Habib Bank Limited Reports PKR 14.5bn Profit for 3QCY24

HBL Reports PKR 14.5bn Profit for 3QCY24 with Strong Non-Funded Income Growth

Habib Bank Limited (HBL) reported earnings of PKR 14.5 billion (EPS: PKR 9.85) for the third quarter of 2024 (3QCY24), reflecting a year-on-year (YoY) decline of 13% but a quarter-on-quarter (QoQ) increase of 1%. For the first nine months of 2024 (9MCY24), the bank’s total earnings reached PKR 44.0 billion, a 3% YoY increase. Along with the results, HBL announced a cash dividend of PKR 4/share for 3QCY24, taking the total payout for 9MCY24 to PKR 12.0/share.

Key Highlights of 3QCY24 Results

• Net Interest Income: HBL’s interest earned in 3QCY24 amounted to PKR 218 billion, up 14% YoY and 4% QoQ. However, interest expense also rose by 23% YoY and 4% QoQ, reaching PKR 154 billion. As a result, Net Interest Income (NII) stood at PKR 64 billion, reflecting a 2% YoY decline but a 4% QoQ increase.
• Non-Funded Income (NFI): The bank’s Non-Funded Income surged by 63% YoY in 3QCY24, bringing the total for 9MCY24 to PKR 60.7 billion, marking a 59% YoY increase. This significant growth was driven by a 20% YoY increase in fee income, which reached PKR 36.6 billion. Additionally, foreign exchange income soared to PKR 5.6 billion, compared to PKR 1.6 billion in the same period last year. Other income also saw a remarkable 110% YoY increase to PKR 9.3 billion in 9MCY24. The bank recorded a PKR 6.6 billion gain from the sale of securities, a significant improvement from a PKR 307 million loss in the same period last year.
• Provisioning: HBL recorded a provisioning charge of PKR 8.9 billion in 3QCY24, bringing the total provisioning for 9MCY24 to PKR 19.0 billion. This is a sharp increase compared to the PKR 7.4 billion provisioning charge in 9MCY23.
• Operating Expenses (OPEX): The bank’s OPEX rose by 8% YoY and 4% QoQ, amounting to PKR 47.9 billion in 3QCY24. Despite the increase, HBL’s cost-to-income ratio improved slightly, standing at 56.5% compared to 57.1% during the same period last year.
• Effective Tax Rate: The bank’s effective tax rate increased to 49.3% in 3QCY24, up from 48.1% in the same period last year.

Outlook

HBL’s 3QCY24 results show solid growth in non-funded income, particularly from fees and foreign exchange gains. However, rising provisioning charges and higher operating expenses indicate some challenges. The bank’s continued focus on non-interest income sources is expected to support future earnings, despite a higher tax burden and rising costs.