiti investment company engaged in investment and financial
activities primarily in Kuwait, the Middle East, Asia and other emerging markets. The company was established
as the financing arm of the National Industries Group (NIG), which is one of the largest private sector industrial
groups in Kuwait.

Noor Investment provides a broad range of financial services through its investment banking department.
These activities /services broadly include private equity, investment strategy & implementation, mergers &
acquisition advisory, valuations, hedging & risk management, local / foreign listing, long-term financial planning
and innovative structuring. The asset management department of the company also engages in managing
proprietary and client portfolios of quoted and unquoted securities, real estate and funds in Kuwait, GCC and
the MENA region.

Pakistan Kuwait Investment Company (Private) Limited (PKIC), a joint venture between the Governments of
Pakistan and Kuwait was established in 1979. PKIC is one of the most respected and profitable institutions in
Pakistan. The company, operating for over 30 years in Pakistan, is engaged in investment and development
banking activities in Pakistan. PKIC is the first financial institution in Pakistan that has been rated AAA (triple A)
for the long-term by both PACRA and JCR-VIS Credit Rating Company, an affiliate of Japan Credit Rating
Company.

Islamic Development Bank (ISDB) is located in Jeddah and is an International Financial Institution
established in 1975 in pursuance of a declaration by the Conference of Finance Ministers of Muslim countries
to foster economic development and social progress in member (Islamic) countries. ISDB has a subscribed
capital of USD 70 Billion and enjoys presence in 57 member countries. The Bank participates in equity capital
and grants loans for productive projects and enterprises besides providing financial assistance in other forms
for economic and social development.

ANNUAL REPORT 2018 35

 Awards and Recognition
2018
Pakistan Banking Awards
Best Bank - 2018
Islamic Finance News (IFN) – Malaysia
Best Islamic Bank in Pakistan
Best Islamic Bank for Treasury Management
– Global Award
Mastercard 2018 MEA Acquirer Forum
Spearheading Acceptance Location Growth
Asset Triple A – Hong Kong
Best Islamic Bank in Pakistan
Best Islamic Trade Finance Bank in Pakistan
Best Islamic Retail Bank in Pakistan
Best Islamic Investment Bank in Pakistan
Sukuk Adviser of the Year – Pakistan
Asset Triple A Asia Infrastructure
Awards
Renewable Energy Deal of the Year, Founding President & CEO of Meezan Bank - Mr. Irfan Siddiqui receiving the ‘Best Bank
Hydropower – Pakistan for 2018’ award from Deputy Governor, State Bank of Pakistan - Mr. Jameel Ahmad
Oil and Gas Deal of the Year – Pakistan at the Pakistan Banking Awards ceremony on November 9, 2018.
Global Finance – New York
Best Islamic Financial Institution in Pakistan
The Innovators – ‘The Innovator 2018’ for Mastercard MENA Acquirer Forum Employers Federation of Pakistan
Most Innovative Solution Deployed for Cash (EFP)
Masterpass QR Payments through FonePay
Displacement 1st Position - Best HRM Practices
Islamic Finance Forum of South Asia
(IFFSA) Awards World Islamic Banking Conference 3rd Position - Employer of the Year 2016
Gold Award for Islamic Finance Education Provider Country Level Award for the Banks Based In
PMI Karachi Pakistan Chapter
Gold Award for Islamic Finance Advisory PMO of the Year
Pakistan
Services Provider ICAP and ICMAP
Global Finance – World’s Best Bank 3rd Position - Best Corporate Reports Awards -
Gold Award for Islamic Finance Deal of the Year
Gold Award for Islamic Investment Bank of the Year
Awards Banking sector
Silver Award for Bank of the Year Best Bank in Asia-Pacific Region South Asian Federation of Accountants
The Banker Global Finance - World’s Best Islamic (SAFA)
Islamic Bank of the Year, Pakistan Financial Institutions Certificate of Merit in the 'Private Sector Banks'
Best Islamic Financial Institution in Pakistan category of Best Presented Accounts Award
Global Islamic Finance Awards
Shariah Authenticity Award Asset Triple A Islamic Finance Awards
Shariah Auditor of the Year Islamic Bank of the Year, Pakistan 2016
Asian Banking and Finance Corporate & Best Islamic Retail Bank, Pakistan Islamic Finance News (IFN) - Malaysia
Investment Banking Awards Best Islamic Trade Finance Bank, Pakistan Best Islamic Bank in Pakistan
Syndicated Loan of the Year, Pakistan Best Islamic Investment Bank, Pakistan Best Islamic Bank for Treasury Management
ICAP and ICMAP Sukuk House of the Year, Pakistan - Global award
3rd Position - Best Corporate Reports Awards – Best Supply Chain Finance Programme, for Runner-up ‘Most Innovative Islamic Bank'
Banking sector Meezan Bank and Karandaaz Pakistan - Global award
CFA Society Pakistan Asset Triple A Asia Infrastructure Awards Pakistan Deal of the Year
Islamic Bank of the Year Transport deal of the year, Pakistan for Swat Global Finance - New York
International Finance Award Expressway Best Islamic Bank in Pakistan
Most Innovative Islamic Bank, Pakistan The Banker - United Kingdom The Innovators - ‘Innovator in
PakWheels.com – People’s Choice Islamic Bank of the Year, Pakistan Islamic Finance 2016’
Awards
Global Islamic Finance Awards
Most Popular Bank in Pakistan’s Islamic Auto Asset Triple A – Hong Kong
Shariah Authenticity Award
Financing sector Best Islamic Bank in Pakistan
Employers Federation of Pakistan (EFP) Islamic Finance Forum of South Asia
Best Bank for Digital Innovation
Recognition Award - Best HRM Practices (IFFSA) Awards
Best Digital Banking Product Meezan UPaisa
Recognition Award - Employer of the Year Gold Awards
Best Retail Bank
Best Islamic Bank Of The Year (Fully Fledged)
Islamic Finance Entity Of The Year Best Trade Finance Bank
2017 Islamic Finance Education Provider Best Investment Bank
Pakistan Banking Awards Islamic Finance Advisory Services Provider Sukuk House of the Year
Best Islamic Bank Islamic Finance Capital Markets Service Provider Best Deal, Pakistan
Pakistan Stock Exchange Limited Islamic Investment Bank Of The Year Islamic Finance Forum of South Asia
Top 25 Companies of the Year, 2016 Silver Award (IFFSA)
Islamic Finance Deal – For Syndicated Project Gold Award for ‘Islamic Bank of the Year
Islamic Finance News (IFN) - Malaysia
Finance Facility - Pakistan’
Best Islamic Bank in Pakistan
Pakistan Society of Human Resource Capital Markets Service Provider of the Year
Best Islamic Retail Bank - Global Award Management Islamic Microfinance Company/
Pakistan Deal of the Year Best Place to Work in Top 10 Best Place to Project of the Year
CFA Society Pakistan Work Category
Advisory Services Provider of the Year
Islamic Bank of the Year Best Place to Work in Financial Services
The Banker - United Kingdom
Corporate Finance House - Fixed Income Industry Category
Islamic Bank of the Year, Pakistan

36 ANNUAL REPORT 2018

Pakistan Banking Awards 2014 Best Islamic Trade Finance Bank in Pakistan
Best Islamic Bank Islamic Finance News (IFN) - Malaysia Best Islamic Retail Bank in Pakistan
CFA Society of Pakistan Best Islamic Deal - Pakistan
Best Islamic Bank in Pakistan
Islamic Bank of the Year Highly Commended Deal - Pakistan
Musharakah Deal of the Year
South Asian Federation of Accountants Global Finance - New York
AsiaMoney
(SAFA) Best Islamic Financial Institution in Pakistan
Best Islamic Bank in Pakistan
‘Certificate of Merit’ - Best Presented Annual Islamic Finance News (IFN) - Malaysia
Report Awards CFA Society of Pakistan Best Deals of the Year
ICAP & ICMAP Islamic Bank of the Year AsiaMoney
2nd Position - Best Corporate Reports Awards - Asset Triple A – Hong Kong Best Islamic Bank in Pakistan
Banking sector Best Islamic Bank in Pakistan
ICAP & ICMAP
Employers Federation of Pakistan Best Islamic Retail Bank in Pakistan 4th Position - BCR Awards - Banking sector
1st Prize - Best HRM Practices 2016 Best Islamic Trade Finance Bank in Pakistan
PakWheels.com - People’s Choice Sukuk House, Pakistan
Awards Best Deal, Pakistan 2011
‘Most Popular Bank’ in Pakistan’s Islamic Auto Highly Commended - Best Islamic
CFA Association Pakistan
Financing sector Structured Trade Finance Islamic Bank of the Year
RTC-3 Potentials of Islamic Banking Highly Commended Best Deal – Pakistan Islamic Finance News (IFN) - Malaysia
Forum Best Islamic Bank in Pakistan
ICAP & ICMAP
Largest Islamic Bank in Pakistan Best Deal of the Year
3rd Position - BCR Awards - Banking sector
Asset Triple A – Hong Kong
South Asian Federation of Accountants Best Islamic Bank in Pakistan
2015 (SAFA) Best Islamic Trade Finance Bank in Pakistan
Global Islamic Finance Awards (GIFA) Best Presented Accounts Award Best Islamic Deal - Pakistan
Shariah Authenticity Award - Private Sector Banks
Global Finance - New York
Islamic Finance News (IFN) - Malaysia The Banker - United Kingdom
Best Islamic Financial Institution in Pakistan
Best Islamic Retail Bank - Global Award Top Islamic Bank in Pakistan
3rd Best Overall Islamic Bank Rozee.pk
– Global Award Top Employer in the Islamic Banking Industry
2010
Best Islamic Bank in Pakistan
CFA Association Pakistan
Islamic Bank of the Year
Pakistan Deal of the Year
2013 Islamic Finance News (IFN) - Malaysia
Asset Triple A - Hong Kong
AsiaMoney Best Islamic Bank in Pakistan
Best Islamic Bank in Pakistan
Best Islamic Bank in Pakistan AsiaMoney
Best Islamic Retail Bank in Pakistan
Best Islamic Trade Finance Bank in Pakistan
CFA Society of Pakistan Best Islamic Bank in Pakistan
Best Islamic Investment Bank Islamic Bank of the Year Global Finance - New York
Best Sukuk House in Pakistan Corporate Finance House of the Year Best Islamic Financial Institution in Pakistan
Best Islamic Trade Finance Deal (Fixed Income)
Islamic Finance News (IFN) - Malaysia
Global Finance - New York 2009
Best Islamic Financial Institution in Pakistan Best Islamic Bank in Pakistan
Islamic Finance News (IFN) - Malaysia
AsiaMoney Ijarah Deal of the Year
Best Islamic Bank in Pakistan
Best Islamic Bank in Pakistan Pakistan Deal of the Year Best Deal of the Year
The Banker - United Kingdom Global Islamic Finance Awards (GIFA)
Top Islamic Bank in Pakistan Global Finance - New York
Best Research and Development in Best Islamic Financial Institution in Pakistan
South Asian Financial Disclosure Index
Islamic Finance
Rankings ICAP & ICMAP
Global Finance - New York 5th Position - BCR Awards - Banking sector
Leading Islamic Bank of the region
Ranked 10th in the Top 15 global Islamic banks Best Islamic Financial Institution in Pakistan
Asset Triple A - Hong Kong
CFA Society of Pakistan 2008
Islamic Bank of the Year Best Islamic Bank in Pakistan
Best Islamic Retail Bank in Pakistan
Islamic Finance News (IFN) - Malaysia
Corporate Finance House of the Year
Best Islamic Bank in Pakistan
MasterCard Innovation Forum 2015 Best Islamic Trade Finance Bank in Pakistan
Best Deal of the Year
Best Shariah Compliant Product Highly Commended Best Islamic Deal Pakistan
– MasterCard, Titanium Debit Card ICAP & ICMAP Global Finance - New York
South Asian Federation of Accountants 3rd Position - BCR Awards - Banking sector Best Islamic Financial Institution in Pakistan
(SAFA) ICAP & ICMAP
Best Presented Accounts Award – Private 4th Position - BCR Awards - Banking sector
Sector Bank 2012
CFA Association Pakistan
ICAP & ICMAP
Islamic Bank of the Year 2007
3rd Position - BCR Awards - Banking sector
Asset Triple A – Hong Kong Islamic Finance News (IFN) - Malaysia
Pakistan Observer
Best Islamic Bank in Pakistan Best Islamic Bank in Pakistan
Largest Islamic Bank

ANNUAL REPORT 2018 37

Meezan, the Arabic word for Meezan, the Arabic word for
'Balance' has been taken 'Balance' has been taken
from Surah Al-Rahman. from Surah Al-Rahman.
At Meezan Bank, we believe At Meezan Bank, we believe
in maintaining a balance in maintaining a balance
between the needs of our between the needs of our
shareholders, our customers,shareholders, our customers,
our staff and other our staff and other
stakeholders. This approach stakeholders. This approach
will Insha’Allah help us will Insha’Allah help us
achieve our Vision of achieve our Vision of
‘providing a strong foundation‘providing a strong foundation
for establishing a fair and justfor establishing a fair and just
society for mankind'. society for mankind'.
Additional fold with pictures and awards

1997 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Meezan Bank acts as the Shariah
Structuring Advisor Over

for the historic transaction 350 100 Over

428
of international
Sukuk offering for USD 600 million
Cities
Branches

Cities
Branches
117 Cities

Al Meezan Al Meezan Investment under a mandate awarded by the BANKING Branch Network expands Deposit base crosses 9th largest bank
Government of Pakistan Branch network to 40 cities Rs.100 billion in Pakistan in terms of 8 largest bank
th
Investment Bank Management Ltd. introduced for the first Total deposits reach in Pakistan in terms of branch
becomes a subsidiary of reaches the Rs. 131 billion branch network
acquires Pakistan operations time in Pakistan Bank handles more than network
of Societe Generale and is Meezan Bank through Meezan Bank wins milestone number of Import/ Export
Deposit base grows to Best Islamic Bank in Pakistan 100 branches Deposit base grows to Rs.100 billion of Import/ Business volume
issued the acquisition of majority shares Rs. 70 billion
Rs.13.7 billion in 31 cities Export business Rs. 143 billion Islamic Bank of the Year Total deposits reach
Deposit base grows to
Rs. 34 billion Rs. 289 billion
Branch network reaches Introduction of Tijarah
10 branches nationwide while the Number of branches Best Islamic
reaches 16 financing allowing
deposit base grows to customers to raise funds Financial Meezan Bank acquires
Rs. 7.7 billion Dollar Mudarabah Certificates Number of branches Best Islamic Bank in Pakistan
and Special Musharkah reaches 62 in 21 cities for financing of stocks Institution in Meezan House inaugurated HSBC Pakistan
Certificates launched for liquidity of finished goods Pakistan
Establishment of CFA
Al Meezan management and inter-bank Meezan Debit Total assets cross Total deposits reach
Investment Bank first Islamic Commercial Banking market Import/Export business Cards launched Best Islamic Bank Rs.200billion Society Rs. 380 billion
license by SBP. reaches Rs. 70 billion Dedicated Islamic Banking in Pakistan

1
Now a full-fledged scheduled Training Centers established Islamic Bank of the Year
Deposit base grows to Meezan Bank becomes the Corporate Finance House
Islamic commercial bank, it is Rs. 54 billion in 3 cities Best Islamic Bank in Pakistan
Riba-Free Certificates Deposit base grows to Advisor and Lead Arranger for Best Islamic Trade of the Year (Fixed Income)
renamed as Meezan Bank Rs. 22 billion Best Islamic Bank in Pakistan
of Islamic Investment the first ever short-term Sukuk Finance Bank in Pakistan
launched Number of branches reaches 28 Best Islamic Bank in Pakistan Best Islamic Bank in Best Islamic Retail
A 24/7 Call Center 38 Islamic Banking seminars
Deposit base stood is established Pakistan held in 23 cities, attended by Bank in Pakistan
Corporate Report Award Launch of Best Islamic Deal - Pakistan
at Rs. 5.08 billion over 4,400 participants
Meezan Islamic Institution Best Islamic Bank in Pakistan
ATM/Debit Cards and Deposit Account launched Deals of the Year-Pakistan Islamic Bank of the Year
ATMs are introduced as a product tailored for Islamic Home remittance service
Pakistan's first Shariah-compliant Financial Institutions enabling Launch of Wakalah based available at all branches
Housing finance them to manage their excess financing product for the Best Islamic
product is launched Best Islamic Bank Introduction of Istisna Islamic Bank of the Year development of partnerships Best Deals of the Year
Online Banking liquidity through a checking Pakistan Financial
account with Meezan Bank in Pakistan financing for working capital between Islamic and Institution in Best Islamic Bank in Pakistan
is launched needs of customers Microfinance banks
across all branches Pakistan Musharakah Deal of the Year
Internet Banking launched Best Islamic Bank in Pakistan
Pakistan's first Shariah-compliant SBP establishes a dedicated
Auto Finance product is launched Islamic Banking Department Corporate Report Islamic Bank of the Year Total deposits cross
and constitutes a Shariah Board Award Corporate Report Award Rs. 230 billion Best Islamic Bank in Pakistan
and Meezan Euro Savings Best Islamic Retail Bank in Pakistan
Best Islamic Best Islamic Account as well as Meezan Pound Government of Pakistan Best Islamic Trade Finance Bank in Pakistan
Sukuk House Pakistan

1
Financial Financial Savings Account launched nominates Mr. Irfan Siddiqui &
Institution in Institution in Dr. Muhammad Imran Ashraf Best Deal, Pakistan
Best Islamic Bank in Pakistan

8
Best Islamic Structured Trade Finance

8
Pakistan Pakistan Usmani as members of
Meezan Bank stands Best Islamic Trade Finance Best Deal-Highly Commended, Pakistan
Bank in Pakistan Steering committee of
Islamic Export Refinance among the top three Launch of Meezan Islamic banking
scheme is introduced Best Islamic Bank auto-finance providers in Best Islamic Deal Pakistan Visa Platinum Debit Card
in coordination with SBP Best Islamic Bank in Pakistan in Pakistan the country
Best Deal of the Year Agreement with Ethical
Finance Limited for Mobile Banking
SME operations start as an establishing first Islamic App Launched
independent business unit Best Islamic Bank Launch of Meezan
in Pakistan commercial bank in
Premium Banking & Republic of Mauritius
Best Deal of the Year Premium Banking Centers
Profit/Return earned on
Launch of first financing and investment Launch of
Government of Pakistan Best Islamic
activities exceed Financial Launch of Mock Branches
Ijarah Sukuk Rs. 10 billion for staff training
Institution
in Pakistan
Best Islamic Bank in Pakistan
Best Islamic Retail Bank in Corporate Internet banking
Launched Technical services and
support agreement with Pakistan
& Best Islamic Trade Finance Launched
Bank in Pakistan Your one window solution for all your eBanking needs

Highly Commended Best Islamic

Implementation of in Sri Lanka Deal Pakistan
new core banking Launched Launch of
application T24
110 Customers’
Appreciation Days and Batch Hiring of over
27 Islamic Banking 550 employees
seminars held across GLOBAL ISLAMIC FINANCE AWARD

the country Best Research and

Official Page Development in Islamic
crosses 85,000 Fans Finance
Launch of Running
Musharakah for working Meezan Titanium
capital requirements of MasterCard Debit Card
Launch of SMS Banking Launched
corporate customers

Official Page
crosses 130,000 Fans
 2015 2016 2017 2018
8th Largest Bank
551
Over

Branches
143 570 145
Branches
Over
660 180
Branches
Over in terms of
Branch Network
Cities Cities Cities

Meezan Bank acquires Pakistan

operations of HSBC Oman Best Islamic Bank in Pakistan
Best Islamic Retail Bank
in the world

Awarded ‘Best Bank for 2018’

by Pakistan Banking Awards

16
Agreement Signing with
Karandaaz Pakistan JCR-VIS Credit Rating Company Limited
Best Bank in Asia-Pacific Region upgrades Credit Ratings to
Total deposits reach Islamic Bank of the Year Pakistan AA+/A1+
Rs. 472 billion Best Islamic Bank in Pakistan

Islamic Bank of the Year

Meezan Upaisa - World's First Islamic Capital Markets Service Provider 01/ 1 8 0 1 / 2 5

Branchless Banking Service of the Year in Pakistan

Islamic Microfinance Launch of Visa Platinum
Company/Project of the Year’ & Supplementary Debit Cards
Pakistan for Meezan UPaisa
GLOBAL ISLAMIC FINANCE AWARD Advisory Services Provider
Shariah Authenticity Award of the Year 7

Launch of Meezan Express Account

Islamic Bank of the Year

Corporate Finance House of the year Islamic Bank of the Year

Best Islamic Retail Bank Top 25 Companies of the Year, 2016 Launch of New Internet Banking
Best Islamic Bank in Pakistan Best Islamic Bank for Treasury
3rd Best Overall Islamic Bank Management - Global Award
Pakistan Deal of the Year Most Innovative Islamic Bank Launch of
-Global Award Runner-up Fastest Debit Cards
Best Islamic Best Islamic Bank in Pakistan Activation
Financial Pakistan Deal of the Year over ATM in Pakistan
Most Innovative Solution
15

Institution in Pakistan Deployed for Cash Displacement

First bank in Pakistan to introduce e-Rights
6

Shares Subscription Services for Investors

5

Best Islamic Bank in Pakistan First Islamic bank in Pakistan to facilitate

Best Islamic Bank, Pakistan Best Bank for Digital Innovation e-Dividend Payments & Tax Certificates for
Best Islamic Retail Bank, Pakistan Best Digital Banking Product shareholders
Best Islamic Trade Finance Bank, Pakistan Best Retail Bank Launch of EMV Chip & NFC
Best Islamic Investment Bank, Pakistan Best Trade Finance Bank enabled Debit Card Adopted Idara Al-Khair
Best Sukuk House, Pakistan Best Investment Bank Welfare Society School
Best Islamic Trade Finance Deal, Pakistan Sukuk House of the Year to provide free education
Best Deal Pakistan to underpriviledged
Top 10 Excellent Places to Work children
Best
Shariah-compliant Best Place to Work in Financial
Product Award Services Industry
16

Best Islamic Bank for Treasury

Best Islamic Bank in Pakistan Best HRM Practices Management-Global Award
Innovator in Islamic Finance 2016 Employer of the Year 2016

Centers of Excellence in Meezan Bank and Pak China

Islamic Finance established at Investment Company Limited enter PMO of the Year
PMI Karachi Pakistan Chapter
IBA, LUMS and IMSciences into Strategic Cooperation Alliance Mastercard 2018 MEA Acquirer Forum
(Peshawar) to Capitalize CPEC Opportunities Spearheating Acceptence Location Growth

Meezan Bank’s First Hajj

booths at Haji Camp
8
18

Strategic partner of Launch of secure online

Accidental Death and Permanent 1st World Islamic Finance Forum shopping with 3D secure
Disability and ATM Cash organized by IBA CEIF
Withdrawal Takaful coverage
Joint Financial Advisors to the
GLOBAL ISLAMIC FINANCE AWARD

(Islamic Insurance) of up to
Rs 1 million for all account holders Ministry of Finance for
Launch of issuance of GoP Ijarah Sukuk
New Corporate
Website Developed Shariah-compliant
trading platform at Pakistan
Mercantile Exchange (PMEX)

Online Account Opening Launch of e-IPO service

Form Launched Official Page for investors with CDC
crosses 1 Million Fans
Completion of Sindh's
first-ever Vocational Training
CSR initiative
 Board of Directors* Directorships and other recent offices held:
■ Deputy Chief Executive Officer, Finance and Administration,
National Industries Group Holding Co. – Kuwait.
Riyadh S. A. A. Edrees ■ Chairman and CEO, Al Durra National Real Estate
Chairman Company – Kuwait
Mr. Riyadh S.A.A. Edrees has been a Director of Meezan ■ Chairman, Noor Executive Committee – Kuwait
Bank since October, 2012. He is also a member of the
Human Resources and Remuneration Committee of the ■ Vice Chairman, Salboukh Trading Company – Kuwait
Board. Mr. Riyadh has also previously served as the Vice ■ Chairman & Director, Noor Al Salehia Real Estate – Kuwait
Chairman of Meezan Bank’s Board.
■ Director, Noor Financial Investment Company – Kuwait
Mr. Riyadh S.A.A. Edrees holds a B.Sc. degree in
Chemical Engineering from Newcastle Upon Tyne ■ Director, Noor Audit Committee – Kuwait
University, U.K. and M.Sc. in Chemical Engineering from
■ Chairman, Noortel – Kuwait
Kuwait University.
■ Chairman, Shorfat al Safwa – KSA
His skills and experience encompass a wide range of
industries and various roles including Executive Manager ■ Chairman, Durrat Al Shameya Investment – KSA
for Industrial Investments & Development Div. at National
Chairman, Abu Dhabi Marina Real Estate Investment
Industries Group Holding - (Kuwait), Assistant Lecturer at
■
Company – UAE
Kuwait University, Vice Chairman at Gas & Oil Fields
Services Co. - (Kuwait), Board member at Kuwait Rock ■ Director and Chairman Audit Committee, Abu Dhabi
Company - (Kuwait), Vice Chairman at Eastern United Marina Real Estate Investment Company – UAE
Petroleum Services - (Kuwait), Kuwait Ceramic Company -
■ General Manager, IKARUS Real Estate – UAE
(Kuwait), Director at Sajaa Gas Private Limited Co.(UAE),
Board member at K-Electric Pakistan, United Gas ■ Executive Committee Member, ARADI Abu Dhabi
Transmissions Company Limited Co. – (UAE). Investment – UAE

Directorships and other recent offices held: ■ Board Member, Hotels Global Group - Jordan
■ Deputy CEO Investment & Mega Projects, National
Industries Group Holding – Kuwait Bader H.A.M.A. Al-Rabiah
■ Chairman, Privatization Holding Co. – Kuwait Mr. Bader H.A.M.A. Al-Rabiah has been a Director of
■ Board Member, Ikarus Petroleum Industries – Kuwait Meezan Bank since November, 2015. He is also a member
■ Board Member, Noor Financial Investment Co. – Kuwait of the Audit Committee of the Board.
■ Vice Chairman – Noor Telecommunication Co. – Kuwait Mr. Bader H.A.M.A. Al-Rabiah has a strong academic
background in accounting and a focused experience in
■ Chairman, IT Partners Information Technology Co. –
Kuwait investments honed over the past 14 years. He was
involved in establishing the Real Estate Investment
■ Advisory Board Member, Markaz Energy Fund – Kuwait Department at Noor Financial Investment Company and
■ Board Member, Saudi International Petrochemical served as the Chairman at Arab Investment, Real Estate
Company (SIPCHEM) – KSA and Agricultural Development Group, Egypt.
■ Vice Chairman, Airport International Group – Jordan Directorships and other recent offices held:
■ Chairman, Middle East Complex for Engineering, ■ Chairman & CEO Noor Salhia Real Estate Company
Electronics and Heavy Industries Co. – Jordan
■ Chairman, Palms Agro Production
■ Board Member, Investment Committee of Bunyah
Fund of the Kuwait Investment Co. – Bahrain ■ Director, Noor Financial Investment Co.

■ Advisory Board Member, Cleantech I & II Zouk ■ Director, International Hotels Group
Venture Limited – U.K. ■ Reserve Director, Kuwait Finance House
■ General Manager Tamouh National & General
Faisal A. A. A. Al-Nassar Trading & Contracting
Mr. Faisal A. A. A. Al-Nassar has been a Director of ■ Vice Chairman, Al-Durra National Real Estate Co.
Meezan Bank since March, 2015. He is Vice Chairman of ■ Board member, International Hotel Group (Jordan)
the Board, Chairman of the Risk Management Committee ■ Chairman, Arab Investment Real Estate and
and member of the Audit Committee of the Board. Agriculture (Egypt)
Mr. Faisal A. A. A. Al-Nassar has a Bachelor’s degree in ■ General Manager, Sidra Middle East for Electrical,
Accounting and Finance from Kuwait University and has Mechanical and Building Contracting Co.
held many senior management positions in the finance
■ General Manager, Ikarus Realestate (UAE)
industry including Corporate Affairs Executive Manager at
National Industries Group Holding Co., Auditor for ■ General Manager, Noor Al-Salhiya Real Estate
government agencies in Kuwait Bureau of Accountancy Company (KSA)
and Head of Taxation Department, Ministry of Finance, Kuwait. ■ Board Member, Abu Dhabi Marina Real Estate Investment
(UAE)

44 MEEZAN BANK LIMITED

Alaa A. Al-Sarawi Mr. Mansur Khan was a fighter pilot in the Pakistan Air
Force from 1970 to 1978.
Mr. Alaa A. Al-Sarawi has been a Director of Meezan
Bank since January, 2009. He is also a member of the He held Directorships in Engro Corporation, Sudanese
Audit Committee and Human Resource and Remuneration Microfinance Development Facility, Zarai Taraqiati
Committee of the Board. Bank Ltd., National Commodity Exchange Ltd., Saudi
Pak Agricultural & Investment Company Ltd., National
Mr. Alaa A. Al-Sarawi is a Senior Investment Manager at Database & Registration Authority, Kissan Support
the Kuwait Investment Authority (KIA). After successfully Services Ltd., SME Bank Ltd., SME Leasing Ltd., TMT
completing KIA training program, he held various senior venture Capital Fund, Small and Medium Enterprise
management positions in the investment space. He Dev. Auth, Business Competitiveness / Support Funds,
completed his Bachelors of Business Administration, Punjab Small Industries Corporation, Pak-Kuwait
Minor in Government from Eastern Washington Takaful Co. Ltd. and Pakistan Steel Mills Corp Ltd.
University in 1995 and received a Diploma in
Accounting from Kuwait Business College in 1990. He A Certified Director from Pakistan Institute of Corporate
has served as board member in several companies and Governance (PICG), Mr. Khan currently serves on the
has attended many courses, conferences and boards of PKIC, The General Tyre and Rubber Co. of
seminars, both local and overseas. Pakistan Ltd., National Clearing Co. Pakistan Ltd. and
Meezan Bank Limited.
Saad Fazil Abbasi
Mr. Saad Fazil Abbasi joined the Board of Directors of Mohamed Guermazi
Meezan Bank in February, 2018. He is also a member of Mr. Mohamed Guermazi joined the Board of Directors of
the Risk Management Committee of the Board. Meezan Bank in 2018. He is currently serving as Senior
Mr. Saad Fazil Abbasi is a Joint Secretary to the Awqaf Investment Specialist in the Islamic Development
Government of Pakistan and is presently posted in the Bank (IDB).
Ministry of Finance.
Mr. Guermazi holds a Masters Degree in Engineering from
Mr. Saad Fazil Abbasi holds an LL.M. degree in the National School of Bridges and Roads in Paris (Ecole
International Economics & Business Law from Kyushu Nationale des Ponts et Chaussées - Ponts PariTech). He is
University, Japan. He has served as the Joint Secretary also serving as Member of the Board of Irada for
to the Government of Pakistan (Privatization Division) / Microfinance Co. Ltd. which is part of Bank of Khartoum
Director General (Privatization Commission). Apart from Group in Sudan.
Government of Pakistan, he has also worked with
multilateral agencies such as the Asian Development Prior to joining the IDB in 2010, and over a period of 15
Bank and the Department for International Development years, he had been serving as Director of Equities, Asset
(DFID) as a consultant. His Government experience Management, Treasury and Financial Markets at Banque
includes serving in all major Ministries at the Federal de Tunisie, one of the most prominent private commercial
level and on the Provincial Government level as an aide banks in Tunisia. Besides his operational responsibilities
to the Chief Minister of KPK. He has also worked with within Banque de Tunisie, he also served as Chairman of
Regulators such as PEMRA and PPRA where he drafted the ‘Société de Bourse de Tunisie’ - a subsidiary of the
Pakistan’s first law on procurement. Presently he is bank specialized in brokerage in securities; General
posted as Joint Secretary External Finance Wing of the Manager and Chairman of the Board of ‘Placements de
Ministry of Finance. Tunisie’ - an affiliated investment company; Board
Member and Chairman of the Audit Committee of ASTREE
Mansur Khan Insurance company; Board Member of the Tunis Stock
Exchange, as well as Board Member of several companies
Mr. Mansur Khan has been a Director of Meezan Bank
in which Banque de Tunisie holds a participation of
since August, 2016. He is also the Chairman of the
Information Technology Committee and member of the reference.
Risk Management Committee of the Board. Previously, Mr. Guermazi had also served as Deputy
He is the Managing Director of Pak Kuwait Investment Managing Director of the Investment Loan Department at
Co. Ltd. (PKIC) since February, 2014 and has over 30 Banque de Tunisie, Project Officer at the Tunisian Qatari
years of diversified experience, and a proven track record Bank for Investment and Senior Engineer in charge of the
in Development / Commercial / Investment Banking. He budget and follow-up of the activity of the fertilizer plants at
has done Masters in Business Administration (with the Tunisian Chemical Group.
distinction) from Pace University, New York, USA;
majoring in Financial Management. Noorur Rahman Abid
Mr. Mansur Khan has served as President / CEO of Mr. Noorur Rahman Abid has been a Director of Meezan
Zarai Taraqiati Bank Limited (ZTBL), SME (Small and Bank since January, 2014. He is also the Chairman of the
Medium Enterprises) Bank Limited, Managing Director Audit Committee and Human Resources and Remuneration
of Punjab Small Industries Corporation (PSIC) and the Committee as well as a member of the Information
Sudanese Microfinance Development Facility (SMDF). Technology Committee of the Board.
He has international experience of working in Asia,
Africa, USA, Europe and the Middle East. Prior to joining Mr. Noorur Rahman Abid is a Fellow Chartered Accountant
Pak Kuwait as Managing Director, he was associated from Institute of Chartered Accountants in England and
with Weidemann Associates Inc., a Crown Agents USA Wales and has held several senior management positions
company. including Assurance Leader for Ernst & Young Middle East

ANNUAL REPORT 2018 45

 and North Africa, Engagement Partner for audits of large Directorships and other recent offices held:
wholesale bank based in Bahrain as well as the largest ■ Member of Board of Trustees, Accounting and
Investment bank based in Bahrain, Chairman of Auditing Auditing Organization for Islamic Financial
Standards Committee and Deputy Chairman of Institutions (AAOIFI), Bahrain
Accounting and Auditing Standards Board of AAOIFI
Member, IBA CEIF Board of Management, Centre
(Accounting and Auditing Organization for Islamic
■
for Excellence in Islamic Finance (CEIF), IBA
Financial Institutions). He played an instrumental role in
promoting several successful initiatives, including the ■ Member of Government of Pakistan Steering
Islamic Banking Center of Excellence in Bahrain and was Committee for ‘Promotion of Islamic Banking in
declared winner of the World Islamic Banking Conference Pakistan’ (2013 – 2016)
2012 Industry Leadership Award in recognition of his ■ Member of Government of Pakistan sub-committee
contribution to Islamic banking. on awareness, training and capacity building for
‘Promotion of Islamic Banking in Pakistan’
Directorships and other recent offices held:
■ Member of the PBA Sub-Committee on Islamic
■ Kuwait Finance House, Kuwait Banking
■ Kuwait Finance House, Bahrain ■ President of the Islamic Finance Association of
■ Kuwait Finance House, Malaysia Pakistan
■ Arcapita Investment Management, Bahrain * The Bank has already submitted applications for the
■ Member of Board of Trustees, Accounting and Auditing Fit and Proper Test of the Directors to the State Bank
Organization for Islamic Financial Institutions of Pakistan which is in process of reviewing the same.
■ Dr. Solaiman Fakeeh Hospital, Saudi Arabia

Ariful Islam
Executive Director & Deputy CEO
Mr. Ariful Islam is a senior banker with over 33 years of
experience with various banks in Bahrain and Pakistan. He
qualified as a Chartered Accountant from the Institute of
Chartered Accountants in England & Wales. He is also a
Fellow Member of the Institute of Chartered Accountants in
Pakistan. He has worked with KPMG (formerly Peat
Marwick Mitchell & Co.) prior to his banking career.

Mr. Islam joined Meezan Bank in 1999 as its first Chief

Operating Officer and is presently the Deputy CEO &
Executive Director of the Bank. He is a member of the Risk
Management Committee and Information Technology
Committee of the Board. Mr. Islam is also the Chairman of
the Board of Pakistan’s leading Asset Management
Company, Al Meezan Investment Management Limited, the
largest Shariah-compliant mutual fund in the country.
Directorships and other recent offices held:
■ Chairman of the Board, Al Meezan Investment
Management Limited
■ Member of the HR Committee, Al Meezan Investment
Management Limited
■ Director, Atlas Battery Limited

Irfan Siddiqui
President & CEO
Mr. Irfan Siddiqui is the founding President and Chief
Executive Officer of Meezan Bank. Having articled with
Coopers & Lybrand, London from 1975 - 1979, Mr. Irfan
Siddiqui qualified as a Chartered Accountant from the
Institute of Chartered Accountants in England and Wales.
He has held several senior management positions
including Chief Executive Officer at Al Meezan Investment
Bank Limited, General Manager at Pakistan Kuwait
Investment Company, Advisor to the Managing Director at
Kuwait Investment Authority, Manager Finance and
Operation at Abu Dhabi Investment Company and Senior
Business Analyst at Exxon Chemical (Pakistan) Ltd.

46 MEEZAN BANK LIMITED

Shariah Supervisory Board
Justice (Retd.) Muhammad Taqi Usmani Awards Received
Chairman – Shariah Supervisory Board IDB Prize in Islamic Banking and Finance 2014
Justice (Retd.) Muhammad Taqi Usmani is a renowned Lifetime Achievement Award presented by the
figure in the field of Shariah, particularly in Islamic finance. Islamic Business and Finance Magazine 2011
He currently holds advisory positions in a number of
His Highness King Abdullah (of Jordan) Award 2011
financial institutions practicing Islamic banking and
finance. Wisamul Istiqlal Award presented by
His Highness King Abdullah of Jordan 2010
Justice (Retd.) Muhammad Taqi Usmani has vast
experience in Islamic Shariah, teaching various subjects His Highness Prince Muhammad bin
on Islam for more than 50 years. He has served as a Judge Raashid Aal Maktoom Award 2004
in the Shariat Appellate Bench, Supreme Court of Pakistan
from 1982 to 2002. He is also the Editor-in-Chief of the Dr. Muhammad Imran Ashraf Usmani
magazine Albalagh (a weekly publication of Jamia Darul Board Member – Shariah Supervisory Board
Uloom, Karachi) as well as an active contributor of articles
in leading Pakistani newspapers. Dr. Mufti Muhammad Imran Ashraf Usmani, son of Justice
(Retd.) Mufti Muhammad Taqi Usmani, graduated with
Justice (Retd.) Muhammad Taqi Usmani graduated from
specialization in Islamic Fiqh (Islamic jurisprudence) from
Punjab University, Pakistan in 1970 and also holds an LL.B.
Jamia Darul-Uloom, Karachi, where he has been teaching
from Karachi University, Pakistan. Prior to these, he
Fiqh since 1990. He also holds an LL.B. and Ph.D. in
completed the Takhassus course, which is the
Islamic finance. He is a member of the administration
specialization course of Islamic Fiqh and Fatwa (Islamic
board of Jamia Darul-Uloom, Karachi. Presently Dr. Usmani
Jurisprudence) from Jamia Darul Uloom Karachi, Pakistan.
is the Member of Shariah Supervisory Board at Meezan Bank.
In March 2004, His Highness Sheikh Mohammad Bin
Dr. Usmani is the author of numerous publications related
Rashid Al Maktoum (Dubai Crown Prince and UAE Minister
to Islamic finance and other Shariah related subjects. He
of Defense) presented a special award to Justice (Retd.)
has presented papers in numerous national and
Muhammad Taqi Usmani in recognition of his lifetime
international seminars and has delivered lectures at
service and achievement in Islamic finance at the occasion
academic institutions including Harvard, LSE, LUMS and IBA.
of International Islamic Finance Forum, Dubai, which is one
of the biggest events in the Islamic finance industry. In the past, Dr. Usmani has served as an advisor / member
of Shariah Boards of several renowned institutions since
Current Board Memberships: 1997 including the State Bank of Pakistan, HSBC - Amanah
■ Permanent Member International Islamic Fiqh Finance, UBS - Switzerland, Guidance Financial Group
Academy, Jeddah, sponsored by OIC USA, Lloyds TSB Bank - UK, Japan Bank for International
Cooperation (JABIC), Credit Suisse Switzerland, RBS
■ Vice President Jamia Darul Uloom Karachi Global, Old Mutual Albarakah Equity & Balanced Funds
South Africa, AIG Takaful, ACR ReTakaful Malaysia,
■ Chairman International Shariah Standard Council set
Capitas Group USA, Bank of London and Middle East
up by the Accounting and Auditing Organization for
Kuwait, BMI Bank Bahrain, Al Khaliji Bank Qatar, Sarasin
Islamic Financial Institutions, Bahrain Bank Switzerland, DCD Group Dubai, International Centre
■ Fellow of the Royal Aal al-Bayt Academy, Jordan for Education in Islamic Finance (INCEIF) and other mutual
and property funds, Takaful Companies and international
■ Member Islamic Fiqh Academy of Sukuk etc.
Rabita-al-‘Alam-e-Islami, Makkah
At present, Dr. Usmani is serving at different capacities at
■ Chairman Centre for Islamic Economics Pakistan since 1991 various organizations which are as under:
■ Chairman Shariah Board Central Bank of Bahrain
■ Faculty Member – Jamia Darul Uloom
■ Chairman Shariah Board Abu Dhabi Islamic Bank, U.A.E.
■ Director – Hira Foundation School
■ Chairman Shariah Board Meezan Bank Ltd., Karachi, ■ Director – Center for Islamic Economics (CIE)
Pakistan
■ Member Shariah Supervisory Board – Meezan Bank
■ Chairman Shariah Board International Islamic Rating ■ Research Faculty Member – Department of Economics
Agency, Bahrain Karachi University
■ Chairman Shariah Board Pak-Kuwait Takaful, Karachi ■ President & Founder Trustee – Ihsan Trust
■ Chairman Shariah Board Pak-Qatar Takaful, Karachi ■ Academic Committee Chairman / Board Member /
Faculty Member – Center for Excellence In Islamic
■ Chairman Shariah Board Arif Habib Investments – Finance CEIF (IBA)
Pakistan International Islamic Fund, Karachi ■ Shariah Board Member – Chairman Shariah Board NBP
■ Member Shariah Board Arcapita Investment Fullerton Asset Management Company (NAFA)
Management B.S.C., Bahrain ■ Shariah Board Member – Al Meezan Mutual Funds
■ Member of Unified Shariah Board of Islamic ■ Shariah Advisor – PMEX
Development Bank Jeddah ■ Chairman – Islamic Index Pakistan Stock Exchange (PSX)
■ Member Shariah Board Guidance Financial Group, USA ■ Shariah Board Member – AAOIFI Shariah Committee

ANNUAL REPORT 2018 47

 ■ Shariah Advisor / Shariah Board Secretary – Guidance Islamic Jurisprudence and Fatwa) from Jamia Darul
Financial Group USA Uloom, Karachi. He is also a Certified Shariah Advisor &
■ Member Central Shariah Supervisory Board – Chartis Auditor (CSAA) from Accounting and Auditing
Takaful Company (Global) Organization for Islamic Financial Institution (AAOIFI).
■ Shariah Board Member – Sarasin Bank Switzerland Mufti Muhammad Naveed Alam joined Meezan Bank in
■ Shariah Board Member – AAOIFI Dubai 2013 as a member of the Shariah Compliance Unit of
■ Shariah Board Member – International Islamic Financial Shariah Compliance Department. His main responsibilities
Market Bahrain IIFM include Islamic banking training, Shariah Compliance
review and Shariah Audit of different departments and
■ Board Member – International Islamic Rating Agency branches.
Bahrain
■ Shariah Board Member – Amanah Islamic Finance He is an active teacher / trainer at Center for Excellence in
(AIFA) Australia Islamic Finance (CEIF) of Institute of Business
Administration (IBA) Karachi, Center of Islamic Economics
■ Chairman Shariah Supervisory Council – Amanah Bank
(CIE) of Jamia Darul-Uloom Karachi, as well as several
Sri Lanka
other renowned universities.
■ President and CEO – Usmani and Co. PVT Ltd.
■ President and CEO – Usmani and Co. Shariah Advisors He is also a member of the Shariah Board of NBP Funds.
PVT Ltd. Prior to joining as RSBM, Mufti Muhammad Naveed Alam
has served as Shariah Advisor of Premier Window Takaful
Operations and also as Shariah Coordinator at Indus
Sheikh Esam Mohamed Ishaq Hospital.
Board Member – Shariah Supervisory Board

Born in Bahrain, Sheikh Esam Mohamed Ishaq graduated

from McGill University, Montreal, Canada and also
studied Shariah with a number of Sheikhs in the
traditional manner.
He is a member of the High Council of Islamic Affairs of
the Government of Bahrain and holds various Shariah
positions in many social, commercial and educational
institutions. Currently, he also teaches Fiqh, Aqeeda
and Tafseer courses in various Centers of Islamic
studies, supervised by the Ministry of Islamic Affairs in
Bahrain.
He holds memberships of the following institutions:
■ The Governance Board of Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI),
Bahrain
■ The Shariah Council of the Maldives Monetary
Authority (MMA), Maldives
■ The Shariah Panel of International Islamic Financial
Market (IIFM), Bahrain
■ Advisory Panel in Bahrain Institute of Banking and
Finance (BIBF), Bahrain
In addition to membership of the Shariah Supervisory
Boards of a number of local, regional and international
Islamic Financial Institutions (IFIs), he is the Chairman
of Shariah Supervisory Boards of the following IFIs:
■ The Family Bank for Microfinance, Bahrain
■ Tamweel Africa Holding, Senegal
■ Investment Dar Bank, Bahrain
■ Eco Islamic Bank, Kyrgyzstan
■ Al Barakah Islamic Bank, Pakistan

Furthermore, Sheikh Esam is Chairman of the Muslim

Educational Society, Vice Chair & Shariah Advisor for
Discover Islam Centre & member of the Board of
Trustees of Al- Iman Islamic Schools, Bahrain.

Mufti Muhammad Naveed Alam

Resident Shariah Board Member
Mufti Muhammad Naveed Alam holds a Masters in Islamic
Banking and Finance from University of Karachi and
Shahadat ul Alamiyah and Takhassus (specialization in

48 MEEZAN BANK LIMITED

Corporate Information
Board of Directors*
Riyadh S. A. A. Edrees Chairman
Faisal A.A.A. Al-Nassar Vice Chairman
Bader H.A.M.A. Al-Rabiah
Mansur Khan
Alaa A. Al-Sarawi
Saad Fazil Abbasi
Mohamed Guermazi
Ms. Laila M. S.A.S.A.S. Abbas (Resigned on February 19, 2019)
Noorur Rahman Abid
Ariful Islam Deputy CEO & Executive Director
Irfan Siddiqui President & CEO
Muhammad Zarrug Rajab**
Mohammad Abdul Aleem**
Talal S.A. Al-Shehab**

* The Bank has already submitted applications for the Fit and Proper Test of the Directors to the State
Bank of Pakistan which is in process of reviewing the same.
** Retired on November 17, 2018
Shariah Supervisory Board
Justice (Retd.) Muhammad Taqi Usmani Chairman
Dr. Muhammad Imran Ashraf Usmani
Sheikh Esam Mohamed Ishaq
Mufti Muhammad Naveed Alam Resident Shariah Board Member

Auditors
EY Ford Rhodes, Chartered Accountants

Chief Financial Officer

Shabbir Hamza Khandwala

Company Secretary
Muhammad Sohail Khan

Registered Office
Meezan House C-25, Estate Avenue,
SITE, Karachi-75730, Pakistan.

Shares Registrar
THK Associates (Pvt.) Ltd.
1st Floor, 40-C, Block-6,
P.E.C.H.S.,Karachi-75400, Pakistan.
Ph: (92-21) 111-000-322,
Fax: (92-21) 34168271
Email: [email protected]
Website: www.thk.com.pk

Contacts
PABX: (92-21) 38103500, Fax: (92-21) 36406049
24/7 Call Centre: 111- 331-331 & 111- 331-332
Email: [email protected]
Website: www.meezanbank.com, www.meezanbank.pk
Social Media:
www.facebook.com/MeezanBank
www.linkedin.com/company/meezan-bank-ltd
www.twitter.com/MeezanBankLtd

ANNUAL REPORT 2018 49

 Board Committees
Board Human Resources and Remuneration Committee

Mr. Noorur Rahman Abid (Chairman)

Mr. Riyadh S.A.A. Edrees
Mr. Alaa A. Al-Sarawi

Terms of Reference

The Board Human Resources and Remuneration Committee (BHRRC) is responsible for ensuring that the Bank
manages its Human Resource in light of the best practices of the industry. The responsibilities of the BHRRC include
reviewing and recommending Human Resource Management policies to the Board of Directors in light of local and
international best practices which also includes but is not limited to remuneration practices defined by the State Bank of
Pakistan, recommending to the Board the selection, evaluation, compensation (including retirement benefits) and
succession planning of key personnel. The Committee also makes recommendations to the Board regarding the
structure of compensation package of Executive Directors, President & Chief Executive Officer, Key Executives and of
any other employee or group of employees along with ensuring implementation of separate remuneration structures for
material risk takers and material risk controllers. The Committee also monitors the training activities, utilization of training and
development budget and implementation of approved training and development policy of the Bank to ensure that the
members of staff are adequately trained for the job they are expected to perform.

Board Risk Management Committee

Mr. Faisal A.A.A. Al-Nassar (Chairman)

Mr. Mansur Khan
Mr. Saad Fazil Abbasi
Mr. Ariful Islam (Deputy CEO)

Terms of Reference

The Board Risk Management Committee (BRMC) is responsible for assessing Bank’s policies on all major risk categories
including credit, market, liquidity and operational risk and adequacy of the risk management function of the Bank. The
BRMC reviews adequacy of the Bank’s capital in accordance with laid down rules and regulations as per Basel Accord.
It also reviews the techniques developed and implemented to measure the Bank’s risk exposure. Its responsibilities also
include to evaluate the risk profile and appetite of the Bank, and ensuring that systems are in place for monitoring overall
risk of the Bank. The Committee reviews exception reports highlighting deviations from the approved policies as well as
deliberates upon risk-related reports including early warning signals of potential risks emerging from Bank’s activities.

Board Audit Committee

Mr. Noorur Rahman Abid (Chairman)

Mr. Alaa A. Al-Sarawi
Mr. Bader Al Rabiah
Mr. Faisal A.A.A. Al-Nassar

Terms of Reference

The Audit Committee is responsible for determination of appropriate measures for safeguarding the Bank’s assets;
review of quarterly, half-yearly and annual financial statements; review of management letter issued by external auditors
and management’s response thereto; review of the scope and extent of internal audit / shariah audit; consideration of
major findings, internal investigations of activities characterized by fraud, corruption and abuse of power and
management's response thereto; ascertaining that the internal control systems are adequate and effective;
determination of compliance with relevant statutory requirements; monitoring compliance with the best practices of
corporate governance and identification of significant violations thereof and oversight of implementation of Internal
Controls over Financial Reporting (ICFR) program across the Bank, ensure effectiveness of overall management of
compliance risk and consideration of any other issue or matter as may be assigned by the Board of Directors.

50 MEEZAN BANK LIMITED

Board Information Technology Committee

Mr. Mansur Khan (Chairman)

Mr. Noorur Rahman Abid
Mr. Ariful Islam (Deputy CEO)

Terms of Reference

The Board Information Technology Committee (BoIT) is responsible for advising and reporting to the Board on status of
technology activities and digital initiatives for their ease in decision making, reviewing IT and digital strategies as well as
relevant policies before submission to Board. BoIT reviews and approves technology-related policies periodically in light
of major technological /regulatory developments and ensures risk management strategies are designed and
implemented to achieve resilience such as ability to respond to wide scale disruptions, including cyber-attacks and
attacks on multiple critical infrastructure sectors. The Committee also receives periodic updates from IT Steering
Committee to monitor all technology-related projects and ensures that technology procurements are aligned with the IT
strategy approved by the Board. If deemed necessary, the Committee may seek expert opinion from independent
sources wherein the quorum will comprise of any two members.

Dates and Attendance of Board Human Resources and Board Risk Management
Board Audit Committee Board IT Committee
Board Committees during 2018 Remuneration Committee Committee

No. of Meetings 14-Feb 19-Apr 28-Aug 23-Oct 13-Feb 18-Apr 28-Aug 23-Oct 13-Feb 18-Apr 28-Aug 23-Oct 12-Feb 12-Apr 27-Aug 22-Oct
Name of Director Attended 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018
Mr. Riyadh S. A. A. Edrees (Chairman) 4/4 P P P P - - - - - - - - - - - -

Mr. Noorur Rahman Abid 4/4 P P P P - - - - - - - - - - - -

Mr. Talal S.A. Al- Shehab 4/4 P P P P - - - - - - - - - - - -

Mr. Faisal A.A.A. Al - Nassar 4/4 - - - - P P P P - - - - - - - -

Mr. Ariful Islam (Deputy CEO) 4/4 - - - - P P P P - - - - - - - -

Mr.Saad Fazil Abbasi* 0/2 - - L L - - - - - - - -

Mr. Mohammad Abdul Aleem 4/4 - - - - - - - - P P P P - - - -

Mr. Noorur Rahman Abid 4/4 - - - - - - - - P P P P - - - -

Mr. Alaa A.Al Sarawi 4/4 - - - - - - - - P P P P - - - -

Mr. Muhammad Zarrug Rajab 3/4 - - - - - - - - P P P L - - - -

Mr. Mohammad Abdul Aleem 4/4 P P P P

Mr. Mansur Khan 4/4 P P P P

Mr. Ariful Islam (Deputy CEO) 4/4 P P P P

L = Leave of Absence
* Mr. Saad Fazil Abbasi was appointed as Member of Board Risk Management Committee on 19th April, 2018

ANNUAL REPORT 2018 51

 Organization Structure
AUDIT COMMITTEE BOARD OF DIRECTORS SHARIAH SUPERVISORY BOARD

RESIDENT SHARIAH BOARD MEMBER

Shariah Audit & Advisory

Internal Audit & Business Risk Review

Company Secretariat PRESIDENT & CEO Shariah Compliance

Finance Legal Affairs

Human Resources, Learning & Development General Services and Special Assets Management

Compliance Risk Management

DEPUTY CEO

BRANCH NETWORK BUSINESS SEGMENTS SUPPORT

Bahawalpur Retail Banking, Commercial, SME & Agriculture Finance Operations

Balochistan Treasury & Home Remittances Customer Support

Faisalabad Corporate & Institutional Banking Information Technology & Digital Banking

Gujranwala Consumer Finance Information Security

Hyderabad Investment Banking

Karachi (East)

Karachi (North)

Karachi (South)

Karachi (West)

Lahore (East)

Lahore (West)

Multan

North
Functional reporting

Potohar Administrative reporting

20 MEEZAN BANK LIMITED

52 ANNUAL REPORT 2018
20 MEEZAN BANK LIMITED
Management Team
Head Office
Irfan Siddiqui President & CEO
Ariful Islam Deputy CEO & Executive Director
Arshad Majeed Consumer Finance
Faiz Ur Rehman Information Technology & Digital Banking
Ijaz Farooq Retail Banking, Commercial, SME & Agriculture Finance
Muhammad Abdullah Ahmed Corporate & Institutional Banking
Shabbir Hamza Khandwala Finance
Zia Ul Hassan Operations
Ahmed Ali Siddiqui Shariah Compliance
Khalid Zaman Khan Human Resources, Learning & Development
Muhammad Raza Customer Support
Munawar Rizvi General Services and Special Assets Management
Syed Tariq Hassan Risk Management
Muhammad Ismail Compliance
Muhammad Sohail Khan Company Secretary
Shahzad Abdullah Treasury and Home Remittances
Urooj ul Hasan Khan Investment Banking
Ebrahim Yakoob Internal Audit & Business Risk Review
Muhammad Farhan Ul Haq Usmani Shariah Audit & Advisory
Muhammad Umar Khan Fareedy Legal Affairs

Regions
Muhammad Saleem Khan General Manager – North & Potohar Regions
Anwar Ul Haq General Manager – Lahore East Region
Kazi Muhammad Aamir General Manager – Karachi East Region
Syed Salman Ahmed General Manager – Lahore West Region
Kamran Zafar Regional Manager – Karachi West Region
Mateen Mahmood Regional Manager – Karachi North Region
Aamir Ali Durrani Regional Manager – Balochistan Region
Abid Hussain Abid Regional Manager – Gujranwala Region
Ameen Muhammad Khowaja Regional Manager – Hyderabad Region
Mashkoor A.G. Khan Regional Manager – Karachi South Region
Moazzam Saeed Khan Regional Manager – Faisalabad Region
Muhammad Tufail Regional Manager – Multan Region
Muhammad Ejaz Nadeem Regional Manager – Bahawalpur Region

ANNUAL REPORT 2018 53

 Lorem ipsum

Management Committees
Asset Liability Management Committee Terms of Reference
The Asset Liability Management Committee (ALCO) is
President & CEO - Chairman responsible for reviewing the Asset and Liability structure of
Deputy CEO - Alternate Chair the Bank, transfer pricing, monitoring the liquidity situation,
Chief Financial Officer & Group Head Finance evaluating asset classes and taking decisions with regards to
Group Head Retail, Commercial, SME & Agriculture Finance risks and rewards associated with purchasing and selling of
Group Head Consumer Finance
these assets. Market and liquidity risks are examined based
Group Head Corporate & Institutional Banking
CRO & Group Head Risk Management on stress testing exercises and gap analysis while
Head of Treasury and Home Remittances considering the overall economic environment of the country.
The ALCO is also responsible for monitoring policy rate
movements and taking necessary steps across all assets and
liabilities to ensure that the overall profitability of the Bank is
maximized. This is mainly performed by alterations in the
profit rates offered across different deposit products. It is also
responsible for ensuring that the Bank’s overall operations are
fully compliant with regulatory framework for the business as
provided by the State Bank of Pakistan.

Business Continuity Steering Committee Terms of Reference

The Business Continuity Steering Committee (BCSC) is
Deputy CEO - Chairman responsible for ensuring that adequate business continuity /
CRO & Group Head Risk Management disaster recovery plans are prepared, tested and that decision
Group Head Operations making authority in the event of a crisis is clearly defined. The
Group Head Retail, Commercial, SME & Agriculture Finance
BCSC reviews and recommends Business Continuity Plan for
Group Head General Services & Special Assets Management
Group Head Information Technology & Digital Banking approval of the Board. It facilitates in execution of Business
Head of Compliance Continuity Plan as and when invoked and in resumption of
Manager IT Disaster Recovery critical business activities. BCSC steers BCP project(s) and their
Head Enterprise Risk Management implementation and provides guidance on project direction to
ensure that organizational requirements are met. It is also
responsible for reviewing the findings of mock drills / actual
disasters and facilitating in removal of identified gaps.

Management Committee Terms of Reference

Group Head Information Technology & Digital Banking The Management Committee (MC) is responsible for monitoring
Group Head Retail, Commercial, SME & Agriculture Finance and overseeing the administrative, operational and business
Group Head Treasury & Home Remittances matters of the Bank to ensure that they are carried out keeping
Group Head Consumer Finance the founding principles, objectives and values in view. It also
Chief Financial Officer & Group Head Finance spearheads the adoption of best practices in all operations of
Group Head Corporate & Institutional Banking
the Bank, makes all processes and procedures efficient and
Group Head Operations
Group Head Human Resources, Learning & Development effective and encourages and facilitates improvement at all
Group Head Shariah Compliance levels and in all functions of the Bank. The MC achieves this
Group Head Customer Support objective by scanning the market for latest developments in
Group Head Administration & Branch Expansion, Security, banking practices and procedures, with focus on effective
RAMD and Fraud Risk Management delivery of Islamic banking to Meezan Bank’s customers. It also
CRO & Group Head Risk Management makes recommendations to the CEO / DCEO in light of local and
Company Secretary international best practices in both business and operations. The
Head of Internal Audit & Business Risk Review MC is also responsible for keeping the CEO / DCEO fully
Head of Compliance
informed of their actions and ensures reporting and obtains
Head of Shariah Audit & Advisory
Head of Legal Affairs
approval from the CEO / DCEO before making decisions.
Head of Investment Banking

Credit Risk Management Committee Terms of Reference

President & CEO - Chairman The Credit Risk Management Committee (CRMC) is responsible
Deputy CEO for overseeing credit risk activities on Bank-wide basis while
Chief Financial Officer & Group Head Finance ensuring compliance with regulatory requirements and
CRO & Group Head Risk Management internal policies. The CRMC’s responsibilities also include
Group Head Retail, Commercial, SME & Agriculture Finance providing support and guiding front lines in managing their
Group Head Corporate & Institutional Banking businesses, performing finance portfolio review, establishing
Head of Treasury & Home Remittances
financing standards and benchmarks, maintaining adequate
Head of Credit Risk
industry diversification and deciding upon provisioning. It is
also required for delegating financing approving powers and
prudential limits on large financing exposures.

54 MEEZAN BANK LIMITED

Management Committees
Disciplinary Action Committee Terms of Reference
Head of Compliance - Chairman The Disciplinary Action Committee (DAC) is responsible for
Group Head General Services & Special Assets Management taking action on any violation of policies and procedures, acts
CRO & Group Head Risk Management of fraud and forgery, breaches of discipline and code of
Group Head Human Resources, Learning & Development conduct, ethics and business practices, law of the land and
Head of Internal Audit & Business Risk Review statutory regulations of SBP by employees.

Disciplinary Action Review Committee Terms of Reference

Deputy CEO - Chairman The Disciplinary Action Review Committee (DARC) is
Company Secretary responsible for reviewing the appeals of the staff against whom
Head of Legal Affairs DAC has already taken disciplinary action. The DARC is
formed with a view to ensure a fresh review of each appeal
filed against the DAC decision.

Compliance & Operational Risk Management Terms of Reference

Committee The Compliance & Operational Risk Management Committee
(CORMC) is responsible for overseeing compliance risk by
President & CEO - Chairman
reviewing the adequacy of controls in place to meet regulatory
Deputy CEO
requirements. The Committee is responsible for promoting
Chief Financial Officer & Group Head Finance
compliance culture in the Bank, facilitate in implementation of
Group Head Information Technology & Digital Banking
Compliance Program and oversee Money Laundering and
Group Head Retail, Commercial, SME & Agriculture Finance
Financing Terrorism risk. In addition, the Committee also
Group Head Operations
oversees Operational Risk Framework by ensuring that
Group Head Shariah Compliance
policies and procedures are in place in all key risk areas and
CRO & Group Head Risk Management
by reviewing Key Risk Indicators. The Committee also monitors
Group Head Human Resources, Learning & Development
level of compliance of major unresolved and recurring issues
Head of Compliance
pointed out in the Internal Audit, Shariah Audit and SBP
Head Enterprise Risk Management
Inspection Report.

IT Steering Committee Terms of Reference

Deputy CEO - Chairman The IT Steering Committee (ITSC) is responsible for identifying,
Group Head Information Technology & Digital Banking prioritizing, and overseeing IT plans and projects. The ITSC
Group Head Operations does this by working with the Information Technology
CRO & Group Head Risk Management department to establish overall priorities and provide general
Head of Compliance direction for IT initiatives by identifying and sponsoring
Group Head Consumer Finance projects that support the Bank's business plan. It also assists
Group Head Retail, Commercial, SME & Agriculture Finance the Bank's senior management, including IT Head, in
Manager Information Security effectively utilizing IT resources to meet the business and
operational needs of the Bank, as well as in resolving conflicts
in demand for IT services and resources.

Investment Committee Terms of Reference

Deputy CEO - Chairman The Investment Committee (IC) is responsible for ensuring that
Chief Financial Officer & Group Head Finance the Bank's investments in listed equity securities are made in
Chief Executive Officer of Al Meezan compliance with the:
Investment Management Limited (i) Investment Policy of the Bank
Chief Investment Officer of Al Meezan
Investment Management Limited
(ii) Limits prescribed under Prudential Regulations issued
by the State Bank of Pakistan and
(iii) Directives of Shariah Supervisory Board of the Bank
The IC also reviews the performance of equity investment
portfolio through its regular meetings and discussions wherein
the members also discuss the forgoing investments and future
strategies in line with investment policy and market dynamics.

Service Board Terms of Reference

President & CEO – Chairman
Service Board is responsible for overseeing service quality
Deputy CEO
of the Bank by reviewing service standards to ensure
Group Head Operations
quality banking experience for customers. Service Board is
Group Head Information Technology & Digital Banking
the main decision-making body for addressing service
Group Head Retail, Commercial, SME & Agriculture Finance
gaps and improving service quality of the Bank.
Group Head Consumer Finance
Group Head Customer Support
Group Head Administration & Branch Expansion, Security,
RAMD and Fraud Risk Management
Head of Service Quality

ANNUAL REPORT 2018 55

 Corporate Governance
Governance practices positively impact long-term representing diversified educational and vocational
corporate performance and therefore, the Bank is careful backgrounds which are invaluable in determining the
about their implementation. The Bank has a system in overall direction of the organization.
place to ensure that it is fully compliant to all the legal
requirements for e.g. Company Secretary’s Office itself As per the guidelines issued by State Bank of Pakistan,
ensures that all the relevant regulatory requirements are the Board decided to opt for in-house approach with
complied with within the given deadlines. Furthermore, a quantitative technique; and accordingly evaluated
dedicated Compliance Department is also functional performance of overall Board, Board Committees and
which remains in contact with the regulators as well as individual Board Members as per the following
with the internal departments to ensure timely categories:
compliance with the legal requirements.
■ Full Board
Best Corporate Governance Practices ■ Chairman
The Bank’s Best Corporate Governance Practices
■ Individual Directors
include the following:
■ Independent Directors
■ Chief Executive Officer
■ Build a Strong, Qualified Board of Directors and ■ Board Committees
Evaluate Performance
The Board comprises of Directors who are Evaluation by External Consultant
knowledgeable and have expertise relevant to the The Evaluation of Board of Directors is conducted
business, are qualified and competent, and have annually as per the State Bank of Pakistan’s
strong ethics and integrity, diverse backgrounds and requirements. The next evaluation will be carried out by
skill sets. Further, as per regulatory requirement, the external consultants, which is in process.
Board performance is evaluated periodically.
■ Define Roles and Responsibilities Criteria for Performance Evaluation
The Board establishes clear lines of roles and
The Board of Directors, while ensuring regulatory
responsibilities among the Directors, Chairman and
compliance, is also vested with fiduciary responsibility on
CEO.
behalf of the shareholders to protect Bank’s interests,
■ Emphasize Integrity and Ethical Dealing provide strategic direction and monitor the achievement
The Directors declare conflicts of interest and refrain of strategic objectives. The Companies Act 2017,
from voting on matters in which they have an interest. Banking Companies Ordinance 1962, SBP’s Prudential
The Bank has adopted a Conflict of Interest Policy, a Regulations and Code of Corporate Governance (the
Code of Business Conduct that sets out the Bank’s Code) describes the role of Board of Directors along with
requirements and a Whistleblowing Policy. its responsibilities and functions.
■ Formation of Various Board Committees To comply with the requirement of the Code, the Board, in
The Board of Directors has constituted various the year 2014, put in place an effective mechanism for
sub-committees, namely Board Audit Committee, Board Evaluation. All individual Board members answer a
Board Human Resources and Remuneration comprehensive questionnaire focused on evaluating,
Committee, Board Risk Management Committee and from various angles, whether the Board has discharged
Board IT Committee, to manage the relevant areas its duties diligently and with foresight. A committee of
and to give their recommendations to the Board. The Directors is designated to collate individual responses
TORs of these Committees are approved by the and present them to the Board for deliberation and
Board of Directors. discussion. As per process, the responses / feedback
■ Engage in Effective Risk Management from the Directors on each of the above-mentioned
The Board has established its sub committees, who categories is compiled and submitted to the Chairman.
regularly identify and assess the risks including The Chairman discusses the results / findings with each
financial, operational, reputational, environmental, individual Board Member. The authorized Independent
industry-related and legal risks. Directors communicate the feedback in respect of the
Chairman for incorporation in the consolidated
Performance Report.
Evaluation of the Board of Directors
The Board of Directors of Meezan Bank sets the Bank’s Accordingly, the analysis comprises of consolidated
strategic direction and ensures that the organization evaluation results and Action Plan forwarded by the
stays true to this direction - enabling it to achieve its Chairman to further strengthen comparatively weaker
long-term objectives while ensuring regulatory areas and is submitted to the Board of Directors for
compliance. To discharge its fiduciary responsibility of consideration in its meeting.
safeguarding the stakeholders’ interests, the Board of
Directors has developed criteria for its performance This exercise in critical self-assessment allows the Board
evaluation as required by the State Bank of Pakistan and to evaluate its performance and overall effectiveness in
the Securities and Exchange Commission of Pakistan. setting strategies, devising control processes, reading
market trends by monitoring micro and macroeconomic
The Board of Directors discusses strategic objectives, factors, and responding to adverse unforeseen situations
budgetary expenses and projected national and to further the cause of a learning organization. This
international macroeconomic indicators to ensure that the process also ensures that the Board is constantly
Bank’s business strategy stays aligned with the growing intellectually and the responsibility of steering
macroeconomic indicators. The Board of Directors and the Bank to new heights of success is discharged
its sub committees are competent and experienced, effectively and efficiently.

56 MEEZAN BANK LIMITED

Induction and Training of Directors ■ Ensure that dissent of Directors, if any, is properly
Formal orientation is arranged for Directors. The Bank recorded in the minutes.
also places keen focus on regular trainings regarding ■ Ensure that minutes truly reflect what transpired
updates in law / regulations for the Directors. During during the meeting.
2018, a training on ‘Listed Companies (Code of ■ Ensure that the Board discharges its role
Corporate Governance) Regulations’ was arranged. In effectively and swiftly in line with regulatory
addition, Shariah training was also arranged for the requirements.
Directors, as per the State Bank of Pakistan’s ‘Shariah ■ Ensure that the Board sub committees perform
Governance Framework for Islamic Banking Institutions’. their designated functions with due diligence.

Members of Meezan Bank’s Board are experienced and Roles and Responsibilities of the
qualified professionals who bring a diverse range of Board of Directors
professional and technical expertise to the organization. The Board of Directors is involved in strategic level
decisions to establish and review the strategies and
Directors’ Training Program medium to long-term goals of the Bank, overseeing the
The Bank is in compliance with respect to training business and affairs of the Bank in light of emerging risks
requirements of Listed Companies (Code of and opportunities. The Management of the Bank is
Corporate Governance) Regulations, 2017. responsible for managing day-to-day business affairs in
an effective and ethical manner in conformity with the
Remuneration of Directors strategies and goals approved by the Board and to
As per Policy, the Board of Directors shall, from time identify and manage the principal risks and opportunities
to time, determine and recommend remuneration of which could impact the Bank in the course of carrying out
the Non-Executive Directors (Chairman, Vice its business. It is also the responsibility of Management,
Chairman and members of the Board) for attending with the oversight of the Board and its sub committees, to
Board Meetings, for approval by the shareholders produce financial statements that fairly present the
on a pre or post facto basis in the Annual General financial conditions and results of operations of the Bank
Meeting (AGM), as per State Bank of Pakistan in accordance with applicable accounting standards and
Prudential Regulations. to make timely disclosures to investors as required under
regulatory requirements. Further, Management also stays
If an employee receives any fee exceeding aware of the business and competitive environment and
Rs 25,000/- in a Tax year (July 1st to June 30th) on develops strategies to maintain the Bank’s competitive
account of Director’s Fee or Attendance Fee from business edge.
any one board membership, the entire Fee will be
passed on to Meezan Bank. This amount will not be Roles and Responsibilities of the
counted towards the income of employee but will be
credited towards the Bank’s income. President & CEO
The President & CEO’s role constitutes an absolutely
All Board Members are nominees of our major engaged position, demanding complete involvement and
Shareholders. Meezan Bank consciously does not shepherding of the organization. The role entails the
have a structure in place to incentivize the Board fee. following:

■ Provide an enabling environment within the Bank to

Performance Review of the President facilitate promulgation of a culture of Shariah
& CEO compliance.
■ Ensure execution of the strategy developed by the
The President & CEO of Meezan Bank is responsible for
Board.
supervising and leading the strategic and managerial
■ Ensure that the Bank maintains its business position
affairs of the Bank. Various elements of the President &
and brand image as the leading Islamic Bank of the
CEO’s performance are monitored continuously and
country.
discussed periodically by the Board. As leader of the
■ Efficiently allocate and manage organizational
organization and executor of the strategy approved by
resources and budgets to ensure achievement of
the Board to further the interests of all stakeholders of the
short and mid-term objectives that contribute to the
Bank, the President & CEO is evaluated on parameters
attainment of the long term strategic goals.
such as financial performance and profitability, budget
■ Establish a system of checks and controls to
allocation and utilization of resources, organizational
supplement the fast-paced growth of the Bank.
expansion, sustainability of product lines, credit ratings
■ Provide liaison between the Board and the Bank’s
and inculcation of the desired organizational culture
management to ensure alignment of managerial
which is conducive to professional and ethical
efforts with Board’s directives.
excellence.
■ Foster a culture of professionalism and high ethical
standards within the Bank.
Roles and Responsibilities of the ■ Facilitate an organizational culture of development of
Chairman innovative products and services to meet the
The Chairman of the Board of Directors ensures that the growing needs of a diverse range of customers.
organization keeps true to its long-term Vision.
Responsible for leadership of the Board, the Chairman Role of Shariah Supervisory Board
ensures that the Board plays an effective role in fulfilling The Shariah Supervisory Board (SSB) is entrusted with
all its responsibilities. The Chairman’s role entails the the duty of directing, reviewing and supervising the
following: activities of the Bank in order to ensure that they are in
compliance with the rules and principles of Shariah. All
■ Ensure that all members of the Board may products and services of the Bank are launched with the
participate in all meetings and have the approval of the Shariah Supervisory Board whose role
opportunity to express their opinion. also entails the following:

ANNUAL REPORT 2018 57

 ■ To develop a comprehensive Shariah compliance Non-Executive Directors
framework for all areas of operations of the Bank that At present all the Directors on the Board are
serves as a guiding principle to the Bank for non-executive except for President & CEO and the
maintaining its commitment towards adherence to Deputy CEO.
principles of Shariah.
■ Ensure Shariah compliance of all aspects of the Statement of Compliance with the
Bank by virtue of having unhindered access to all Code of Corporate Governance
books of accounts, records and documents.
The Statement of Compliance with Code of Corporate
■ Guide and direct the Bank through rigorous
Governance is annexed with this annual report.
deliberation on issues placed before the Shariah
Supervisory Board. Accessibility of Annual Report
■ Monitor the Shariah compliance of the Bank through
Annual Report 2018 and other information of the Bank are
Shariah Audit and Shariah compliance reviews and
accessible on Bank’s website: www.meezanbank.com
prescribe appropriate enforcements whenever
needed. Investors’ Relations section on the
Code of Conduct & Ethical Standards Corporate Website
This relevant section is available on the Bank’s website:
for Directors www.meezanbank.com
The Bank has also developed ‘Code of Conduct & Ethical
Standards for Directors’ as per requirements of Code of Investor Grievances
Corporate Governance which is signed by every Director Meezan Bank has established a robust grievance reporting
of the Bank. mechanism which seeks to resolve any complaints or
unattended issues if, despite all vigilance, do occur. The
Directors’ Profiles and their mechanism put in place allows for such matters to be reported
Involvement / Engagement in other electronically, in writing or over the phone. To ensure that the
Companies stakeholders may register their complaints conveniently, a
multitude of online forms are available on Meezan Bank’s
This information has been incorporated in the Directors’
corporate website (www.meezanbank.com). The Investor
profiles.
Complaints Form, on submission, is sent directly to the Office
Informing the Company Secretary's of the Company Secretary. Similarly, a general complaints form
Office on Sale or Purchase of Meezan for reporting and resolution of business-related complaints
Shares sends registered issues to relevant departments. A dedicated
email address ([email protected]) is also in place
Executives are required to inform the Company Secretary
for the express purpose of reporting issues if the stakeholder
about any change in the shareholding in his/her own
feels the need to email rather than use online forms.
name, in the name of his/her spouse and / or
dependent/minor children to the Company Secretary Furthermore, grievances may also be lodged by calling the
through a prior written notice regarding their intention to Bank’s Call Center (UAN: 111-331-331 & 111-331-332), which
do so before executing the transaction and subsequently is functional round the clock, where officers are available to
through provision of complete details of the actual assist stakeholders with their queries and complaints.
transaction within two days of its execution, enabling the
Company Secretary to immediately notify the transaction
to Pakistan Stock Exchange in terms of the revised listing
Managing Conflict of Interest
rules and also to subsequently report the transaction to The Bank has a policy in place for dealing with conflicts
the Board of Directors. of interest relating to members of the Board. Under this
policy, any Director who has a business interest in a
Foreign Directors matter being presented at a Board meeting does not
Security clearance of Foreign Directors is initially done by participate in neither the discussion nor the decision on
the sponsor Shareholders being their nominee Directors. that matter. The policy is applied consistently and there
Subsequently Meezan Bank conducts verification as per was no breach of this policy during the year.
FPT requirements. Finally it is carried out by the
Regulators as per law / regulatory requirements, as their Presence of the Chairman of Audit
appointment is subject to clearance by the Regulators. Committee at the AGM
The Chairman of the Audit Committee attends the Annual
Minority Shareholders General Meeting (AGM) and this is duly recorded in the
The Bank ensures that the interest of the minority minutes of AGM.
Shareholders is protected. In order to ensure their
participation in general meetings, all notices of the
Shareholders’ meetings are timely announced on
Pakistan Stock Exchange (PSX), published in nationwide
newspapers and dispatched at the registered addresses
of the Shareholders as per regulatory requirement. The
Bank also ensures compliance to all the regulatory
requirements and takes all possible steps to encourage
attendance of minority shareholders in their meetings.

Executive Director
The Executive Director serves as a Non-Executive
Director in two companies.

58 MEEZAN BANK LIMITED

SWOT Analysis
Being aware of the environment in which one operates, as well as of one's own strengths and weaknesses, is a key
element in the success or failure of any business. Meezan Bank's management is cognizant of the fact that the
economy and the banking industry are in a state of flux and regularly conducts SWOT analysis of the organization
to capitalize on its strengths and work on its weaknesses in view of the opportunities available in its environment
and the threats that it needs to overcome. A SWOT summary of the business as it stands today is given below:

S
■ Pakistan's largest Islamic bank ■ Dedicated Shariah Supervisory
STRENGTHS

■ Largest market share of Board comprising of

Pakistan's Islamic banking sector world-renowned Shariah
■ Comprehensive menu of truly scholars
Shariah-compliant products and ■ Dedicated department for
services Shariah compliance, research
■ Strong financial indicators and Shariah Audit

W
WEAKNESSES

■ Limited opportunities for investment of surplus liquidity

■ Limited availability of human resources with Islamic banking knowledge

O
OPPORTUNITIES

■ Increasing awareness about Islamic financial services and demand for

Shariah-compliant products and services
■ Growing local and international Islamic banking market
■ Significant potential for market penetration

T
Macro-economic challenges
THREATS

■
■ Conventional banks entering Islamic banking market
■ Misconceptions and misunderstandings among the general public about
Islamic banking

ANNUAL REPORT 2018 59

 Strategy and Resource Allocation
The year 2018 marks the completion of 16 years of Islamic Commercial Banking for Meezan Bank in Pakistan. During this
period, Meezan Bank has risen from the 36th to the 7th largest bank in the country in terms of deposits amongst all
commercial banks in Pakistan. Meezan Bank’s robust strategic planning and its execution have been pivotal for its
best-in-industry growth and success. Over the years, we have developed attractive market positions and strong
capabilities that hold potential for solid future growth. With a Vision to ‘Establish Islamic banking as banking of first
choice…’, we have forged ahead with a long-term goal of creating value for all our stakeholders.

Strategic Objectives
Meezan Bank’s strategic objectives are based on the driving forces that are rapidly changing the financial industry.
Macroeconomic conditions such as interest rates, changing customer expectations, growing competition from Fintechs
and rapid digitalization are some of the factors upon which the Bank has formulated its strategic agenda.

During 2018, the Bank’s strategic agenda has been based on the following:

■ Digitalization
■ Customer Experience
■ Innovation

Digitalization
As digitalization continues to transform Pakistan’s banking sector, the Bank has formulated strategies for becoming
more customer-driven and efficient. During 2018, the Bank took several initiatives to achieve this objective including
launch of new internet banking website, back-end automation to reduce the daily extraction processing time by more
than 75%, as well as automation of payment systems for better customer experience.

Customer Experience
Meezan Bank works with an ambition to deliver the best customer experience on the basis of a strong value
proposition. To this end, the Bank is not only digitalizing its service model but is also implementing ways to deliver
higher service levels. With the establishment of a Service Board, and strong focus on training, the Bank is working on
ways to build and maintain a strong pipeline for enhanced customer service.

Innovation
During 2018, the Bank continued to invest substantial resources in innovation and responding to new competitive
forces. To achieve this objective, the Bank engaged in a series of initiatives to develop its Alternate Distribution
Channels and to ensure that it remains in a position to capitalize on technology trends. An example of this is the
introduction of the fastest debit card activation via ATMs in Pakistan, reducing the processing time to merely 30
seconds or less.

Resource Allocation Plan

Capitals including financial capital, human capital as well as intellectual capital are key considerations while developing
the Bank’s strategic objectives as well as its risk appetite. The Bank ensures its capital position is such that it is adequate
to support its business activities. Resource allocation and capital management are therefore integrated in the Bank’s Risk
Management and Governance processes.

Realizing that the real benefit of the strategic planning process lies in its effective implementation, a dedicated Strategy
Department has also been set up to assist with the implementation of this plan. To ensure its effective communication and
implementation within the Bank, the Balanced Scorecard (BSC) methodology has been used.

For effective resources allocation (especially in wake of Bank’s growth trajectory) and to maximize cross-functional
congruence towards Bank’s objectives in line with its strategic plan, several groups / departmental level BSCs have also
been prepared with performance driven measures, timelines, and specified targets.

Moreover, several strategy sessions for different groups, department heads and managers have also been arranged with
the President & CEO and Deputy CEO in order to ensure that their KPIs are relevant towards realization of Meezan Bank’s
corporate strategy, with optimum levels of capital and resources.

Liquidity Management
The Bank’s primary liquidity management objective is to meet the expected and unexpected cash flows while supporting
its business and customers and also maintaining strict adherence to its Shariah compliance policies. In order to achieve
this objective, the Bank ensures liquidity management based on the monitoring of short and long-term liquidity risks.
These risks are monitored by various functions across the organization, depending on its type. Deployment of excess
liquidity however, remains a challenge for the Bank that requires continuous support from Regulators and Government at
par with conventional banks especially in medium to long-term scenario.

Meezan Bank’s strategic objectives are therefore aligned with its risk appetite, liquidity requirement and its capital plan.

60 MEEZAN BANK LIMITED

Risk and Opportunity Report
Opportunity loss is one of the most important concerns for all entities, irrespective of the nature, size and complexity of
their business; caused by missing business opportunities that arise when necessary risks are not taken. Pursuing
opportunities requires taking risks, which most are reluctant to do so, because of the fear of potential negative
consequences. This requires periodic review of risk appetite in line with strategic objectives and business goals. This
equally applies to the banking business as well, which by its very nature is risky, coupled with enhanced opportunities in
a rapidly changing environment. Highly competitive banking industry and entry of non-traditional financial intermediaries
and channels may lead to irreparable recovery because of missed opportunities. This requires futuristic vision,
appropriate strategy and its realistic transformation.

Key Sources of Uncertainity

Banks are typically exposed to commercial and financial risks including but not limited to credit, concentration,
liquidity, market, operational, profit rate and equity investment risks. However, compliance and cybersecurity risks
have also assumed unprecedented challenges in moving towards untapped markets and alternate distribution
channels. Importantly, Meezan Bank being the largest Islamic bank in the country is fully cognizant of the
importance of these risks including the Shariah compliance risk that is only unique to Islamic banking businesses.

Changing dynamics result in uncertainties for different sectors of the economy. Exchange rate pressure, depleting
foreign exchange reserves, widening trade and external deficit, significant increase in policy rate, volatility in
international oil prices along with continuous pressure in stock market are major parameters determining the trend
of economy of the country. Rising inflation, low GDP growth, recurring circular debt, increasing cost of energy
supplies and in the backdrop, prospective conditionalities will have an impact on the overall business environment.

Initiatives of newly elected government with reference to austerity measures, improving fiscal discipline,
governance reforms, ease-in-doing business environment, low-cost housing schemes, environmental protection
drives and plans to give relief to down trodden segments of the society should be seen in the positive direction with
close watch.
Impact of significant increase in policy rate should have positive impact on profitability of banks; however, going
forward it may lead to increased level of non-performing financing and this requires cautious approach in booking
new assets. The policy rate rise may also adversely impact private financing demand in the country. However,
improved security condition, tightening of illegal channels to curb money laundering, and new Government’s
agenda of broadening tax base and related business friendly reforms will have a positive impact on the overall
economy and banking sector too. Implementation of deposit protection mechanism to facilitate small deposits will
increase the confidence in the banking industry.

Enhanced focus for financial inclusion in the form of branchless and digital banking, need for efficient and secure
alternate distribution deliveries with multiple services, room for enhanced small and medium financing, search for
new channels to upscale fee-based income, continuous pressure for improving service quality standards and
outreach of fintechs in embracing wide range of activities put pressure on banking sector to think and act out of the box.

The continuous engagement of Pak-China Governments to remove uncertainties about materialization of strategic
initiatives under China Pakistan Economic Corridor (CPEC) will be an important determinant in the overall growth of
economy. However, CPEC has its own challenges in terms of its regional context in addition to financial & feasibility
intricacies of projects involved. Several opportunities can be created under CPEC which include infrastructure
project financing and share of Pakistani banks in those projects. The management of foreign currency reserves,
exchange rate parity, movement of policy rate, balance of payment position, circular debt management,
requirements for private and public sector funding and structural reforms will play a major role in determining the
course of economy that will also have direct bearing on the performance of banking sector.

In the context of Islamic banks, deployment of excess liquidity remains a challenge that needs continuous support
from regulators and Government at par with conventional banks especially in medium to long term scenario.

Meezan Bank continued its journey of growth by exploring opportunities to achieve its strategic objectives while ensuring
effective risk mitigates and controls in place. Under the overall supervision of the Board of Directors and Shariah
Supervisory Board, various business units of the Bank continued to explore new business opportunities in close
coordination with Risk Management, Compliance, Product Development, Shariah Compliance, Information Technology
and Operations departments, keeping in mind the risk appetite of the Bank. In the emerging scenario and considering
new trends in consumerism, the availability of large data, its proper analysis and usage for enhancing reach of customers
for banking services provide new opportunities to explore upon. New business opportunities are supported through
state-of-the-art data center, strengthening of core banking system, broad spectrum of alternate distribution channels with
enhanced security environment, broadened branch network, customer-centric service quality parameters and increased
focus on personalized banking.

ANNUAL REPORT 2018 61

 While searching for new business opportunities, the Bank fully recognizes the importance of credit, market, liquidity,
strategic, Shariah non-compliance, regulatory and reputational risks as well as risks arising from people, processes,
systems and external events. This requires adequate capital base to ensure financial viability, absorb risk losses and
long-term resilience of the Bank.

Significant growth in the Bank along with strategic direction / business objectives set by the Board of Directors coupled
with the enhanced capital adequacy requirement by State Bank of Pakistan under Basel Framework necessitated solid
capital availability all times. The Bank is well equipped to ensure reasonable cushion in its capital adequacy over and
above the regulatory requirement. The Bank successfully issued first ever Shariah-compliant perpetual Sukuk certificates
in Pakistan amounting to Rs 7 billion in 2018. The Bank has been continually improving quality of its capital by
strengthening its core capital mainly in the form of reserves and unappropriated profit while ensuring dividends for its
shareholders. The close monitoring of capital adequacy in view of the business targets help the Bank to have effective
capital plan in place ahead of the regulatory capital adequacy road map.

The Board and its Committees are actively involved in further strengthening its policy framework so as to determine the
Bank’s risk appetite and tolerance levels. All policies on wide range of subjects are deliberated in detail in the Board
Committees. During the year 2018, the Board of Directors approved a large number of policies, plans and strategy
documents. Duly approved policies provide framework to operate the Bank within the limits set by the Board and to
achieve strategic objectives.

The risk appetite is defined by focusing on the level of material risks the Bank is willing and prepared to take while
pursuing its business and strategic goals, recognizing a range of possible outcomes as business plans are
implemented. Meezan Bank’s risk appetite is expressed both in qualitative and quantitative terms to allow tracking of
performance in line with its strategic plan, business environment and expectations of stakeholders.

Statement of Board of Directors on Risk Assessment

The Board of Directors and its sub-committees comprising of Board members thoroughly assessed all principal
risks including but not limited to credit, liquidity, solvency and compliance risks through various reports and early
warning indicators so as to ensure that the Bank has in place necessary policies, procedures, systems and controls
to mitigate risks that may affect its business objectives, further performance, financial viability and sustainability.

The Bank has been continually improving upon its policy framework, capital base, products and services offerings,
internal controls environment and governance framework that is equally appreciated in terms of its improved external
rating and the ‘Best Bank’ award. Risk management in banking has transformed over the period and is being dealt with
at enterprise level, largely in response to regulations that emerged from the global financial crisis, capital adequacy
standards, anti-money laundering and anti-terrorist financing initiatives, technological innovations, increase in
cyber-crime activities and increasing needs of customers.

The Risk Management Framework established by the Board of Directors has been further strengthened by enhancing
oversight by the Board and its Committees along with various Management Committees. The Bank implements an entity
wide ‘Three Lines of Defence’ model for risk management. Business lines / front offices serve as first line of defence and
are primarily responsible for managing risks on day-to-day basis. Risk management and other control functions being the
second line of defence are responsible for assisting business lines for designing and implementing adequate controls to
manage risks. The Internal Audit function is responsible for providing independent assurance on adequacy of Bank’s risk
management environment.

The Bank vigorously improves upon its systems, tools, techniques, trainings & development of its human resources to
better equip itself for fulfilling everchanging requirements of its stakeholders. Continuous refinement of processes and
their documentation, enhanced coverage of risk indicators, escalation mechanism and continuous developments in
management information systems further strengthened the control environment of the Bank. The Bank focused on
comprehensive risk analysis, high service quality standards, capacity building of control, support and business functions
and enhanced level of post facto monitoring to manage risks associated with strategic plan and performance indicators.
The Bank emphasizes on diversification while booking of assets and liabilities. All material exposures are managed and
monitored actively. The Bank has enhanced its collaboration with solution providers for strengthening its internal controls
and improving upon delivery of its services. Risk management techniques facilitate in identification, assessment,
measuring, reporting and management of both conventional risks and risks peculiar to Meezan Bank. Further, these tools
are subject to continual development and refinement. Risk Management strategies for various risk types and business
continuity and recovery plans, IT disaster recovery arrangements and early warning signals are being actively managed
to mitigate actual and potential risks. These improvements help the Bank to achieve its strategic objectives and key
performance indicators. This enables the transformation of Bank’s risk management practices from being ‘crisis fighters’
to ‘proactive and systematic risk management’.

62 MEEZAN BANK LIMITED

 Materiality Approach
The Bank gives due consideration to materiality concept while managing its risks. Resources are deployed
efficiently to medium to high risky areas while minor risks are typically managed through transfer and outsourcing
arrangements. The Bank manages all of its core operations on its own. Regulatory and Shariah compliance is at the
heart of materiality approach while managing existing operations and taking new initiatives.

Because of integrated efforts, the Bank has significantly expanded its deposit base, financing portfolio and branch
network without exposing itself to unwarranted risks. The Bank will continue to explore new business opportunities
equally supported by effective risk measures, robust products and technological support to serve wide range of
customers Insha’Allah.

Business Continuity Management - 2018

The Business Continuity Management (BCM) is a management process to avoid and manage risks associated with
disruption of mission critical operations so as to ensure resilience of Bank’s operations. It details plans and procedures
to be implemented before, during and after disaster events to maintain continuity of businesses. In Meezan Bank, the
business continuity is managed at strategic, tactical and operational level. It involves well defined plans, effective
decision-making processes, description of distressed scenarios, coordinated efforts among stakeholders and
operational continuity to safeguard the interests of the Bank’s key stakeholders, reputation, brand image and value
creating activities. The Bank has in place a comprehensive business continuity framework with clear set of governance
structure, business continuity and information technology disaster recovery plans, clearly defined roles and
responsibilities of individuals and teams for disaster response, recovery, resumption and restoration of activities to a
pre-defined level of operation following disruption. The Board of Directors approved Business Continuity and Information
Technology Disaster Recovery Plans subsequent to their deliberations in the Board and Management Committees.
Board approved plans follow procedural documents on business continuity.
BCM program is in line with the guidelines issued by the regulator and industry standards and is subject to periodic
reviews. It sets out the agreed arrangements for bringing disaster events under control and ensures availability of
necessary resources for maintaining critical business functions. Having a BCM framework in place helps the Bank to
ensure safety of human resources, protection of critical assets and resumption of mission critical activities from alternate
processing site(s) in case the primary site(s) are not accessible or available. In Meezan Bank, the first priority is always
to ensure the safety of human life in case of any disaster. Detailed business continuity including information disaster
recovery plans, has been established with the approval of the Board of Directors. The Bank maintains Alternate
Processing Sites at three different locations within Karachi with the overall objective to ensure resumption of Mission
Critical Activities (MCAs) in case of disaster. IT disaster recovery is managed from Islamabad. The Bank’s BCM team
continuously strives to improve upon business continuity preparedness which enables the Bank to continuously deliver
its mission critical services and products to its customers. Over the period, the Bank has streamlined the process of
active communication and escalation of events that may impact business continuity. Rapid response to such events lead
to minimal disruptions. Coordination among various stakeholders has been further strengthened for cohesive planning
and response. Moreover, the Bank has continued testing the effectiveness of business continuity arrangements through
periodic drills, performance of critical operations from alternate sites, branch evacuation procedures have been updated
and emergency response teams have been further streamlined. The Bank conducted evacuation drills for its entire
branch network successfully that further strengthens the Bank’s preparations to cope with unwarranted eventualities.
Findings of drills are reviewed and necessary improvements are an on-going process. This helps in strengthening the
confidence of stakeholders regarding the availability of products and services under stress scenarios and embeds
business continuity within the organizational culture of the Bank.

ANNUAL REPORT 2018 63

 Products and Services
Meezan Bank offers a diverse range of Shariah-compliant banking products and services to cater customer
requirements. All products of the Bank are approved by the Shariah Supervisory Board and are completely
Riba-free.

Meezan Rupee Current Account Meezan Rupee Savings Account

This is a checking account that works Meezan Bank's Rupee Savings
on the basis of 'Qard' and provides Account is ideal for short-term
the convenience of conducting investments and transactional needs.
day-to-day transactions with ease and The account provides monthly profit,
comfort. There is no restriction on along with a variety of free packaged
withdrawals or number of transactions benefits. Profit is calculated on daily
and there is no deduction of service balance and credited into the
charges if the balance maintained is account on a monthly basis. Minimum
low. The account is ideal for daily investment required for opening an
transactional needs of individual and account is Rs 100 and there is no
business entities. deduction of service charges if the
balance maintained is low.

Meezan Asaan Current Account Meezan Asaan Savings Account

Meezan Asaan Current Account Meezan Asaan Savings Account
provides swift and hassle-free provides swift and hassle-free
account opening process, since account opening process, since
there is no requirement of submitting there is no requirement of submitting
any proof of income document for any proof of income document for
opening this account. Account works opening this account. Account works
on the basis of ‘Mudarabah’ and can
on the basis of ‘Qard’ and can be
be opened with a minimum deposit of
opened with a minimum deposit of
Rs 100 and a valid CNIC. Maximum
Rs 100 and a valid CNIC. Maximum credit balance limit is Rs 500,000.
credit balance limit is Rs 500,000. Maximum withdrawal limit per month
Maximum withdrawal limit per month is Rs 500,000.
is Rs 500,000.

Meezan Express Current Account Meezan Express Savings Account

Meezan Express Current Account has Meezan Express Savings Account has
been designed to facilitate the been designed to facilitate the
beneficiaries of home remittance and beneficiaries of home remittance and
encourage them to use formal banking encourage them to use formal banking
channels. The biggest advantage of channels. The biggest advantage of
Meezan Express Current Account is Meezan Express Savings Account is
that it can be opened on the basis of a that it can be opened on the basis of a
CNIC only* & there is no withholding tax CNIC only* & there is no withholding tax
on cash withdrawals through cheque or on cash withdrawals through cheque or
ATM. Meezan Express Current account ATM. Meezan Express Savings
can only be fed through home remittances, account can only be fed through home
no other credits are allowed. remittances, no other credits are allowed.
*Terms and conditions apply *Terms and conditions apply

Foreign Currency Current Account Meezan Bachat Account

Meezan Foreign Currency Current Meezan Bachat Account is a savings
Account is a ‘Qard’ based account account that offers a higher expected
that can be opened with just 100 profit. The minimum investment
USD/Pound/Euro. There is no deduction required for opening an account is
Rs 50,000. Profit is calculated with a
of service charges if the balance
higher weightage for account
maintained is low. balance up to Rs 25 million. There is
no restriction on withdrawals or
numbers of transactions and there is
no deduction of service charges if the
balance maintained is low.

64 ANNUAL REPORT 2018

Karobari Munafa Account Monthly Mudarabah Certificate
Karobari Munafa Account is The Monthly Mudarabah Certificate is a
specifically tailored for large short-term deposit product for an
corporates or GoP-controlled entities investment period of one month only.
where profit is calculated on daily Profit is paid on maturity with
balance and credited into the re-investment option available on a
account on a monthly basis. The continuous basis. Minimum investment
minimum investment required for required is Rs 100,000. Pre-mature
opening an account is Rs 1 million. withdrawal can be made as per the
There is no restriction on withdrawals approved schedule.
or number of transactions and there
is no deduction of service charges if
the balance maintained is low.

Foreign Currency Savings Account Certificates of Islamic Investment

Meezan Foreign Currency Savings Certificates of Islamic Investment are
Accounts are excellent business Term Deposit Certificates for investment
tools for individuals and corporate periods ranging from 3 months to 5
clients both for meeting their years with profit payment on monthly,
business needs and for diversifying quarterly and maturity basis. Minimum
their investment in different foreign investment required is Rs 50,000. There
is no limit on maximum investment.
currencies. These accounts allow
Pre-mature withdrawal can be made as
customers to not only earn Halal per the approved schedule.
profits every month but also
safeguard their investment against
currency fluctuations. Meezan
Foreign Currency Savings Account
can be opened by individuals,
sole-proprietorships, partnerships
and limited companies in 100 USD
/ Pound / Euro only.

Meezan Kids Club Account Meezan Amdan Certificate

Meezan Kids Club Account is Meezan Amdan Certificate is a Term
introduced for children under the age Deposit Certificate that offers a
of 12 years to cultivate the habit of higher expected monthly profit to
saving in the early years. The investors for periods of 5 1/2 & 7
account can be opened with Rs 500 years. It is ideal for those individuals
only. The profit is paid on monthly and organizations that need a regular
basis. VISA Debit card fee is waived stream of monthly income. Minimum
for the first year. Exciting gifts are investment required is Rs 100,000.
given to Kids Club members on However, for senior citizens, widows
account opening. and disabled, minimum investment
required is Rs 50,000. Pre-mature
withdrawal can be made as per the
approved schedule.

Meezan Teens Club Account Monthly Mudarabah Certificate

Meezan Teens Club Account is The Monthly Mudarabah Certificate is a
Pakistan's first teens account short-term deposit product for an
designed to cater the requirements investment period of one month only.
of the age group of 12 to 18 years. Profit is paid on maturity with
re-investment option available on a
Teens Club Account can be opened continuous basis. Minimum investment
from Rs 1,000. The profit is paid on required is Rs 100,000. Pre-mature
monthly basis. VISA Debit Card fee is withdrawal can be made as per the
waived for the first year. Exciting gifts approved schedule.
await the Teens Club members upon
account opening.

ANNUAL REPORT 2018 65

 Dollar Mudarabah Certificate Smart Remittance Wallet
Dollar Mudarabah Certificate is a Smart Remittance Wallet is a unique
foreign currency term deposit wallet account with a saving facility
certificate through which the that allows customers to receive
customer can invest US Dollars for remittances directly in their account
defined period ranging from 3 months and get free airtime of Rs 2 against
to 3 years and earn profit six-monthly each dollar received. Smart Remittance
or at maturity. Minimum investment Wallet also gives good profit rates on
required is $10,000 and there is no savings, with the flexibility to use the
maximum investment limit. Pre-mature money at any time. The key product
withdrawals can be made as per features include no minimum deposit
approved schedule. requirement, no withholding tax on
withdrawals and instant account
activation through the use of biometric
technology. Biometric facility will also
allow customers to withdraw cash
from Meezan Bank branches. The
Smart Remittance Wallet holder can
Takaful Coverage maintain balance upto Rs 1.5 million.
In line with its customer-oriented
strategy, Meezan Bank is offering
Takaful coverage to all of its account
holders in case of Accidental Death Online Branches
or Permanent Disability. Customers Meezan Bank offers free online
maintaining an average monthly banking facility on all Pak Rupee Online Banking
balance of Rs 10,000 and above,
are entitled to a Takaful cover of up to accounts to online banking
Rs 1 million. In addition, ATM cash customers. This enables the Bank’s
withdrawal Takaful Coverage, on the customers to access their accounts
amount withdrawn from any ATM, is and conduct transactions from any
offered to all the account holders, in of Meezan Bank’s 660 branches
case money is snatched within the nationwide, regardless of in which
radius of 1.5 kms and 30 minutes. branch or city they have their
account. This facility provides great
Conditions apply. Please refer to the Bank’s
website. convenience for depositing and
withdrawing cash, making pay
orders and availing numerous other
banking services.
Meezan Kafalah
Meezan Kafalah is a savings plan
with Takaful coverage up to Rs 15 Smart Payroll Solution
million through which customers can Smart Payroll Solution enables
save for their future plans such as companies to manage payments
education or wedding of their child, (salary, pension, staff reimbursements
going for Hajj, planning for old age and bonus) in a cost effective, secure
etc. Meezan Kafalah is a and efficient manner. It not only allows
Shariah-compliant alternative to cash withdrawals through ATMs, but
bancassurance with easy exit option also allows customers to pay bills,
at any time. An individual can start top-up mobile credits and transfer
his plan with monthly contribution as funds to any 1Link member bank
low as Rs 2,000 only. Plans are through Meezan Bank ATMs.
available from 3 to 15 years. Companies can easily issue ATM card
to their employees and once
employees’ salaries are loaded onto
Meezan Labbaik
their accounts, they can immediately
Meezan Labbaik facilitates customers
who wish to perform Hajj & Umrah via draw cash from any of Meezan Bank’s
renowned agents on Bank’s panel. or 1Link member banks’ ATMs.
Customers have multiple Travel
Asaan payment options allowing
them to decide when and how they Mobile Banking App
want to pay off the plan. Alternatively, Designed for the customer on the go,
customers can also avail Mudarabah the App is available for download
based Labbaik Savings Asaan from Google Play and Apple App
Account in which customers can save Store. Compatible with all major
for the Hajj & Umrah of their parents, Android and iOS versions, the App
spouse, children or other family allows customers to check debit card
members on some future date.
Customers can also apply for Hajj discounts as well as to view account
through the Bank branches on the activity, pay bills, top-up mobile
Govt. Hajj Scheme as announced by phone credits, transfer funds and
the Government of Pakistan from time block / unblock cards in a fast,
to time. convenient and secure way.

66 MEEZAN BANK LIMITED

Secure e-Commerce Payments Meezan Premium Banking
Meezan Debit Cards offer secure and Meezan Meezan Premium Banking is the Bank’s
seamless online shopping experience Secure Online Shariah-compliant priority banking
via Verified by Visa and Mastercard
Payment service developed to cater the banking
Secure Code service. This technology needs of high-net worth customers.
ensures online safety by authenticating Premium Banking customers enjoy
transactions through a unique code special privileges such as:
sent to customers’ registered mobile
number or email address; eliminating ■ Meezan Mastercard Platinum Debit
the need for Web Pay Session Card - a very prestigious card,
activation. offering discounts at selected retail
outlets and restaurants across
the country, along with higher
transactional, withdrawal and fund
transfer limits.
■ Access to selected Airport lounges
at Karachi, Lahore, Islamabad,
Fonepay Multan and Sialkot and at selected
Meezan Bank has partnered with airports abroad during international
Meezan
flights.
Mastercard and Fonepay to launch Fonepay
the latest award-winning innovation ■ Dedicated Premium Banking Centres
at Karachi, Lahore, Islamabad,
in payments based on QR technology.
Rawalpindi, Faisalabad and Sialkot.
Meezan Bank customers can now
simply scan the QR image displayed ■ Premium Phone Banking is a
dedicated Call Centre exclusively
at shops to make the payment at
for Premium Banking customers.
over 100,000 merchants in Pakistan.
■ Fee waivers on selected basic banking
transactions and ADC services.

Meezan ATM Network Meezan VISA Debit Card

Meezan Bank offers a nationwide Meezan VISA Debit Card provides
network of over 625 ATMs located convenience to customers to access
at its branches and at prominent their funds anytime and anywhere, at
off-site locations across the country. all outlets and ATMs displaying the
Meezan Bank ATMs offer funds VISA symbol. The new NFC based
transfer, bill payment, mutual funds payment capability on Meezan VISA
investment and redemption, instant Debit Card allows customers to pay
debit card activation, debit card PIN for any transaction on the go by just
generation and PIN change facilities tapping the card at the merchant
in addition to cash withdrawals. counters accepting NFC payments.
Moreover, EMV Chip ensures advanced
security available to counter skimming
frauds.

Internet Banking Meezan Mastercard Debit Card

Meezan Bank’s Internet Banking facility Meezan Mastercard Titanium Debit Mastercard
provides customers global access to Card is the first Titanium debit card
their account 24 hours a day, 7 days a
User Guide
launched in Pakistan. The debit card Terms and Conditions

week. The Internet Banking facility offers comes packed with benefits for the
a suite of features such as account frequent traveller offering free access
Utility Bill Payment
IBFT Postpaid
(Inter Bank Funds Transfer) Mobile Bill Payment

statement views, payment of utility bills to airport lounges across the Middle
with Quick Pay service, funds transfer East, coupled with a wide array of
facility, cheque status inquiry, complaint exclusive offers and discounts within
logging, cheque book requisition, pay Pakistan and worldwide. Moreover,
order request and stop payment Meezan Mastercard Platinum Debit
Card caters to exclusive needs of
Mini Statement

marking. Customers can also invest and

Prepaid Mobile Phone
Cash Withdrawal Airtime Purchase

redeem funds from Al-Meezan Mutual Premium Banking customers with even
Funds. more features and benefits.
111-331-331 & 111-331-332 www.meezanbank.com

ANNUAL REPORT 2018 67

 Supplementary Debit Cards SMS Alerts
Meezan Bank Supplementary Debit Meezan Bank's SMS Alerts service Meezan
Cards allow the families of customers keeps customers informed about SMS Alerts
to share the convenience and activities in their accounts; enabling
independence of making day to day
payments. Supplementary Debit Card them to keep track of their financial
offers the same features and benefits transactions along with latest
as a primary card. A customer can avail account balance. Meezan Bank
a maximum of 5 supplementary cards. customers also get email alerts of
their transactions which is
particularly helpful for customers
travelling abroad. Corporate SMS
Alert service has also been
launched to meet the needs of
corporate clients.

Skim Guard Commercial Vehicles Ijarah

Meezan Bank has introduced an Meezan Commercial Vehicles – Ijarah
innovative mechanism by the name of offers financing facility for all the
‘Skimguard’ for the first time in Pakistan vehicles that can be used for
to reduce exposure to skimming
frauds. When a high value transaction commercial purposes. This includes
is initiated on Meezan Bank’s ATM, a financing to logistics, transportation,
passcode is sent via SMS and after distribution and oil marketing
entering the same on ATM, the companies etc. The facility ranges
transaction is completed successfully. from small truck, vans, coasters,
Skimguard service is applicable on all buses to heavy trucks, truck chassis,
ATM transactions including cash prime movers etc. This product also
withdrawal, IBFT (Meezan to Other provides customized financing plans
Bank Transfers) and 3PFT (Meezan to for specific SME and corporate
Meezan Transfers).
customers.

Meezan PayPak Debit Card Meezan Consumer Ease

PayPak is a domestic payment Durable Goods
scheme owned and operated by Meezan Consumer Ease – Durable
1Link Guarantee Ltd duly approved Goods Financing is first ever
by State Bank of Pakistan. Meezan Shariah-compliant limit based
PayPak Debit Card is a PIN based financing facility, which allows
card that ensures utmost security customers to purchase laptops,
not only at ATM machines for cash generators and various consumer
withdrawal but also at POS durable items such as LED TVs, air
terminals while shopping at all conditioners, washing machines,
merchant outlets across Pakistan. mobile phones etc. on easy and
affordable monthly installments. A
one-time limit approval makes the
process simple and hassle-free for the
customer, making him/her eligible for
multiple financing facilities for Riba-free
goods. The Consumer Ease products
are based on Shariah concept of
Musawamah, which is a general and
regular kind of sale.

SMS Banking Car Ijarah

Meezan SMS Banking is an Based on Ijarah principle, Car
interactive service that allows Ijarah is an auto finance facility. It is
customers to access their account a car rental agreement under which
on demand anytime, anywhere from the Bank purchases a new / used /
their mobile phone. imported car of the customer's
choice and rents it out for a period
of 1 to 7 years, agreed at the time of
the contract. Rental payments start
after one month delivery of vehicle
to the customer. The Bank bears
the WHT (Withholding Tax) amount.

68 MEEZAN BANK LIMITED

 delivers the commodity / goods on deferred basis. Upon
Bike Ijarah delivery, Bank sells the goods in the market.
Meezan Bike Ijarah is a
Shariah-compliant solution which is Tijarah
based on Ijarah principle, under This is a working capital solution especially for those
this facility, the Bank purchases the customers who sell their inventory on credit and require
bike and rents it out to the customer funds for operations during the credit period. In Tijarah,
for a period of 1 to 3 years, agreed the Bank purchases the finished goods from the customer
at the time of the contract. Rental and after taking the delivery, sells the goods in the market.
payments start after delivery of
vehicle to the customer. The facility Ijarah
includes full comprehensive Takaful Meezan Bank provides Ijarah based products to provide
cover as well. flexible solution for meeting long term financing
requirements of the customers. Ijarah technically means to
give something on rent. The Bank uses this product for
medium and long-term financing purposes where the
Easy Home Bank acquires the asset required by the customer and
Based on the principle of Diminishing then leases it to the customer for a fixed period. This
Musharakah, Easy Home is a product is used for the financing of fixed assets such as
Shariah-compliant home financing plant, machinery, generators, equipment, vehicles etc.
facility, in which a customer can buy Running Musharakah
or build a house, renovate an existing This is a Shirkatul-aqd based financing facility offered to
house or replace the conventional
the customers where the Bank participates in the
house loan with Islamic house
operating activities of the customer and shares profit and
finance. With flexible financing
tailored to support the customer's
loss as per the actual performance of the business. This
need, Meezan Easy Home provides product is also used as a viable financing solution for
one of the best home financing service industry and travel agents whose financing needs
solutions in the country with a are generally not addressed by other asset backed
hassle-free process and a quick products. This product is used to meet the working capital
turn-around time. requirement of the customer.

Diminishing Musharakah
This is a medium and long-term financing product, where
Financing Products the Bank and the customer jointly purchase an asset and
Meezan Bank offers a wide range of products to its create joint ownership in the asset. The Bank then leases
Corporate, Commercial and SME Customers to meet their its share in the asset to the customer while the customer
financial needs. Following is a list of the generic products purchases units of ownership in the asset from the Bank at
that are used to offer financing solutions: periodic intervals. Upon purchase of all the units, the
customer becomes the owner of the asset. This mode is
Murabaha used for financing of fixed assets such as land, factory,
Meezan Bank offers a convenient and easy-to-use solution building, machinery, equipment, vehicles etc.
for financing raw material and inventory requirements of
the customer through Islamic mode of Murabaha. Structured Finance Solutions
Murabaha is a sale transaction where the seller discloses In order to provide solutions to unique financing
the cost and profit to the buyer at the time of execution of requirements of the customers such as project financing,
sale. Murabaha is a short-term Islamic facility for meeting CAPEX and BMR requirements, short-term retail Sukuks
asset based working capital requirement of customers etc, Meezan Bank offers specialized hybrid solutions that
where instead of providing a loan, Meezan Bank sells the are specifically developed as per the special financing
required asset to the customer on spot or deferred basis. requirement of the customer.

Musawamah Shariah-compliant range of Trade Financing Solutions

Musawamah is a bargain sale in which the Bank does not Import Financing
disclose the cost and profit to the customer. Meezan Bank offers a comprehensive solution for all the
Istisna import related financing requirement of its customers.
Meezan Bank offers an Istisna based solution to finance Some of the major import financing products are as
complete working capital requirements of its customers. follows:
Istisna is a type of sale transaction where the buyer places Letter of Credit Services
an order with the seller to manufacture certain asset and In order to facilitate imports of customers, Meezan
the sale is completed upon delivery of the asset to the Bank offers letter of credit establishment services on
buyer. Under this facility, Meezan Bank provides funds to Wakalah basis at competitive rates and unmatched
customers for manufacturing certain assets for the Bank service quality.
and then, upon delivery, sells the assets in the market.
Short-term Import Financing
Commodity Salam Meezan Bank offers flexible and convenient import
This is a working capital financing solution whereby the financing facility on the basis of Musawamah /
Bank and customer enter into a sale contract in which sale Murabaha. If the customer wants to finance its letter of
price is paid by the Bank in advance and customer credit, the Bank appoints the customer as its agent to

ANNUAL REPORT 2018 69

 import the goods and customer establishes the LC as Guarantee Services
an agent of the Bank. Upon receiving possession of In order to facilitate trade, Meezan Bank offers
the goods, the Bank sells the goods to the customer on Shariah-compliant guarantee facility to its customers
a deferred payment bases. where the Bank provides different types of payment
and performance guarantees on behalf of the
Finance against Imported Merchandize
customer.
Meezan Bank also offers finance against imported
merchandize facilities to its customers on the basis of
Musawamah / Murabaha. Under this facility, the Bank Meezan eBiz
appoints the customer as its agent to import the goods Meezan eBiz allows customers to
and the customer establishes the LC as an agent of the execute critical banking transactions
Bank. Upon receiving possession of the goods, the in real time over the internet while
Bank sells the goods to the customer on deferred maintaining the security of information exchanged over
payment basis and then keeps the same goods under this channel. With the help of Meezan eBiz, customers can
its pledge for securing the payment obligations of the view their account balances, account details, account
customer. statements as well as efficiently conduct their day-to-day
transactions such as fund transfers, IBFT, salary
Hedging Facilities
payments, bill payments, payment orders etc. via an
In order to hedge the risk of foreign currency price
automated, secure and versatile electronic processing
fluctuations, Meezan Bank offers a Shariah-compliant
platform.
hedging facility on the basis of Wa’ad.
Long-term Import Financing Meezan eBiz+
Meezan Bank offers long-term import finance facilities Meezan eBiz+ is a customized
on the basis of Ijarah or Diminishing Musharakah Payments & Cash Management
where the customer imports the asset either as the solution that allows corporate
One window solution for all your Cash Management needs

Bank’s agent (in case of Ijarah) or as the Bank’s customers to not only electronically manage their banking
partner (in case of Diminishing Musharakah). Upon relationship, but also reduce operational overhead by
receipt of the asset, the asset is leased to the customer outsourcing the management of collections and
for a specified period as per the rules of Ijarah. payments. Each installation is tailor-made to meet
customers’ specific requirements including Host to Host
Export Financing integration with customer ERP system. The functionalities
Meezan Bank also offers a full range product menu for available in addition to the features offered by eBiz+
exporters where all the requirements of the exporters can include:
be fulfilled under one roof in a convenient manner. Some of
the major facilities for exporters are as follows: ■ Managing collections through customized deposit slip,
Hedging Facilities e-collections, Payment Vouchers and Direct Debit and
In order to hedge the risk of foreign currency price Alternate Delivery Channels (ADC)
fluctuations, Meezan Bank offers Shariah-compliant ■ Managing payment electronically, such as funds
hedging facility on the basis of Wa’ad. transfer, IBFT, pay-order issuance, RTGS, corporate
cheques issuance as well as dividends payments
Salam & Murabaha as alternative to Export Bill ■ Advance level customized reports and e-alerts (email,
Discounting SMS, SFTP)
In order to provide financing for the immediate ■ Online real time account statement and MIS which
financing needs of the exporters, Meezan Bank offers can be downloaded into multiple formats for
a Shariah-compliant alternative to export bill auto-reconciliation
discounting where instead of providing loan against
the export order, Meezan Bank keeps the export bill as
security and extends a fresh Murabaha financing
facility to the customer or purchases FCY against Pak
rupees from the customer on Salam basis at spot rates
to cater to the financing requirements of the customer.
Islamic Export Refinance Scheme
Meezan Bank with the collaboration of State Bank of
Pakistan offers subsidized rate financing solutions
through modes of Murabaha, Istisna, Tijarah and
Running Musharkah under Islamic Export Refinance
Scheme.
Islamic Long-term Finance Facility
Meezan Bank with the collaboration of State Bank of
Pakistan provides subsidized rate long term financing
facilities through modes of Ijarah and Diminishing
Musharakah under Islamic Long Term Finance Facility.

70 MEEZAN BANK LIMITED

 EasyHome

Live your dreams with Meezan Bank's

Easy Financing Solutions
Meezan Easy Home offers a completely Meezan Car Ijarah, for new,
Shariah-compliant way to Buy or Build used & imported vehicle, is a
the house of your dreams. Also available Riba-free car financing solution,
for renovation of house or transfer of where you get luxury with
existing mortgage facility from any other economy and have the
bank to Meezan Bank. advantage of eased rentals.

MEEZAN EASY HOME MEEZAN CAR IJARAH

• Special rates for Chartered Accountants • Affordable Rental
• Flexible Payment Plan • Minimum 15% advance rent
• Maximum Financing against property value • Rental paid after delivery of vehicle
• Flexibility to make partial pre-payments • No upfront registration charges
• Affordable and competitive installments • Easy selection of financing tenure
with regularly reducing monthly rentals from 1 to 7 years
• Minimal Processing Fees

Follow us on
The Year in Review
Chairman’s Review 74
Directors’ Report to the Members 76
Directors’ Report to the Members (Urdu) 93
Annexure to the Directors’ Report 94
Statement of Value Added and Distributed 95
Allocation of Income and Expenses to
Remunerative Depositors’ Pool 96
Statement of Inventory 97
Statement of Financing Portfolio Income 97
Business and Operations Review 98
Marketing & Corporate Communication 120
Corporate Social Responsibility 122
Sustainability Report 125
Report of the Board Audit Committee 133
Shariah Supervisory Board Report 134
Shariah Supervisory Board Report (Urdu) 141
Statement of Sources and Uses
of Charity Fund 142
Review Report to the Members 143
Statement of Compliance with
Listed Companies Code of Corporate
Governance Regulations, 2017 144
Statement of Internal Controls 146
Notice of Annual General Meeting 147
 Directors' Report to the Members

On behalf of the Board of Directors, we are pleased to in remittances and uninterrupted energy supplies to the
present the twenty-second Annual Report setting out the industrial sector.
detailed financial results of the Bank for the year ended
December 31, 2018. Notwithstanding these positive developments, significant
challenges remained on domestic and external fronts,
particularly the unfavorable balance of payment position.
Pressure on external account and a stronger dollar
resulted in a much-needed depreciation of 27% in
Pakistani Rupee against the dollar.

Rising oil prices at the start of the year resulted in core

inflation increasing to a four year high. This, along with the
pressure on the external account, led the SBP to increase
Target Rate by 425 basis points during the year bringing
the Target Rate to 10% in December 2018. Subsequently,
on January 31, 2019, the SBP, further increased the Target
Rate by 25 basis points, bringing it to 10.25%.
Fortunately declining oil prices have been a blessing for
the country and has helped ease the pressure on Balance
of Payments. At the same time, a number of steps taken by
the new Government to discourage imports and promote
exports are gradually having an impact and will help
manage the present predicament.

The Government’s monetary tightening policy such as PKR

devaluation, increase in Target Rate and import duties,
may slow down the GDP growth rates in the short-term but
we believe that these measures will yield positive results in
Best Bank in Pakistan – 2018 the longer term.
We are overjoyed and humbled that Alhamdulillah, Meezan
Bank has been recognized as the ‘Best Bank for 2018’ at Our Performance
the Pakistan Banking Awards - the most prestigious and By the Grace of Allah, Meezan Bank recorded excellent
definitive recognition of excellence in Pakistan’s banking all round results for the year ended December 31, 2018.
sector. This award has only been possible due to the The Bank posted Profit After Tax of Rs 8.96 billion, 42% up
efforts and cooperation of all stakeholders particularly our from Rs 6.3 billion in 2017 – the highest growth in the last
valued customers. It is the trust and confidence of our six years. The growth in profitability was primarily driven by
customers that has motivated us to pursue our Vision of an impressive growth in core banking income achieved
establishing “Islamic Banking as banking of first choice”. through strong balance sheet growth and Bank’s focus to
maintain a portfolio of high yield earning assets. The
The Pakistan Banking Awards are held by Institute of Earnings per Share – on enhanced share capital increased
Bankers Pakistan in collaboration with DAWN Media Group to Rs 7.67 from Rs 5.56 per share - an increase of 38%. The
and A.F.Ferguson & Co., Chartered Accountants, a book value per share increased to Rs 34.5 per share from
member firm of the PwC network, under the patronage of Rs 30.0 per share last year.
the State Bank of Pakistan. This is indeed a notable
achievement as it recognizes the significant contributions of
Meezan Bank to national development, particularly in Islamic Profit After Tax Rupees in Millions
Finance, and as an institution that manages its resources 8,962
effectively, including its employees, clients, franchise, 9,000
community and finances. Meezan Bank had previously 8,000
won the ‘Best Islamic Bank in Pakistan’ at the Pakistan
Banking Awards in 2016 and 2017. We will strive to live up 7,000
6,313
to the expectations of our valued customers as the Best
6,000
Bank in Pakistan. 5,562
5,023
5,000
Economic Overview 4,570
Pakistan’s economy performed modestly in 2018 with a 4,000
real GDP growth rate of 5.8% for the fiscal year 2017-18
which is the highest in the last five years. This achievement 3,000
is impressive especially because it has been accomplished in
2,000
the face of global head winds. Major impetus to growth came
from improved performance of services and agriculture 1,000
sectors. All major macroeconomic indicators showed
progress with healthy credit off take to the private sector, 0
2014 2015 2016 2017 2018
slowdown in imports and improvement in exports, increase

76 MEEZAN BANK LIMITED

Key Business Results

2018 2017 Growth

Profit After Tax Rs 8.96 Billion Rs 6.31 Billion 42%

Financing Rs 513 Billion Rs 420 Billion 22%

Total Assets Rs 938 Billion Rs 789 Billion 19%

Deposits Rs 785 Billion Rs 667 Billion 18%

Sub-ordinated Sukuk (Additional Tier I and Tier II) Rs 14 Billion Rs 7 Billion 100%

Equity Rs 40.3 Billion Rs 35.1 Billion 15%

Trade Business (Imports and Exports) Rs 1,013 Billion Rs 710 Billion 43%

Branch Network 660 Branches 601 Branches 10%

Presence 181 Cities 159 Cities 14%

Financial Results Rs in Millions

PROFIT AND LOSS ACCOUNT 2018 2017

Profit / return earned on Islamic financing, investments and placements 48,625 36,427
Return on deposits and other dues expensed (20,457) (15,684)
Net spread 28,168 20,743
Fee and commission income 5,257 4,166
Foreign exchange income 1,318 1,211
Dividend income 567 1,177
Gain on securities - net 8 825
Other income 312 246
Total Income 35,630 28,368
Administrative and other expenses (19,670) (16,832)
Profit before provisions 15,960 11,536
Provisions and write offs - net (1,168) (1,284)
Profit before taxation 14,792 10,252
Taxation (5,830) (3,939)
Profit after tax 8,962 6,313

Net Spread The increase in fee and commission income was also duly
The return on financings, investments and placements supported by a strong growth of 39% and 25%
increased from Rs 36.4 billion in 2017 to Rs 48.6 billion in respectively in debit card related fee and branch banking
2018, an increase of 33%, mainly due to the Bank’s continued income. Home remittance related fee grew by a healthy
focus to increase volume of high yield earning assets 52% despite the stiff competition and stringent regulatory
portfolio and its re-pricing pursuant to increase in Target requirements.
Rate. On liability side, return on deposits and other dues
expensed increased from Rs 15.7 billion in 2017 to Rs 20.5 Improvement in Income Efficiency Ratio
billion in 2018 – an increase of 30% contributed by higher Although administrative and other operating expenses
deposit volume and increase in depositors’ profit rates. increased to Rs 19.7 billion from Rs 16.8 billion primarily
due to rising inflation, rupee devaluation and increase in
Trade (import & export) Business Volume Crossed a staff expenses, rent and costs associated with new
Trillion Rupee Landmark branches, the rise in expenses is sufficiently absorbed by
Another landmark achievement during the year was the the growth in the Bank’s income resulting in improvement
increase in Trade volume to Rs 1 trillion – an impressive in income efficiency ratio to 55% from 59% last year.
growth of 43% over the previous year. This achievement
was made possible due to the efficient handling of import and Financing Crossed Half a Trillion Rupee Landmark
export transactions supported by a comprehensive network A significant achievement during the year was the increase
of over 650 world-class correspondent banking relationships in the financing portfolio of the Bank that crossed half a
all over the globe. trillion and reached Rs 513 billion from Rs 420 billion in 2017
– an impressive growth of 22%. The Advance to Deposits
Growth in Fee and Commission Income Ratio (ADR) of the Bank stood at 65%, as compared to 63%
In line with the increase in the Bank’s Trade Finance business, in 2017. The focus remains on building a high quality
the fee and commission income of the Bank increased to Rs 5.3 diversified financing portfolio targeting top notch
billion from Rs 4.2 billion in 2017 – an impressive growth of 26%. corporate, commercial and consumer clients.

ANNUAL REPORT 2018 77

 Financing Rupees in Millions issue of GoP Ijarah Sukuk since June 2017. To keep the
existing level of SLR eligible securities intact while
540,000
512,564 accounting for the maturity of GOP Ijarah Sukuk 16, the
480,000 SBP conducted its Open Market Operation (OMO) using
420,000
420,029 Bai-Muajjal Structure to manage the liquidity of Islamic
Banks.
360,000
311,530
300,000 Further, we understand that the Ministry of Power is
planning to issue Energy Sukuk guaranteed by the
240,000
207,569 Government of Pakistan which will partially address the
175,712
180,000 liquidity deployment challenge being faced by the Islamic
120,000
Banking Industry. We are hopeful that with the efforts of
State Bank of Pakistan and the Ministry of Finance, there
60,000 will be new Sovereign Sukuk issues during 2019
0 Insha’Allah.
2014 2015 2016 2017 2018

Deposits Grew By an Impressive 18% against Banking

Corporate Financing Industry Average of 8%
The Bank’s corporate financing portfolio serves multinational On liability side, the Bank’s deposit portfolio increased by
companies, large local corporate groups and public sector Rs 118 billion or 18% during the year to close at Rs 785
entities. Out of the total increase of Rs 93 billion in the billion from Rs 667 billion in 2017. The Bank’s deposits
Banks total financing portfolio in 2018, 47% was contributed grew by 18% i.e. more than double the growth in deposits
by the Corporate segment. Superior relationship of Banking Industry which grew by 8%. The Bank not only
management and an extensive product range, supported successfully expanded its deposit base but also
by an active Investment Banking team that focuses on maintained an optimal cost of funds through strong
Debt Syndications and Project Finance, has been relationship management and better customer experience.
instrumental in achieving this growth.
Deposits Rupees in Millions
SME & Commercial Financing
785,477
Meezan Bank recognizes the importance of the Small and 800,000
Medium Scale Enterprise sector as well as the Middle
market segment referred to as the Commercial portfolio 700,000
667,181
(referred to as “SME & Commercial”). The Bank focused on
capacity building in this segment with the help of the 600,000
559,398
International Finance Corporation (IFC is a subsidiary of
the World Bank). Excellent portfolio growth was achieved 500,000 468,281
with the total SME & Commercial financing portfolio
increasing by 44% from Rs 70 billion to Rs 101 billion 400,000
378,744
during the year. This segment also had a significant
contribution to the total trade business of the Bank with a 300,000
share of 41% of the total trade business handled by the
Bank. 200,000

Consumer Financing 100,000

The Bank’s Consumer segment offers car leasing (Car
Ijarah), home mortgage (Easy Home), consumer durable 0
financing (Consumer Ease) and commercial vehicle 2014 2015 2016 2017 2018
financing. The total Consumer Financing portfolio grew by
an impressive 41% during the year. You will be glad to know that the average current account
deposits of your Bank grew by 24%. The average current
Asset Quality account mix in the total deposits of the Bank improved by
The Bank increased its financing exposure in all sectors 1% year on year. The Bank maintains a strong position in
while simultaneously maintaining quality of its portfolio and the Banking Industry with a share of deposits of 5.9% as
ensuring all the risk parameters are met. It is pertinent to compared to 5.4% in 2017. The Bank remains committed to
mention that the Bank’s financing portfolio is growing continuously raise service quality standards and set new
remarkably every year without compromising on the quality benchmarks in customer care to ensure service delivery
of assets. The Bank has one of the lowest non-performing across all channels.
financing ratio in the Banking Industry of 1.3%, down from
1.5% in 2017 and compared to an average of 8% for the Effective from July 01, 2018, the SBP introduced Deposit
Banking Industry as a whole - a testimony to the stringent Protection Mechanism whereby all scheduled banks are
risk acceptance parameters of the Bank. The Bank maintains required to pay annual premium calculated at 0.16% of their
a comfortable level of provisions against its non-performing respective “aggregate eligible deposits”. As a result, the
financings with coverage ratio of 139%. Bank has recognised and paid a charge of Rs 434 million
for the half year period from July 2018 to December 2018.
Investments
The investments portfolio of the Bank closed at Rs 124 Branch Expansion Strategy – An Investment in Future
billion as compared to Rs 119 billion in 2017. Liquidity During the year, the Bank further expanded its foot prints
management remained a key challenge for Islamic Banking across the country and opened 59 new branches bringing
Industry of Pakistan as there are limited investment the total number of branches to 660 in 181 cities (2017:
avenues despite sufficient liquidity. There has been no new 601 Branches in 159 cities). The extensive branch network

78 MEEZAN BANK LIMITED

of the Bank provides excellent client coverage throughout Share of Meezan Bank in
the country and has contributed to the consistent growth of Islamic Banking Industry - Based on deposits
the Bank. This ‘brick & mortar’ network is strongly
supplemented by the comprehensive array of digital 26%
35%
services, including Internet Banking, Mobile App and other
Alternate Distribution Channels, thereby ensuring
customers enjoy a seamless and efficient banking
experience. We believe that Pakistan has a significant
growth potential in retail banking and with an extended and
well diversified geographical outreach, the Bank is Meezan Bank
well-positioned to cater the banking needs of the masses. Islamic Windows of
39% Conventional Banks
Other Islamic Banks
Branch Network
Dividend per share
700
660 The Board has recommended the final cash dividend of
Rs 2 per share (20%) for the year 2018 bringing the total
601
600 payout for the year to Rs 3.5 per share (35%) as Rupee 1.5
571
551 per share i.e. 15% interim cash dividend was paid
alongwith issuance of 10% Bonus Shares during the year.
500
The Bank has maintained its unbroken payout record since
428 the date of listing on the Stock Exchange.
400
Upgraded Credit Rating
You will be happy to know that the JCR-VIS Credit Rating
300
Company Limited, an affiliate of Japan Credit Rating
Agency, Japan has upgraded your Bank’s credit rating as
200 follows:
Rating Type Previous Credit Rating Upgraded Credit Rating
100
Entity Long-term AA (Double A) AA+ (Double A Plus)
Entity Short-term A1+ (A One Plus) A1+ (A One Plus)
-
2014 2015 2016 2017 2018
Subordinated Tier II Sukuk AA- (Double A Minus) AA (Double A)
Additional Tier I Sukuk Not Applicable AA- (Double A Minus)
Issue of Additional Tier I Capital and Capital Adequacy Ratio
Another important achievement during the year was the
successful issuance of Additional Tier I capital of Rs 7 The JCR-VIS has maintained the Bank’s short term rating at
billion, in form of perpetual, unsecured and sub-ordinated A1+ (A One Plus) with stable outlook which is the highest
Sukuk that further strengthened the Bank’s Capital standard in short term rating. The assigned ratings
Adequacy Ratio and supported the growth strategy of the indicate sound performance indicators of the Bank.
Bank. The Bank initially planned the issue size of Rs 5
billion however as the issue received an overwhelming Corporate Awards and Recognitions
response from the investors, the Bank increased the issue Meezan Bank has a history of achieving exemplary
size to Rs 7 billion. The Sukuk has been rated AA- (Double achievements and receiving awards at national and
A minus), by JCR-VIS Credit Rating Company Limited, an international level. These accolades recognize the degree
affiliate of Japan Credit Agency, Japan. of success enjoyed by Pakistan’s first and the largest
dedicated Islamic Bank and one of the fastest growing
As a result, the Bank’s CAR now stands at 14.55% - well
institutions in the country. Meezan Bank won the following
above the minimum mandatory level of 11.90% for the year
2018 and this will support the future growth plans of the prestigious awards during the year:
Bank. The Bank is a well-capitalized institution and
maintains a healthy CAR through strong profitability, Tier I Pakistan Banking Awards
and Tier II capital issues and effective management of ■ Best Bank 2018
its risk weighted assets (RWAs).
International Finance Awards
Islamic Banking Industry ■ Most Innovative Islamic Bank, Pakistan
Islamic Banking has taken strong roots in Pakistan with
Meezan Bank as a market leader offering a complete range Islamic Finance News (IFN)
of Islamic banking products and services. Islamic Banking ■ Best Islamic Bank in Pakistan
Industry deposit accounts for almost 15% of the total Banking ■ Best Islamic Bank for Treasury Management
Industry deposits. The Bank’s market share amongst the – Global Award
full-fledged dedicated Islamic Banks operating in Pakistan
is approximately 57%. Meezan’s market share for the CFA Society of Pakistan
Islamic Banking Industry as a whole including Islamic ■ Islamic Bank of the Year
Banking windows of conventional banks in Pakistan is 35%.
Global Finance
■ Best Islamic Financial Institution in Pakistan
■ The Innovators – ‘The Innovator 2018’ for Masterpass
QR Payments through FonePay

ANNUAL REPORT 2018 79

 ICAP & ICMAP customers; however customers have to contribute towards a
■ Best Corporate Reports Award (Securing Third position) charity account in case of late payment to disincentivise
– Banking Sector misuse of the system. Also, if during a Shariah-audit, a
transaction is identified where the process defined to ensure
Asset Triple A Islamic Finance Awards – Hong Kong
Shariah-compliance is not followed, income of such a
■ Best Islamic Bank in Pakistan
■ Best Islamic Trade Finance Bank in Pakistan
transaction is transferred to charity account. This practice
■ Best Islamic Retail Bank in Pakistan differentiates Meezan Bank from conventional banks. During
■ Best Islamic Investment Bank in Pakistan 2018, a total of Rs 38 million was paid from the charity
■ Sukuk Advisor of the Year – Pakistan account on behalf of the customers and to purify the
non-compliant income to different charitable organization
Asset Triple A Asia Infrastructure Awards and NGOs, with a major portion given to Ihsan Trust, an
■ Renewable Energy Deal of the Year - Hydropower independent trust formed on the directives of Meezan Bank’s
– Pakistan Shariah Board to contribute towards education and
■ Oil and Gas Deal of the Year – Pakistan
healthcare-related initiatives.
Asian Banking and Finance Corporate & Investment
In addition to the above, a significant contribution made to
Banking Awards
■ Syndicated Loan of the Year, Pakistan
the national exchequer this year was a donation of Rs 15
million made jointly by the Bank and its staff to The Supreme
PakWheels.com – People’s Choice Awards Court of Pakistan and the Prime Minister of Pakistan Diamer –
■ Most Popular Bank in Pakistan’s Islamic Auto Financing Bhasha and Mohmand Dams Fund (Dam Fund) for the
sector construction of the dams, affirming the Bank’s commitment to
this important national cause. The Bank also continues to
The Banker collect donations and contributions for the Dam Fund through
■ Islamic Bank of the Year, Pakistan its extensive nationwide network of 660 branches as well as
its ATMs, Internet Banking and Mobile Banking channels, in
Global Islamic Finance Awards accordance with the directives of the State Bank of Pakistan.
■ Shariah Authenticity Award
The amount of donation collected for the Dam Fund so far
■ Shariah Auditor of the Year
amounts to Rs 464 million.
Mastercard MENA Acquirer Forum
■ Spearheading Acceptance Location Growth The disclosure required under Company’s Corporate Social
Responsibility (General Order, 2009) has been duly made in
Islamic Finance Forum of South Asia (IFFSA) Awards the Annual Report.
■ Gold Award For Islamic Finance Education Provider
■ Gold Award For Islamic Finance Advisory Services Corporate and Financial Reporting Framework
Provider The Board of Directors is fully cognizant of its responsibility
■ Gold Award For Islamic Finance Deal of the Year under the Listed Companies (Code of Corporate
■ Gold Award For Islamic Investment Bank of the Year Governance) Regulations, 2017 issued by the Securities
■ Silver Award For Bank of the Year
and Exchange Commission of Pakistan. The following
statements are a manifestation of its commitment towards
Employers Federation of Pakistan (EFP)
high standards of Corporate Governance and continuous
■ Recognition Award - Best HRM Practices
■ Recognition Award - Employer of the Year
organizational improvement.

Corporate Social Responsibility & Charity Funds 1. The financial statements prepared by the Management
Management of the Bank present fairly its state of affairs, the results
Charity is one of the most important pillars of a healthy of its operations, cash flow and changes in equity.
society. Keeping this and the Islamic principles of Ihsan in
2. Proper books of account of the Bank have been maintained.
mind, Meezan Bank recognizes its responsibility as a
conscientious corporate institution and integrates Corporate 3. Appropriate accounting policies have been
Social Responsibility (CSR) as an integral part of its value consistently applied in preparation of financial
system. As a socially responsible organization, the Bank statements except for the change in accounting policy,
recognizes that it is part of the community at large and that duly disclosed in notes to the financial statements. The
there is a strong need to contribute to the society and support accounting estimates are based on reasonable and
those in need, be it on financial or non-financial basis. The prudent judgment.
Bank remains committed to its objective of paying back to the
society - both directly and indirectly, and in this regard have 4. International Financial Reporting Standards as
contributed through various ways and means. applicable in Pakistan have been followed in
preparation of financial statements and departure from
Since the Bank operates strictly on Shariah approved these has been adequately disclosed, if any.
principles, there are no late payment penalties taken from the

80 MEEZAN BANK LIMITED

5. The system of internal controls is sound in design and line of defense and are primarily responsible for managing
has been effectively implemented and monitored. The risks on day-to-day basis. Risk management and other
ultimate responsibility of the effectiveness of internal control functions being the second line of defense are
controls system and its monitoring lies with the Board. responsible for assisting business lines for designing and
An Audit Committee has been formed for this purpose implementing adequate controls to manage risks within the
that meets periodically and independently throughout limits prescribed by regulators and set under risk appetite
the year with the management and also the internal framework. The internal audit & business review function
and external auditors to discuss the effectiveness of provides independent assurance on adequacy of Bank’s
internal controls system and other financial reporting internal controls and risk management environment.
matters. In addition, there are financial forecasts and
budgetary control procedures in place, which are Risk Management activities are performed at strategic,
reviewed and monitored throughout the year to macro and micro levels. The overall responsibility for risk
indicate and evaluate variances from the budget. management rests with the Board of Directors and it has
constituted Board Risk Management Committee comprising
6. There are no doubts upon the Bank’s ability to continue of Board members with well-defined terms of reference. Over
as a going concern, Insha’Allah. the period of time, the scope of Risk Management Group
(RMG) has been continuously broadened mainly focusing on
7. The directors of the Bank are in compliance with establishing & improving upon risk management policies and
respect to training requirements. procedures, limit structuring and strengthening systems and
controls. It also includes risk assessment and measuring
8. The appointment of the Chairman and other members
techniques, reporting of risk profile at appropriate level,
of the Board and terms of their appointment along with
generating early warning signals, suggesting remedial
the remuneration policy adopted are in the best interests
measures and enhancing level of awareness about risk
of the Company as well as in line with the best practices.
management principles and practices all across the Bank.
9. Key operating and financial data for the last six years in These measures are aligned with applicable Shariah
summarized form, categories and pattern of guidelines, regulatory instructions including but not limited to
shareholding are annexed to the report. Basel accord, best industry practices and Bank’s growth
strategy.
10. The value of investments of the Bank’s recognized
Provident Fund and Gratuity Fund as at December 31, Various management level committees comprising of
2018 are as under: members with relevant experience and expertise perform
their functions as per their approved mandate so as to ensure
- Staff Provident Fund Rs 2,661 million that risk exposures are within risk appetite of the Bank while
- Staff Gratuity Fund Rs 1,063 million providing roadmap to achieve strategic and business goals.
The management committees include:
11. The purchase and sale of shares by the Directors,
Chief Executive, Chief Financial Officer, Head of 1. Credit Risk Management Committee (CRMC)
Internal Audit and Company Secretary during the year 2. Asset Liability Management Committee (ALCO)
and pattern of shareholding is included in the report. 3. Compliance & Operational Risk Management
Committee (CORMC)
Compliance with Listed Companies
(Code of Corporate Governance) Regulations, 2017 The CRMC ensures that credit risk activities of the Bank fall
The requirements of the Code of Corporate Governance set within the ambit of approved policies, regulatory
out by the Securities and Exchange Commission of Pakistan requirements, risk appetite thresholds and industry norms.
in the Listed Companies (Code of Corporate Governance) Credit Committee, the sub-committee of CRMC is the highest
Regulations, 2017 relevant for the year ended December 31, level body for approval of financing transactions. ALCO
2018 have been adopted by the Bank. A statement to this reviews market, liquidity and country risk exposures, assets
effect is annexed with the report. and liabilities mix and maturity profile, sets pricing and takes
decisions for sound liquidity management. The Bank has
Risk Management Framework established the Compliance and Operational Risk
Risk Management Framework in Meezan Bank comprises Management Committee (CORMC) focusing on issues
governance and organizational structure, policy and arising from compliance risk along with operational risk and
procedural framework, risk assessment techniques, tools, control issues. The Committee facilitates in implementation of
systems, early warning indicators, reporting and escalation compliance program and oversees money laundering and
mechanism aligned with the Bank’s strategic directions and financing terrorism risk.
business goals set by the Board of Directors and
commensurate with size and scope of the Bank. An entity Credit risk is being managed through comprehensive
wide ‘Three Lines of Defense” model for risk management financing policies and detailed procedures, well-defined
with clearly defined roles and responsibilities is at the core of credit approval processes, prudently established financing
Bank’s operations. Business lines / front offices serve as first approval delegation authorities, balanced risk-reward trade

ANNUAL REPORT 2018 81

 off, limit and products structuring, concentration limits, control self-assessment, enhanced coverage of key risk
adequate collateral coverage, documentation, legal and indicators and improvements in processes through risk
hindsight reviews and reporting structure. The Bank’s identification, mitigates and awareness sessions reflects
strategy is to ensure financing growth while focusing on upon continuous improvements in operational risk
comprehensive risk analysis and portfolio diversification to management framework. The Bank monitors capital
mitigate risks and improved turnaround time to fulfill needs of adequacy position of the Bank on proactive basis and
customers. Market risk is managed through the Board strategizes accordingly. Coverage of business continuity
approved market risk policy; regulatory & internally approved plans has been further strengthened at branch level by
market risk limits, counterparty and dealer limits and regular conducting evacuation drills. Wide range of system and
review and monitoring of the investment portfolio by the customized reports for all types of risk exposures, escalation
Bank’s ALCO. The Bank uses Value at Risk (VaR) techniques matrices, effective approval processes, awareness
for market risk measurement. Regulatory reserve programs and close collaboration among various functions
requirements, liquidity mismatches, deposit mix and and growing understanding to view risk profile at enterprise
concentration, and other tools are used to gauge the liquidity level and risk modules will further strengthen the role of risk
management of the Bank on daily basis. Further, Regulatory management and other control functions to manage risks on
Liquidity framework under Basel is in place that also proactive basis.
strengthens the liquidity risk framework. Country risk
exposures are managed through policy parameters and Statement of Internal Controls
limits establishment. Operational risk is managed through The Board is pleased to endorse the Statement made by
standing operating procedures, deployment of necessary the Management relating to internal controls. The
human resources, training and development, segregation of Management’s statement on internal controls is included
duties, strengthening maker, and checker and approving in the Annual Report.
mechanism, risk indicators, system-based reports, business
continuity and disaster recovery plans. Pattern of Shareholding
The pattern of Shareholding as at December 31, 2018 is
Under Risk Management Group, capacity building both in annexed with the report.
terms of hiring of additional fresh and experienced human
resources, participation of staff in variety of training and Directors
development programs and growing focus of getting Following the expiry of the three year term of the previous
certifications in related areas leads to enrichment of the Board of Directors, an election of Directors was held on
expertise and implementation of best practices. Full-fledged November 17, 2018 and a new Board was constituted.
credit risk function caters corporate, investment banking, The Board would like to thank and wishes to place on
commercial & SME, agriculture and consumer business record its sincere appreciation for the valuable services
segments. The coverage of RMG in credit assessment of rendered by the outgoing directors Mr. Mohammad Abdul
individual and group customers has been enhanced through Aleem, Mr. Muhammad Zarrug Rajab, and Mr. Talal S.A.
four-eye principle, limits structuring and deployment of risk Al-Shehab. The Board congratulates all the elected
officers in the field. The Bank has successfully implemented directors. The new Board consists of eleven directors,
automated financing approval system for corporate and including CEO as a deemed director. The Bank has
commercial customers that was further streamlined the already submitted applications for the Fit and Proper Test
approval process. The Bank conducts regulatory & internal of the Directors to the SBP which is in process of reviewing
stress testing for credit, market, liquidity and operational risk the same. Composition of the Board is as follows:
by applying various shocks under different scenarios.
S. No Names
Enterprise Risk Management (ERM) setup is in place under
RMG catering market, liquidity, financial institutions,
operational, business continuity risks, Basel implementation, 1. Mr. Riyadh S.A.A. Edrees - Chairman
hindsight reviews of financing cases, their monitoring and
2. Mr. Faisal A.A.A. Al-Nassar - Vice Chairman
risks related policy framework. The role of ERM has been
closely integrated into formulating capital strategy of the 3. Mr. Bader H.A.M.A. Al-Rabiah
Bank. The Board has established a comprehensive Recovery
Plan dealing with various crisis scenarios along with trigger 4. Mr. Mansur Khan
events and appropriate remedial action plans. In order to
further strengthen the scope of risk management, the Bank 5. Mr. Alaa A. Al-Sarawi
recognizes the importance of environmental, sustainability,
6. Mr. Saad Fazil Abbasi
compliance and information security risks as distinct types of
risks and continuously improves upon to cater these risks. 7. Mr. Mohamed Guermazi
Periodic review and update of contingency funding plan
helps the Bank to assess its liquidity position and prospective 8. Ms. Laila M. S. A. S. A. S. Abbas (Resigned on February 19, 2019)
under stressed environment. The role of market risk function
in monitoring of treasury activities has been strengthened 9. Mr. Noorur Rahman Abid
with limits structuring, robust monitoring mechanism,
reporting and system improvements. Operational losses 10. Mr. Ariful Islam - Deputy CEO
reporting, initiatives to mitigate incidents of fraud and
11. Mr. Irfan Siddiqui - President & CEO
forgeries, improvements in managing security risk, risk and

82 MEEZAN BANK LIMITED

The record of the Board meetings held during the year and it reviews the effectiveness of its performance periodically.
attended by the Directors is as follows: To that end, all individual Board members answer a
comprehensive questionnaire focused on evaluating, from
Name of Directors No. of No. of various angles, whether the Board has discharged its
Meetings Meetings duties diligently and with foresight. A committee of
held Attended Directors is designated to collate individual responses and
Mr. Riyadh S.A.A. Edrees - Chairman 4 4 present them to the Board for deliberation and discussion.
During the self-evaluation exercise, the Board evaluates
Mr. Faisal A.A.A. Al - Nassar - Vice Chairman 4 4 itself from the following perspectives:

Mr. Bader H.A.M.A. Al-Rabiah 4 4

■ Evaluation of the overall Board
■ Evaluation of the Chairperson
Mr. Mansur Khan 4 4
■ Evaluation of Individual Directors
Mr. Alaa A. Al - Sarawi 4 4 ■ Evaluation of Independent Directors
■ Evaluation of Board Committees
Mr. Saad Fazil Abbasi* 3 - ■ Evaluation of the CEO

Mr. Noorur Rahman Abid 4 4 This exercise in critical self-assessment allows the Board
to evaluate its performance and overall effectiveness in
Mr. Muhammad Zarrug Rajab** 4 3
setting strategies, devising control processes, reading
Mr. Mohammad Abdul Aleem** 4 4
market trends by monitoring micro and macroeconomic
factors, and responding to adverse unforeseen situations
Mr. Talal S.A. Al-Shehab** 4 4 to further the cause of a learning organization. This
process also ensures that the Board is constantly growing
Mr. Ariful Islam - Deputy CEO 4 4 intellectually and the responsibility of steering the Bank to
new heights of success is discharged effectively and
Mr. Irfan Siddiqui - President & CEO 4 4 efficiently.

*Mr. Saad Fazil Abbasi was appointed with effect from February 28, Auditors
2018. The present auditors, EY Ford Rhodes, Chartered
**Mr. Mohammad Abdul Aleem, Mr. Muhammad Zarrug Rajab, and Accountants retire and being eligible offer themselves for
Mr. Talal S.A. Al-Shehab retired during the year. reappointment. As required under Listed Companies (Code
of Corporate Governance) Regulations, 2017 the Board and
The name of the members and their attendance in meetings the Audit Committee has recommended the appointment of
of the Committees formed by the Board held during the year EY Ford Rhodes, Chartered Accountants as auditors of the
is included in the Annual Report. Bank for the year ending December 31, 2019.

The remuneration of the Board members is recommended by Al Meezan Investment Management Limited – Subsidiary
Board and approved by the shareholders in General We acknowledge the excellent performance of our
meeting. However, in accordance with the Code of subsidiary, Al Meezan Investment Management Limited
Corporate Governance, it is ensured that no Director takes (Al Meezan). Al Meezan is the leading asset management
part in deciding his own remuneration. The Bank does not company in Pakistan with a track record of over 23 years
pay remuneration to non-executive directors except fee for of fund management operations and has a distinction of
attending the meetings. In order to retain the best talent, the having exclusive mandate of providing Shariah-compliant
Bank’s remuneration policies are structured in line with investments solutions to its investors. The Company offers
prevailing industry trends and business practices. For a comprehensive product suite of 16 mutual funds and
information on remuneration of Directors and CEO in 2018, multiple investment plans spanning from basic equity and
please refer notes to the Financial Statements. income funds to commodity funds, dedicated equity fund
and aggressive asset allocation funds. The company also
The Bank has a policy in place for dealing with conflicts of manages the largest Voluntary Pension Fund in Pakistan.
interest relating to members of the Board. Under this policy, With a healthy investor base of over 91,600 customers Al
any Director who has a business interest in a matter being Meezan is the largest Shariah compliant asset
presented at a Board meeting does not participate in neither management company of the country with Assets under
the discussion nor the decision on that matter. The policy is Management (AUMs) crossing Rs 87.9 Billion mark in
applied consistently and there was no breach of this policy December 2018. Its AUMs represent around 15% of the
during the year. total mutual funds industry and 43% of the Shariah
compliant mutual funds industry. The Company is also
Performance evaluation Mechanism for the Board increasing its presence and has now 23 branches across
The Board of Directors and its sub committees are Pakistan, with 6 of them were opened this year.
competent and experienced, representing diversified
educational and vocational backgrounds which are Future Outlook and Strategy
invaluable in determining the overall direction of the The near term challenges to Pakistan’s economy continue
organization. The Board of Directors is keen to ensure that to persist with the rising inflation, an elevated fiscal deficit

ANNUAL REPORT 2018 83

 and low foreign exchange reserves. The recent decline in diversified customer base, for which we remain indebted
international oil prices would play a positive role in slowing to them. We sincerely thank each one of our team
down the current inflationary trajectory and will instill members for their hard work and commitment. May Allah
confidence in the foreign exchange market. Almighty bestow His blessings on our entire team and their
families.
Our focus will be on maximizing our franchise value by
accelerating the growth momentum and ensuring access The Board would like to express its sincere thanks and
to financial services to a wider population through our vast gratitude to the State Bank of Pakistan, the Ministry of
branch network well distributed across urban and rural Finance, the Securities and Exchange Commission of
areas of the country. Active acquisition of new to bank Pakistan and our Shariah Supervisory Board for their
customers will be a key area of focus to further enhance continuous commitment to establish a viable Islamic
our existing customer base while simultaneously financial system in the country. We would also like to
improving our deposit mix. Our financing decisions shall congratulate the State Bank of Pakistan for being
continue to be based on maintaining asset quality and recognized as the ‘Best Central Bank in Promoting Islamic
maximizing yields. Finance’ by Islamic Finance News – Malaysia. We are
hopeful that with the continued efforts of the Ministry of
The Bank remains committed to contribute to the country’s Finance, SBP’s Islamic Banking Department and
development projects and working with large corporates Implementation Committee for promotion of Islamic
for their funding requirements. Mainly, we plan to increase Banking, there will be more Sukuk issues in the future.
our exposure in SME sector which has scope for
substantial growth. The Bank has already engaged IFC We would also like to thank our Board members,
advisory services to further penetrate in the SME segment. shareholders, holders of Additional Tier I Sukuk and
subordinated Tier II Sukuk for their continued support and
Despite the challenging external environment, the Bank the members of the Shariah Supervisory Board for their
intends to accelerate its branch expansion strategy and unrelenting efforts towards establishing Meezan Bank as
will add more than hundred branches during the next year the premier Islamic bank. Most importantly, we are
to further increase its geographical presence across the thankful to Allah Almighty for his continued blessings on
country. The Bank’s priority is to ensure that Islamic our Bank which has enabled us to achieve this incredible
banking products and services are made available across performance in a very short span of time and we pray that He
the length and breadth of Pakistan through an extensive gives us more strength and wisdom to further expand our
branch network duly supported by new technologies that vision of making Islamic banking as banking of first choice.
is critical for effective market penetration.

We will continue to invest substantially in technology to On behalf of the Board.

further improve efficiency and productivity and enhance
security of our banking transactions and customer data.

Culture is an important element of value system of the

Bank. The Bank believes in building a professionally
competent workforce that delivers a world-class banking
experience to customers. We continue to invest in our
human resources by providing them learning and Riyadh S.A.A. Edrees Irfan Siddiqui
development opportunities focused on capacity building of Chairman President & CEO
our resources and preparing them for future leadership roles.
Karachi:
Islamic banking has a good future in Pakistan and its share February 21, 2019
in the country’s Banking Industry is continuously rising. We
believe that a robust and viable Islamic Banking Industry
will play a critical role in increasing the savings rate in the
country.

Meezan Bank remains committed to its Vision to ‘establish

Islamic banking as banking of first choice’ and will
continue to play its pioneering role in Islamic banking to
contribute to the growth of Islamic banking in Pakistan.
The Board is confident that the Bank will Insha’Allah
continue to play its leadership role in evolving Islamic
Banking Industry in Pakistan.

Acknowledgement
The landmark achievements of Meezan Bank would not
have been possible without the proactive support of our

84 MEEZAN BANK LIMITED

 Annexure to the Directors’ Report
For the year ended December 31, 2018

The purchase and sale of shares by the Directors, Chief Executive, Chief Financial Officer (CFO) and Company Secretary,
their spouses and minor children during the year are given below:

Number of Number of Number of Bonus Right Shares Number of

Shares as at Shares Shares sold Shares alloted Subscribed Shares as at
Jan. 01, purchased during during December. 31,
2018 during the year the year the year 2018

NAME OF DIRECTORS
Mr. Mohammad Abdul Aleem* 195,384 - - 19,538 - 214,922
Mr. Noorur Rahman Abid 3,029,143 - - 302,914 - 3,332,057
Ms. Laila M.S.A.S.A.S. Abbas** - 501 - - - 501
Mr. Irfan Siddiqui 3,411,150 - - 341,114 - 3,752,264
Mr. Ariful Islam 1,904,176 - - 190,417 - 2,094,593

CHIEF FINANCIAL OFFICER

Mr. Shabbir Hamza Khandwala 587,378 - - 58,737 - 646,115

HEAD OF INTERNAL AUDIT

Mr. Ebrahim Yakoob - - - - - -

COMPANY SECRETARY
Mr. Muhammad Sohail Khan 11,286 - - 1,128 - 12,414

* Mr. Mohammad Abdul Aleem retired on November 17, 2018.

** Ms. Laila M.S.A.S.A.S. Abbas resigned on February 19, 2019.

94 MEEZAN BANK LIMITED

Statement of Value Added
and Distributed
2018 2017
% %
Rupees in ‘000 Rupees in ‘000
Value Added

Profit / return on Islamic financings, investments

and placements - net of provision 47,456,407 100.0% 35,143,606 97.1%

Fee and commission income 5,257,170 11.1% 4,165,971 11.5%

Dividend income 567,429 1.2% 1,176,517 3.2%

Foreign exchange income 1,318,460 2.8% 1,210,827 3.3%

Gain on securities and other income 319,444 0.7% 1,070,967 3%

54,918,910 42,767,888
Operating and other expenses excluding salaries,
depreciation, amortisation and workers welfare fund (7,478,953) (15.8%) (6,563,649) (18.1%)
47,439,957 100% 36,204,239 100%

Value allocated as follows:

To Depositors / Financial Institutions

Profit on deposits and other dues expensed 20,456,948 43% 15,683,700 43%

To Employees
Salaries, allowances & other benefits 10,092,557 21% 8,391,105 23%

To Shareholders
Cash Dividend 2,922,981 6% 3,008,213 8%
Bonus Shares 1,062,902 2% - -
3,985,883 8% 3,008,213 8%

To Government
Workers Welfare Fund 363,001 1% 241,377 1%
Income tax 5,830,206 12% 3,939,243 11%
6,193,207 13% 4,180,620 12%
To Expansion
Depreciation & amortisation 1,735,045 4% 1,636,047 5%
Retained in business 4,976,317 11% 3,304,554 9%
6,711,362 15% 4,940,601 14%
47,439,957 100% 36,204,239 100%

Statement of Value Added & Distributed 2018 Statement of Value Added & Distributed 2017

15% 14%

13% 12%

43% 43%

8% 8%

21% 23%

To Depositors/Financial Insitutions To Employees To Shareholders To Government To Expansion

ANNUAL REPORT 2018 95

 Allocation of Income and Expenses to
Remunerative Depositors’ Pool
For the year ended December 31, 2018
2018 2017
Rupees in '000

Income from financing activities 29,061,728 20,793,510

Income from investments 6,139,566 5,969,474
Income from placements with financial institutions 11,522,776 8,612,593
Other income attributable to pools 2,717,152 2,209,095
Total Income 49,441,222 37,584,672

Less: Directly attributable charges to pools including takaful (Note) (1,431,931) (959,646)
Less: Profit on assets allocated to IERS and other special pools (8,676,943) (5,035,426)
Less: Profit share allocated to bank's equity and other pools
in Mudarabah pools (11,717,502) (9,249,421)
Gross distributable Income 27,614,846 22,340,179

Mudarib (Bank) share of profit before hiba 14,057,355 11,323,001

Less: Hiba from Mudarib (Bank) share (1,388,628) (1,491,157)
Net Mudarib (Bank) Share of profit 12,668,727 9,831,844
Rab-ul-Maal share of profit 14,946,119 12,508,335

Rab-ul-Maal share of profit is distributed as follows:

Remunerative depositor's profit share in Mudarabah pools 14,946,119 12,508,335

The Bank maintain following four remunerative general pools:

Net Income Profit share Mudarib Hiba from Net Mudarib Remunerative
allocated to allocated to (Bank) Mudarib (Bank) share depositors'
General Pool bank's equity share of (Bank) of profit share in
and bank's and other profit share Mudarabah
equity pools pool
2018
Rupees in '000
Rupee deposit pool 38,060,143 11,430,491 13,314,826 1,388,628 11,926,198 14,703,454
Dollar deposit pool 1,231,221 270,257 720,723 - 720,723 240,241
Pound deposit pool 37,775 15,365 20,169 - 20,169 2,241
Euro deposit pool 3,209 1,389 1,637 - 1,637 183

39,332,348 11,717,502 14,057,355 1,388,628 12,668,727 14,946,119

2017
Rupees in '000
Rupee deposit pool 30,903,519 9,158,057 10,872,732 1,491,157 9,381,575 12,363,887
Dollar deposit pool 644,561 78,055 424,879 - 424,879 141,627
Pound deposit pool 29,535 7,863 19,505 - 19,505 2,167
Euro deposit pool 11,985 5,446 5,885 - 5,885 654

31,589,600 9,249,421 11,323,001 1,491,157 9,831,844 12,508,335

Note: Administrative and operating expenses (including salaries and marketing costs) are paid by the Bank and not charged
to the Depositors' pool as per the guidelines of Mudarabah Pools.

96 MEEZAN BANK LIMITED

Statement of Inventory
Meezan Bank provides financing through various sale-based modes including Murabaha, Musawamah, Istisna, Tijarah,
Salam, etc. Under these modes, the Bank either purchases the goods to be financed or gets them manufactured. It then
sells the goods to the customer on spot / deferred basis.
This statement signifies the difference of Islamic modes of financing that is based on trade of real assets and goods.
It also demonstrates the exposure that the Bank takes in different sectors.
The goods lying unsold at the date of the financial statements are carried as inventory in the financial statements of the
Bank. The sector wise detail of inventory held by the Bank as at December 31, 2018 is as follows:

2018 2017
Sector Nature of Inventory Rs. in ‘000 Rs. in ‘000
Agriculture & Food Products Corn, Sugar, Soyabean, Ghee, Canola, Rice (Grain, Paddy), Wheat, Syrups, Oil Cake,
Edible Oil 14,588,574 9,889,810
Chemical and Pharmaceutical Chemicals, Medicines, Paints, Fertilizer, Polymers 3,291,088 2,833,451
Petroleum Products High Speed Diesel, Low Sulphur Furnace Fuel Oil, High Sulphur Furnace Fuel Oil,
Premium Motor Gasoline 7,274,000 155,000
Textile Cotton (Raw Cotton, Bales, Fabric, Yarn), Bed Sheets, Garments,
Home Textile Products (Towels, Pillow Covers, etc) 5,906,976 4,241,682
Wholesale & Retail Trade Rock Phosphate, Coal, Caps and Corks, Confectionary Items, Medical Machinery 1,617,206 1,330,567

Construction Iron & Steel, Sanitary Items & Fittings, Pipes, Cement Bags 797,283 2,314,681
Others Poultry Feed, Float Glass, Copper Wire, Bottle Caps, Ship Scrap, Battery Lead Panels,
Electronic Components, Sport Goods, Cars, ATM Machines, Fans, Foam, Auto Spare,
Finished Leather, Parts, Paper, Packaging & Material (Chip Boards, Glass Vials,
Glass Bottles) 3,113,706 1,017,621

Grand Total 36,588,833 21,782,812

Sector-wise Breakup
2% 9%

40%
4%

16% Agriculture & Food Products

Chemical and Pharmaceutical
Petroleum Products
Textile
Wholesale & Retail Trade
Construction
Others

20% 9%

Statement of Financing Portfolio Income

Meezan Bank provides financing to its Corporate, Commercial, SME, Agriculture and Consumer banking customers using
a variety of Shariah-compliant modes of financing. The below mentioned matrix shows the percentage of income earned
on different financing modes, and depicts a well balanced and diversified financing portfolio of the Bank.
The diversification has been achieved by using arrangements based on trade, rent, joint ownership, profit / loss
partnership and agency, to suitably meet the needs of customers and provide a halal return.
Rs in Million
2018 2017
Islamic mode of financing Amount % Amount %
Running Musharakah 9,425 31.20% 6,276 29.20%
Diminishing Musharakah 7,403 24.51% 6,629 30.84%
Ijarah 3,173 10.50% 2,036 9.47%
Istisna 3,084 10.21% 1,989 9.25%
Musawamah 1,820 6.03% 907 4.22%
Wakalah 2,888 9.56% 1,753 8.15%
Murabaha 1,196 3.96% 1,072 4.99%
Tijarah 614 2.03% 449 2.09%
Salam 292 0.97% 185 0.86%
Others 311 1.03% 200 0.93%
Total 30,206 100% 21,496 100%

ANNUAL REPORT 2018 97

 Business and Operations Review
Business Review
Meezan Bank, in its seventeenth year of operations as a brand image, effective relationship management and
full-fledged Islamic Commercial Bank and now as the an extensive network of 660 online branches in more
‘Best Bank’ in Pakistan, maintained its growth than 180 cities that not only gives the Bank excellent
momentum and recorded excellent results for the year outreach throughout the country but is also a key
2018. Profit after tax increased to Rs 8.96 Billion from contributor to its success, enabling it to not only
Rs 6.31 Billion in 2017 – a commendable growth of over increase its deposit base but also maintain optimal cost
42%. The Bank’s growth rate has made it the fastest of funds.
growing bank in the industry with a branch network of
660 branches in more than 180 cities, a deposit of Financing portfolio of the Bank grew by 22% in 2018.
Rs 785 Billion and an asset base of over Rs 938 Billion. The Bank recorded a growth of 14%, 44% and 41%
The Bank offers a variety of product and services respectively in Corporate, SME / Commercial and
targeted towards the needs of masses, and mid-tier Consumer segments. During the year, Meezan Bank
and premium banking customers. also engaged with International Finance Corporation
(IFC) and Karandaaz Pakistan to further penetrate the
Some of the key accomplishments, achievements and SME and Commercial sector. The main focus of the
targets of the Bank during the year are as follows: Bank remains on building a high-quality financing
portfolio, targeting the best corporate, commercial and
■ 18% growth in the deposit base, which closed at retail clients. The financing portfolio is well-diversified
Rs 785 Billion by segments, with maturities comfortably balanced at
■ Growth in financings by 22% with the Advances to 64% in short-term and 36% in long-term. ADR of the
Deposit Ratio (ADR) improving to 65% Bank increased to 65% as compared to 62% in 2017.
■ Trade business volume surpassed Rs 1 Trillion The Bank’s non-performing financing ratio of 1.34% is
one of the lowest in the banking industry, which reflects
Meezan Bank’s growth in deposits was more than the excellent asset quality of the Bank.
double the banking industry growth in deposits and
was even more impressive since it was achieved by With the support of a wide branch network, the Trade
increasing the ratio of Current Accounts to Total Business volume handled by the Bank achieved an
Deposits from 35% in 2017 to 37% in 2018. impressive growth of 43% over the previous year.
Contributing to this success was the Bank’s customer-
The main reasons for this were the Bank’s excellent centric approach and efficient Treasury Management.

Best Bank
in Pakistan
Recognized by
Pakistan Banking Awards 2018

98 MEEZAN BANK LIMITED

Retail Banking
Meezan Bank has the largest Islamic banking customer that customers can transfer funds, pay bills, view
base in the country, serving over 2.2 Million customers. discounts and get detailed information on their account
Since its inception in 2002, the Bank has witnessed activity and financing offerings whenever, wherever
tremendous growth and has attained the position of and however they want.
being the country’s 7th largest bank in a short span of 16
years, which has only been possible due to its wide Meezan Bank’s call center facilitates customers by providing
range of deposit products and the continuous support product information, performing certain operations like
and patronage of its customers. initiating requests, activating debit cards, and taking
customer complaints and suggestions.
The Bank is also playing a key role in promoting
Financial Inclusion (making financial services available The Bank’s focus for 2019 will be on further improving
to those sections of the population who do not have and enriching its customers’ banking experience.
access to formal banking channels) by opening
branches in remote cities and placing special Branch Network
emphasis on two products - Meezan Asaan account
and Branchless Banking - that allow this segment of the Branches Cities
population to open bank accounts and conduct 700
660
financial transactions using their mobile phones. 650
571 601
Financial Inclusion is an important goal of both the 600
Government of Pakistan and the State Bank of Pakistan, 550
551
and Meezan Bank is committed to supporting this 500
428
initiative. 450
400
351
In order to facilitate customers in their remittances, 350
Meezan Bank launched Meezan Express accounts 300

(both current & savings) and Meezan Smart Wallet, a 250

181
Mudarabah-based Home Remittance account that is 200
143 146 154
currently facilitating the Bank’s customers and 150
103 117
increasing its deposit base. 100
50
0
2013 2014 2015 2016 2017 2018

Deposits
Meezan Bank offers an extensive range of deposit
products - current, savings and term deposit accounts,
and is a market leader in offering innovative Shariah-
compliant products and services to cater to the diverse
needs of both individuals and companies, ranging from
SMEs to large corporates.

The Bank’s wide range of deposit products, covering all

categories of customers (individual & business) has
enabled it to achieve exponential growth through a
large, well-diversified and stable customer and deposit
base. The Bank’s total deposits as of December 31,
2018 stood at Rs 785 billon, increasing 18% over 2018.
CASA mix remained stable at 73% as compared to the
previous year.

Deposits
Rupees in Billion
785
800
667
700
600 559

500 468

450
339
350
Branch network plays a vital role in deposit 288
300
mobilization. Meezan Bank opened 59 new branches
during the year, bringing the current branch network to 250

660 branches, operating in 181 cities across Pakistan. 200

150
In addition to the tailored service provided in its 100
branches, the Bank provides multiple touchpoints to its 50
customers for conducting their banking transactions. 0
The Bank’s diverse portfolio of Alternate Distribution 2013 2014 2015 2016 2017 2018
Channels provides diverse touch points supported by
cutting-edge secure technology. The Bank’s Digital
channels range from ATMs, internet banking, mobile
and SMS banking. The rich and ever-expanding set of
features on Meezan Bank’s digital touchpoints means

ANNUAL REPORT 2018 99

 Wealth Management
Meezan Bank offers a complete range of deposit and
other investment products that provide its customers
a complete Wealth Management solution. Dedicated
Relationship Managers cater to the various investment
needs of customers by identifying investment opportunities
for them, providing them relevant advice and educating
them about the various products offered by the Bank.

Meezan Kafalah
Meezan Kafalah is a Shariah-compliant alternative to
Bancatakaful products. It is a simple and profitable
savings plan with natural life Takaful coverage, along
with many features that make it an attractive deposit Major benefits currently offered under Meezan Premium
product for customers. Meezan Kafalah has received Banking are:
a very positive response from retail customers as it is
Meezan Mastercard Platinum Debit Card – the most
designed to meet their long-term savings objective
■
prestigious Debit Card of the Bank, offering access to
with the added protection of Takaful (Islamic
local and international lounges, discounts at
insurance). Meezan Kafalah provides value-added
numerous retail outlets and restaurants across the
features such as 100% Accidental Death Benefits /
country, along with higher transactional, withdrawal
Takaful coverage on Permanent Total Disability, and
and fund transfer limits, making it the perfect
Funeral Expenses. These benefits can be availed by
companion for high net worth individuals.
a minimum investment of only Rs 2,000 allowing a
maximum coverage up to Rs 15 Million having Lowest ■ Premium Phone Banking – a dedicated Call Center
Takaful expense rate of 0.130%. The tenure of exclusively for Premium Banking customers.
Meezan Kafalah is 3 to 15 years for every individual ■ Access to Airport Lounges in Karachi, Lahore,
up to 55 years of age. Islamabad, Multan and Sialkot, and at selected
airports abroad through Meezan Mastercard Debit
As of December 31, 2018 the Bank provided Takaful Card on international flights
coverage of approx. Rs 11.5 Billion to more than ■ Dedicated Premium Banking Centers in Karachi,
28,000 customers; an increase of over 28% from
Lahore, Islamabad, Faisalabad, Rawalpindi and
2017. Sialkot, with the facility of private conference rooms
for short business meetings.
■ Fee Waivers on selected banking and Alternate
Distribution Channels services.

Alternate Distribution Channels

In addition to its traditional ‘brick and mortar’ branch
network, Meezan Bank provides banking services
through a broad spectrum of channels, including:
■ The largest ATM network of any Islamic Bank
■ Internet Banking
■ Mobile App
■ SMS Banking
■ Visa and Mastercard debit cards
■ 24/7 Call Center
These channels are often collectively referred to as
Alternate Distribution Channels (ADCs). In addition to
these, the Bank also provides e-Statement and SMS
Alert facilities.
Meezan Premium Banking
Meezan Premium Banking caters to the banking needs A robust state-of-the-art ADC infrastructure is an integral
of high net worth individual customers and sole part of the Bank’s corporate philosophy, which emphasizes
proprietors and provides them with exclusive services digital innovation. The main focus of the Bank’s digital
and value-added benefits - from personalized banking strategy is to provide customers with convenient and secure
services to exclusive discounts and other privileges. access to their accounts for all banking requirements,
wherever and whenever they require.
Premium Banking customers enjoy priority service at all
Meezan Bank branches and also have access to Customers can use ADCs for all their basic banking
state-of-the-art Premium Banking Centers in major needs - cash withdrawal, shopping and payments,
cities of the country. During the year, new Premium e-commerce i.e. online shopping, funds transfer, bill
Banking Centers at K Block Model Town Branch, payments, balance and statement inquiries, product
Lahore and DHA Phase 1 Branch, Rawalpindi were also and services information and complaint registrations,
inaugurated to facilitate high net worth customers of the among many other services. Meezan Bank has always
respective areas. strived to make banking a convenient and pleasant

100 MEEZAN BANK LIMITED

experience for its customers and this philosophy is Meezan Bank’s Debit Cards portfolio continued its
especially visible in the Bank’s Alternate Distribution upward trajectory in 2018. POS Transactions grew by
Channels. 51%, e-commerce transactions grew by 192% and
International Transactions grew by 252% during the
ATM Network year. It is due to the long-standing patronage of
Meezan Bank witnessed yet another year of healthy Meezan Bank’s customers that the Bank now enjoys
growth in 2018. Countrywide ATM Network grew from one of the highest usage and card activation ratios in
580 ATMs to 625 ATMs while the transaction volume the industry.
on ATMs grew by 27% during the year. Substantially,
all ATMs were upgraded with EMV and Biometric Internet Banking
capability which will open up many avenues for Meezan Bank revamped its Internet Banking in 2018
new initiatives including Cardless Withdrawals, to make it easier and more user-friendly as well as to
Remittances and Account Verifications. give it a modern and more pleasing look. The new
Internet Banking offers an adaptive design and can
Debit Cards easily be used on all types of devices including
Meezan Bank’s Debit Cards offer a wide range of
mobile and tablet. The new dashboard view on
features and benefits such as chip-based security,
Internet Banking allows customers to access
NFC payments, 3DSecure E-commerce payments,
frequently used features upfront; this helps in
fastest Debit Card activation, and an extensive
alliances and discounts program with special focus delivering one of the fastest Internet Banking
on e-commerce promotions. Meezan Bank’s Blessed experiences in Pakistan. The launch of new Internet
Friday discount program with leading e-commerce Banking has resulted in an unprecedented growth in
merchants has already become a hallmark of debit IBFT and Bill Payment transactions through this
card discounts in the industry. channel, which grew by over 41% in 2018 as
compared to 25% in the previous year.
Mobile App
Meezan Bank’s Mobile App has been the most
preferred and fastest growing medium of digital
transactions among all Alternate Distribution
Channels in the recent years. Financial transactions
using the Mobile App grew by over 70% during the
year and the App is expected to remain the fastest
growing channel in the future.

Currently, with over 300,000 downloads, Meezan

Bank’s Mobile App has been amongst the most
trending and best rated apps in its category on both
Google’s Play Store and Apple Store.

IBFT
IBFT or Interbank Funds Transfer is a peer to peer
funds transfer facility among 1Link Member Banks in
Pakistan. Meezan Bank offers IBFT facility via its
In order to further augment the product portfolio, ATMs, Internet Banking and Mobile App, whereby
Meezan Bank launched an off-the-shelf version of customers can instantly transfer funds to any other
Visa Platinum Card for customers who wish to bank account in Pakistan. Meezan Bank witnessed a
enjoy the best of debit card features. Moreover, healthy growth in the numbers of IBFT transactions,
Supplementary Cards were also launched in 2018 so which grew by 42% in 2018.
that immediate family members of the Bank’s
customers can also enjoy benefits similar to those QuickPay
available to the basic customers. Meezan Bank’s QuickPay service offers a wide range
of bill payment options for Utility Companies’ Bill
Payments, Mobile Top-ups, Educational Institutions
Fees, Mutual Fund Investments, Airlines Tickets and
Government Entities Payments, etc. through Meezan
Bank’s ATMs, Internet Banking and Mobile App. The
number of billers during 2018 almost doubled to over
80 billers and the list is still growing. QuickPay
transactions grew by over 50% in 2018 whereas
QuickPay transactions through Mobile App grew by
over 63%.

Call Center
The Bank’s in-house Call Center is managed by
a professional team of phone banking officers,
facilitating customers and the general public
nationwide for banking transactions and general
banking or product enquiries.

ANNUAL REPORT 2018 101

 SMS Alerts Meezan Bank also signed up with Mastercard for their
Meezan Bank offers one of the most extensive SMS most advanced Analytics and Fraud Prevention
Alerts service to its customers so that they stay platform, called Mastercard Decision Intelligence,
informed about all activities and transactions in their and with Visa for their Fraud Alert and Prevention
accounts. Continuous efforts are being made to platform called Visa Risk Manager. These platforms
provide fastest delivery of SMS and to maintain a are not only capable of deploying various risk
high uptime by effectively managing two of the rules on debit card transactions using multitude of
leading SMS gateway providers simultaneously. parameters but also provide real time risk scoring of
Meezan Bank is also among one of the few banks that all international and local debit card transactions.
provide e-mail alerts together with SMS alerts as a Meezan Bank’s Transaction Monitoring Team uses
complimentary service. In 2018, the number of these platforms for their 24/7 monitoring in order to
subscribers to SMS Alert Service grew by 30% as attend all security alerts from these systems on real
compared to 2017. time basis.

QR Payments Meezan Bank also completed Chip & PIN certification

Meezan Bank is one of the leading players in the on Visa and Mastercard during the year which will go
industry when it comes to the QR Payments a long way in securing our new debit card customers
Ecosystem. In 2018, Meezan Bank, in partnership from any misuse on POS if the card is lost or
with Fonepay, issued over 100,000 new QRs to a skimmed.
broad base of merchants from across Pakistan and
processed over 2 Million QR transactions as Acquirer All ATM machines of Meezan Bank were also
of QR payments. Acknowledging the unprecedented upgraded during the year for EMV acquiring. With this
upgrade, all Meezan Bank ATMs can now also read
growth in QR merchant acquisition, Meezan Bank
and process EMV chip data when a chip card is
was bestowed with the ‘Spearheading Acceptance
inserted for ATM cash withdrawal.
Location Growth’ award by Mastercard for the Middle
East and Africa Regions this year.
Lastly, to limit the Bank’s exposure in case of any
cyber-attack scenario, the Bank has successfully
tested and deployed aggregate daily limits with Visa
and Mastercard in addition to taking various other
measures which will effectively protect the Bank
against any cyber-attack.

A completely secure
Banking Experience

Continuous Focus on Security

Customer security is one of the topmost priorities
for Meezan Bank. Working on this strategic priority,
Meezan Bank took a number of new initiatives during
2018 to further strengthen the security of Debit Cards
usage.

In order to protect customers from skimming frauds,

an innovative Skimguard feature was launched on
Meezan Bank’s ATMs where a One Time Password
(OTP) is triggered on real time basis if a high value
transaction is conducted on the ATM. The transaction Meezan Bank is committed to providing value added
is processed only upon successful verification of OTP products and services to its customers to make their
by the cardholder. transactional experience convenient and secure, and
is continuously working towards introducing new
For enhanced security on online e-commerce products, services and payment methods for its
transactions, Meezan Bank introduced 3DSecure customers.
services of Mastercard and Visa in 2017 which
successfully protected over a Million transactions in We look forward to an even more exciting and
2018. happening year ahead.

102 MEEZAN BANK LIMITED

 Highlights - Year 2018 DEBIT CARDS
11%

INTERNET BANKING
AND MOBILE APP
SMS SUBSCRIBERS
SUBSCRIBERS TM 42%
30%

GROWTH
COMPARED TO POS AND
ATM 2017 E-COMMERCE
TRANSACTIONS TRANSACTIONS
27% 76%

IBFT BILL PAYMENT

TRANSACTIONS TRANSACTIONS
42% 50%

Payments and Cash Management also reduce operational burden by outsourcing

The Bank offers two Cash Management products, the management of country wide collection and
Meezan eBiz and Meezan eBiz+. More than 1,600+ payment needs. Each implementation is tailor-made
Corporate, Commercial and SME customers are to meet customers’ specific MIS and reconciliation
availing the benefits of this electronic product suite requirements. Functionality available, in addition to
to manage their collections, payments, MIS and features of eBiz+, includes:
reconciliation needs, resulting in increased business
productivity. . ■ Manage collections through branches as well as
electronic and Alternate Distribution Channels
Meezan eBiz
Meezan eBiz allows customers ■ Manage payment like funds transfer, Inter
to execute banking transactions Bank Funds Transfer, Payorder issuance, RTGS,
instantly over the internet in a corporate cheques issuance as well as e-Dividend
secure and convenient manner. With the help of payments .
Meezan eBiz, customers can view and download their ■ Real Time Information through online reporting for
account balances, account details, account statements reconciliation and transactional alert through SFTP,
as well as efficiently conduct their day-to-day email and SMS
transactions such as Intra and Inter Bank Fund
■ Host to host integration with customer ERP system
Transfers, salary payments, utility bill payments,
for both collection and payments execution
payorder issuance and many more via an automated,
secure and versatile electronic processing platform. ■ Dedicated Customer Service / Client Service Team
with excellent system integration capabilities. The
Meezan eBiz+ Bank has not only received a very positive response
Meezan eBiz+ is a comprehensive from local companies but also from multinational
customized Cash Management companies and acts as a trusted strategic partner
solution which allows Corporate, for their transactional banking needs. The number of
One window solution for all your Cash Management needs

Commercial and SME customers to not only Cash Management mandates being handled by the
electronically manage their banking relationship, but Bank grew by over 60% during the year.

ANNUAL REPORT 2018 103

 Home Remittance working under the guidance of Shariah Supervisory
The Home Remittance Unit (HRU) of Meezan Bank Board, the Bank is capable of providing a wide range of
plays an active role in the nationwide drive of Shariah-compliant financing solutions to meet the working
stimulating and formalizing home remittances through capital finance, import export finance, funding for
banking channels under the Pakistan Remittance commodity operations, long-term finance, documentary
Initiative (PRI) and non-PRI arrangements. A focused credit requirements and project financing needs to its
approach towards this business has contributed in customers.
improving the banking experience of customers and The Bank’s Corporate Banking relationship team
has allowed the Bank to progressively grow this collaborates across lines of businesses and partner
business segment.
groups (Treasury, Cash Management, Investment Banking,
The Bank increased its outreach; expanding its market Commercial Banking and Consumer Banking) to develop
share in the UAE, UK and tapping a new market i.e. and deliver suitable, value-added and innovative solutions
Kuwait, thereby increasing volumes routed through it by while continuing to integrate and upgrade delivery
40%. To facilitate its customers, the Bank runs a platforms, business intelligence and driving operational
dedicated Home Remittance Customer Support service excellence.
which directly resolves queries of Home Remittance
Despite challenging business atmosphere during the year
customers in order to provide them better service and
due to uncertain political environment and increasing
prompt resolution of complaints.
competition amongst banks, the Bank was able to deliver
In 2018, with a special focus on innovation and the extraordinary results in all key performance areas by
streamlining of processes, Meezan Bank procured and building strong portfolios and business verticals.
implemented a new Home Remittance solution, which
focused on automation and going paperless. To ensure
proper Know Your Customer (KYC) and compliance
checks, biometric verification of Cash over the Counter
(COC) customers has been tested, which will go live in
the first quarter of 2019.

Branchless Banking
Almost 62% of Pakistan’s population remains unbanked
due to reasons such as lack of access to a physical
branch network, hesitation to avail interest-based
banking facilities and stringent KYC. Providing this
section of the population access to Islamic banking
would be a major step towards realizing Meezan Bank’s
Vision of establishing ‘Islamic banking as banking of
first choice...’. Corporate Financing
The Bank’s corporate assets portfolio grew by 14% to
There are over 150 Million mobile phone subscribers in Rs 373 Billion in 2018. The focused business
Pakistan while the total number of bank accounts is only development strategy adopted by the Bank to vigilantly
build a high quality and well diversified portfolio has
around 41 Million. At the same time, the total number of
enabled the Bank to grow its corporate financing book
‘smart phones’ in the country is now reported to have at a CAGR of 24% since 2014, with non-performing
crossed 40 Million, and availability of 3G and 4G financing kept at 1.35%.
services means that mobile phone subscribers can now
The Bank, with excellent service delivery capabilities
easily conduct banking transactions such as payments
and well-equipped teams of professionals, has been
(P2P, B2P, G2P, etc.), mobile top-ups and account trusted by both local entities and multinational
transfers. The Bank is well positioned to serve this companies as the strategic banking partner for their
market segment as it is one of the twelve banks in the 360 degrees banking needs.
country that have a ‘Branchless Banking’ license – a
A detailed description of corporate banking products
prerequisite to this product offering. offered by the Bank is on page 69.
Corporate Banking Investment Banking
Meezan Bank provides a comprehensive variety of Being transfigured from an Investment Bank, Meezan
financial services to a large number of corporate clients Bank continued its bequest as one of the most active
including multinationals and public sector entities by Investment Banking players in the Pakistani market
partnering with them to build long-term relationships. by providing a full range of investment banking
These include traditional products required by companies services including financial advisory, green and brown
for managing their working capital & trade finance needs field project finance, equity and debt capital market
and more sophisticated and innovative solutions for arrangements to meet the ever-demanding financing
large-scale investments. By drawing on the expertise of needs of its clients.
in-house product specialists and Shariah scholars

104 MEEZAN BANK LIMITED

Since inception, the Bank has led advisory and well-equipped to provide innovative and tailored
arrangement mandates for a large number of project solutions to cater to the specialized needs of its diverse
finance, syndications and capital market transactions; clientele. These attributes along with the team’s deal
bringing the total volume of Investment Banking structuring, placement and execution capabilities have
transactions arranged by the Bank to the tune of over also been widely acknowledged by numerous local and
Rs 1 Trillion. During 2018, with the commitment to maintain international bodies.
its market leadership position, the Bank successfully
delivered transactions of over Rs 263 Billion, of which With its Vision to ‘Establish Islamic banking as banking of
some of the notable transactions are highlighted overleaf. first choice...’, the Bank is committed to continue
innovating in the field of Islamic investment and
With a highly qualified team, having diversified experience corporate financing, and maintain its position as the
and depth of local market acumen, the Bank is leader of Islamic banking industry in the country.

June 2018 June 2018

8

8
MEEZAN BANK
PAK ARAB PIPELINE COMPANY
SUKUK ADVISER OF THE YEAR PKR 11.80 BILLION
SYNDICATED TERM FINANCE FACILITY
PAKISTAN
Syndicated Loan
MEEZAN BANK
THE ASSET ASIAN AWARDS of the Year-Pakistan MANDATED LEAD ADVISOR & ARRANGER
OIL AND GAS DEAL OF THE YEAR

Daniel Yu
Editor in Chief Daniel Yu
Editor in Chief

June 2018 June 2018

8
8

WATER AND POWER MEEZAN BANK

DEVELOPMENT AUTHORITY
US$ 1.37 BILLION BEST ISLAMIC INVESTMENT BANK
DASU HYDROPOWER PROJECT – STAGE 1 PAKISTAN

MEEZAN BANK
SHARIAH ADVISOR THE ASSET ASIAN AWARDS
RENEWABLE ENERGY DEAL OF THE YEAR

Daniel Yu
Daniel Yu Editor in Chief
Editor in Chief

IFFSA
ISLAMIC FINANCE FORUM OF SOUTH ASIA
IFFSA
ISLAMIC FINANCE FORUM OF SOUTH ASIA
IFFSA
ISLAMIC FINANCE FORUM OF SOUTH ASIA

2018 2018 2018

GOLD AWARD GOLD AWARD GOLD AWARD
ADVISORY SERVICES PROVIDER DEAL INVESTMENT BANK
OF THE YEAR OF THE YEAR OF THE YEAR

ANNUAL REPORT 2018 105

 Major Investment Banking
Transactions

Lucky Electric
Power Company
Power Holding Lucky Electric Power K – Electric Limited
Private Limited Company Limited Syndicated Project Finance Facility
Syndicated Finance Facility Syndicated Project Finance Facility Rs 25,000 Million
Rs 100,000 Million Rs 70,700 Million Mandated Lead Advisor & Arranger
Mandated Lead Arranger & Shariah Structuring Advisor
Lead Arranger &
Shariah Structuring Agent Shariah Structuring Advisor

Nishat Group

PIONEER
Pak-Arab Pipeline Company Hyundai Nishat Motors CEMENT LTD.
Limited (Private) Limited Pioneer Cement Limited
Syndicated Long Term Finance Facility Syndicated Islamic Syndicated Islamic Finance Facility
Rs 11,800 Million Finance Facility
Rs 2,600 Million
Mandated Lead Advisor & Arranger, Rs 5,660 Million Mandated Lead Advisor &
Investment Agent, Accounts Bank & Financial Advisor &   Arranger, Shariah Structuring Agent
Shariah Structuring Advisor Mandated Lead Arranger and Investment Agent
Commercial Banking Supply Chain Financing Program
(Including Small & Medium Enterprises with Karandaaz
(SME) and Agricultural Finance) In 2015, the Bank partnered with Karandaaz
Meezan Bank is cognizant of the fact that in order to Pakistan to structure financing programs to meet
achieve its Vision of establishing ‘Islamic banking as financing needs of vendors and distributors
banking of first choice...’ it must increase the outreach operating in organized supply chains in Pakistan.
of Islamic banking well beyond the blue-chip corporate The financing programs are based on risk sharing
sector. Accordingly, the Bank has developed a very mechanism between Karandaaz and the Bank.
clear focus on developing the SME and Agriculture Karandaaz Pakistan has financial and institutional
sectors, which represent the backbone of Pakistan’s support from leading international development
economy. The consistent and impressive growth of finance institutions, principally United Kingdom's
Commercial Banking reflects the level of trust and Department for International Development (DFID)
confidence the Bank has built with its customers. The and the Bill & Melinda Gates Foundation. The
overall funded portfolio for this segment has increased Consultative Group to Assist the Poor (CGAP), a
from Rs 75 Billion in 2017 to Rs 108 Billion in 2018 - a member of the World Bank Group, managed the
44% growth. start-up phase of the Company and continues to
provide technical support. Karandaaz promotes
Financing Portfolio Commercial, SME & Agriculture access to finance for small businesses through a
Rupees in Billion commercially directed investment platform and
120 financial inclusion for individuals by employing
108 technology enabled digital solutions.
100
Meezan Bank is the first Pakistani bank to be
80
75 selected by Karandaaz for their specialized
Supply Chain Partnership Program and the two
60 organizations have committed to provide Rs 5 Billion
48 financing to small and mid-sized corporate vendors
40 and distributors.
28.20

20
13.70 18.50 The financing programs entail partnering with key
corporate customers to provide financing to their
0 supply chain business partners. Towards this end,
2013 2014 2015 2016 2017 2018 the Bank has signed mandates with top tier
corporates operating in Automotive, Fertilizer &
FMCG sectors of the economy. This initiative has
Small & Medium Enterprises successfully brought a large number of SME
Growth and development of the Small and Medium customers in the financing net through structured
Enterprises (SME) segment is of vital importance for financing programs.
sustainable socio-economic development of the
country. Meezan Bank has a clear focus on growing The Bank also partnered with a leading local
its SME business, which accounts for more than corporate for a pilot Agri Value Chain Financing
90% business entities in Pakistan. Program. As part of this program, the Bank provides
financing to select farmers for their advisory, quality
Continuing the strategy to capitalize on SME inputs, crop monitoring, farm support & market
segment and revamp existing SME financing model linkages requirements. The program includes
into a robust SME Banking model, Meezan Bank branchless banking services and clean financing
engaged the International Finance Corporation facilities for the Kharif season.
(IFC) for providing advisory and technical services.
According to IFC, the Bank is well positioned to The Supply Chain Financing programs exhibited
capitalize on the opportunities available in the robust growth in 2018, as new key corporates
industry. In this regard, a two-pronged approach partnered with the Bank to initiate the program for
has been adopted; the first is to strengthen & their Supply Chain business partners and this
deepen relationship with its existing liability customer resulted in a strong portfolio growth during the year.
base by offering them financing products through
program based financing and the second is to Agriculture Financing
attract new to bank financing customers through a Meezan Bank has been a reliable partner in the
lead generation strategy. growth of the agriculture sector, a strategically
important sector of the country and a prime supplier
The Bank has registered more than 40% growth in of raw material in the value chain from farm to fork.
SME financing in 2018. Growth in SME Trade Increase in agricultural productivity leads to increase
Business (Import & Export) has been a critical in the income of rural population which in turn leads
revenue driver as part of SME Banking philosophy. to more demand for industrial products. The
The Bank accelerated its pace of trade mobilization progress of agriculture sector therefore provides a
and recorded robust growth by routing Rs 208 sound base for economic development and is
Billion in the SME segment, registering a 51.82% considered one of the preconditions for takeoff or
increase over last year. self-sustained growth of any developing economy.

ANNUAL REPORT 2018 107

 Meezan, as the leading Islamic commercial bank of Trade Business
the country, owes a critical responsibility to provide Islamic Banking is well-positioned to cater trade finance
Shariah-compliant solutions to meet the financing needs of customers and the Bank’s trade business
needs of the agriculture sector. For this, the Bank (Import & Export) performed very well in 2018, with
has launched Agriculture Finance so that financing a total volume of more than Rs 1 Trillion. The Bank,
requirement of the farming community can be with excellent service delivery capabilities and well-
served through Shariah-compliant means. The Bank equipped teams of professionals, has been trusted
has been further enhancing its outreach to rural both by local customers and multinational companies to
enterprises through branch network expansion be the strategic banking partner for their 360 degrees
while focusing on digital inclusion of the rural banking needs.
enterprises so that it can diversify its portfolio in the
days to come. Trade Business
Rupees in Billion
1200
1013
1000

800
712
552
600
461
376
400
315

200

0
2013 2014 2015 2016 2017 2018

Portfolio Mix
Meezan Bank has a diversified commodity financing Consumer Finance
portfolio, well-spread amongst Wheat, Edible Oil & Meezan Bank is the pioneer in providing Shariah-
Seed, Cotton Ginning, Fertilizer, Coal, Sugar, Rice, compliant consumer financing in the country and offers
Feed, and Steel sectors. Furthermore, Meezan Bank various consumer asset products to its customers.
is continuously exploring new and untapped sectors Performance for 2018 is provided below:
of the economy in order to enhance its portfolio and
to diversify its risk. Car Ijarah
Pakistan’s Auto sector witnessed strong growth in
Non Performing Finances the first two quarters of 2018. However, in the third
Despite the significant growth in assets, the and fourth quarters, the auto industry sales shifted
Bank has maintained strong credit screening and towards a declining pattern. The automobile
Risk Management criteria, since these form the industry of Pakistan grew by 21% in 2018 (as
backbone of any financing institution. Testimony compared to 26% in 2017) with car sales standing at
to the effectiveness of the Bank’s credit approval 331,880 units as compared to 274,236 units last
criteria is the fact that the Bank’s NPL ratio for the year.
Commercial Banking segment has improved from
2% to less than 1.5%. After 17 years of launching its Auto Finance business
and now as the ‘Best Bank’ in Pakistan, Meezan
Commercial Vehicles Financing Bank has a Car Ijarah Portfolio of over 32,000 active
Meezan Bank entered the Commercial Vehicles contracts that comprise new, used and imported
financing business in January, 2016. The Bank vehicles. The Auto Finance portfolio of the Bank
provides financing for commercial vehicles to the grew by a healthy 41% during the year. The Bank
SME and Corporate sector such as Oil, Goods, has remained active in implementing a number of
Passenger, Logistics and Transportation Companies. changes to improve the infrastructure, product
Financing is offered for all types of Commercial features and management of its Auto Finance
Vehicles ranging from Heavy Trucks, Prime Movers business. The Bank follows a strategy of maintaining
and Buses to Light Commercial Vehicles. Meezan stringent credit criteria for the Consumer Finance
Bank has emerged as a leading bank in this segment.
segment. Alhamdulillah, in 2018, Meezan Bank has
recorded growth of 78% over 2017.

108 MEEZAN BANK LIMITED

Easy Home Meezan Bike Ijarah
Islamic banks have emerged as key financiers for the Meezan Bike Ijarah is Pakistan’s first Riba-free
housing sector and Meezan Bank, the largest Islamic motorcycle financing facility which is based on the
bank in Pakistan, stands amongst the leading Housing Islamic financing mode of Ijarah (leasing). In a short
Finance providers in the country. span of time, Meezan Bank has managed to form
alliances with all major motorcycle producers of
The year 2018 proved to be very positive for the Bank’s Pakistan and has financed around 8,000 bikes
Housing Finance business, as its Housing Finance across all major cities of Pakistan.
portfolio grew by Rs 2.16 Billion during the year, with
the disbursement figure for 2018 being the highest
ever amount in a single year (Rs 4.85 Billion), Labbaik Hajj & Umrah
creating an enabling environment for Shariah- Meezan Labbaik, Hajj & Umrah Facility is a
compliant Housing Finance in Pakistan. completely Halal & Riba-free travel solution for Hajj
& Umrah, that was initiated by the Bank as a
Corporate Social Responsibility project and has
gained immense popularity over the years,
especially after its enrolment in Government Hajj
Scheme in 2015.

Under Labbaik, Meezan Bank is enrolled in Govt.

Hajj Scheme through which customers can file their
Hajj applications through its branches and be
eligible for Hajj ballot conducted by the Ministry of
Religious Affairs and Inter Faith Harmony (MORA &
IH).

In its fourth year of enlistment i.e. 2018, the Bank

collected over 51,000 Hajj applications and retained
its 4th position among the thirteen (13) Banks on
MORA’s panel.
.
Labbaik Travel Asaan provides an excellent
opportunity to offer Private Hajj & Umrah to
customers on convenient terms i.e. Upfront Plan in
Meezan Consumer Ease which the customer pays the complete cost before
Meezan

Meezan Bank’s Consumer Ease Unit offers Shariah- travelling and the Installment Plan in which the
compliant consumer durable goods financing to its customer makes a down payment before travelling
customers. This business segment is progressively while the balance amount is paid in 12 equal
growing and offers financing for a diverse range of monthly installments without any additional charges.
consumer durables.
Labbaik Savings Asaan is alternatively
This is a limit based financing facility. Once the limit offered to customers who wish to perform Hajj /
of the customer is approved, the customer can Umrah later in life (i.e. 6 months to 20 years) under a
utilize the limit for purchase of durable goods Mudarabah based deposit account in which the
offered by the Bank. This facility has been customer gets profit every month on the deposited
well-received by the Bank’s customers since it amount.
makes the acquisition of household durables quick
and convenient.

ANNUAL REPORT 2018 109

 Treasury Financial Institutions
Meezan Bank has one of the most well equipped In order to provide its services over a wide global
Treasuries in the country, both in terms of people and network, the Bank has further expanded its financial
systems. The Bank offers a wide range of Shariah institutions and correspondent banking network, which
compliant products that not only serves the foreign now encompasses 83 countries with more than 650
exchange needs of its clients but also makes effective correspondents. This network provides customers with
utilization of excess liquidity to generate profits that are a one-stop solution to their banking needs, including
paid as return to depositors. export and import transactions and foreign remittances.
Back to back guarantee business has also expanded
Being an election year, 2018 was marked by volatile with an increased number of international banks,
markets, presenting the Bank with opportunities and including Danske, DZ Bank, Emirates NBD and KEB
challenges alike in the Treasury market. The Bank Hana approaching Meezan to issue guarantees against
capitalized on these opportunities, achieving both their counter guarantees. This reflects on the improved
volumetric and earnings growth. The sales desk image of Meezan Bank internationally and enhanced
achieved trade volumes of USD 6.877 Billion level of comfort of correspondent banks working with
approximately, an 18% growth over the previous year. Meezan. The beneficiaries of these guarantees include
The FX interbank desk not only continued to facilitate government and private entities including SSGC,
the sales desk in managing this surge in volumes, but Pakistan Railways, CMA, Civil Aviation Authority and
also managed the exchange rate risk of the Bank various others, with applicants belonging to 18 different
profitably, increasing non-funded income by 15.5% countries.
over the last year. Keeping in view the idea of promoting Islamic Financial
Solutions, Meezan Bank has enlisted new Takaful
Volume of FX Business routed through Treasury Windows of insurance companies so as to provide its
USD Billion
customers with full-fledged Shariah-compliant financial
services. These Takaful windows are prioritized while
6,877
7000 assigning insurance limits for the transactions.
5,807
6000 Using the Bank’s correspondent network to enhance its
4,739 5,235 trade finance business, LCs were opened for new
5000
corporate customers for the import of commodities and
4000
heavy machinery & equipment, etc. from Europe, Asia
and the Middle East. With an aim to provide better
3000 services to the customers for their international
remittances involving trade and personal remittances,
2000
new nostro accounts have been opened with Danske
1000
Bank, Bank of Montreal and Standard Chartered for
Danish Krone, Canadian Dollar and Australian Dollar
0
respectively. The Bank now currently holds 26 active
2015 2016 2017 2018
nostro accounts in 18 different currencies which enable
its customers to carry out their banking transactions
The Bank’s ALM desk performed well despite the without facing heavy currency conversion charges.
challenges of effective liquidity deployment which were
even greater in 2018, given the fact that there were no

DID
Sukuk auctions conducted by the State Bank of
Pakistan during the year. Coupled with this, the growing
deposit base of the Bank flushed the ALM desk with
excess liquidity to the tune of approximately Rs 288
Billion. To manage this, the Bank entered into a
three-year Bai Muajjal with the Government of Pakistan,
which was the first of its kind, as previous GoP Bai
YOU
KNOW
Muajjal transactions had a one-year maturity. Through
ISLAMIC BANKS
this Bai Muajjal, the Bank was not only successful in
deferring the complete maturity of GoP Ijara 16 of face
MAINTAINING DEPOSITS
value approximately Rs 41.2 Billion for three years, but
WITH THE STATE BANK
by virtue of being the biggest participant of the auction
was also able to set the cutoff rate at 11.47%. In It is mandatory for every commercial bank to keep a specified
percentage of deposits raised from Current and Saving
addition to this, the Bank also increased its portfolio of
account holders as reserves with State Bank of Pakistan
Bai Muajjal on a secured basis to Rs 185 Billion (SBP).The Cash Reserve Requirement (CRR) of Islamic
approximately, thereby, incurring minimal capital banks is placed with SBP in a current account on which no
charge towards interbank exposures reflected on the return is paid to the bank. Besides CRR, Islamic Banks have
to invest 14% of their deposits in Islamic financial securities
balance sheet. For broadening liquidity allocation
such as GoP Ijarah Sukuk to fulfill Statutory Liquidity
options, the Bank successfully conducted Commodity Requirement (SLR). The income earned from these securities
Murahaba transactions through Pakistan Mercantile is free from any Riba and is therefore fully Shariah-compliant.
Exchange (PMEX) during the pilot testing phase, which Furthermore, Islamic banking institutions are not allowed to
is now under consideration by SECP for invest in T-Bills or PIB’s to maintain their SLR’s.
implementation.

110 MEEZAN BANK LIMITED

 Al Meezan Investment ■ Most Outstanding Asset Management Company -
Management Limited Pakistan
Corporate Insider

Asset Management ■ Best Asset Management Company

The asset management business of Meezan Bank is International Finance Awards
managed by its subsidiary, Al Meezan Investment
Management Limited (Al Meezan). The company has During the year under review, the JCR-VIS Credit Rating
been in operation since 1995 and has one of the Company has maintained Management Quality Rating of
longest and most consistent track records among Al Meezan AM1, which denotes that the Asset Manager
private sector companies managing mutual funds in exhibits excellent management characteristics. This is
Pakistan. It also has the distinction of being the only the highest management quality rating assigned to
asset management company in Pakistan with the management companies.
exclusive mandate of providing Shariah-compliant
investments solutions to its investors. Apart from asset The AUMs of Al Meezan have recorded an average
management, Al Meezan is also licensed to render annual growth of over 14% during the last five years, as
Investment Advisory Services and manage Voluntary shown below:
Pension Schemes.
Funds Under Management of Al Meezan
Al Meezan, with a track record of over 23 years of Fund Funds under Management Rupees in Billion
Management operations, reflects strong Islamic Discretionary Portfolios
asset-management franchise and healthy Assets Under 120
118
Management (AUM) profile with sizeable retail AUMs, 107
adequate governance & control framework, stable & 102
professional management team and well defined 100

investment process. The Company has also always

78
strived to serve its esteemed clientele with distinction 80
and service excellence, this is evident, in the fact that 66
over these two decades, Al Meezan has managed to 60
59

amass a healthy investor base of over 91,600 48

customers, who have entrusted the company with 10 9 93 88
40
providing them unique investment options and 71
competitive returns. 56
61
20 45

The company has grown considerably, since inception,

and has recorded to its credit multiple achievements. 0
The Company offers a comprehensive product suite of 2013 2014 2015 2016 2017 2018 Dec-2018

16 mutual funds and multiple investment plans

spanning from basic equity and income funds to
commodity funds, dedicated equity fund and The Product Development team at Al Meezan
aggressive asset allocation funds. The company also works proactively to introduce new Shariah-compliant
manages the largest Voluntary Pension Fund in investment structures while the Shariah Compliance team
Pakistan. With Assets Under Management (AUMs) of Meezan Bank ensures Shariah compliance of funds
crossing Rs 87.9 Billion mark in December 2018, under management of Al Meezan.
Al Meezan is the largest Shariah-compliant asset
management company of the country. The Company is During the year, Al Meezan successfully launched
also increasing its presence and has now 23 branches Meezan Rozana Amdani Fund (MRAF) & Meezan
across Pakistan, with 6 of them introduced this year. Strategic Allocation Fund II (MSAF-II). Moreover, five
additional plans, namely Meezan Capital Preservation
Plan – IV to VIII were introduced during the same period
Its AUMs represent around 15% of the total mutual
which generated considerable investor interest and
funds industry and 43% of the Shariah-compliant
enthusiasm.
mutual funds industry.

Al Meezan was also granted multiple accolades during

the year 2018 as given below:

■ Best in Shariah Compliant Investment Solutions

Corporate Livewire

■ The Islamic Asset Manager of the Year, Pakistan

The Asset Triple A

■ CIO 100 Honoree (2017)

CIO 100 Symposium

■ Best Investment Management Company-2018- Pakistan

World Finance

■ Islamic Fund Manager of the Year - Pakistan & Sustained

Excellence in Shari'ah Compliant Investments Best Asset Management Company in Pakistan
AI Global Media by International Finance Awards

ANNUAL REPORT 2018 111

 Operations Review Information Technology
Meezan Bank aims to deliver superior quality products Meezan Bank synergizes digital, ADC and Data
and services that not only meet the expectations of its Analytics to drive innovation and automation through
customers but also exceed them. For this purpose, it is state-of-the-art technological solutions. Technology
imperative that the Bank has efficient support functions enables reliable, anytime, anywhere and customer-
infrastructure. At Meezan Bank, the support units work centric banking services while continuously evolving
together to ensure that all transactions undertaken by delivery channels and touch points to intermediate a
the Bank are in accordance with the directives of its diverse and sophisticated customer base.
Shariah Advisor and the Shariah Supervisory Board
(SSB) as well as with the Bank’s Policies and Technology is business, integrating with front office and
Procedures. Some of the key support units are: operations alike, contributing to growth, brand image
and customer satisfaction. Meezan Bank provides
Service Quality security, efficiency and convenience, at times opposing
The Bank believes in nurturing a service culture that goals, while providing superior banking experience to
ensures consistent delivery of its products and services customers as they access the Bank’s products and
to customers across all banking channels within services digitally and conventionally.
stringent service standards monitored regularly by a
dedicated team. Major technology-related initiatives of the Bank in 2018
were:
A Service Board, chaired by the Bank’s CEO, comprised
of senior level representation from various business and Business Process Automation via T24
support units, meets regularly to review service quality and External Applications Integration
performance of the Bank and takes measures to ensure Keeping true to the path of digitization, Meezan Bank is
that the Bank delivers a superior banking experience focused on delivering improved transaction turnarounds
for customers. through automation and modular enhancement of
processes.
A dedicated team regularly monitors the performance
of branches on service standards defined by the The Bank upgraded its T24 Core Banking System to
Service Board and evaluates Branch Service Quality. R16, permeating the ability and ease of process
The Bank also uses service evaluation techniques such enhancements throughout the Bank. This initiative will
as Mystery Shopping and conducts Customer provide digitized processes to customers and automate
Satisfaction Surveys for obtaining feedback from solutions.
customers for improving its products and services.
The Bank’s external applications connectivity platform
The Bank has a dedicated Complaint Management has also been extended, enabling fintech solutions to
team that handles customer complaints under the be on-boarded quickly and conveniently.
Customer Grievances Handling Policy approved by the
Board. The Bank’s robust complaint handling Launch of New Internet Banking
mechanism allows its customers to log complaints
The Bank has launched its new Internet Banking facility,
through a number of channels, including a 24/7 Call
providing a seamless digital experience of frequent
Centre, website, a dedicated email address for
activities on a single screen, adding user-friendliness,
complaints and ‘Hearing and Caring’ drop boxes
convenience and security; and increasing the range of
placed at branches nationwide.
online services for account holders.

DR Switching
The Bank has acquired a new solution to automate DR
Network Switching, providing seamless switching without
any manual intervention, reducing manual errors while
increasing uptime and service availability.

State-of-the-Art Network Security

The Bank has upgraded its firewall to more effectively
filter Internet-based application traffic, providing malicious
bot protection, application-layer encryption, and behavior

112 MEEZAN BANK LIMITED

analytics to help defend against advanced level application The Bank works under the guidance and direct
attacks. supervision of its Shariah Supervisory Board (SSB) for
the following functions:
This initiative has reduced application attacks and
network threats, and also complies with international ■ Facilitating new research and product
security standards as well as provides increased network development activities.
controls.
■ Refining existing products and procedures.
Data Analytics ■ Providing Islamic banking trainings to new and
A major Bank initiative for 2019 is to utilize Data Analytics existing staff members.
(DA) in supporting, facilitating and growing business ■ Conducting regular Shariah reviews of
units. This will play a vital role as an incremental business branches and departments.
profitability contributor and yield a faster turnaround in
achieving corporate goals. ■ Coordinating with the Bank’s Shariah
Supervisory Board.
DA will facilitate segments by taking advantage of data ■ Facilitating learning programs of Islamic
to determine the products and services that will provide banking, both in-house and at external avenues
the quickest time to market with the highest plausibility of including educational institutes and training
success. companies.

The core objectives of Big Data Analytics enterprise The Bank has achieved such success and recognition in
integration platform is to achieve cost efficiencies, its research and product development activities that the
optimize revenues, enhance cost and return ratios, and practices and procedures adopted by Meezan Bank are
digitally enable the Bank, providing the best class accepted as benchmarks of the Islamic banking
customer service, in addition to day-to-day BI, Reports industry, both locally and internationally.
and Dashboards to Business and Operations.
Shariah Structuring and Review
The key focus of all these initiatives is to provide a The Bank has a dedicated Shariah structuring team that
world-class banking experience to our customers. works with Product Development Unit, clients, Shariah
scholars, lawyers, law firms and accountants to advise
Product Development client-specific structures to enable clients to obtain
The Bank has a dedicated Product Development Unit Shariah-compliant financing facilities. More than 4,500
that works as an autonomous unit under the Customer such cases were processed during 2018. The Bank’s
Support Group. The Bank does extensive research on staff also visited over 150 clients to gain hands-on
new and upcoming products having prime focus on understanding of their business processes to structure
Retail, Consumer and Branchless Banking products and Shariah-compliant financing solutions that suit their
services. needs.

Major functions of the Product Development Unit The Bank has successfully issued the first ever
comprise: Shariah-compliant Tier-1 Sukuk in Pakistan. The
structure has now become the standard for issuance of
such type of Sukuk in Pakistan, which is followed by
■ Coordination and collaboration with business
other banks who have issued Tier-1 Sukuk in the
support functions including IT, Operations &
country.
Compliance to competently manage product
improvement and execution.
During the year, SBP launched Islamic Long-term
■ Coordination with SBP IBD for Retail Banking Financing Facility scheme (ILTFF) to enable exporters
products. of the country to avail Shariah-compliant discounted
financing. In line with SBP's guidelines, the Bank
■ Overall management of the Bank’s deposit
pools. developed financing schemes for customers under
ILTFF and also provided guidelines for pool
■ Research on new Product Development, management mechanism of the product.
Consumer, Retail and Branchless Banking
products. The Bank has been financing commercial vehicles
through Ijarah mode for long. The Bank has now
■ Staff training related to Retail, Consumer and
developed a Diminishing Musharakah-based vehicle
Branchless Banking products.
financing product for those customers who could not
avail Ijarah-based facility because of their specific
Shariah Compliance balance sheet requirements.
Shariah compliance is a way of life at Meezan Bank and
the Bank has a zero-tolerance policy in this regard. The Bank developed a Shariah-compliant structure for
Various checks and balances ensure that all the financing of purchase of shares of a listed company for
products, services, processes, policies and procedures a corporate customer. The deal was developed on
of the Bank are fully Shariah-compliant. To continually Shares Murabaha structure under guidance of the
meet this objective, a dedicated department was Bank’s Shariah Supervisory Board.
established in 2005 to provide a centralized hub for
research and product development activities, finding The Bank also introduced Farmers Financing through
practical and Shariah-compliant solutions for different Salam mode. Under this program, farmers were
financial needs, conducting Islamic banking trainings provided financing for procuring agricultural input and
and Shariah compliance exercises. other services related to crops under the Salam mode.

ANNUAL REPORT 2018 113

 During the year, the Bank structured and approved a ■ The Bank structured a Rs 5.66 Billion financing facility
Shariah-compliant solution for one of the largest Micro for Hyundai Nishat Motor Private Limited, a new
Finance Institutions (MFI) of the country for funding auto-manufacturer which is in the process of
small borrowers on a Shariah-compliant basis. The establishing an assembling plant in the country.
Bank reviewed and suggested improvements in the
processes, systems, accounting and documents of the ■ Rs 5 Billion Diminishing Musharakah-based Sukuk
MFI. The Bank also designed a Musharakah product was structured for Agha Steel Industries Limited.
under which the Bank will give financing to the MFI, ■ Diminishing Musharakah-based financial solution of
after which the MFI will further give micro financing to Rs 1.3 Billion was structured for Martin Dow Marker
the small borrowers. Limited.

Contributions towards the Islamic

Banking Industry of Pakistan
■ The Bank partnered with IBA – Centre for
Excellence in Islamic Finance and Centre of
Islamic Economics (CIE) in conducting awareness
programs for religious scholars, parliamentarians,
bureaucrats and government officials. More than
300 such participants attended the program in
February, 2018 in Islamabad. The direct result of
this program was the Senate Resolution,
unanimously passed in the Senate, resolving that
at least 30% of the Government debt should be
replaced with Shariah-compliant modes.
■ The Bank has led a consortium of Islamic Banks for
the structuring of Rs 200 Billion Energy Sukuk for
In this digital age where e-commerce is revolutionizing Ministry of Energy/ Power Holding Private Limited
the world of commerce, the Bank’s Shariah Supervisory for settling part of the energy sector circular debt.
Board has provided guidelines for extending financing ■ The Bank was also involved in devising a Shariah-
for durable goods to its customers through a digital compliant solution for the Deposit Protection
platform. Keeping in view the significant demand of Scheme (DPC) launched by the State Bank of
personal financing products, the Bank's Shariah Pakistan.
Supervisory Board has also provided guidelines for
meeting certain personal financing needs of individuals ■ The Bank has been actively supporting the State
through a Shariah-compliant structure. Bank of Pakistan for various matters related to the
Islamic banking industry, such as improvement of
Shariah Governance Framework, solutions for
The Bank continued its efforts to increase Shirkatul
Energy Finance Scheme, issuance of new Sukuk,
Aqd-based financings, as a result of which the quantum
etc.
of Running Musharakah transactions continued to rise
and the total Running Musharakah financing at year
end stood at Rs 158.86 Billion, which is 30% of the Internal Training
Bank’s total financing portfolio. ■ Meezan Bank has put into place a rigorous training
regime for its staff, in order to enhance their
The Bank worked on eight syndicated / structured knowledge and skills about Islamic finance. The
transactions involving hybrids of various structures learning initiatives include basic orientation for all
such as Ijarah, Diminishing Musharakah, etc. Some of new staff, specialized functional modules on
the major transactions are as follows: various business products and processes,
certificate programs on Islamic banking as well
■ The Bank has structured and developed a customized as refresher programs. During the year, 105
Diminishing Musharakah-based syndicated financing training sessions comprising 840 man hours were
solution for setting up of a coal-based power plant by organized for the staff members across the
Lucky Electric Power Company Limited. The deal country, catering to more than 5,000 employees
was first of its kind and value of its Islamic element of the Bank. This number includes orientation
was Rs 12.5 Billion. sessions for new joiners, refresher programs like
Asset Refresher, Deposit Refresher, Trade Finance
■ In order to support CPEC projects, the Bank & Treasury Operations and certification programs
provided short-term working capital syndicated in Islamic Financial Products.
Running Musharakah-based solution to China Power
Hub Generation Company Pvt Limited of up to Rs 4.8
Billion.
■ Diminishing Musharakah-based financial solution of
Rs 10.5 Billion was offered through a syndicate to
K-Electric for financing both running & upcoming
projects and to bridge the working capital
requirements of the company.
■ The Bank structured a Rs 3 Billion Sukuk transaction
for Javedan Corporation Limited as a part of its
initiative to develop the housing and infrastructure
sector.

114 MEEZAN BANK LIMITED

■ The Bank also invited a number of professionals
and academicians to share their knowledge on
Shariah Audit & Islamic Financial
various practical and academic issues with the Advisory
Bank’s middle and senior level staff. Shariah Audit
Meezan Bank has a dedicated and independent
External Training (Customer & Public Shariah Audit function in place to ensure that all its
operations are carried out according to the Shariah
Awareness Initiatives) rules and principles as prescribed by the Shariah
■ Meezan Bank’s efforts towards realizing its Vision Supervisory Board, Resident Shariah Board Member
have led to numerous projects and partnerships (RSBM) and State Bank of Pakistan, as well as to ensure
focused on creating awareness about Islamic that a robust Shariah control system is in place and
banking among different segments of the society. working effectively to mitigate Shariah non-compliance
The Bank arranged 65 seminars on Islamic risks associated with the Bank’s operations. The
Banking in 38 cities of Pakistan which were department is equipped with a large team of Shariah
attended by more than 6,500 participants. Auditors and Advisers certified by AAOIFI. The Bank
has been recognized as ‘Shariah Auditor of the Year’ &
received ‘Shariah Authenticity Award’ by Global Islamic
Finance Awards (GIFA) in 2018.

■ The Bank acted as the Strategic Partner of IBA –

Centre of Excellence in Islamic Finance (IBA-CEIF)
in organizing the 2nd World Islamic Finance Forum
(2018). The forum was attended by around 500 To test the efficiency of Shariah controls, the Shariah
local and international delegates. Audit function mainly focuses on the following areas:
■ The Bank’s staff members conducted various ■ Evaluation and assessment of Shariah control
training programs at IBA-CEIF, National Institute of systems that are in place.
Banking & Finance (NIBAF) and Institute of ■ Eradication of non-Shariah-compliant income, if
Bankers Pakistan (IBP). Meezan Bank’s staff teach any, and evaluation of Shariah-compliant returns.
Islamic banking courses and conduct seminars at
a number of reputable universities across the ■ Support Bank’s staff in learning, developing and
country. refining Shariah skills as a tool to mitigate Shariah
non-compliance risk.
■ In the scholastic field, Meezan Bank also provided ■ Conducting on-site sessions with staff members to
support to Journal of Islamic Banking and Finance enhance their Islamic banking knowledge; training
through contribution of academic and scholarly sessions on ‘How to improve Shariah Audit Rating’
articles/ research papers. are also conducted as a hand-holding activity at
The Bank continued to play a key role in supporting every Region of the Bank.
IBA-CEIF towards the common aim of capacity building
Evaluation of Treasury operations on an ongoing
for the industry and spreading awareness about Islamic
■
basis to assist Treasury in ensuring Shariah
Banking. In this regard, various sessions for banking
compliance in their day-to-day operations
practitioners, Shariah scholars, judges and academicians
were conducted at IBA-CEIF with the support of ■ Conduct quarterly audits of pool management,
Meezan Bank. profit calculation and distribution process in order
to ensure Shariah-compliance in the profit
During the year, students from IBA-Karachi and Bahria calculation & distribution process.
University visited Meezan Bank’s Head Office. They
Continuous improvement through necessary changes
were given presentation on practical issues in Islamic
■
in manual, risk based evaluation methodologies, audit
Banking along with a tour of the Head Office.
programs and checklists to coupe with dynamic
and vibrant Islamic banking environment, products
Two international scholars visited Meezan Bank’s Head and structures.
Office to give their views on different aspects of Islamic
Banking. ■ Placement of an effective Quality Assurance and
review function for enhancing due diligence in the
Meezan Bank is also a strategic partner for Lahore audit processes and procedures.
University of Management Sciences (LUMS) and
Institute of Management Sciences, Peshawar through Islamic Financial Advisory
supporting Islamic Banking related activities and Meezan Bank regularly facilitates banking as well as
sessions organized by these institutes. non-banking financial institutions, including mutual

ANNUAL REPORT 2018 115

 funds, stock exchanges, Takaful companies and other The Bank gives special attention to the well-being of its
corporate entities, both locally and internationally, in most important asset - its employees, and considers
developing Shariah-compliant products for their them the key to its success.
business needs.
The Bank has worked towards becoming the ‘Employer
The Bank has successfully facilitated the country’s first of Choice’ by attracting, developing, retaining and
electronic Commodity Murabaha transaction through caring for best quality resources and continually striving to
Pakistan Mercantile Exchange (PMEX), Meezan Bank build a dynamic and professionally competent workforce.
served as the only Shariah Technical Services Provider
for the development of this Shariah-compliant trading
platform at PMEX. In 2018, the Bank inducted 1,817 staff members, out of
which 223 were inducted through batch hiring. Out of
total three batches that the Bank induced in 2018, one
The Bank also continues to extend its services to
Bahrain Institute of Banking and Finance (BIBF) through was of Personal Banking Officers and the other two
sharing its expertise, knowledge and experience by were of Branch Services Officers. Extensive training
preparing content for their upcoming AAOIFI courses. was offered to the newly hired officers. The batch hiring
For this purpose, the Bank prepared presentations initiative enables the Bank to develop a regular talent
simplifying the clauses, short case study / practical pipeline for its ever expanding branch network. It also
examples and self-assessment exercises for all AAOIFI enables the Bank to contribute to the society by
Shariah and Accounting Standards. providing employment opportunity to the qualified,
competent but otherwise professionally inexperienced
The Bank also conducted sessions on Islamic finance youth and developing them into professional bankers.
at various prestigious institutions in Turkey including
Borsa Istanbul, Central Bank of Turkey and Istanbul The active recruitment exercises helped in growing the
Sabahattin Zaim University in an effort to demystify Bank’s Headcount by 5.6% in 2018.
Islamic banking and finance and to explore the way
forward for the benefit of Islamic Financial Industry.
Staff Headcount
In the area of Capital Markets, the Bank facilitated its
clients in launching several investment funds and plans 2017 2018
across the year, bringing total funds and plans under Central 2,833 3,078
advisory to more than 60 with a total size of over Rs. 120
Billion. The Bank continues to provide regular support North 1,195 1,196
to Pakistan Stock Exchange (PSX) in maintenance and South 2,295 2,392
re-composition of the two Islamic indices.
Head Office 1,783 1,891
The Bank continues to offers distance learning
programs on Islamic Finance to over 300 professionals
and students through an internally established unit Staff Headcount
‘International Institute of Islamic Bankers’ (IIIB), which is
Pakistan’s first distance learning institute accredited by 14% 36%
Finance Accreditation Agency (FAA), Malaysia.

Human Resources
Meezan Bank believes in building a dynamic and
professionally competent workforce that is fully capable
of providing a world-class banking experience to its
customers. The Bank’s branch network of 660 branches
in more than 180 cities is supported by a workforce of
over 8,557 full-time employees and 1,474 outsourced
staff.
22% 28%

Employees in 2018 Central South Head Office North

10,000
8,557 8,292
The Bank believes in providing career development
8,000
and diversification opportunities to its staff members
such that they may find growth and progress within the
organization. One manifestation of this belief is that the
6,000 Bank gives its staff members a fair and equal
opportunity to apply for vacancies created within the
4,000 organization, through Internal Job Post (IJP).

2,000 During 2018, 75 jobs were filled through internally

sourced talent, while 439 elevations were made across
the Bank at different levels (as compared to 292
0
As of Average during the elevations in 2017). This approach creates a culture of
31st Dec, 2018 year 2018 merit-based career growth within the Bank and is also a
2018
strong enabler in talent retention.

116 MEEZAN BANK LIMITED

Elevations Shariah Audit Rating, Asset Refresher programs, Deposit
and Consumer Refresher and five days Islamic Banking
500 Orientation.
439

400 A number of programs were conducted during the year

to strengthen the skillset of staff in customer-facing
292 roles. These mainly included Customer Service Skills,
300 AML / CFT, Sales and Product Certification, Wealth
Management, Premium Banking, Account Opening,
200 Branch Operations Refresher and also Islamic Banking.

100

0
2017 2018

Meezan Bank has always been cognizant of the

importance of caring for its employees and their
families. The Bank established an Employee Benevolent
Fund Trust (EBFT) in 2012 for providing financial
assistance to employees for welfare, education and
marriage needs. Establishment of EBFT shows Meezan
Bank’s keenness in achieving excellence in all its
affairs. Such an initiative is rarely seen in the banking
industry and highlights the Bank’s sincerity towards
being an employee-friendly organization.

A testimony to the Bank’s commitment to following

best practices in its HR affairs are the HR awards which
the Bank has won. The Bank was rewarded with
'Recognition Award in Employment Practices' in the
category of Large National Organizations by The
Employers Federation of Pakistan – Pakistan’s largest In addition to the above, the Bank also offered external
forum for employers. learning opportunities to its staff. During the year, 123
external trainings and certifications were provided,
Learning and Development benefitting 480 (374 unique) members of staff. Some of
Meezan Bank’s Learning and Development philosophy the key external trainings and certifications included
consists of providing a variety of learning opportunities Building High Performance Teams, Risk Adjusted
to its staff through in-house, external and international Balance Scorecard, Developing Future Leaders,
training programs. The Bank has three dedicated Master Class in Private Equity, Advanced Certificate in
learning centers located in Karachi, Lahore and AAOIFI Shariah Standards (ACSS), Management
Islamabad and additional training facilities in Development Program and OMEGA CSA.
Faisalabad, Gujranwala, Multan and Peshawar, where
learning programs are conducted throughout the year Leveraging on technology, this year the Bank launched
under an organized learning calendar. In addition to seven E-Learning modules on its Learning Management
class-room-style training, the Bank provides a multitude System (LMS). These included programs on AML / CFT,
of learning opportunities to its staff members through Fair Treatment of Customers, Shariah Knowledge
different channels, comprising of Video conferencing, Booklet, Prevention of Fraud and Forgery, Meezan
Learning Management System, Town Halls, Knowledge Labbaik and Video Training on Information Security.
Sharing Sessions and Mock Branches.
In-House Subject-wise Staff Trained
The Bank conducted a total of 368 in-house learning
programs attended by 10,102 (5,433 unique) participants, 1%
encompassing 656 learning days. In-house trainings 6%
comprise of Induction, On-boarding, Islamic Banking,
Technical, Role-specific, Leadership and Soft Skills 11%
programs.
42%

Induction training is mandatory for all new joiners.

There are two types of Induction training programs:
Orientation Program and Batch Training. The primary
purpose of these programs is to get the new joiners 11%
familiarized with the Bank’s Vision, Mission, Culture, Technical Training

Values, History, and Key Policies / Procedures, etc. Induction

Soft Skill
Islamic Banking trainings are a major element of the Role Specitic
Bank’s learning regime. A total of 42 different Islamic Islamic Banking
Banking training programs were held across the Bank. Awareness Sessior
12% 17%
These programs included five days advanced Islamic Leadership

Finance course, Islamic Banker’s Certification, Improving

ANNUAL REPORT 2018 117

 External Subject-wise Staff Trained

9%

9%

43%

13%

Technical Training
Conference/Seminar
Islamic Banking
Role Specitic
Soft Skill
13% 13%
Leadership

Operations
Meezan Bank’s Operations department works as a
partner of all business units and is responsible for
end-to-end operations of Retail Banking, Trade Finance,
Credit Administration, Centralized operations, Debit
Cards, Cash Houses, Treasury and Capital Market
operations, Mutual Funds, Reconciliation, SWIFT and
Central Bank Reporting. The primary function of the
Operations department is to ensure that all transactions
are accurately processed in line with Meezan Bank’s
internal policies, procedures and standard operating
procedures (SOPs) as well as Shariah guidelines, SBP
regulations and all related legal requirements. Proper
alignment of operations capabilities with overall
organizational goals and objectives has a significant
impact on business performance, and consequently, on
competitive strength. Cognizant of this fact, Meezan
Bank has developed its Operations function into a strong,
resilient and effective business partner for revenue
generating functions, thus providing the needed impetus
to its efforts of establishing Islamic banking as banking of
first choice.

The Bank has focused on continuous improvement of

policies, procedures and turnaround time (TAT), thus
enhancing operational efficiency and improving effective
utilization of resources. The emphasis has been on
leveraging latest technologies to improve operating
efficiency and staff productivity. The Bank is committed
to making substantial investments to achieve this
objective.

118 MEEZAN BANK LIMITED

 My colleagues in the
Shariah Supervisory Board and
I are extremely pleased that
Alhamdulillah Meezan Bank
has been recognized with the
‘Best Bank’ award-the best not
only among Islamic banks
but all over Pakistan.
Alhamdulillah, this is a big achievement
for Meezan Bank and we are very
happy to know about this.
Justice (Retd.) Mufti Muhammad Taqi Usmani

ANNUAL REPORT 2018 119

 Marketing & Corporate Communication
During 2018, the Bank launched several initiatives
aimed at re-enforcing its Vision of establishing ‘Islamic
banking as banking of first choice...’, enhancing brand
image and increasing visibility to existing and potential
customers.
Major Initiatives to Support & Promote Islamic
Banking
The marketing campaigns listed below utilized Press,
Radio and Social & Digital Media. This year, Meezan
Bank increased its emphasis on Digital & Social Media
marketing to reach customers using digital videos, posts
and messages to reinforce its message.
The major activities conducted during the year included:
• Best Bank in Pakistan campaign
• Independence Day campaign to highlight the

e Best
importance of getting rid of interest in Pakistan’s
banking system
with th
• Mobile Wallet campaign Bank restigious
Bankin
g Awar d
P
• Government Hajj Application collection campaign Pakistan
’s Most

• Vouch365 discount campaign

• To support the Islamic pages of major newspapers,
Meezan Bank placed a weekly masthead ad on these Follow us
on

pages. A number of corporate and product related

ads for Debit Cards, Current Account, Consumer
Financing, etc. were also placed.

Events & Sponsorships

The Bank sponsored and participated in more than 30 public events nationwide that provided excellent marketing mileage and increased
brand visibility among the general public. Apart from this, the Bank organized more than 30 Area-wise Islamic banking seminars
nationwide to increase awareness and answer questions about Islamic banking.

Ramadan Cards
The Bank continued to distribute Ramadan cards to highlight the importance of this holy month.

The Bank also conducted the following

activities exclusively on Digital & Social Media:

• Ramadan campaign based on balance of life

• Blessed Friday Shopping campaign
• Over 20 product-focused campaigns on social media
for Home Remittance, Kafalah, Consumer Ease,
Meezan Express Account, Bike Ijarah, Car Ijarah,
Easy Home etc.
• International Day of Disabled Persons campaign
• Educational video on the difference between Islamic
and Conventional Banking
• Educational video on the difference between Islamic
and conventional car financing
• Live coverage of World Islamic Finance Forum (WIFF)
• Consumer Financial Protection Framework campaign

120 MEEZAN BANK LIMITED

 MEEZAN BANK’S SOCIAL MEDIA
FOOTPRINT

FOLLOWERS
More than

74,800 LIKES
GROWTH Over

90% 1.86m
Largest fan base
since 2017 in Pakistan’s banking industry
The highest number of
followers amongst all banks
in Pakistan
18 th
in World’s
Top 100 Banks on Facebook
by The Financial Brand

FOLLOWERS
More than

4,900
GROWTH

40% SUBSCRIBERS
since 2017
More than
Over FOLLOWERS
6,500 More than

GROWTH 18,900
194%since 2017 GROWTH

First dedicated
Islamic Banking Channel
78% since 2017
in the country The highest number of followers
amongst all banks in Pakistan
 Corporate Social Responsibility
Meezan Bank believes in creating value for its stakeholders and society simultaneously, in a manner that is integrally
linked to its values and the Islamic principle of Ihsan. The Bank recognizes that it is part of the community at large and
that there is a strong need to contribute to the society. Throughout 2018, the Bank partnered with various organizations
to design and implement initiatives, primarily in the healthcare and education sectors, to benefit the society.

Some of our most recent and most ambitious projects are mentioned below:

Education scholars, government officials and parliamentarians in

collaboration with Centre for Islamic Economics (CIE),
Employee Volunteering for TCF Rahbar
Meezan Bank and Takaful Pakistan.
– Youth Mentoring Programme
The Citizens Foundation (TCF) is one of Pakistan’s leading Idara Al-Khair Welfare Society
non-profit organizations in the field of education for the less Idara Al-Khair Welfare Society is a non-profit private
privileged. The Rahbar Programme forms part of the many organization which has been working for the cause of
volunteering initiatives of the organization, and is designed education for the last 30 years. During 2018, Meezan Bank
specifically for eighth and ninth grade students of TCF with signed an agreement with Idara Al-Khair to support the
an aim to mentor the youth to become responsible and school - Campus VI Yaroo Goth, Karachi, that is currently
productive members of the society. providing free education to 400 children. The Bank has
provided financial assistance to the Campus, playing a key
role in spreading education in hard-to-reach and
under-privileged areas that are currently not fully covered
by the country’s education system. The initiative forms part
of the Bank’s Corporate Social Responsibility efforts aimed
at supporting education equality for all.

Meezan Bank supported this mentoring program, which is

driven by ‘Thought to Destiny’ theme, whereby Bank
employees voluntarily mentored TCF students by
dedicating six Saturdays for Rahbar in 2018.

Centres for Excellence in Islamic Finance at Lahore Healthcare

University of Management Sciences (LUMS), Institute
of Business Administration (IBA) and IM Sciences The Indus Hospital
(Peshawar) Since its inception in 2005, The Indus Hospital (TIH) has
Lahore University of Management Sciences (LUMS), been running an unparalleled and unique healthcare
Institute of Business Administration (IBA) and IM Sciences business model, whereby it provides premium healthcare
(Peshawar) are among Pakistan’s leading private sector at no cost at all to low income populations. The Bank, in
educational institutions. Meezan Bank entered into addition to hosting collection boxes at all branches has
cause-related partnerships with these institutions in order taken the following initiatives as part of its CSR activities:
to help foster the learning and development of Islamic
banking and finance across the country by supporting their Blood Donation Drive
newly established Centres for Excellence in Islamic Since 2014, the Bank is supporting TIH through
Finance. With an altruistic motivation to support the cause successful voluntary Blood Donation Drives at its Head
of Shariah-compliant banking services and increasing the Office located in Karachi. This year, the Bank held a
awareness of Islamic finance, Meezan Bank worked closely blood donation drive with the objective of encouraging
with these institutes to facilitate development and launch of people to donate blood. Staff members from Head Office
training programs on Islamic banking and finance and and branches participated in this activity with great
co-author case studies and research papers. Meezan enthusiasm. In addition to proper screening for blood
Bank’s employees also participated as guest speakers in donation, the staff members were also screened for
several executive programs at these educational institutions. various diseases including Hepatitis and other infectious
This contribution plays an instrumental role in the promotion diseases for free.
of ethical practices across the country, as the Bank aims to
equip students and executives with adequate Islamic TIH Golf Fundraiser
knowledge as well as professional skills. These Meezan Bank, with its aim to support quality healthcare
partnerships have proven to be a great success and for all segments of the society, supported The Indus
during 2018, around 900 students were trained at IBA Hospital in its Golf Fundraiser, held at Karachi Golf Club.
Centre for Excellence in Islamic Finance. The institute also The event engaged more than 100 golfers and top CEOs
held a number of Islamic banking awareness sessions for of several organizations. TIH Karachi is expanding from

122 MEEZAN BANK LIMITED

 150 beds to 1,800 beds to help continue providing free Sindh Institute of
quality healthcare to all. This fundraiser not only helped Urology Transplant (SIUT)
create awareness about the philanthropic activities of Sindh Institute of Urology Transplant (SIUT) is one-of-
TIH, Karachi, but also helped collect voluntary financial its-kind center for kidney transplantation in Pakistan and
support to expand the number of beds in the hospital. has been providing free medical treatment for kidney and
liver diseases to patients, predominantly from the rural and
TIH Brick for Life poor urban strata with virtually no access to medical
The steady increase in patient numbers at The Indus facilities. SIUT’s extensive facilities, which house
Hospital in Karachi has highlighted the urgent need to state-of-the-art equipment, enable it to provide free
expand the facility to be able to serve more people with treatment to Pakistanis.
free of charge and quality healthcare. With an aim to
support this expansion, Meezan Bank and its employees Meezan Bank contributed to SIUT by raising awareness
contributed to the TIH ‘Brick for Life’ initiative by donating amongst its customer population through information
bricks worth Rs 500 each. The event was held at the leaflets and banners strategically placed within its
Bank’s Head Office, Karachi, inviting participation from branches.
the entire Meezan Family.
Behbud Association Karachi
Behbud Association Karachi is a registered non-profit
organization, working for over 50 years, focusing on
poverty alleviation and empowerment of underprivileged
and marginalized communities through interventions in
education, health, vocational training, income generation
and disaster relief. Meezan Bank sponsored Behbud
Association Karachi in holding the Behbud Spring
Fiesta, Karachi. The event aimed to raise funds for
Behbud’s development projects and charitable activities,
encompassing education, health and vocational training
for the empowerment of women.

AKU Charity Golf Tournament for

Paediatric Congenital Heart Programme
One in every 100 infants born in Pakistan each year has a
cardiovascular disease, resulting in the death of many
babies without any diagnosis. In an effort to raise
Layton Rahmatulla Benevolent Trust
awareness regarding this issue and its adequate
(LRBT) Golf Tournament 2018
diagnostic and treatment, Meezan Bank participated in the
Layton Rahmatullah Benevolent Trust (LRBT) is Pakistan's
AKU Charity Golf Tournament for Paediatric Congenital
largest non-governmental organisation working to fight
Heart Programme – an event organized at Karachi Golf
blindness in the country. Established in 1984, it is based in
Club to fund additional 100 life-saving paediatric cardiac
Karachi with hospitals and primary eye care centres
procedures.
throughout the country. Meezan Bank participated in the
LRBT Golf Tournament 2018, held at the Karachi Golf Club.
This was the second charity golf tournament held by the
Tree Plantation Drive
During 2018, Meezan Bank formally launched its green
organisation to raise funds for the treatment of Cataract,
initiative, a tree plantation campaign in an attempt to
Glaucoma, retinal and corneal diseases among
counter the twin threats of climate change and pollution
underprivileged children and adults who cannot afford the
facing the country. The tree plantation campaign forms
treatment.
part of the Bank’s Corporate Social Responsibility
programme under which over 5,000 trees were planted
Shaukat Khanum Memorial
across the country.
Cancer Hospital (SKMCH)
Shaukat Khanum Memorial Cancer Hospital (SKMCH) and
Research Centre has established itself as a centre of
excellence providing comprehensive care, free of cost, to
thousands of cancer patients in Pakistan.

Meezan Bank first joined hands with the SKMCH in 2010,

when an MOU was signed, as per which the Bank has
placed collection boxes in all Meezan Bank branches in
Sindh and Balochistan. Under this agreement, the
collected amount is directly deposited to the hospital’s
main collection account through Meezan Bank’s free online
banking service. This initiative has shown extremely
positive results as the collection from these boxes has
increased significantly, especially in those areas where the
hospital did not have prominent presence or donation
collection channels.

ANNUAL REPORT 2018 123

 Donation for Diamer-Bhasha and
Mohmand Dams
Meezan Bank continues to collect donations and
contributions for the Diamer-Bhasha and Mohmand Dams
through its nationwide network of 660 branches as well as
ATMs, internet banking and mobile banking channels, in
accordance with the directives of State Bank of Pakistan. In
addition to a one-day voluntarily salary contribution from its
employees, the Bank also made an equivalent donation to
the Diamer-Bhasha and Mohmand Dams Fund, reaffirming MEEZAN BANK
its commitment to Corporate Social Responsibility and IS THE FIRST
pitching in for this national cause. ISLAMIC BANK
IN PAKISTAN
TO INTRODUCE
SHIRKAT-UL-AQD
BASED FINANCING
PRODUCT:
RUNNING
MUSHARAKAH
Meezan Bank is the first Islamic bank in Pakistan to introduce a
Shirkat-ul-Aqd based financing product named Running
Musharakah. This is a financing facility offered to the customers
where the Bank participates in the operating activities of the
customer and shares profit and loss as per the actual
performance of the business. During the year 2018, the Bank
partnered with more than 170 companies ranging from
manufacturing to the service sector, on the basis of profit and loss
sharing.
Running Musharakah was launched at Meezan Bank in 2011 with
a portfolio of Rs 0.75 Billion, and with the continued efforts of the
Bank, it now stands at Rs 158.86 Billion. The Bank ranks among
the top banks globally in terms of percentage of financing
Charity Funds Management through Shirkat-ul-Aqd based mode.

through Ihsan Trust Running Musharakah Portfolio Over Time

Meezan Bank has a social purpose culture that focuses on Rs. in Billions

applying its principles and values in areas where they 200

create a positive impact on people and communities. The 145.91

158.86

Bank has adopted stringent Shariah Compliance and

150

Shariah Audit standards that allow it to screen all income

100
and in case of any non-compliance, to transfer the same to 78.3

a charity account. During 2018, the Bank supported a 50 48.34

number of NGOs and philanthropic organizations including 28.73

Omair Sana Welfare Foundation, The Indus Hospital,

10.35
0

Alamgir Welfare Trust, Afzaal Memorial Thalassemia 2013 2014 2015 2016 2017 2018

Foundation, Bait-Us-Salam Welfare Trust, The Citizens

Foundation, Patients Behbud Society, AKUH as well as
REGULATION OF ISLAMIC BANKING INDUSTRY
Diya Pakistan.
BY THE STATE BANK OF PAKISTAN
State Bank of Pakistan regulates the Islamic Banking industry
As an extension of the same initiative, Ihsan Trust was through a separate Islamic Banking Department, which
regulates the industry through its own policies, regulations and
launched as the operator of Ihsan Trust Fund which is a guidelines in order to ensure Shariah-compliance in Islamic
‘Waqf’ made through a separate Waqf deed. Meezan Bank Banks.
is the biggest supporter of Ihsan Trust, supporting the Islamic Banking Department of the State Bank of Pakistan works
organization through its human resource and other utility- under its Shariah Advisory Committee comprising of renowned
and reputed Shariah Scholars including Mufti Irshad Ahmad
related expenses. Ihsan Trust is the largest interest-free Aijaz, Dr. Noor Ahmed Shahtaz and Ayatullah Shabbir Hasan
loan provider for higher education in Pakistan that reaches Lakhani (Maisami). Some of the key regulations under which
out to the under-privileged sector of the society to help Islamic Banking industry operates are:
such individuals escape the cycle of poverty that they are ■ Shariah Governance Framework for Islamic Banking
Institutions – 2018
stuck in. The Trust provides Qarz-e-Hasna (Interest-free
Instructions for Profit & Loss Distribution and Pool
loan) facility to students who want to pursue higher ■
Management for Islamic Banking Institutions – 2012
education. More than 2,200 students from 125 universities, ■ Guidelines on Islamic Financing for Agriculture – 2008
educational institutions and professional bodies across ■ Risk Management Guidelines for Islamic Banking Institutions
Pakistan have benefited from this facility since its – 2008
inception, including Institute of Business Administration ■ Guidelines for Islamic Microfinance Business by Financial
(IBA), Ghulam Ishaq Khan Institute of Engineering Institutions – 2007
Sciences and Technology (GIKI), COMSATS University ■ Six AAOIFI standards adopted by State Bank of Pakistan.
AAOIFI is the premier standard setting organization for
Islamabad, FAST National University, National University of Islamic Financial Institutions globally
Sciences and Technology (NUST), DOW University of
Health Sciences (DUHS) etc.

124 MEEZAN BANK LIMITED

Sustainability Report
As Pakistan’s leading Islamic Bank, Meezan Bank believes in playing a prominent role in contributing to the United Nations
Sustainable Development Goals (SDGs). With a key focus on responsible growth as well as its environmental, social and
governance impact, the Bank aims to develop and implement sustainable business practices that fully meet the
expectations that the society has from responsible corporate citizens. Meezan Bank's consciousness of its responsibility
towards society and stakeholders is also expressed in its Vision and Mission statements.

Stakeholders Institutional Investors

Meezan Bank holds regulatory and internal meetings
with its Institutional Investors in the form of Board of
Directors meetings and Board Committee meetings,
which are planned and announced on a periodic basis.
Shareholders
Shareholders’ engagement is ensured through Annual
Meezan Bank’s General Meeting held every year, which all
shareholders are invited to attend. This meeting
Stakeholders provides the shareholders an opportunity to interact
with the Bank’s senior management and share their
suggestions, concerns and views.
Customers & Public
Meezan Bank's customers include individual and
Shareholders, corporate depositors, large corporations as well as
represented by the Board small & medium enterprises. The Bank ensures that all
of Directors customer segments are engaged through numerous
Customers: Retail, forums and via multiple channels. To achieve this, the
Corporate, Consumer and
Commercial Banking
Bank regularly conducts a number of activities during
customers the year for its customers as well as the general public,
such as Islamic banking seminars, workshops, local
Depositors
get-togethers on new branch openings and occasion
based activities.
■ Islamic Banking Seminars & Workshops are a
series of free Islamic banking education initiatives
Regulators (Government)
that are conducted across the country on a regular
Employees basis in order to enhance awareness and dispel
common confusions about Islamic banking.
Business partners:
Suppliers & Service
Developed in partnership with the Bank’s leading
Providers Shariah finance experts who break-down Islamic
finance topics into approachable and tailored
content; the seminars help individuals understand
the concepts of Islamic finance and thereby
promote the cause of Islamic banking as a whole.
Peers: The Islamic banking seminars and workshops are
Other financial institutions
(Islamic as well as conventional) open-to-public local events that are attended by
residents and traders of the locality as well as
Trade Associations members of local trade bodies and chambers. The
Opinion-formers: seminars also give the Bank an opportunity to
Journalists, special interest interact, understand and get feedback from
groups, public via multiple customers for further improvement of products and
communication
channels services. In 2018, around 65 Islamic banking
seminars and workshops were conducted
nationwide across 38 cities that were attended by
Meezan Bank's stakeholders are the people and more than 6,500 participants.
organizations that affect or are affected by its
operations. The Bank’s commitment to its stakeholders
is central to its sustainability strategy and reflects the
values that allow it to create shared success with its
clients, communities and other stakeholders.

Stakeholder Engagement
Stakeholder relationships are long-term relationships
which should be handled professionally and with
sincerity. Meezan Bank engages its stakeholders
through numerous channels, while maintaining focus on
its Mission to optimize stakeholders' value through an
organizational culture based on learning, fairness,
respect for individual enterprise and performance.

ANNUAL REPORT 2018 125

 ■ Branch Opening Events offer another opportunity ■ Staff Get-togethers
where all staff members of a new branch meet the The Bank supports a culture of valuing and
residents and businessmen of the locality. This appreciating its staff and makes efforts to ensure that
event adds value by giving a jump-start to the the quality of working relationships is improved
business activities as well as giving the potential through regular interactions in the form of staff
customers an opportunity to meet the new branch gatherings at both local and regional levels. Keeping
team and develop a better understanding of Islamic up with the aim of finding an improved fit between
banking, and the products and services that employees needs and organisational benefits, the
Meezan Bank offers. senior management team held multiple on-site and
off-site Strategy Sessions. The meetings, in addition
■ Independence Day Celebrations are hosted to providing a venue for exchange of creative ideas,
across the country including the Bank’s Head also proved to be an effective team-building
Office, Branches and Regional Offices. Customers initiative.
are invited with their friends and families to visit their
branch and interact with branch staff. These events To acknowledge the efforts of the team members, a
further emphasize the inculcation of positive image Service Conference was organized in Murree, which
building in our children and also give Meezan was the third iteration of this initiative. During this
Bank's staff the opportunity to connect with conference, key achievements were acknowledged
customers and their families, hence strengthening and new benchmarks of service quality excellence
their relationship. This year, in addition to branch- were set for the future.
wide celebrations, the Bank hosted a Family
Get-Together for its staff stationed at the Head This year, the Bank also held a Retail Banking
Conference followed by a recreational picnic to
Office.
Churna Island, Karachi, in recognition of the hard
work and dedication employees bring to the Bank
every day.

Employees
Critical to fostering sustainable growth and
development is the Bank’s focus on investing in its ■ Board’s Policy on Diversity
employees and providing them with an environment As an equal opportunity employer, Meezan Bank
where they can thrive. Considered as Meezan Bank’s emphasizes the need for diversity in the work place.
most valuable asset; the Bank provides its employees The Board of Human Resources & Remuneration
with an inclusive environment that provides them with Committee (BHR&RC) has encouraged the Bank to
multiple growth opportunities, recognizes and rewards implement gender initiatives which encourage and
their performance and supports them in ensuring their support female employment. In line with the same
financial, physical and emotional wellness. approach, the Bank increased its total number of
female employees from 633 in 2017 to 716 in 2018.
Meezan Bank uses various means to ensure that its
employees stay motivated and committed to the cause ■ Recruitment & Succession Planning
of Islamic banking and are groomed into better Meezan Bank aims to strengthen its capabilities and
professionals as well as productive members of the secure customers primarily through recruitment of
society. Some of the initiatives undertaken by the Bank skilled professionals. The Bank believes that a
for its staff are: sustainable and resilient organizational hierarchy
forms the foundation for sustainable growth. The
Appreciation of Achievements
Bank develops sustainable policies for retaining and
■

Academic and professional achievements are managing human capital at the Bank. Given the rapid
milestones in an individual's career. Meezan Bank expansion of the Bank, the Board of Human
acknowledges the outstanding performance of its Resources & Remuneration Committee (BHR&RC)
team members in order to boost employee morale made recommendations to the Management for the
and create a positive work environment. The Bank implementation of an effective Succession Plan.
recognizes its employees and teams via internal
email circulations and publication in quarterly The recruitment process is transparent and is
newsletter. It also follows the practice of making the detailed in the Human Resource Manual accessible
published research work of its employees available to all staff via the Intranet. Meezan Bank uses, where
to all staff in electronic form. Additionally, the Bank applicable, all available media for job advertisement
distributes Service Awards on yearly basis to staff as part of its recruitment process, including the
members who complete five and ten years of service. Bank's corporate website, social media channels -

126 MEEZAN BANK LIMITED

 Facebook, Twitter & LinkedIn, and print advertising in company-funded Employee Benevolent Fund Trust
prominent local newspapers. (EBFT) that allows eligible employees to seek
financial support for themselves and for their families
The Bank's management encourages existing during difficult times.
employees to apply for vacant positions to allow staff
to grow professionally. Towards this end, internal Nature of Approved EBFT Cases
searches are conducted to fill vacant slots within the The Bank processed a total of 208 cases during the year 2018,
organization as well. In 2018, the Bank recruited staff out of which 177 cases were approved.
through batch hiring across the country for the
positions of Branch Service Officers who are 120
responsible for managing day-to-day operational 103
tasks in the branches. All the batches were hired 100
under a transparent and merit-driven process. 80
The Bank held 19 induction sessions through 60
49
participation in Job Fairs held at different cities
40
across Pakistan including Karachi, Lahore, Multan,
Quetta, Mirpur and Islamabad to benefit from the 20
13 12
entourage of competent and capable young
0
individuals. Medical Marriage Education Others

■ Provision of Accelerated / Advance Bonus

Under the accelerated bonus concept, the Bank
facilitates its employees through provision of
advance bonus opportunity that allows them greater
financial freedom. In addition, the Bank’s pay-for-
performance philosophy extends to Saturday
Allowances for branches, paying eligible employees
with additional wages for any additional hours they
put in.
Internal & External Communication Channels
The Bank disseminates information about its various
achievements, activities and initiatives to the external
world by engaging the internal staff and external
stakeholders through the Annual Report, regular Press
The Bank also ensures implementation of the Bank's Releases, publication of the quarterly newsletter-
Succession Planning Policy. The policy and PAGES, direct customer communications such as SMS,
procedure for design and implementation of customer letters, e-statements, emails and through
succession planning is anchored by the Bank’s top social media channels. The Bank also engages
management and facilitated by the HR team. customers by arranging its visibility and accessibility on
Successors are identified on the basis of their public discussion forums, seminars as well as electronic
potential as well as their performance and & print media.
experience.

■ Employment of Special Persons

Meezan Bank operates under its corporate
philosophy of providing merit-based support to
people with disabilities, providing them with
livelihood and self-reliance opportunities. The Bank
Green IT: Introducing Energy
has hired people who face challenges such as lack Efficiency at work
of speech, visual impairment, inadequate or no
hearing and physical deformity. These persons have In line with United Nations Sustainable Development
been placed on jobs where they can be productive Goals, Meezan Bank is working to reduce its energy
despite the challenges they face. footprints through better usage of its information
technology and communication infrastructure. Some of
■ Employee Benevolent Fund Trust (EBFT) the key initiatives are as follows:
Meezan Bank has always been on the forefront of
providing its employees with the best opportunities to Use of Technology to Reduce Business Travel
realize their potential. This forms part of the Bank’s Meezan Bank has invested in the installation of
commitment to make it a great place to work. As an high-quality video conferencing facilities at all major
extension of this philosophy, the Bank realizes its offices across the country, an initiative that has efficient
responsibility towards its employees and their usage in trainings, meetings, interviews and
families, encouraging a culture of respect and care. conferences. As a result, video conferencing has
The Bank’s Human Resource policies are dedicated become a sensible alternative to business trips and has
to supporting employees during major life events. In reduced the Bank’s volume of business flights
addition to providing an extensive healthcare considerably. Over the last few years, the Bank has
coverage to help meet the expenses of employees; managed to not only reduce its overall travel costs but
the Bank also has a joint employee and also reduce its contribution to aviation emissions.

ANNUAL REPORT 2018 127

 Encouraging Paper-free Environment Account Opening (CAO) Workflow to streamline the
The Bank is striving to improve its work efficiency, document movement between branches and Head
control operating expenses as well as make its Office. It includes digital archiving of account opening
contribution towards reducing deforestation by form and documentation and introduction of paperless
reducing the use of paper for photocopying and environment through electronic account opening form.
printing. The following steps have been taken towards This has resulted in savings of both cost and time and
this end: has increased overall efficiency.
■ Implementation of electronic process flows for
certain HR-related processes
Learning & Development
■ Implementation of an electronic IT help-desk and Staff Training
document repository system Meezan Bank offers an extensive range of training
opportunities to employees for their professional
Introduction of an eco-printing campaign at work
development. Training includes technical training
■

by introducing dual-sided printing across the

courses and workshops as well as specialized soft skills
organization
trainings.
Implementation of a tracking system for photocopied
The internal learning programs are managed under
■

documents made at the Head Office. This system

■

an organized learning calendar through a large pool

enables the Bank to manage and control the
of internal trainers whereas externally offered
wastage resulting from photocopies.
opportunities are used for developing and
enhancing specialized technical as well as soft skills.
Increasing Energy Efficiency through a
Next-Generation Data Center
Meezan Bank’s implementation of state-of-the-art Data
Center has helped the Bank to deploy more efficient
remote working technologies, while also double the
utilization of its existing hardware. The Bank is also
currently working on increasing the energy efficiency in
its Data Center to promote a more sustainable and
eco-friendly infrastructure.

Conducting Online Employee Satisfaction Survey

This survey is an on-going practice and is conducted
regularly on an organization-wide basis to gauge
employees’ level of job satisfaction. Recently, the Bank
undertook the initiative of conducting the Survey online, ■ The Bank has mock branches in Karachi, Lahore
in an effort to reduce the eco-impact of paper. The and Islamabad which enable the staff to get trained
initiative not only serves as an opportunity to engage in a simulated branch environment and equip them
the employees but also encourages their inclusion with the practical elements of their day-to-day core
through an ‘online’ methodology that increases banking systems related to work. The mock branch
participation. The switch to online technology has also in Karachi is also equipped with an ATM for
enabled the Bank to provide error-free direct input and hands-on ATM-related trainings.
data analysis.
■ Keeping up with the Bank’s aim of encouraging
workforce development through a multitude of
Implementation of the Bank’s Intranet Portal learning opportunities, Guest Speaker Sessions
Meezan Bank became the first bank in Pakistan to have been initiated for employees as well as Senior
launch a comprehensive intranet portal - Meezan Management so they may get key insights from
World, based on the latest platform of IBM WebSphere some of the most renowned industry experts and
and IBM Connections. The portal has the capacity to accomplished professionals and businessmen. The
build workflows, facilitate project and document initiative has received a very favourable response
management, initiate discussions and also serve as from the audience and has helped broaden the
Business Continuity Planning tool, allowing employees intellectual horizon of the audience.
to work from any Meezan office, in case of an
emergency. Enhancing Employee Capacity
Meezan Bank is also keen to inculcate a learning
Implementation of State-of-the-art T24 software culture by encouraging staff to obtain additional
The Bank has a state-of-the-art T24 software to shift qualifications for their development. IBP Superior
from paper-cheque payments to electronic payments. Qualification (ISQ) Exams is one such certification that
The software serves as a gateway for multiple banking is regarded as an esteemed qualification for bankers.
services including treasury, electronic payments and Meezan Bank motivates its employees to acquire
foreign exchange transactions, apart from managing ISQ-Junior Associate Program of Institute of Bankers
multiple payment channels including ATMs, Internet Pakistan (JAIBP) through a highly attractive incentive
banking, mobile banking and others. structure based on cash rewards, salary increment as
well as reimbursement of registration and course fees.
Implementation of Centralized Account Opening
Workflow Women on Key Positions of the Bank
Due to growth in branch network and future expansion Meezan Bank is an equal opportunity employer and
plans, the Bank strategically implemented Centralized there are females on many key positions of the Bank

128 MEEZAN BANK LIMITED

including Branch Banking, Product Development, opportunity to many ambitious women who want to
Finance and Support functions such as Training and contribute to the cause of Islamic banking while
Communication. maintaining a balance with their responsibilities at
home. Launched in 2015, this facility has been warmly
Health & Recreation welcomed by employees and till date, twelve children
have been enrolled successfully.
Meezan Bank demonstrates a strong commitment to
improving the health and well-being of its employees
through a workplace wellness program that not only
focuses on providing a pleasant working environment to
its staff but also encourages participation in healthy
activities during the workday. The Bank believes in
promoting a healthy lifestyle for its employees to create
a healthier, more productive workforce. The following
efforts evidence the Bank’s commitment to adopting
healthy habits and in making this organization an
excellent workplace.
Medical Benefits & Health Facilities
The medical assistance benefits give peace of mind to
employees and enables them to focus on their
professional responsibilities without having to worry
about financial risks in the event of a medical problem.
Hospitalization coverage therefore forms an integral Company Sports
component of the total compensation package offered Meezan Bank organizes a variety of sports activities for
by Meezan Bank. In keeping true to its stated its employees. Cricket, a national favourite, is promoted
compensation philosophy of offering a balanced and within the organization and financial industry through
competitive remuneration package for attracting and participation of the Bank's cricket team in local cricket
retaining talent, the Bank has instituted outpatient, tournaments. The Bank regularly organizes cricket
hospitalization and maternity benefit plans for its tournaments for inter-department, inter-branch and
employees by providing coverage for these inter-region teams that travel and compete within the
eventualities. country.
Gym & Swimming Pool
The Bank encourages a healthy lifestyle for its
employees by providing both male and female
employees access to independent and modern
gymnasium facilities and separate recreational areas at
Meezan House along with a 1,200 sqft swimming pool.
The facilities are supported by specialized swimming
and fitness trainers to assist the staff in their exercise
and diet routine.

Cafeteria at Subsidized Cost

The Bank also provides hygienically cooked meals at a
subsidized cost to its staff at the Head Office; which is
prepared in an on-location kitchen. The staff is also
provided with multiple tea and coffee areas for
refreshments throughout the day.

Safety Measures
Employees
The Bank has invested in protecting its employees
through the following means:
■ Medical and Life Takaful coverage
■ Shuttle transportation with security at subsidized
cost for travelling to and from Meezan House (Head
Office)
■ High-tech security systems and security guards are
deployed at the Bank's premises
■ A well-designed fire fighting system, with availability
Day Care Facility for Working Parents of trained fire fighters at the location
In order to facilitate working parents at Meezan Bank, a ■ Regular fire and evacuation drills, that are
Day Care facility is available at its Head Office located conducted to help employees become aware of the
in Karachi. Equipped with all the key requirements, this safety steps in case of an emergency. The Bank has
facility caters to children aged two months to three trained and assigned a team to provide assistance
years. The child-friendly environment gives an to staff in the case of a fire or natural calamity.

ANNUAL REPORT 2018 129

 various channels are logged in a Complaint
Management System to keep track of their resolution.
The Bank has a complaint escalation mechanism
whereby all complaints are escalated to the senior
management if not resolved within the stipulated time.
During 2018, the Bank upgraded its Complaint
Management System by implementing a system of
acknowledging complaints through automated SMS
which resulted in process automation of complaint
management. In addition, the Bank enhanced its
complaint monitoring mechanism by introducing
Complaint Management Dashboard which is regularly
reviewed by the senior management to ensure timely
resolution of customer complaints. During the year, the
Customers Bank received 65,303 complaints and the average
Safety measures have been taken to protect customers complaint resolution time was 5.6 working days.
using ATMs and other ADC channels by implementing
the following: Environmental Sustainability
■ Installation of locks and cameras in all ATM rooms Reducing Environmental Impact of Business
with 24 / 7 recording Activities
Anti-skimming devices have been installed on all In an effort to reduce the overall impact of its business
activities on the environment and to minimize
■

ATMs
greenhouse gas emissions, Meezan Bank actively
■ ATM-safe-usage-guidelines are displayed on all employs initiatives to reduce emissions from its
ATM screens for customers before they undertake a operations, daily activities as well as employee travel.
transaction Some of our most noteworthy initiatives, including
Meezan Internet Banking website is encrypted with reduction in direct and indirect energy consumption are
mentioned below:
■

256 bit encryption two-factor authentication for

funds-transfer transactions on Internet Banking Energy Conservation through Re-Designed
■ Recording of all customer calls to the Call Centre Branch Signage
An integral part of Meezan Bank's branding is its
■ IVR Transactions are secured via a separate branch signage which is the most commonly visible
Telephone Banking PIN (T-PIN) image of the Bank. The Bank has redesigned its
■ Meezan Bank's SMS alerts service keeps the branch signages using new LED lights. After the
customers constantly updated of any activity (Debit redesigning, the overall energy consumption has
or Credit) in their account reduced by approximately 60% compared to the
previous design which used incandescent
Selection of Business Partners tubelights. Keeping in mind that the Bank has 660
Meezan Bank ensures that its business partners are branches across Pakistan; this contributes
selected and approved through a detailed review and significantly in reducing the overall energy
selection process. The Bank's procurement team is consumption by the Bank.
empowered to finalize the best supplier and service
provider based on quality, costing, historic Energy Conservation through Energy-Efficient
performance and market reputation. The process is Office Building Structure
reviewed by the Internal Audit team to ensure Meezan Bank constantly takes energy-saving
compliance to the approved internal processes as well measures at its Head Office. The Head Office
as market norms. building has been constructed using glass panels
and atriums which allow natural light to come in
Service Quality Monitoring throughout the day, thereby almost eliminating the
need for artificial lighting in large sections of the
Meezan Bank has Pakistan's largest Islamic banking
building during working hours. The energy-
branch network of 660 branches in more than 180
conserving centralized cooling system also
cities. The branches work under defined operational
contributes to reduced electricity consumption in
procedures which are constantly reviewed and
the office building.
monitored by concerned departments including the
Service Quality Department (SQD). A dedicated team of
SQD is in place to review branch services and to
support branch staff in ensuring delivery of quality
banking experience to its customers. Furthermore,
branches are encouraged to improve their Service
Quality ratings through continuous coaching as a result
of which their efforts are recognized through Service
Champion Awards.

Complaint Management System

The Bank has a dedicated team which handles and
addresses customer complaints as per the Customer
Grievance Handling Policy approved by the Board. All
complaints of the customers that are received through

130 MEEZAN BANK LIMITED

 Minimizing Carbon Footprint through Shuttle financial risk coverage to its deposit account holders
Bus Service and consumer finance customers:
At Meezan Bank, we embrace the idea of minimizing ■ Takaful Coverage for ‘Accidental Death and
our environmental impact through continuous Permanent Disability’ and ‘ATM Cash Withdrawal
development of our internal processes. In pursuit of Theft’ to all checking account holders who are
the same aim, the Bank provides its Head Office maintaining an average monthly balance of
staff with a secure pick-and-drop facility that is Rs 10,000/- or more.
currently being availed by almost 50% of the Head
Office staff. The initiative has helped the Bank to ■ The critical need of Life Takaful Coverage has been
minimize use of personal transport, effectively addressed for Housing Finance customers by
curtailing fuel consumption as well as increasing providing a completely Shariah-compliant Life
staff convenience and motivation. Takaful cover. In the event of death of a customer,
the Takaful benefit covers the outstanding amount
Maintaining Sustainable Banking Operations payable to the Bank. The Takaful cover is also
The Bank has an extensive network in more than 180 available in case of customer's natural or accidental
cities across the country and strives to construct, disability. The Life Takaful cover provides great
manage and upgrade its facilities with sustainability comfort to the Bank's Housing Finance customers
and improved efficiency as its guiding principles. as well as to their family members.
From various energy conservation efforts to the The Bank's Auto, Bike and Commercial Vehicle
implementation of smart business practices, the
■

Finance operates under the Ijarah model, in which the

Bank is now working towards increased awareness Bank takes responsibility for comprehensive Takaful
among its stakeholders to address and to minimize coverage of the vehicle over the complete financing
the social and environmental impacts of its period. The Bank also offers an additional facility of
operations. Some of these include: tracker with free monitoring and Accidental Death
■ Installation of LED lights at the entire Head Office Coverage to the customers of Consumer Car Ijarah.
building to reduce electricity consumption
■ Deployment of energy efficient ATMs as part of the Business Ethics &
Bank's focus on providing technologically
advanced facilities to its customers along with Anti-Corruption Measures
reducing the usage of diesel and electricity Meezan Bank has a comprehensive Code of Conduct
■ Installation of multi-function printer / photocopier and Standard of Ethics that forms part of its Human
machines that allow decommissioning two Resource Policy. The Bank's Disciplinary Action
devices, a laser copier and a scanner, resulting in Committee (DAC) takes action on any violation of
elimination of separate machines and reduction of policies & procedures, acts of fraud & forgery,
overall paper consumption breaches of discipline and code of conduct, ethics &
business practices, law of the land and any statutory
■ Implementation of dual-side printing initiative regulations by an employee. Appeals of the staff
across the organization that will reduce paper against which DAC takes disciplinary actions are
usage to a significant extent reviewed by an independent Disciplinary Action Review
■ Minimizing Carbon emission through a large Committee, which has been formed with a view to
plantation section at the Head Office that utilizes ensure a fresh review of each appeal filed against the
recycled ablution water from the in-house mosque DAC decision. Furthermore, to ensure dignified and
healthy work environment, the Bank has also
Green Banking established an Anti-Harassment Committee that deals
with the instances of sexual harassment reported either
Meezan Bank is committed to driving growth for green verbally or in writing.
banking initiatives and is therefore continuously
exploring opportunities to support and finance
environment friendly projects as its contribution towards Rural Development Program
making our planet more sustainable. A comprehensive Considering the importance of agriculture for the
‘Green Banking Policy’ in line with the instructions and country and inherent market potential for agriculture
guidelines of the State Bank of Pakistan has been duly finance, Meezan Bank has established a dedicated
approved in the Board Meeting of the Bank that outlines Agricultural Finance Department. There has always
the compliance measures to be put in place to ensure been a great demand from rural households to have
smooth and transparent operations of the Bank. The Islamic financing products. Meezan Bank Agri Finance
Board of Directors has also implemented a Policy is set to further enhance outreach with the induction of
Framework that delineates broader guidelines to the dedicated team of agricultural graduates from Punjab,
management for ensuring that adequate controls are Sindh and Khyber Pakhtunkhwa. The Bank's agriculture
maintained and risk is managed within acceptable finance product suite primarily constitutes of agriculture
limits. inputs and Ijarah-based agriculture development
E-statements facilities for meeting the mechanization requirements of
The Bank also provides E-statement facility through agriculture farming.
which customers can receive periodical account
With the Vision to ‘Establish Islamic banking as banking
statements directly via email. This facility is offered at no
of first choice...', Meezan Bank is providing Islamic
additional cost; all that is required is a personal e-mail
financing products that are best suited for rural
address on which the e-statements are sent.
communities. The Bank is also considering innovative
Consumer Protection Measures financing solutions like leveraging technology for digital
inclusion and value chain financial interventions for
The Bank has taken the following measures to provide agricultural growers.

ANNUAL REPORT 2018 131

 Meezan Bank’s
Contribution to United Nations Sustainable
Development Goals
Meezan Bank operates with a Vision to ‘…facilitate the implementation of an equitable economic
system, providing a strong foundation for establishing a fair and just society for mankind.’ As a
result, our focus on sustainability is embedded deep in our business model.
In September 2015, the United Nations (UN) introduced a set of goals to end poverty, protect
the planet and ensure prosperity for all as part of a new sustainable development agenda that
has been adopted by 195 countries across the world. During 2018, Meezan Bank focused on
the following Sustainable Development Goals (SDGs), which it believes are in line with its
sustainability strategy.

4 QUALITY
EDUCATION
Through its strategic initiatives, Centres for Excellence in Islamic Finance at
Lahore University of Management Sciences (LUMS), Institute of Business
Administration (IBA) and IM Sciences (Peshawar), the Bank is making a
substantial contribution in increasing the relevant skills for employment and
entrepreneurship of youth in the country. Through the ‘Islamic Finance Young
Leaders Program’, the Bank, along with IBA Centre for Excellence in Islamic
Finance is providing exposure and learning to students and young
professionals from different parts of the country.

7 AFFORDABLE AND
CLEAN ENERGY For the purpose of creating opportunities for modern, sustainable energy
services and promoting investment in clean energy technology and energy
infrastructure; the Bank is pursuing the State Bank of Pakistan (SBP) closely,
for designing an Islamic alternative for SBP’s Scheme for Renewable Energy.

8 DECENT WORK AND

ECONOMIC GROWTH
Through its focus on employee development, training and championing public
education and awareness regarding finance, the Bank is not only promoting a
healthy work environment but is also strengthening the country’s economy by
expanding the access of individuals to Islamic banking.

12 RESPONSIBLE
CONSUMPTION
AND PRODUCTION
Through its issuance of Green Banking Policy, the Bank has put in a conscious
effort for environmental conservation, by making improvements in energy
efficiency and use of alternative energy sources for the protection of the
environment. It includes financing to alternative energy sources and
environmental friendly businesses. The policy not only helps in compliance to
relevant laws on environmental protection but also provides openings to
emerging businesses.

17 PARTNERSHIPS
FOR THE GOAL To support Digital Payments in Pakistan and to bring greater transparency to
the economy, the Bank has signed an MoU with NayaPay Pvt Ltd. to enable
merchants and consumers to sign up, transact and communicate cheaply,
securely and conveniently.
As Pakistan’s first Bank to partner with Karandaaz Pakistan for specialized
Supply Chain Partnership Program, the Bank is strengthening domestic
resource mobilization as well as mobilizing financial resources for SMEs in the
country.

Source: www.un.org/sustainabledevelopment/sustainable-development-goals/

132 MEEZAN BANK LIMITED

Report of the Board Audit Committee
Board Audit Committee (BAC) comprises of four non-executive directors having vast experience and knowledge of
finance and accounting. The Chairman of BAC is an independent director. Bank has adopted Committee of
Sponsoring Organizations (COSO) Integrated Internal Control Framework and the Charter of Internal Audit & BRR
department (IAD) provides complete independence to Head - IAD alongwith free access to BAC.

BAC has been proactively focusing on effectiveness of internal controls, risk management, compliance and
governance processes in accordance with the requirements of Code of Corporate Governance and Terms of
Reference (ToRs) of BAC duly approved by the Board of Directors. During the year 2018, four BAC meetings were
held and following major activities were performed by BAC in accordance with its approved Terms of Reference.

■ BAC reviewed quarterly, half yearly and annual financial statements of the Bank and recommended the same
for approval of the Board.
■ BAC reviewed management letters issued by the external auditors, management's response and their
compliance status and held discussions with external auditors on major observations. BAC also recommended
the appointment of external auditors and their fees to the Board.
■ BAC reviewed and approved the audit strategy, audit plan, scope and extent of the work to be performed by
internal audit (IAD) and Shariah audit. BAC also reviewed adequacy of resources as per the scope.

■ BAC reviewed significant findings of internal audit and Shariah audit along with monitoring of its timely
compliance. BAC also reviewed the whistle blowing mechanism.
■ BAC reviewed major findings of internal investigations with respect to fraud & forgery and whistle blowing along
with management’s action thereto. BAC also reviewed annual review report of fraud, forgeries and robberies.
■ BAC reviewed related party transactions and recommended the same for Board’s approval.
■ BAC reviewed the AML environment, compliance and AML activity report, compliance policy, AML policy and
compliance program, Institutional Risk Assessment Framework (IRAF) – Self Assessment Questionnaire and
SBP inspection reports along with monitoring of its compliance status. BAC also reviewed minutes of
Compliance and Operational Risk Management Committee meetings.
■ BAC reviewed internal audit manuals, programs, revision in polices, ToRs of BAC and recommended the same
for Board’s approval.
■ BAC reviewed Shariah audit manual and ensured compliance of corrective actions determined by Shariah
Supervisory Board on the reports of Shariah audit.
■ BAC reviewed the independent assurance report on compliance with Shariah rules and principles along with
monitoring of its compliance status.
■ BAC reviewed and had an oversight of implementation of Internal Controls over Financial Reporting (ICFR)
program across the Bank.
■ BAC reviewed Internal Audit Department self-assessment and internal quality assurance reviews along with
progress and implementation status.

■ BAC conducted self assessment of its performance to review compliance with SECP Listed Companies (Code
of Corporate Governance) and SBP circulars. Self-assessment report was also presented to the Board.
■ BAC reviewed statement on internal control system and recommended the same for endorsement by the Board.
■ BAC also held separate meetings with external auditor and internal auditor respectively without the CFO and the
management in line with the Code of Corporate Governance.

Mr. Noorur Rahman Abid

Chairman-BAC

ANNUAL REPORT 2018 133

 Shariah Supervisory Board Report - 2018
various government and private entities such as Lucky
Energy Limited, China Power Company, Siddiqsons
Energy Limited, K-Electric, Javedan Corporation
Private Limited, Hyundai Nishat Motors Private Limited,
Agha Steel Industries Limited, Martin Dow Marker
Limited for various purposes such as infrastructure
All praises to Allah ( ). This was the seventeenth year development, capital expansion and power project
of Islamic commercial banking for Meezan Bank which financing. It is worth mentioning that to strengthen the
is under review. During the year, the Shariah Shariah compliance control, physical inspection of
Supervisory Board (SSB) of Meezan Bank held five delivery of goods was carried in almost all the Istisna
meetings to review various issues, referred to them by and Tijarah transactions.
the Bank.
During the year, the Bank has played a vital role in
promoting the Islamic banking industry of Pakistan.
Meezan Bank has a team of professionals in the Shariah
Awareness programs were conducted for religious
Compliance Department (SCD) working under the
scholars, Parliamentarians, Bureaucrats and
guidance of SB. The main objective of this department
Government officials, independently and in
is to perform research and analysis on Shariah issues,
collaboration with Institute of Business Adminstration -
facilitate and ensure Shariah compliance in all the new
Center of Excellence in Islamic Finance (IBA - CEIF).
processes, procedures and product development,
The direct result of this program was a unanimously
refinement of existing products and procedures,
passed Senate Resolution resolving that at least 30% of
conduct Islamic banking trainings, Shariah compliance
the Government debt should be replaced with
reviews of branches, Head Office Units and for each
Shariah-compliant modes.
class of transactions, maintain relevant documentation
and process flows on test check basis and to provide We are pleased to inform that the Bank is leading a
secretarial services to the Bank’s Shariah Board. consortium of Islamic Banks for the structuring of
Pakistan Energy Sukuk for Ministry of Energy / Power
In addition, a separate Shariah Audit Department is Holding Private Limited for settling part of the energy
working under the Board Audit Committee to review the sector circular debt.
overall Shariah compliance in the Bank’s activities
which submits the report to Resident Shariah Board The Bank was also involved in devising a Shariah-
Member (RSBM) / Shariah Supervisory Board for compliant solution for the Deposit Protection
information, review and determination of appropriate Corporation Scheme (DPC) launched by the State Bank
corrective actions. of Pakistan.
To comply with the requirements of the Shariah The Bank has been actively supporting the State Bank
Governance Framework – 2018, function of Product of Pakistan for various matters relating to the Islamic
Development has been transferred to Customer banking industry, such as suggestions for Shariah
Support Group, which is an independent group Governance Framework, solutions for Energy Finance
reporting directly to the Deputy CEO. We appreciate Scheme, issuance of new Sukuk etc.
the efforts of the staff of SCD and Shariah Audit
Department for their efforts in promoting and The SSB appreciated the efforts of RSBM and SCD
strengthening the environment of Shariah compliance team in playing an active role in the implementation
in the bank. committee made by the Federal Minister and in
supporting Government for introducing tax reforms for
It gives us comfort to observe high level of commitment Islamic modes of financing.
of the staff, management and the Board members of the
Bank. It is also encouraging to know that there are more During the year, the SB provided guidelines for different
than 10,035 staff members in the Bank who are the issues, most noteworthy of them were:
source of halal income for their families.
■ Issuance of the first ever Shariah-compliant Tier-1
During the year ending December 31, 2018 major Sukuk in Pakistan
developments are as under: ■ GOP Financing - Bai Muajjal with Ministry of Finance
(MoF)
Research and New Product Development ■ Meezan Bank as Payroll Partner
The SB recognizes the efforts of the Bank for
conducting around 150 customer and industry visits to ■ Shares custodial facility
understand the business model and reviewing more ■ Guidelines for durable goods financing through
than 4,500 different types of transactions as per the e-commerce / digital platform
guidance of RSBM / SSB. ■ Personal financing product for different purposes

Review of more than 8 syndicated transactions, Training & Development

involving various hybrid structures such as Ijarah, SSB is pleased to note that the year 2018 was highly
Diminishing Musharakah and Running Musharakah was productive in terms of Islamic banking products
done by the Bank under the supervision of RSBM / SSB. training. A special training session was arranged for the
All the syndicate transactions were catered towards members of Board of Directors of the Bank which was

134 MEEZAN BANK LIMITED

delivered by Dr. Imran Ashraf Usmani and Sheikh Esam number of funds and plans under its advisory to
Mohamed Ishaq. more than 50, covering more than half of the Islamic
mutual fund industry.
During the year, 105 training sessions comprising 840
man-hours were organized for staff members across Review of Assets
Pakistan catering to more than 5,000 employees of the The Bank primarily used Diminishing Musharakah,
Bank. This number includes orientation sessions for Running Musharakah, Istisna, Ijarah, Murabaha,
new joiners, refresher programs like Asset Refresher, Musawamah, Salam - Bills, Wakalah Tul Istithmar, Tijarah,
Deposit Refresher, Trade Finance & Treasury Salam - Commodity, Musharakah and Bai Muajjal for its
operations and certification programs in Islamic financing activities during the year.
Financial Products. For the newly opened branches, the
Bank organized 11 sessions (5 days each) of basic We appreciate that the Bank is also focusing on
Islamic banking, to equip staff with the required level of financing alternative energy projects to reduce Carbon
knowledge. In order to create awareness, other than the footprints. The Bank has moved towards diversification
training of internal staff, the Bank also conducted 65 in the usage of various financing products and has
seminars in 38 cities (Karachi, Islamabad, Lahore, reduced the reliance on Murabaha, as is evident from
Peshawar, Rawalpindi, Faisalabad, Multan, the Bank’s financing portfolio. There is a growth of
Hyderabad, Azad Jammu & Kashmir, Hazara, 39.65% in Ijarah from previous year. The Bank has
Abbottabad and DG Khan etc.) which were attended by mainly focused on financing through Musharakah
more than 6,500 participants representing customers, modes, including Diminishing Musharakah and
general public, professionals, ulema, muftian-e-karam Running Musharakah and these modes of financing
and students of various universities. constitute 49.25% of the Bank’s total financing. The
Bank’s total financing portfolio reached Rs 522 Billion
To promote understanding of Islamic banking among (gross) as of December 31, 2018.
university students, visits were arranged for student of
Institute of Business Administration (IBA), Institute of
Financing Modes 2018 2017 Growth /
Business Management (IoBM) and Bahria University.
Presentations on Islamic banking was delivered and % % (Decline) %
discussions were held to address the major questions
related to Islamic banking concepts. Diminishing
Musharakah 18.75 19.72 (0.97)
SSB is pleased to note that our RSBM and one of the
team members of SCD were involved in the translation Musharakah &
of AAOIFI Shariah Standard in Urdu, which is a
Running Musharakah 30.50 34.16 (3.66)
commendable achievement on their part.

During the year, around 118 members of the senior Istisna 14.06 13.31 0.76
management and executives of the Bank were also
given training on Islamic banking. 44 staff members Ijarah 10.57 9.22 1.35
were sent to Institute of Business Administration -
Center of Excellence in Islamic Finance (IBA - CEIF) to Murabaha 3.82 4.61 (0.78)
attend the Advanced Certificate in AAOIFI Shariah
Standards (ACSS). Till date 14 staff members have Musawamah 7.63 4.54 3.09
cleared Certified Shariah Auditor and Advisor (CSAA)
certification. Salam - Bills 1.10 2.76 (1.66)
Shariah Advisory and Industry Support
SSB is also pleased to share that the Bank is actively Wakalah Tul Istithmar 7.82 7.29 0.53
supporting the Islamic Finance industry across the
world by providing tailor-made Shariah Advisory Tijarah 2.57 1.91 0.66
solutions to their business needs. Following are the
notable advisory services provided by the Bank during Salam - Commodity 1.82 0.96 0.86
the year:
Other 1.36 1.53 (0.17)
■ Technical services to support the Pakistan Mercantile
Exchange (PMEX) platform for liquidity management
of Islamic Banking Industry. We have noted that as per our guidelines, the Bank
reversed the financing of Rs 8.9 Million provided to its
■ Advisory services to Islamic Co-operative Finance, customers under Murabaha & Istisna without any profit
Australia related to the introduction of Tak