HBL profit shows threefold increase to Rs25.3 billion

Habib Bank Limited (HBL) declared a consolidated profit after tax of Rs25.3 billion for the first nine months of 2020, an almost threefold growth over the same period last year.

Profit before tax for the first nine months of 2020 more than doubled, to Rs42.9 billion. The bank's earnings per share increased to Rs17.17 compared to Rs5.89 in 9M'19. Aided by the strong earnings stream, the bank's CAR rose by 125 bps in the third quarter, to 17.8pc.

HBL added more than Rs300 billion in domestic deposits during the first nine months of 2020, increasing total domestic deposits to Rs2.5 trillion and boosting its market share to 14.4pc; HBL's total deposits reached Rs2.7 trillion. The bank continues to maintain strong current account and CASA ratios of 34.6pc and 81.7pc, respectively.

HBL has continued to support customers through these difficult times, and fully leveraged the various schemes that the SBP has launched to support the economy and businesses. HBL supported its retail customers' financing needs through these difficult times, in the process showing growth of 16pc in just one quarter, driven by personal and auto loans

HBL recorded net interest income of nearly Rs100 billion driven by a strong 14pc growth in its average domestic deposits. Lower footfall and restricted business volumes during the first half of the year due to lockdowns and the economic downturn has resulted in fee income being lower than last year. However, total non-fund income increased by more than 50pc to Rs24.1 billion helped by realization of capital gains from the proactive build-up of the treasury portfolio over the last year.

Administrative expenses were well controlled and grew by a mere 2pc over 9M'19, while the bank continued to invest in its digital initiatives and strengthen compliance and controls.

During 9M'20, the Bank spent over Rs500 million in protective measures for staff and customers across the network and in direct contributions to protect the vulnerable in these very difficult times. Consequently, the cost/income ratio reduced from 76.8pc in 9M'19 to 57.2pc in 9M'20.

Domestic provisions have remained well contained and are nearly 50pc lower than for 9M'19. However, HBL has prudently taken a general provision of Rs6.0 billion as a buffer against potential provisions arising from the impact of the pandemic, thus increasing its coverage to 100pc of non-performing loans.

Q3 2020 continued with a strong business momentum, backed by HBL's transformative digitization efforts. The quarter saw gains through partnerships with multiple business stakeholders on affordable housing, ground breaking interventions through development finance initiatives and financial inclusion.

HBL has cemented its position as the leading digital bank in Pakistan; its digital payment solutions enable HBL customers the ability to enjoy a cash-less, convenient lifestyle. The bank's customer base has risen to 27 million customers, driven primarily by an increase in its digital platforms usage. There has been a 93pc increase in HBL Mobile and Internet Banking transactions volume YoY. Konnect by HBL has also seen a 157pc increase in its throughput YoY.

The bank maintains a leadership position in HBL Pay, its cash management proposition. HBL Pay attained175pc growth in volume. Transaction & Employee Banking also showed doubledigit growth in digital receivable management, payments, and salary processing through its digital channels.

HBL retained its #1 position in Consumer Finance. The bank ranks #1 in Credit Cards, Debit

Cards, Merchant Acquiring, Personal Loans and #2 in Auto Loans. The bank has the largest credit card portfolio in the country (Rs11 billion) with 50,000 cards issued YTD, the highest in the industry.

The bank occupies pole position in the industry with its portfolio of 5.9 million debit cards in use. POS acquiring maintains its market leader position with the highest number of POS terminals at 28,500. Rural banking continues to lead the market with a 30pc share. The auto loans business financed an impressive number of 4,550 vehicles.

Total deposits for first nine months rise by Rs300b to Rs2.5 trillion