HBL records Rs25.75bln profit in nine-months

KARACHI: Habib Bank Limited (HBL), the country’s largest private bank, recorded a profit of Rs25.75 billion in the first nine-month of this year, translating into earnings per share (EPS) of Rs17.47, the bank said on Thursday.

The bank also announced a third quarter dividend of Rs3.50/share (35 percent), which was in addition to an already-paid cash dividend of Rs7. The profit was slightly up as compared to Rs25.71 billion during the same period of the last year.  

“With enhanced recoveries, the bank was able to reduce provisions 58 percent in the period under review as compared to the first nine months of 2015… growth in administrative expenses was restricted to 10 percent,” the bank said in a statement. 

HBL’s profit, however, inched down two percent to Rs9.78 billion for the quarter ended September 30 due to increase in non-markup expenses, translating into EPS of Rs6.61 as against Rs6.81 in the same quarter last year. “Earnings came in higher than estimates,” said Amreen Soorani, an analyst at JS Research. During this period, the bank earned Rs36.13 billion in interests as against Rs34.97 billion last year. It paid Rs15.33 billion in interests as compared to Rs15.74 billion. Net interest income of the bank was recorded at Rs20.80 billion as against Rs19.22 billion.

Total non-markup expenses, including administrative expenses increased to Rs13.79 billion as compared to Rs12.52 billion in the same period of the last year that reduced the margins.

The bank’s non-performing loan coverage ratio, however, improved to reach 90 percent as of Sept. 30 over the previous quarter. The bank said its balance sheet grew seven percent to reach Rs2.4 trillion. Local current and saving account deposits increased nine percent and the mix improved to 89 percent as of Sept. 30.

“Average current accounts for the first nine months of 2016 increased 19 percent over the comparable period of 2015, enabling HBL to reduce its cost of domestic deposits,” it said. “With average domestic loans also growing across all segments, the bank was able to grow net interest income seven percent to Rs62.2 billion for the first nine months of 2016.”

The bank further said its fees and commissions rose 18 percent to Rs13.7 billion for the nine-month period. “Bancassurance, trade, investment banking and general banking-related fees continued to make significant contributions to the fee income,” it added.

HBL has nearly 2,000 auto teller machines and more than 14,000 point of sales machines to provide access and convenience to its broad array of customers. “The bank’s consolidated capital adequacy ratio (CAR) was 16.4 percent with the tier-1 CAR at 12.7 percent, well above regulatory requirements, as of Sept 30,” it said.