Karachi, October 16, 2024 – Habib Bank Limited (HBL) announced a 13% year-on-year (YoY) decline in earnings for the third quarter of calendar year 2024 (3QCY24), with profits totaling PKR 14.5 billion (Earnings Per Share: PKR 9.85).
Despite the YoY decrease, the earnings of HBL were up 1% quarter-on-quarter (QoQ). For the nine months ending September 2024 (9MCY24), HBL reported total earnings of PKR 44.0 billion, reflecting a 3% YoY increase, driven primarily by growth in total income.
Along with its financial results, HBL declared a cash dividend of PKR 4 per share for 3QCY24, bringing the total dividend payout for 9MCY24 to PKR 12.0 per share.
Key Financial Highlights:
Interest Income and Net Interest Margin
HBL’s interest earned in 3QCY24 reached PKR 218 billion, representing a 14% YoY and 4% QoQ increase. However, interest expenses surged by 23% YoY and 4% QoQ, amounting to PKR 154 billion. As a result, the bank’s Net Interest Income (NII) came in at PKR 64 billion, marking a 2% YoY decline but a 4% increase QoQ. For 9MCY24, NII totaled PKR 185.3 billion, a 4% YoY rise.
Non-Funded Income (NFI)
HBL’s NFI witnessed a remarkable 63% YoY increase during 3QCY24, reaching PKR 60.7 billion for 9MCY24, a 59% YoY growth. This was driven by a 20% YoY increase in fee income, which rose to PKR 36.6 billion, and a significant boost in foreign exchange income, which jumped from PKR 1.6 billion to PKR 5.6 billion. Other income also saw an impressive 110% YoY surge, reaching PKR 9.3 billion in 9MCY24. Additionally, HBL posted a gain of PKR 6.6 billion from the sale of securities, a notable recovery from a PKR 307 million loss in the same period last year.
Provisioning and Operating Expenses
HBL recorded a provisioning charge of PKR 8.9 billion in 3QCY24, bringing the total provisioning charge for 9MCY24 to PKR 19.0 billion, compared to PKR 7.4 billion in 9MCY23.
Operating expenses (OPEX) increased by 8% YoY and 4% QoQ in 3QCY24, amounting to PKR 47.9 billion. Consequently, the bank’s cost-to-income ratio slightly improved to 56.5% in 3QCY24 from 57.1% in the same period last year.
Taxation
The bank’s effective tax rate for 3QCY24 stood at 49.3%, slightly higher than the 48.1% recorded in the same period last year.
With steady income growth but higher expenses and provisions, HBL faces a challenging but resilient financial landscape in the coming quarters.