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April 21, 2021

HBL’s Q1 profit jumps 108 percent to Rs8.560 billion

Business

April 21, 2021

KARACHI: Habib Bank Limited consolidated net profit increased 108 percent to Rs8.560 billion translating into earnings per share (EPS) of Rs5.68 for the quarter ended March 31, 2021, a bourse filing said on Tuesday.

It earned Rs4.108 billion with EPS of Rs2.79 in the same quarter last year. Interim cash dividend of Rs1.75/share was announced for the period ended March 31, 2021, that was 1.7 percent, the PSX notice said.

Net interest income (NII) of the bank settled at Rs32.5 billion for Q1CY21, up 16 percent, led by a sharp reduction in interest expense.

“Interest earned remained stagnant QoQ indicating that asset re-pricing following the rate cuts has completed for the bank,” an analyst at Arif Habib Limited said.

The bank’s total deposit base closed at Rs2.8 trillion. Average domestic deposits increased by a multi-year high of nearly 20 percent over Q12020, with average current accounts rising by more than Rs120 billion.

This led to a nearly Rs500 billion expansion in the bank’s average balance sheet in Q12021. Consequently, despite a much lower interest rate environment, net interest income rose to Rs32.5 billion, a 16 percent growth over Q12020.

Expenses remain well contained despite continued investments in people and technology. The bank reduced its administrative expenses by seven percent over Q12020 as the cost to income ratio (excluding capital gains) improved to 58.4 percent in Q12021 from 81.4 percent in Q12020.

Total non-performing loans (NPLs) of HBL declined by Rs 0.7 billion over December 2020, with the infection ratio remaining stable at a record low of 6.3 percent.

Helped by strong profitability, the bank’s Tier 1 CAR rose to 13.9 percent, with total CAR increasing to 17.9 percent, a statement said.

Total deposit base closed at Rs2.8 trillion, with robust CA and CASA ratios of 35.1 percent and 83.1 percent, respectively. Average domestic deposits increased by a multi-year high of nearly 20 percent over Q12020, with average current accounts rising by more than Rs120 billion.

HBL President and CEO Muhammad Aurangzeb said, “The bank’s growth momentum continues in the new year with all activity drivers showing an upward trajectory. The growth was broad-based across all business lines, with strong performance from the deposits, cards, trade and consumer finance businesses.”

The revenue growth was ably supported by a more stringent operating cost regime. “Q12021 saw the landmark opening of HBL’s Beijing branch in China. Continuing with our response to the challenge of the pandemic, with the strong support of the board, HBL arranged to make available Covid-19 vaccines to all staff working at the bank, adding to its industry-leading benefits for its employees,” he added.

MCB Bank earns Rs6.79bln Q1 profit

MCB Bank’s unconsolidated net profit inched up percent to Rs6.79 billion for the quarter ended March 31, 2021, translating into EPS of of Rs5.73, a bourse filing said.

It earned Rs6.519 billion with EPS of Rs5.50 in the corresponding period last year. The bank announced interim cash dividend at Rs4.5 per share, which was 45 percent, in continuation of its highest dividend pay-out trend.

The MCB board of directors met on Tuesday under the Chairmanship of Mian Mohammad Mansha, to review the performance of the bank and approve the condensed interim financial statements for the first quarter ended March 31, 2021. “The result was above expectations due to recognition of reversal in provisioning and higher than anticipated fee income,” an analyst at KASB Securities said.

Net interest income for the period clocked in at Rs16.29 billion compared with net interest income of Rs17.28 billion in the corresponding period last year. “Net Interest Income slightly decreased by six percent in Q1CY21 as the full impact of asset re-pricing was taken into account.” Total non-interest income stood at Rs4.97 billion in the quarter under review as against Rs4.16 billion last year. “Non-interest income increased by 19 percent largely driven by 16 percent growth in fee income and gain on sale of securities worth Rs367 million.” The bank recognised a provisioning reversal of Rs213 million during the quarter under review that lent further support to the earnings. Operating expenses slightly increased by 3 percent to Rs10.1 billion.

The total asset base of the bank on an unconsolidated basis was reported at Rs1.77 trillion. Analysis of the asset mix highlights that the net investments increased by Rs75 billion (7.4 percent) whereas the gross advances decreased by Rs33 billion (6.5 percent) over December 2020. However, consumer lending book grew by Rs2.2 billion (8 percent) in the first quarter 2021.

The non-performing loan (NPLs) base of the bank hence recorded a marginal increase of 1.2 percent over December 2020 to report at Rs51.8 billion. FSV benefit was not taken in calculation of specific provision and carries un-encumbered general provision reserve of Rs4.06 billion. The coverage and infection ratios were reported at 98.1 percent and 10.8 percent, respectively. Bank’s total Capital Adequacy Ratio (CAR) is 20.11 percent against the requirement of 11.5 percent.

International Steels posts Rs2.37bln Q3 profit

International Steels Limited (ISL) has announced a net profit of Rs2.37 billion for the quarter ended March 31, 2021, as against the profit of Rs189.6 million recorded in the corresponding period last year.

The EPS for the period under review clocked in at Rs5.47 compared with EPS of Re0.44 last year.

Sales revenues for the quarter under review clocked in at Rs17.4 billion compared with the sales of Rs13.1 billion in the same period last year.

“Net revenue of the company grew

33 percent during the quarter primarily on the back of 30 percent higher product prices,” an analyst at Sherman Securities said.

Gross margin of the company increased to 24 percent during Q3FY21 from nine percent in Q3FY20. “We believe higher cold rolled coil (CRC) and GI prices, low cost hot rolled coil (HRC) inventory and substantial inventory gains elevated margins by 15ppts YoY.”

Operating cost increased by 24 percent during the quarter to Rs253.2 million, while finance cost decreased 61 percent to Rs158.03 million due to lower interest rates regime.

For the nine-month period ended March 31, 2021, ISL posted a net profit of Rs5.15 billion translating into EPS of Rs11.84 compared with profit of Rs655.5 million and EPS of Rs1.51 in the same period last year.