Karachi, October 29, 2024 — The State Bank of Pakistan (SBP) has imposed a hefty penalty of Rs 290.71 million on Habib Bank Limited (HBL) over the first nine months of 2024, marking a significant increase in regulatory fines compared to the same period last year.
According to financial report of Habib Bank for the period ending September 30, 2024, these penalties underscore a notable rise in scrutiny from the central bank.
The recent financial disclosures reveal that the penalties imposed by the SBP have surged nearly eightfold from Rs 32.447 million during January to September 2023. In addition to the SBP fines, Habib Bank was subject to penalties amounting to Rs 59.932 million by other regulatory authorities in Pakistan and abroad during the same period, up from Rs 49.643 million last year. In total, the bank’s penalties amounted to a substantial Rs 350.644 million for the first three quarters of 2024, as compared to Rs 82.09 million during the same timeframe last year.
Despite these setbacks, Habib Bank demonstrated strong financial performance, delivering a consolidated profit before tax of Rs 85.9 billion for the nine months of 2024, reflecting a 3% growth over the same period in the previous year. This resilience is largely attributed to the robust performance across its domestic sectors and improved profitability in its international branches. After-tax profits also climbed, reaching Rs 43.3 billion, while earnings per share (EPS) rose to Rs 30.03 for the period.
The balance sheet of Habib Bank has expanded by 12% since December 2023, with assets now totaling Rs 6.2 trillion. The bank reported an 18% increase in domestic deposits, which now stand at Rs 4.1 trillion. A substantial portion of this growth is attributed to low-cost deposits, which surged by Rs 422 billion, thereby enhancing the CASA ratio from 85.8% in December 2023 to 87.3% by September 2024. International deposits of Habib Bank rose by 11%, surpassing USD 2 billion, bringing the total deposits to Rs 4.8 trillion.
As market interest rates stabilize, Habib Bank has witnessed a resurgence in lending activity, with domestic loans rising by 3.9% in the third quarter. International lending has also revived, driving total advances to Rs 1.8 trillion.
Bank’s positive financial performance amid heightened regulatory scrutiny indicates its ability to manage growth and compliance challenges effectively. Nevertheless, the substantial increase in fines serves as a reminder of the importance of adhering to evolving regulatory standards and ensuring operational resilience in an increasingly complex financial environment.