Analyst Briefing: HBL aiming to mark its position in the top five foreign banks

December 11, 2019 (MLN): Habib Bank Limited (HBL) held its Corporate Analyst Briefing on December 10, 2019, to discuss the latest financial results along with the future outlook of the bank.

To recall, HBL had posted net profits of Rs. 8.8 billion (EPS: Rs. 5.89) for the nine months ended on September 30, 2019, i.e. around 10.9% lower than the same period of last year.

Shedding some light on the aforementioned performance, the bank’s management said that a rise in operational expenses, combined with exceptional charges during the year, took a slight toll on the bank’s overall profits. But the management was hopeful that the performance in next year would be much better due to the absence of non-recurring charges.  

According to the report prepared by Insight Securities, the management of HBL informed the attendees that it is planning to bring the cost-to-income ratio, which currently stands at around 76.8%, down to 50% within a span of two years.

Expressing similar hopes on the other key performance indicators, the management stated that the Return on equity would be brought to its standard level once all the legal and business transformations return to normal.

Speaking on the $225 million penalty imposed by the New York State Department of Financial Services, the management informed that HBL obtained financing from International Finance Corporation and China Development Bank to pay the fines. In this regard, the bank further stated that it would pay 25% of this debt in the current year and another 25% in the next year.

Talking about its future plans and growth strategies, the management informed that being the only bank with RMB dealership, it is working on and looking forward to issuing Panda Bonds in the Chinese market.

As per a report by BMA Capital, the management also briefed about its plan to mark its position in the top five foreign banks, for trade volumes between South Asia, GCC, Turkey, Central Asia and China.

Furthermore, the bank was hopeful that its overall current account deposits would surpass Rs. 1000 billion in the next two years, and that its foreign liability would slump by 20-30% by the end of this year.

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