KARACHI: Habib Bank Limited (HBL) Thursday declared another record profit before tax (PBT) of Rs 21.5 billion for the quarter ended March 31, 2023, 47% higher than the PBT of Rs 14.6 billion last year.
“This strong performance was driven by excellent results across all domestic businesses and sustainable operating profit from the international franchise,” an HBL press release said.
The Bank’s profit after tax rose by 54% to Rs 13.3 billion with earnings per share improving from Rs 5.78 in Q1’22 to Rs 9.00 in Q1’23. Along with the results, the Bank declared a dividend of Rs 1.50 per share (15%).
The Bank’s balance sheet grew by 7% to Rs 4.96 trillion with deposits increasing to Rs 3.6 trillion. A growth of Rs 260 billion in average low-cost domestic deposits enabled HBL to contain the rise in deposit cost.
The record policy rate of 21% resulted in muted credit demand with a net reversal in private-sector credit growth. However, total advances were maintained at December 2022 levels of Rs 1.8 trillion.
In the rapidly rising rate environment, a combination of significantly higher net interest margins and a 13% growth in the average domestic balance sheet drove a 53% growth in net interest income.
“This was well supported by a 46% higher interest income from international business. Consequently, HBL’s total net interest income increased to Rs 55.8 billion. HBL continues to lead the market in fees, with another robust growth of 27% to Rs 9.3 billion,” the press release said.
The flagship cards business continued to deliver stellar results, accounting for two-thirds of the fee increase. Trade cash management and consumer finance made solid contributions, delivering high double-digit fee growth.
The Bank’s total revenue for Q1’23 thus increased by 38% over Q1’22, to Rs 64.4 billion.
“HBL continues to invest in its people and its digital infrastructure while ensuring it gives back to the communities in which it operates. In Q1’23, unprecedented inflation levels and Rupee devaluation further impacted administrative expenses which increased to Rs 39.2 billion.
“However, with the strong revenue growth, the cost/income ratio improved from 65.1% in Q1’22 to 60.8% in Q1’23. With the slowdown in loan growth, the infection ratio has increased to 5.4% but remains below industry levels; prudent provisioning ensured that the Bank’s total coverage was maintained at above 100%,” the press release added.
Commenting on the Bank’s performance, its President & CEO Muhammad Aurangzeb said, “We have remained steadfast in the course we have set for ourselves i.e. setting new benchmarks in challenging times.
“Given this was achieved while Pakistan faces perhaps the most challenging economic conditions in its history, speaks for the continued patronage of our clients, the robustness of our business model and the dedication of the entire HBL team.
As we navigate the current environment, we remain live to risks; we will pursue a course that ensures the highest possible standards of client experience whilst ensuring that business controls are robust across the franchise.”
