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HomeEquityHBL posts 15% higher profits owing to suppressed provisioning

HBL posts 15% higher profits owing to suppressed provisioning

February 24, 2022 (MLN): Habib Bank Limited (HBL) announced its CY21 results today where the bank reported net profits of Rs35.5bn (EPS: Rs23.9) compared to Rs30.9bn (EPS: Rs21.06) in the same period last year, showing an upsurge of 15% YoY.

Along with the result, the bank announced a final cash dividend of Rs2.25 per share, taking the full-year cash payout to Rs7.5 per share.

The YoY growth in earnings was primarily due to reduced provisioning charges as last year saw elevated expenses as part of building general coverage along with improved non-interest income, earning report by Arif Habib Limited cited.

Net interest income of the bank settled at Rs131.4bn for CY21, marginally up by 1% YoY. The flattish YoY rise in the spread is mainly due to 7% YoY increase in interest expense.

On the other hand, non-interest income of the bank surged by 19% YoY during CY21 to Rs36.3bn, led by a marked improvement in fee income (35% YoY) due to resumption in economic activity and improved trade volumes, while FX income clocked in at Rs5.3bn compared to a loss of Rs161mn SPLY.

Meanwhile, capital gains clocked in 85.5% YoY lower during CY21 to Rs1bn.

On the expense side, provisions saw a 34% YoY reduction during the period under review as last year aggressive charges were booked to enhance coverage.

In addition, operating expenses remained flattish in CY21, posting a meagre 2% YoY increase. Moreover, the effective tax rate was stood at 43% for CY21 compared to 42% in CY20.

Consolidated Profit and Loss Account for the year ended December 31, 2021 (Rupees '000)

 

Dec-21

Dec-20

% Change

Mark-up/return/profit/interest earned

                  262,253,962

                  271,237,258

-3.31%

Mark-up/return/profit/interest expensed

                  130,834,913

                  141,132,940

-7.30%

Net mark-up/return/profit/interest income

                  131,419,049

                  130,104,318

1.01%

Non-mark-up/interest income

 

 

 

Fee, commission income

                     25,433,355

                     18,795,739

35.31%

Dividend income

                           913,769

                           489,303

86.75%

Share of profits of associates and joint venture

                       2,585,595

                       2,963,090

-12.74%

Foreign Exchange Income/(loss)

                       5,380,594

                        (161,688)

(Loss)/ Income from derivatives

                        (182,098)

                       1,077,945

Gain on sale of securities – net

                       1,024,384

                       7,054,874

-85.48%

Other income

                       1,155,761

                           375,597

207.71%

Total non-mark-up /interest income

                     36,311,360

                     30,594,860

18.68%

Total income

                  167,730,409

                  160,699,178

4.38%

Non-mark-up/interest expenses

 

 

 

Operating expenses

                     95,784,969

                     94,018,405

1.88%

Workers' Welfare Fund

                       1,273,226

                       1,109,730

14.73%

Other charges

                           557,198

                           320,793

73.69%

Total non-mark-up/interest expenses

                     97,615,393

                     95,448,928

2.27%

Profit before provisions and taxation

                     70,115,016

                     65,250,250

7.46%

Provisions/ (reversals) and write offs-net

                       8,087,105

                     12,219,614

-33.82%

Profit before taxation

                     62,027,911

                     53,030,636

16.97%

Taxation

                     26,521,038

                     22,117,287

19.91%

Profit after taxation

                     35,506,873

                     30,913,349

14.86%

Earnings per share – basic and diluted (Rupees)

                               23.88

                               21.06

13.39%

 

Copyright Mettis Link News       

Posted on: 2022-02-24T16:53:35+05:00

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