HBL profit surges 19% to Rs51bn, dividend hits 140%

October 23, 2025 (MLN): Habib Bank Limited (PSX: HBL) has reported its financial results for the nine months ended September 30, 2025, posting a profit after tax (PAT) of Rs51.38bn, marking an 18.78% increase from Rs43.25bn recorded in the same period last year (SPLY).

The earnings per share (EPS) stood at Rs34.97, up from Rs30.03 in SPLY, showing improved profitability despite challenging market conditions.

The Board of Directors declared a third interim cash dividend of Rs5.00 per share (50%) for the quarter ended September 30, 2025. This brings the cumulative payout for the nine months to 140% (Rs14.00 per share), including interim dividends of Rs9.00 per share (90%) already paid in earlier quarters.

The bank's mark-up/return/interest earned dropped 19.76% to Rs503.40bn from Rs627.34bn, primarily reflecting lower yields amid a declining interest rate environment.

Meanwhile, mark-up/return/interest expensed fell more sharply by 32.73% to Rs296.08bn from Rs440.16bn, resulting in a net mark-up income of Rs207.33bn, up 10.77% year-on-year.

On the non-mark-up side, total non-mark-up/interest income rose 11.25% to Rs67.54bn from Rs60.71bn, demonstrating strong resilience in diversified revenue streams.

However, fee and commission income declined 6.36% to Rs34.25bn from Rs36.58bn, contrasting with typical growth trends in digital banking revenues.

Dividend income increased 7.65% to Rs2.91bn, while share of profit of associates surged 26.41% to Rs4.88bn, showing strong performance from equity investments.

Foreign exchange income climbed 21.44% to Rs6.77bn, benefiting from currency volatility and trade finance activities.

In a standout performance, gain on securities surged 113.98% to Rs14.05bn from Rs6.57bn, showing favorable investment revaluations and strategic portfolio management.

Income from derivatives declined significantly by 60.02% to Rs1.98bn, while other income jumped 472.73% to Rs2.69bn from Rs469.14m.

Consequently, total income amounted to Rs274.86bn, showing a 10.89% increase compared to Rs247.88bn last year.

Operating expenses increased by 8.38% to Rs152.66bn from Rs140.86bn, driven by inflationary cost pressures, technology investments, and network expansion.

Workers' welfare fund rose 20.33% to Rs2.13bn, while other charges declined sharply by 67.94% to Rs112.43m from Rs350.64m.

Overall, total non-mark-up/interest expenses rose 8.34% to Rs154.89bn from Rs142.97bn, though the increase remained below the growth in total income, indicating improved operational efficiency.

The bank's profit before credit loss allowance and taxation increased 14.36% to Rs119.97bn from Rs104.91bn last year.

In a positive development, credit loss allowance and write-offs declined dramatically by 58.95% to Rs7.81bn from Rs19.03bn, signaling improved asset quality and reduced stress in the loan book.

After provisions, profit before taxation (PBT) stood at Rs112.16bn, up 30.60% from Rs85.88 billion in SPLY.

Taxation expense increased 42.59% to Rs60.78bn, resulting in a profit after taxation of Rs51.38bn, marking an 18.78% increase from Rs43.25bn recorded last year.

Profit attributable to equity holders of the bank amounted to Rs51.29bn, up 16.46% from Rs44.04bn in SPLY. Non-controlling interest stood at Rs86.99m compared to a loss of Rs789.95m in the previous year.

The strong financial performance, coupled with significantly lower provisioning requirements and improved net interest margins, positions HBL favorably as one of Pakistan's leading banking institutions.

The generous dividend payout of 140% for the nine-month period underscores the bank's commitment to delivering strong shareholder returns while maintaining robust capital adequacy.

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