HBL third-quarter profit down 11pc

October 16, 2021

KARACHI: Habib Bank Ltd, one of the country’s biggest banks, posted an 11 percent fall in its net profit for the three months ending September 30, the bank said on Friday.HBL, majority-owned...

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KARACHI: Habib Bank Ltd, one of the country’s biggest banks, posted an 11 percent fall in its net profit for the three months ending September 30, the bank said on Friday.

HBL, majority-owned by the Aga Khan Fund for Economic Development, said it earned Rs8.95 billion in the third quarter of the calendar year, compared to Rs10.08 billion a year earlier.

In a statement to Pakistan Stock Exchange, HBL also announced an interim dividend of Rs1.75/share, which is an addition to the Rs3.5/share cash dividend already paid.

Earnings per share remained at Rs6.17, compared with Rs6.86 in the same period last year.

Analyst Umair Naseer at Topline Securities said the results remained in line with industry expectation “with net interest income (NII) down 10 percent year-on-year to Rs32 billion due to decline in margins”.

The bank said its revenue for the quarter rose to Rs65.87 billion, compared with Rs64.79 billion a year earlier. However, interest expenses remained higher at Rs33.59 billion from Rs29.09 billion a year ago.

For the three-quarters, the bank recorded profit at Rs26.98 billion, up from Rs25.27 billion during the same period last year. EPS for the three-quarters was recorded at Rs18.21 from Rs17.17 a year ago.

The bank said its profit before tax rose 8 percent to of Rs46.4 billion for nine month of current colander year, while the profit after tax increased to Rs27.0 billion, with earnings per share increasing to Rs 18.21 in nine months compared to Rs17.17 same period last year.

“HBL has the industry’s largest balance sheet which further increased to Rs 4.1 trillion, in the nine months of 2021,” it added.

“This was achieved by continued strong growth in deposits, which increased by more than Rs330 billion (12 percent) during 2021 to Rs 3.2 trillion; the Bank’s industry leading current account book exceeded Rs 1.1 trillion.”

It said domestic advances continued to increase, rising by 9.0 percent over December 2020 and surpassing Rs 1.1 trillion.

Consumer assets have continued their strong growth and crossed Rs95 billion in the current quarter.”

With international franchises on a growth trajectory, HBL’s total advances increased by 12% over Dec’20, to Rs 1.4 trillion.

The statement said HBL registered total revenue of Rs123 billion as the strong growth in fees and balance sheet volumes were able to offset the impact of industry-wide margin compression.

The bank recorded a net interest income of Rs 97.2 billion, driven by Rs 400 billion growth in average balance sheet volumes.

Fee income showed an impressive growth of 34% to Rs 17.9 billion, driven by stellar performance from the cards and consumer businesses and a strong growth in domestic trade volumes which surpassed the $10 billion mark for the first time.

Total expenses remained flat year-on-year despite the bank’s continued investment in technology and digital initiatives and in contributing to Pakistan’s economic growth and development.

The bank’s cost to income ratio (excluding capital gains) reduced from 60.9 percent in nine months of 2020 to

57.7 percent in first three quarters of 20221.

Muhammad Aurangzeb, president and CEO of HBL said the bank has maintained its robust performance across all business fronts and continued its strong business momentum in Q3 2021.

The period saw significant gains, owing to the bank’s strong core banking performance, transformative digitalization efforts, strategic partnerships and groundbreaking interventions on financial inclusion and development finance initiatives," he added.

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