HBL profit jumps 106pc to Rs10.083bln in Q3CY20

KARACHI: Habib Bank Limited profit jumped 106 percent to Rs10.083 billion in the quarter ended September 30, 2020, translating into earnings per share (EPS) of Rs6.85, a bourse filing said on Friday.

The bank earned Rs4.897 billion profit with EPS of Rs3.36 in the same quarter last year. It did not announce any cash dividend for the quarter under review as per the central bank’s letter issued on April 22, 2020. Optimus Research Analyst Muhammad Ahmed said the bank’s results were above expectations owing to lower than estimated contraction in net interest income on sequential basis during the third quarter of calendar year 2020.

Net interest income of the bank increased 35 percent to Rs35.709 billion in Q3CY20 from Rs26.354 billion in Q3CY19. It was “potentially due to better than estimated yields on government securities and slower than anticipated re-pricing of loan book,” Ahmed noted.

The bank’s fee and commission income slipped six percent to Rs4.484 from Rs4.779; dividend income went up 70 percent to Rs90.746 million from Rs53.185 million; and share of profits from associates jumped 49 percent to Rs1.319 billion from Rs884 million. Despite recording higher share of profit from associates and fee income, “non-interest income fell 32 percent QoQ on account of booking significantly lower gains from realisation of debt and equity securities (negative 85 percent QoQ), which restricted an even greater rise in bottom-line of Q3CY202,” Optimus Research said in its note.

Operating expenses dropped almost six percent to Rs22.612 billion in July-September 2020, from Rs24.001 in the same quarter during 2019. Brokerage Topline Securities in a research note said, “Operating expenses’ increase was limited to a three percent QoQ. Cost to Income clocked in at 53 percent.”

This quarter the bank booked lower capital gains (Rs655 million). The bank’s income from foreign exchange also provided a major sigh of relief, with total income from foreign exchange/derivatives clocking in at Rs289 million during the nine months of 2020 against a loss of Rs484 million during the first half of the year.