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HBL recovers declining profit growth on account of reduced tax provision

 October 25, 2018 (MLN): Owing to the major relief provided by reduced tax expenses, Habib Bank Limited (HBL) successfully redirected its declining pre-tax profits towards a healthy growth of almost Rs.8.4 billion in consolidated profits, for the nine month period ended September 30, 2018.

As compared to the same period last year, HBL’s net mark-up/return/profit/interest income after provisions declined by 2% on account of provision for diminution in the value of investments, which exceeded prior provision by over Rs.1.3 billion.

Meanwhile the company suffered significant declines in inflows from non-mark-up /interest income, whereas administrative expenses registered further rise.

Fortunately, HBL saved substantially on settlement payment to New York State Department of Financial Services, due to which most of the drop in inflows was recovered.

While HBL’s pretax profits came down by 5.7%, further reduction in tax provisions (54%) caused the total profits to rise drastically, to Rs.9.9 billion.

The company has reported an appreciable rise in its basic and diluted earnings per share, which grew by Rs.5.7 per share as they stand in at Rs.6.57 per share.

In addition to this, HBL’s board of directors have recommended an interim cash dividend at Rs.1 per share (10%), in addition to the previously paid interim dividend at Rs.2 per share (20%)

Consolidated Profit and Loss Account for the nine months ended September 30,2018 (Rupees '000)

 

Sep-18

Sep-17

% Change

Mark-up/return/profit/interest earned

                  117,071,110

                  109,389,601

7.02%

Mark-up/return/profit/interest expensed

                     55,950,012

                     47,413,889

18.00%

Net mark-up/return/profit/interest income

                     61,121,098

                     61,975,712

-1.38%

Provision/(reversal) against advances

                        (387,604)

                           312,818

 

Provision/(reversal) against off-balance sheet obligations

                             20,173

                             (8,992)

 

Provision for diminution in the value of investments

                       2,085,134

                           774,384

169.26%

Bad debts written off directly

                                      –  

                                      –  

 

 

                       1,717,703

                       1,078,210

59.31%

Net mark-up/return/profit/interest income after provisions

                     59,403,395

                     60,897,502

-2.45%

Non-mark-up/interest income

 

 

 

Fee, commission and brokerage income

                     12,708,959

                     15,520,466

-18.11%

Dividend income

                           636,969

                           959,337

-33.60%

Share of profits of associates and joint venture

                       2,324,938

                       2,277,455

2.08%

Income/(loss) from dealing in foreign currencies

                        (568,622)

                       1,932,472

 

Gain on sale of securities – net

                           405,771

                       5,041,126

-91.95%

Unrealized (loss)/gain of revaluation of investments classified as held for trading

                           (48,471)

                           (99,000)

-51.04%

Other income/(loss)

                             32,807

                           662,899

-95.05%

Total non-mark-up /interest income

                     15,492,351

                     26,294,755

-41.08%

 

                     74,895,746

                     87,192,257

-14.10%

Non mark-up/interest expenses

 

 

 

Administrative expenses

                     56,263,712

                     43,494,750

29.36%

Other provisions/write offs-net

                           154,488

                           403,742

-61.74%

Other charges

                           465,994

                               2,499

18547.22%

Workers' Welfare Fund

                           330,051

                           816,850

-59.59%

Total non-mark-up/interest expenses

                     57,214,245

                     44,717,841

27.95%

Extraordinary/unusual item – settlement payment to New York State Department of Financial Services

                                      –  

                     23,717,115

 

Profit/(loss) before taxation

                     17,681,501

                     18,757,301

-5.74%

Taxation

                       7,771,355

                     17,202,873

-54.83%

Profit/(loss) after taxation

                       9,910,146

                       1,554,428

537.54%

Earnings per share – basic and diluted (Rupees)

                                  6.57

                                  0.87

655.17%

 

Copyright Mettis Link News

Posted on: 2018-10-25T14:34:00+05:00

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