HBL Earning preview: PKR depreciation to do a number on profits

MG News | July 24, 2019 at 10:34 AM GMT+05:00

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July 24, 2019 (MLN): A Board of Directors meeting of Habib Bank Limited is currently underway where the members are reviewing the bank’s half yearly performance, results of which will be released shortly.

Local research houses believe that HBL’s net income will slide mainly due to Foreign Exchange losses on USD denominated borrowings taken in lieu of the New York settlement payment since PKR has suffered significant depreciation in the last quarter.

Additional contributing factors of decline in profitability are higher administrative expenditures and increased provision on domestic and international loan book.

Since the State Bank of Pakistan (SBP) hiked policy rates to 12.25% until June 2019, the Bank is expected to have earned higher on its loans (or any other interest income), however its interest expenses on deposits are also expected to have shot up.

Projections by various brokerage houses are listed in the table below:

Brokerage house	PAT for 1H2019 in Billion Rupees	Earning per share in Rupees	Year-on-year % Change in PAT
Arif Habib Ltd	4.775	3.26	-40%
Ismail Iqbal Securities*	5.276	3.6	-30%
BIPL	5.6	3.7	-32%
JS Global	4.778	3.26	-40%
Shajar Capital	6.623	4.52	-18%
Aba Ali Habib Securities	5.680	3.79	-30%
Darson Securities	7.207	4.83	-11.3%
Al Habib Capital Markets	4.777	3.11	-41%
AKD Securities		3.88 (-28%)
Topline		3.73 (-31%)

*unconsolidated earnings

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