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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