HBL profit jumps 13 percent in Q1 on higher interest income

By Our Correspondent
April 24, 2024
The Habib Bank Limited (HBL) plaza pictured in this photo. — The News File

KARACHI: Habib Bank Limited (HBL), Pakistan’s largest bank by assets, reported a 13 percent increase in its first-quarter net profit on Tuesday, buoyed by a significant rise in interest earned income.


The Karachi-headquartered bank said its net profit for the quarter ending March 31 was Rs15.043 billion, up from Rs13.256 billion in the same period last year. In a statement to the Pakistan Stock Exchange, HBL declared an interim cash dividend of Rs4 per share and noted that earnings per share rose to Rs10.37, from Rs9.00 a year earlier.

The bank said its interest earned income for the quarter rose to Rs198.314 billion, compared with Rs148.550billion during the same quarter a year earlier. Interest expensed income also remained higher at Rs137.777 billion from Rs92.707 billion a year ago.

The bank paid Rs15.069 billion in taxes, up from Rs8.245 billion paid during the same period last year. According to a statement, HBL’s balance sheet stood at Rs5.5 trillion with total deposits closing at Rs4.4 trillion. Domestic deposits grew by more than Rs220 billion reaching Rs3.7 trillion, with current accounts recording their highest first-quarter growth in the last 5 years. Total advances declined by 6 percent over December 2023 to Rs1.75 trillion as credit demand continues to remain subdued.

However, the bank’s consumer business maintained its growth trajectory, reaching Rs130 billion in March 2024. The average domestic balance sheet grew by Rs522 billion, leading to a 6 percent increase in net interest income despite falling market yields. This was well supported by growth in revenue from the international business, helped by rising spreads in most markets.

The bank’s total net interest income thus rose by 8 percent to Rs60.5 billion. HBL continued to lead the market in fees, which posted a stellar growth of 27 percent increasing to Rs11.9 billion in Q1’24. The flagship cards business continued to lead, contributing 35 percent of the fee growth, while trade and branch banking also registered strong double-digit fee growth. Consequently, HBL’s total revenue increased by 25 percent to Rs 80.7 billion.

“HBL's strong Q1'24 results showcase our unwavering commitment to client-centricity. The bank saw significant growth across digital channels while enjoying a leadership position in the credit card business," Muhammad Nassir Salim, president and CEO of HBL, said in a statement.

"In the period ahead, the bank’s focus will be on operationalizing its strategy. This means putting its client segmentation approach into action; each segment will be managed as a distinct stream, with defined propositions, channels, and products. HBL will continue accelerating the momentum in its business trajectory.”

Fauji Cement profit sees slight increase to Rs7.04 billion

Fauji Cement Company Limited reported a profit after tax of Rs7.04 billion for the nine months ending FY24, a slight increase from Rs6.97 billion in the same period last year, despite facing higher financial costs due to expansion-related debt.

The company's sales revenue rose by 14.4 percent year-on-year to Rs59.4 billion, up from Rs51.91 billion, driven by a 68 percent surge in export sales, which benefited from currency devaluation and lower imported coal prices. However, domestic sales experienced a 4 percent decline.

Total industry dispatches for the nine-month period reached 34.5 million tonnes, marking a 3 percent increase year-on-year, with Fauji Cement's own dispatches slightly up by 1 percent year-on-year to 3.79 million tonnes.

The company's gross margins improved to 30.66 percent, compared to 27.09 percent in the same period last year, attributed to enhanced sales prices and cost optimization measures implemented by management.

The cost-saving initiatives included increased use of local coal, diversification into alternative fuels, a rise in in-house power generation to offset a 35 percent hike in power tariffs, and fixed cost optimization, all contributing to the positive financial outcome.

Administrative expenses saw a marginal decrease of 0.7 percent year-on-year, while other expenses dropped by 8.3 percent year-on-year. Conversely, selling and distribution expenses witnessed a significant sixfold increase to Rs2.56 billion.

Other income for the company decreased by 8.0 percent year-on-year to Rs571.29 million. The finance cost escalated by 50.3 percent year-on-year to Rs3.77 billion, primarily due to the expansion-related debt and elevated interest rates.

The tax burden for Fauji Cement also grew, with the company paying Rs3.7 billion in taxes, a 22.9 percent year-on-year increase from Rs3.01 billion paid last year.

ISL profit plummets 53.5pc in Q1

International Steels Limited (ISL) reported a significant drop in profit after tax for the first quarter of 2024, with earnings falling 53.5 percent year-on-year to Rs705.7 million, down from Rs1.52 billion in the same period last year.

Earning per share remained at Rs1.62.

The companysaid its revenue decline by 31.9 percent to Rs16.28 billion, compared to Rs23.9 billion in the same period last year. Despite a 30.7 percent reduction in the cost of sales, it was insufficient to counterbalance the decrease in sales, resulting in a 39.8 percent drop in gross profit to Rs1.91 billion for the first quarter of 2024.

Gross margins contracted to 11.75 percent, a decrease from 13.28 percent in the same period last year. Other income also experienced a downturn, decreasing by 12.5 percent to Rs48.04 million in the first quarter, from Rs54.91 million.

Administrative expenses saw a marginal increase of 1.0 percent, while other operating expenses witnessed a significant reduction of 83.1 percent, amounting to Rs105.96 million and Rs55.47 million, respectively. Conversely, selling and distribution expenses soared to Rs767 million, marking a 2.68-fold increase year-on-year.

Finance costs for ISL were down 52.8 percent at Rs186.52 million, compared to Rs394.73 million in the same period last year. The tax expense for the quarter stood at Rs139.48 million, a sharp decline of 76.7 percent year-on-year, from Rs598.38 million paid in the previous year.