Habib Bank Limited (HBL) paid monetary penalties worth over Rs476 million during calendar year 2022, according to documents made available to Pkrevenue.com on Monday.
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HBL’s annual profit declines to Rs34.4 billion amid high taxation
KARACHI: Habib Bank Limited (HBL) on Friday announced that its net annual profit has declined to Rs34.4 billion for the year ended December 31, 2023.
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Highest number of banking complaints filed against HBL in CY22
Aggrieved with banking services, customers have filed the highest number of complaints against Habib Bank Limited (HBL) – the largest bank in Pakistan – during the year 2022.
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HBL announces fall in net profit to Rs23.63 billion in nine months
Habib Bank Limited (HBL) on Wednesday announced 12.42 per cent decline in net profit to Rs23.63 billion for nine months period ended September 30, 2022 as compared with Rs26.98 billion in the same period of the last year.
Earnings per share (EPS) fell to Rs15.95 for the period as compared with Rs18.21 in the same period of the last year, according to consolidated financial accounts submitted to Pakistan Stock Exchange (PSX).
Board of Directors of Habib Bank Limited met on October 26, 2022 to approve the financial results for nine months and third quarter ended September 30, 2022. The board recommended an interim cash dividend for the third quarter ended September 30, 2022 at Rs1.50 per share i.e. 15 per cent. This is in addition to the interim cash dividend already paid at Rs3.75 per share i.e. 37.5 per cent.
READ MORE: HBL says allegations meritless
The decline in net profit of the bank may be attributed to massive increase in tax payment during the period. HBL paid an amount Rs31.97 billion as income tax during January – September 2022 as compared with Rs19.39 billion in the corresponding period of the last year.
Net mark-up / interest income of the bank grew to Rs116.04 billion in nine months period ended September 30, 2022 when compared with Rs97.15 billion in the same period of the last year.
READ MORE: HBL comes under scrutiny for assisting terror organizations
The bank booked huge earnings from foreign exchange income. The foreign exchange income of the bank sharply increased to Rs12.72 billion during January – September 2022 as compared with Rs2.91 billion in the same period of the last year.
However, the bank incurred massive loss from derivatives which recorded at Rs3.41 billion during the period under review as compared with Rs77 million in the same period of the last year.
Total income of the bank increased to Rs151.64 billion for nine months ended September 30, 2022 when compared with Rs122.87 billion in the same period of the last year.
Operating expenses of HBL rose to Rs90.93 billion during first nine months of the year 2022 when compared with Rs70.01 billion in the same period of the last year.
The bank declared profit before tax at Rs59.19 billion for nine months period ended September 30, 2022 when compared with Rs51.87 billion in the corresponding period of the last year.
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HBL says allegations meritless
KARACHI: Habib Bank Limited (HBL) on Friday issued a clarification related to the news published a day earlier related to supporting terror financing.
In a communication sent to Pakistan Stock Exchange (PSX), the bank said that the allegations in the complaints – which have been pending in the US court for more than two years – are meritless, and HBL is contesting them fully and vigorously.
The public record is clear that the HBL is unwavering in its commitment to combating the financing of terrorism.
“HBL’s extensive global implementation of anti-money laundering and counter-compliance controls is well documented and has been highly successful and lauded by regulators around the world,” it added.
HBL’s preliminary motion was successful in two aspects: The Court dismissed the primary liability claims and narrowed the case substantially. The court also stated that the secondary liability claims will be evaluated for dismissal upon following due legal proceedings, and no judgment was passed by the court on the matter.
“Indeed, the court specifically invited HBL to renew its motion to dismissal all remaining claims for lack of jurisdiction after the parties have exchange certain factual information concerning jurisdiction.”
Moreover, HBL proactively initiated a business transformation program, in early 2018, around its control and compliance process and system to adhere to international standards.
“The bank has made investments in management time and resources to further strengthen its AML and CFT protocols by partnering with global experts in this field,” HBL added.
The bank is committed to adhere to the highest standards of compliance with the international and local laws and regulations.
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HBL comes under scrutiny for assisting terror organizations
KARACHI: Habib Bank Limited (HBL) has come under scrutiny once again and has been alleged to provide financial support to the terrorist organizations.
According to KTrade Alert issued on Thursday, shortly after the news had hit the market, HBL’s stock hit the lower circuit.
READ MORE: HBL declares 108 percent growth in quarterly profit
As per the Justice Against Sponsors of Terrorism Act (JASTA), HBL Bank has repeated misconduct and revealed a pattern of funding terrorism at various occasions in the last decade as of 2006.
Plaintiffs in these consolidated cases are 370 individuals who were injured or whose family members were injured or killed in terrorist attacks, who bring this action against HBL Bank under the Anti- Terrorism Act (ATA), as amended by the Justice Against Sponsors of Terrorism Act (“JASTA”).
Recall that HBL Bank and HBL’s New York Branch were previously implicated in money laundering and terrorist financing back in 2017.
The bank was penalized USD225 million and lost its NY banking license for non-compliance with and violation of NY’s state laws and regulations.
Therefore, the bank recognized a penalty of PkR 23.72 billion (EPS impact of PkR16.2) in CY17 that wiped majority of the profits.
To recall, HBL’s CET1 and Tier1 CAR deteriorated to 12.1 per cent each in CY17 vis-à-vis 13.1 per cent in CY15.
As a reminder, HBL has one of the lowest CAR in the banking industry. As per June 2022 accounts, the Tier1 and CET1CAR stands at 11.39 per cent and 10.69 per cent, respectively against the requirement of 11.0 per cent and 9.5 per cent.
As per the court, HBL’s motion to dismiss primary liability claims has been granted as none of the alleged banking services were acts of international terrorism.
Meanwhile, secondary liability claims have been denied because HBL allegedly supported and aided campaign of terrorism.
The parties are expected to meet on October 19, 2022 to file a proposed civil case management plan and scheduling order.
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President Alvi rejects Habib Bank plea, orders to pay victims
ISLAMABAD: The President of Pakistan, Dr. Arif Alvi has rejected plea in six different cases filed by Habib Bank Limited (HBL) and ordered to pay victims.
A statement issued on stated that the President ordered the HBL to compensate the victims of online banking fraud as justifications presented by the bank were not sufficient.
READ MORE: HBL ordered to compensate bank fraud victim
Dr. Alvi directed HBL to refund and compensate the 6 defrauded customers with their stolen money and observed that since the bank failed to prove observance of relevant provision of laws, rules and regulations, therefore, its representations were devoid of any merit and deserved to be rejected.
The President rejected HBL’s six representations involving a total amount of Rs. one million and observed that victims were deprived of their hard earned deposits when the bank unilaterally activated the electronic funds transfer (EFT) facility without the request/consent of account holders and failed to put in place necessary safeguards against online exploitation of the account holders by the fraudsters.
READ MORE: FBR directed to bring entire sugar supply chain into tax net
In all six cases, the President found the bank negligent of its duty to inform the account holders about the pros and cons of activating the electronic funds transfer (EFT) as required by the mandatory guidelines of the State Bank of Pakistan (SBP).
Had the bank not opened EFT facility without customers’ consent, the account holders could have avoided the financial loss, he added.
The President rejected the bank’s claim that all transactions were 3D secured, being a secondary step, by observing that the State Bank of Pakistan (SBP), required all banks to register its customers for internet banking prior to offering them internet based products and services and putting in place all necessary safety measures to safeguard its clients from fraudsters.
READ MORE: President Alvi directs bank to refund unfair recovery
In his decisions, the President concluded that since the bank could not produce any evidence to the effect that it had complied with the provisions of relevant laws, rules and regulations, therefore, its representations were devoid of any merit and deserved to be rejected.
According to details, the account holders were called by fraudsters who lured them in their trap by providing them information regarding their names, CNIC, dates of birth, ATM Card numbers and obtained from them the names of their mothers and used this information to deprive the account holders of their deposits by making multiple e-commerce transactions, even though the bank customers were not using any mobile app and they were also in possession of their ATM Cards.
The victims approached their respective bank branches to freeze their accounts and seek refund, however, they were not provided any relief by the bank on the grounds that they themselves had shared their personal banking credentials with unknown callers.
READ MORE: President Alvi rejects FBR plea in maladministration cases
Feeling aggrieved, the account holders approached the Banking Mohtasib of Pakistan (BMP), after hearing arguments on account of banking malpractices, maladministration, wrong doings, the fraudulent transactions, the corrupt and malafide practices by the Bank officials, it decided the cases in favor of the applicants.
The Bank, however, chose to further escalate the matter and filed separate representations with the President which were rejected and the Bank was directed to comply with the directions of the Banking Ombudsman.
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Rupee fall to continue till IMF fund realization: Pakistan’s top bank
KARACHI: Pakistani Rupee likely to continue its falling spree until the country receives funds from the International Monetary Fund (IMF), according to an analyst briefing by the Habib Bank of Pakistan (HBL), the top bank of the country.
“The bank management believes that the rupee would continue to depreciate until Pakistan receives $1.2 billion from IMF,” according to the Topline Securities quoting the bank.
READ MORE: HBL ordered to compensate bank fraud victim
The HBL conducted its second quarter of 2022 analyst briefing on July 29, 2022 where the management discussed financial results of the bank and its future outlook.
The asset repricing of the loan book is likely to re-price by 3Q2022 and 4Q2022. As a result, Net Interest Income (NII) and Net Interest Margins (NIMs) of the bank are likely to remain strong in 2H2022 as per the management. The management expects further hike in policy rate in the upcoming monetary policy meeting.
READ MORE: SBP takes measures for prevention of digital bank fraud
On loan growth the management indicates that HBL will continue to grow and remain in double digit. Deposits are also expected to grow in an ongoing year where HBL is targeting to maintain its market share of 14 per cent.
Foreign exchange income jumped to Rs7.8 billion in the first half of 2022 vs Rs1.4 billion 1H2021 primarily due to (1) Rs1.3 billion from the revaluation of overseas banking due to rupee devaluation, (2) Rs3.2 billion generated from the long derivative FX position, and (3) Rs1.9 billion treasury activities.
The bank offered Voluntary Separation Scheme (VSS) to its employees amounting to Rs2.6 billion in 1Q2022 and Rs0.6 billion in 2Q2022.
READ MORE: SBP directs banks to report digital fraud cases
Out of the total PIB portfolio, around 55 per cent of PIBs are floater rates with average yield of around 11 per cent and T-bill yields of 10.75 per cent. Fixed PIB worth of Rs50 billion is maturing in July however no other PIBs are maturing in 2H2022.
HBL continues to focus on improving its customer experience in the digital space which is also evident from its improving numbers. Total mobile app monthly active users reached 1.8 million in 1H2022 vs. 1.3 million in 1H2021.
READ MORE: Habib Bank, Meezan Bank directed to pay fraud victims
The management highlighted that in the current economic scenario, stress is seen in Autos, Cement, Steel and few other customers but with current provisions HBL is at a comfortable levels. Total coverage of the bank now stands at 101 per cent in June 2022 vs. 100 per cent in March 2022.
Bank’s cost to income ratio in 1H2022 stood at 52.1 per cent vs. 51.3 per cent in 1H2021. Management targets to maintain the current cost to income ratio where the growth in operating expenses are in line with the inflation.
HBL posted strong financial results, but due to higher taxation which hits bottom-line resulting into ROE of 9.2 per cent and ROA of 0.5 per cent.
READ MORE: President Alvi rejects MCB Bank’s appeal in fraud case
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Habib Bank posts 33% decline in half year profit
KARACHI: Habib Bank Limited (HBL), one of the largest banks in Pakistan, has posted 33 per cent decline in profit for the half year ended June 30, 2022.
According to financial results submitted to the Pakistan Stock Exchange (PSX), the bank declared profit after tax at Rs12.11 billion for the half year ended June 30, 2022 as compared with Rs18.03 billion in the same half of the last year.
READ MORE: FFBL declares Rs1.7 billion in 2QCY22
The sharp decline in net profit may be attributed to significant rise in payment of taxes. The bank paid an amount of Rs22.48 billion as taxes during the half year ended June 30, 2022 as compared with Rs13.17 billion in the same half of the last year, showing an increase of 71 per cent.
The HBL issued the condensed interim consolidated profit and loss account (unaudited) for the six months ended June 30, 2022. It declared basic and diluted earnings per share at Rs8.10 for the half year ended June 30, 2022 as compared with EPS of Rs12.04 in the same half of the last year.
READ MORE: Hyundai announces second quarter financial results
Net mark-up income of the bank increased to Rs73.89 billion for the first half (January – June) 2022 as compared with Rs64.86 billion in the same half of the last year.
Total non-mark up income of the bank also increased to Rs23.67 billion for the half year under review as compared with Rs17.61 billion in the same half of the last fiscal year.
READ MORE: PTCL declares 39% growth in half year net profit
This brings the total income of the HBL at Rs97.57 billion for the half year ended June 30, 2022 as compared with Rs82.47 billion in the same half of the last year.
The operating expenses of the bank increased to Rs59.05 billion during the half year under review as compared with Rs46.85 billion in the same half of the last year.
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HBL ordered to compensate bank fraud victim
ISLAMABAD: President of Pakistan, Dr. Arif Ali Alvi, on Wednesday ordered Habib Bank Limited (HBL) to immediate compensate a victim of bank fraud.
President Dr Arif Alvi reprimanded HBL for unnecessarily dragging the matter of reimbursement of a trivial amount of Rs. 39,000 to the victim of bank fraud.
READ MORE: SBP takes measures for prevention of digital bank fraud
He directed the bank to reimburse the defrauded amount, along with the payment of transportation charges, within fifteen days to the victim and termed the action of the HBL an act of malpractice and maladministration.
The President reprimanded the HBL for preferring representation before the President against the order passed by the Banking Ombudsman in favor of the victim of the bank fraud involving a meager amount.
READ MORE: SBP directs banks to report digital fraud cases
The President observed that the transfer of money from one account to another through cheating was a common incident of fraudulent activity but despite the knowledge of the account where the money landed and was then withdrawn no action was taken against the beneficiary of the transaction.
The President emphasized that the bank was liable to make good the loss of their customers and advised the bank management to look into the issue and take remedial measures to safeguard the interest of its customers, especially the small depositors and account holders.
READ MORE: Habib Bank, Meezan Bank directed to pay fraud victims
The President directed the State Bank of Pakistan, being a regulatory body, to take earnest action against both the Banks and bank branches by adopting regulatory and punitive action to redress the fraudulent activities which result from noncompliance with Rules and Regulations issued by the State Bank of Pakistan.
According to the details, an unknown person tricked Nazeer Ahmad Bhutta to provide the last digits of his ATM card and later deprived him of his deposit.
READ MORE: President Alvi rejects MCB Bank’s appeal in fraud case
The victim preferred an appeal before the Banking Ombudsman who decided the case in favour of the victim. However, HBL, instead of implementing the decision, preferred representation to the President.
The President upheld the decision of the Banking Ombudsman and directed the Bank to reimburse the defrauded money to the complainant.