Imposition of super tax drags Habib Metropolitan’s earnings down by 2%

MG News | April 22, 2019 at 01:42 PM GMT+05:00

0:00

April 22, 2019 (MLN): Habib Metropolitan Bank Limited (HMB) has announced its financial results for 1QCY19, as per which the company has posted net earnings of Rs. 1.6 billion, down by 2.09% as compared to same period last year. The bank’s EPS stood at Rs. 1.45 (down, 3.33%)

The Bank initially made a good start by recording an increase in net interest income by 21.8% as a result of interest rate reversals. Similarly, total non-mark-up income grew by 15.8% due to growth in fee income and income from foreign exchange by 27.9% and 68.8% respectively.

The bank’s profits, however, took a U-turn towards south after taxation expense jumped by 87%. This was attributable to higher effective tax rate, given the compulsion on banking sector to record a 4% Super Tax on CY17 profits during 1QCY19, as part of the recent mini budget.

Nevertheless, the bank performed way better than the projections put forward by brokerage houses, which ranged from 12% to 36% decline in Profit after Tax whereas the actual decline was only 2.09%.

Profit and loss account for the quarter ended March 31 2019 (Rupees'000)
	Mar-19	Mar-18	% Change
Mark-up / return / interest earned	14,166,590	9,927,296	42.70%
Mark-up / return / interest expensed	-9,537,396	-6,127,441	55.65%
Net mark-up / interest income	4,629,194	3,799,855	21.83%
NON MARK-UP / INTEREST INCOME
Fee and commission income	1,193,446	932,723	27.95%
Dividend income	24,507	9,349	162.13%
Foreign exchange income	457,628	270,977	68.88%
Income / (loss) from derivatives	-	-
Gain / (loss) on securities	10,578	18,210	-41.91%
Other income	111,647	320,647	-65.18%
Total non-mark-up / interest income	1,797,806	1,551,906	15.85%
Total Income	6,427,000	5,351,761	20.09%
NON MARK-UP / INTEREST EXPENSES
Operating expenses	3,150,644	2,780,117	13.33%
Workers welfare fund	61,829	49,460	25.01%
Other charges	714	158	351.90%
Total non-mark-up / interest expenses	-3,213,187	-2,829,735	13.55%
Profit before provisions	3,213,813	2,522,026	27.43%
(Provisions) / reversal and write offs - net	-133,628	-97,421	37.17%
Extra ordinary / unusual items	-	-
PROFIT BEFORE TAXATION	3,080,185	2,424,605	27.04%
Taxation	-1,476,675	-786,910	87.65%
PROFIT AFTER TAXATION	1,603,510	1,637,695	-2.09%
Basic and diluted earnings per share	1.45	1.50	-3.33%

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