Habib Bank Limited posts 16% year-on-year earnings growth in the third quarter of 2026, supported by stronger fee and foreign exchange income and a reversal of provisions.
KARACHI, October 22, 2026: Habib Bank Limited (HBL) has reported its highest quarterly profit of Rs19.5 billion in the third quarter of calendar year 2026, marking an increase of 16% year-on-year and 7% quarter-on-quarter.
According to an analysis by Arif Habib Limited, earnings per share (EPS) reached Rs13.33 during the quarter. The bank’s profit for the first nine months of 2026 rose 5% year-on-year to Rs54 billion, with EPS of Rs36.80.
HBL also announced a cash dividend of Rs6 per share for the quarter, taking the cumulative payout for the nine-month period to Rs18 per share.
Earnings growth was supported by stronger non-funded income, including fee-based and foreign exchange earnings, while a reversal of provisions further boosted profitability.
Fee and foreign exchange income support earnings
Interest earned by the bank increased 16% year-on-year to Rs207 billion, while interest expenses rose 25% to Rs137 billion. Consequently, net interest income remained broadly stable compared with the same period last year.
Non-funded income grew 12% year-on-year, supported by fee income of Rs13.5 billion, up 14%, and foreign exchange income of Rs4.4 billion, which increased 63%.
HBL recorded a net provisioning reversal of Rs1.2 billion, reflecting continued strength in asset quality. Operating expenses increased by 5% year-on-year, leaving the cost-to-income ratio at approximately 58%. The effective tax rate stood at 53.3% during the quarter.
Investments expand as deposits edge lower
On the balance sheet, deposits declined 0.4% quarter-on-quarter to Rs5.8 trillion.
Investments increased 35% year-on-year and 20% quarter-on-quarter to Rs5.4 trillion. Advances grew 9% year-on-year and 1% quarter-on-quarter, indicating relatively subdued lending growth.
The bank also increased its reliance on borrowings amid slower deposit growth. Total borrowings rose 61% year-on-year and 78% quarter-on-quarter to Rs2 trillion.
HBL is currently trading at a price-to-book multiple of 0.89 times for estimated calendar year 2026 earnings, with a dividend yield of 8.2%, based on the last day’s closing price, according to the analysis.