HBL declares 32 percent decline in net profit for first quarter

KARACHI: Habib Bank Limited (HBL) has announced 32 percent decline in profit after tax to Rs3.177 billion for first quarter of year 2019 as compared with Rs4.68 billion in the same quarter of the last year.

The earnings per share also declined to Rs2.08 for the period as compared with Rs3.12 in the same quarter of last year.

Analysts at Arif Habib Limited said that though the profit declined in first quarter as compared with the same quarter of the last year but it grew by 26 percent on quarter on quarter basis (QOQ) despite higher tax rate this quarter.

Major drivers for earnings this quarter that have contributed to a remarkable 116 percent QoQ increase in PBT include a total gain on foreign exchange income and derivatives compared to a hefty loss last quarter.

Moreover a net reversal was booked this quarter against a heavy provisioning expense booked last quarter. A dividend of PKR 1.25/share was also announced for the quarter.

NII of the bank settled at PKR 23.4bn for 1QCY19, rising 19 percent YoY as 63 percent higher interest expense was offset by the 39 percent rise in mark-up income. NII registered an uptick of 12 percent QoQ as well.

NFI of the bank depicted healthy improvement of 22 percent YoY / 60 percent QoQ. The bank booked a profit on FX income (and derivatives) of a total PKR 637mn compared to a staggering loss of PKR 3bn during 4QCY18 and PKR 478mn during 1QCY18. Moreover, fee income of the bank showed an impressive jump of 18 percent YoY.

The bank booked a net reversal of PKR 83mn compared to a hefty provisioning expense of PKR 3.2bn during 4QCY18 (owing to impairment charge on the equity book).

Higher OPEX (+21 percent YoY / 21 percent QoQ) owing to NY remediation/business transformation costs continued for the bank.

Effective tax rate was set at 62 percent for 1QCY19 vis-à-vis 36 percent SPLY due to additional super tax being booked this quarter on CY17 earnings.

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