HBL full-year profit surges 68pc to Rs57.8bn, raises payout

KARACHI: HBL, Pakistan's largest bank by assets, on Friday reported a record profit before tax of Rs113.6 billion for 2023, up 47 percnet from a year earlier, driven by strong growth in net interest income and fee income.

The bank's profit after tax rose 68 percent to Rs57.8 billion, while earnings per share increased to Rs39.32 from RS23.23 in 2022. It also announced a final dividend of Rs4 per share, taking the total payout for the year to Rs9.75 per share.

The bank's balance sheet expanded 19 percent to Rs5.5 trillion, with deposits growing 19 percent to Rs4.1 trillion. Domestic deposits increased by Rs533 billion to Rs3.5 trillion, reflecting the bank's strong franchise and customer loyalty.

Despite macroeconomic challenges, HBL's advances increased to Rs1.9 trillion, with consumer loans, agriculture lending and microfinance all reaching new highs. Average deposits increased by nearly Rs350 billion mostly from low-cost deposit growth.

The banls average balance sheet increased by Rs700 billion, while rising rates translated into a 159 bps improvement in net interest margin. This drove a 46 percent rise in HBL’s total net interest income which grew to Rs242 billion, the highest in the industry.

The bank continued to dominate the realm of fee income, which posted yet another stellar growth of 34 percent, clocking in at Rs42.3 billion in 2023. Fee growth was once again dominated by HBL’s pre-eminent cards business while trade, cash management and retail banking all delivered more than 20 percent increases. Total revenue grew by 41 percent to Rs300 billion, the highest ever for HBL and in the Pakistan banking sector.

The strong revenue base helped to reduce the cost/income ratio to 56.8 percent in 2023. The bank’s prudent provisioning ensures that the coverage remains well above 100 percent. The record results also boosted the Bank’s Capital Adequacy Ratio (CAR), which moved up by 118bps to over 16 percent, well ahead of regulatory requirements.

HBL's president and CEO Muhammad Aurangzeb said the bank delivered exceptional results in 2023, despite the economic headwinds, by focusing on three strategic pillars: growing Pakistan's economy, shaping the financial industry and achieving regional relevance.

"We have further solidified our impact beyond profit margins through strategic partnerships and impactful initiatives. We remain grateful for the trust of our clients and are committed to exceeding their expectations. HBL is well-positioned to navigate the future and create lasting value for all stakeholders,” Aurangzeb said in a statement.

SCBPL profit surges record 115pc to Rs42.6bn in 2023

Standard Chartered Bank (Pakistan) Limited (SCBPL), the country's largest and oldest international bank, reported a record profit before tax of Rs89.2 billion for 2023, up 78 percent from a year earlier, driven by strong revenue growth and lower loan impairments.

The bank said its profit after tax jumped 115 percent to Rs42.6 billion, the highest ever since its incorporation in 2006.

The bank's board of directors recommended a final cash dividend of Rs2.50 per share, taking the total dividend payout for the year to a record high of Rs9 per share, representing a payout ratio of 90 percent.

Its overall revenue rose 72 percent to Rs161.8 billion, while its client revenue, which includes income from corporate, commercial, retail and Islamic banking, increased 78 percent with positive contributions from all segments.

The operating expenses grew 29 percent to Rs72.6 billion, in line with the prevalent inflationary trend. The bank also benefited from a net release of Rs163 million in loan impairments during the year, compared with a charge of Rs5.9 billion in 2022, reflecting its prudent risk approach and recoveries of bad debts.

The total assets crossed Rs1 trillion mark for the first time, reaching Rs1.02 trillion at the end of 2023, up 8 percent from the start of the year.

Its total deposits stood at Rs720 billion, of which 50 percent were current accounts that grew 10 percent to Rs360 billion during the year.

The bank contributed around Rs63.5 billion to the national exchequer in 2023 in the form of direct income taxes and withholding taxes.

The return on equity, a key measure of profitability, was 46.4 percent for the year, while its capital adequacy ratio, a measure of financial strength, was 20.1 percent, well above the regulatory requirement.

"We are incredibly proud to announce our exceptional performance in 2023, delivering highest ever profit for the franchise," Rehan Shaikh, the bank's chief executive officer, said in a statement.

"These results are a testament to the work we have put in over the last few years to transform and grow our business. The results also signify the strong foundations, resilient and innovative business model, trust of our clients and the value that we are creating for our shareholders."

Shaikh said the bank aimed to build on its success by delivering sustainably higher returns with a focus on driving income growth and improving operational leverage.

He said the bank would continue to pursue simplification and digitisation of its business with a goal to further improve its productivity, client and employee experience and create capacity to reinvest in incremental growth initiatives.

"Although the external environment remains challenging, we are committed to sustainable growth in our performance, whilst delivering innovative solutions for our clients and contributing positively to Pakistan's progress," Shaikh said.