Habib Bank declares Rs6/share dividend in Q1FY26

April 17, 2026 (MLN):  Habib Bank Limited (PSX: HBL) reported a slight 3% dip in its consolidated profit after taxation, logging Rs16.15bn for the three-month period ended March 31, 2026, compared to Rs16.63bn in the same period last year.

The bank's basic and diluted earnings per share (EPS) edged down to Rs11 from Rs11.32 in the corresponding period of 2025, while dividend was declared at Rs6 per share.

HBL's core lending business saw moderate growth, but margin pressures were evident.

The bank’s mark-up/interest earned grew by a solid 18% to Rs184.23bn from Rs156.69bn. However, the cost of funding outpaced this growth, with mark-up/interest expensed surging 28% to Rs112.86bn from Rs87.94bn.

As a result, net mark-up/interest income expanded by a modest 4% to Rs71.37bn compared to Rs68.75bn in the prior year.

On the non-funded front, total non-mark-up/interest income fell by 5% to Rs20.50bn from Rs21.61bn.

This contraction was primarily dragged down by a massive 93% plunge in net gains on securities, which dropped to just Rs296.57m from Rs4.17bn, along with an 84% drop in income from derivatives (Rs121.26m).

These steep declines overshadowed strong performances in other areas, such as a 158% surge in dividend income (Rs3.58bn) and a 9% increase in fee and commission income (Rs12.58bn).

With core income slightly up and non-core income down, HBL's total income edged up by just under 2% to Rs91.88bn.

Operating overheads remained relatively controlled, with total non-mark-up expenses rising 6% to Rs53.81bn, driven by a 6% increase in operating expenses (Rs53.13bn). Consequently, profit before credit loss allowance and taxation dipped 3% to Rs38.07bn.

Asset quality provisioning placed an additional burden on the bottom line. The bank's net credit loss allowance and write-offs spiked by 58% to Rs4.33bn from Rs2.74bn in the prior year.

This pushed profit before taxation down by 8% to Rs33.74bn. However, HBL received a significant cushion from a lower tax burden. Taxation for the quarter dropped 12% to Rs17.59bn from Rs20.01bn, helping to contain the final net profit decline to just 3%.

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