HBL reports over three-fold increase in net profits during 1HCY20

By MG News | July 24, 2020 at 03:15 PM GMT+05:00

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July 24, 2020 (MLN): Habib Bank Limited (HBL) has announced its financial results for the 1HCY20 ended June 30, 2020. As per the results, the bank has reported over three-fold increase in consolidated net profits to Rs 15 billion (EPS: Rs 10.32). The bank’s consolidated total profit was Rs 3.92 billion (EPS: 2.53) in the same period of last year.

Here, it is pertinent to mention that the bank exceeded market expectations, as its profits were higher than the projections put forth by brokerage houses.

The profitability of the bank went up primarily due to higher net interest income (NII), up by 32% YoY to Rs 63 billion.

According to Ismail Iqbal's research, the major improvement in earnings is the result of higher than expected NII, which they believe it would not be sustainable as lagged impact of interest rate decline on advances would be reflected in 2HCY20 results.

Meanwhile, Non-funded income (NFI) of the bank jumped up by 2.09 times YoY, mainly on account of reduction in exchange losses on FX open position (down by 54%) and capital gains of Rs 6.7 billion against the loss of Rs 2 billion during 1HCY19.

Due to the closure of the New York branch, the operating expenses of the bank increased by only 6% YoY, to Rs 47.67 billion. Moreover, the tax expenses increased by 78% YoY in 1HCY20.

Consolidated Profit and Loss Account for the half-year ended June 30, 2020 (Rupees '000)
	Jun-20	Jun-19	% Change
Mark-up/return/profit/interest earned	143,131,563	111,090,000	28.84%
Mark-up/return/profit/interest expensed	80,056,387	63,386,612	26.30%
Net mark-up/return/profit/interest income	63,075,176	47,703,388	32.22%
Non mark-up/interest income
Fee, commission, and brokerage income	8,899,718	10,677,330	-16.65%
Dividend income	196,897	314,461	-37.39%
Share of profits of associates and joint venture	1,227,025	1,328,379	-7.63%
Foreign Exchange Income/(loss)	(742,336)	(1,632,651)	-54.53%
Income/(loss) from derivatives	258,278	(1,023,516)	-
Gain/ (loss) on sale of securities - net	6,706,856	(2,113,615)	-
Other income	97,077	402,834	-75.90%
Total non-mark-up /interest income	16,643,515	7,953,222	109.27%
Total income	79,718,691	55,656,610	43.23%
Non mark-up/interest expenses
Operating expenses	47,672,039	44,968,345	6.01%
Workers' Welfare Fund	516,746	202,309	155.42%
Other charges	232,608	81,279	186.18%
Total non-mark-up/interest expenses	48,421,393	45,251,933	7.00%
Profit before provisions and taxation	31,297,298	10,404,677	200.80%
Provisions and write offs-net	5,467,852	510,925	970.19%
Profit before taxation	25,829,446	9,893,752	161.07%
Taxation	10,640,834	5,966,450	78.34%
Profit after taxation	15,188,612	3,927,302	286.74%
Earnings per share - basic and diluted (Rupees)	10.32	2.53	307.91%

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