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HBL declares Rs4 DPS despite profit drop in 3QFY24

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April 23, 2024 (MLN): Habib Bank Limited (HBL) has earned Rs14.59 billion [EPS: 9.95] on an unconsolidated basis during the quarter ended March 31, 2024 (3QFY24), reflecting a marginal 4.61% YoY dropcompared to the profit of Rs15.3bn [EPS: 10.43] earned in the corresponding period last year.

Despite this meager drop in earnings,the Board of Directors (BoD) of HBL has recommended a final cash dividend of Rs4per share i.e.40%.

Going by the income statement, the bank remained strong in earninga higher net interest income of Rs55.86bn in 3QFY24, reflecting an increase of 8.3% YoY compared to Rs51.58bn in SPLY.

While witnessing growth, gains on the interest side were limited as interest expenses increased by a greater proportion.

During the period under review, the bank’s total non-markup income also ticked up by 49.25% YoY to Rs18.17bn, owing to a massive jumpin foreign exchange income and fee and commission income.

The rise in non-markup income comes due to improved and expanded economic activity in the country.

On the other hand, HBL witnessed a drop of over Rs4bn in its other income during the review quarter.

On the expense side, the total non-markup expenses increased by 18.39% YoY to Rs42.3bn in 3QFY24 compared to Rs35.373bn in 3QFY23.

The increase was attributed to a substantial rise in the bank’s operating expenses from Rs35.2bn in 3QFY23 to Rs41.56bn in 3QFY24.

Additionally, the bank’s expenses related to the Workers' Welfare Fund also went up during the review period.

The profit and loss statement further shows that HBL incurred a provision reversal of Rs2.04bn compared to Rs2.68bn recorded in SPLY.

On the tax front, the bank paid Rs15.1n, 50.34% YoY higher than the amount paid in 3QFY23 due to higher activity in the economy.

Higher expenses, coupled with a significant tax expense, capped the gains from increased income and led to a drop in profitability for the bank in the quarter.

Un-consolidated Profit and Loss Account for the quarter ended March 31, 2024 (Rupees '000)
  Mar-24 Mar-23 % Change
Mark-up/return/profit/interest earned 186,437,496 140,284,550 32.90%
Mark-up/return/profit/interest expensed 130,578,896 88,708,410 47.20%
Net mark-up/return/profit/interest income 55,858,600 51,576,140 8.30%
Non mark-up/interest income      
Fee and commission income 10,530,818 8,244,010 27.74%
Dividend income 1,653,891 1,216,253 35.98%
Foreign exchange income 3,812,945 383,143 895.18%
Income / (loss) from derivatives 2,417,841 (6,160,416) -139.25%
Loss on securities – net (287,107) -1,079,004 -73.39%
Other income 40,112 9,568,932 -99.58%
Total non mark-up /interest income 18,168,500 12,172,918 49.25%
Total income 74,027,100 63,749,058 16.12%
Non mark-up/interest expenses  
Operating expenses 41,559,086 35,203,661 18.05%
Workers' Welfare Fund 579,105 508,167 13.96%
Other charges 158,496 15,765 905.37%
Total non mark-up/interest expenses 42,296,687 35,727,593 18.39%
Profit before provisions and taxation 31,730,413 28,021,465 13.24%
Credit loss allowance and write offs – net 2,038,597 2,679,788 -23.93%
Profit before taxation 29,691,816 25,341,677 17.17%
Taxation 15,096,839 10,041,791 50.34%
Profit after taxation 14,594,977 15,299,886 -4.61%
Earnings per share – basic and diluted (Rupees) 9.95 10.43


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Posted on: 2024-04-23T14:31:03+05:00