Lower Provisioning pulls up HBL’s bottom-line

October 15, 2021 (MLN): Habib Bank Limited (HBL) has declared its financial results for 9MCY21 ended September 30, 2021, as per which, the bank has posted its consolidated profit after tax (PAT) of Rs26.99 billion (EPS: Rs18.21), registering a nominal increase of 6% YoY when compared to the net profits of Rs25.27bn (EPS: Rs17.17) recorded the same period of last year.

This slender increase in profitability is mainly attributable to a 35.5% YoY reduction in provision expenses coupled with a 7% increase in non-funded income (NFI).

During the period under review, the bank’s interest expenses went down by 12.4% YoY, whereas, income came down by 7% YoY. As a result, the bank’s net interest income (NII) observed a marginal decline of 1.65% YoY to Rs97bn during 9MCY21 due to an increase in borrowing and a lower policy rate.

On the other hand, non-funded income (NFI) of the bank witnessed a slight increase of around 7% YoY to clock in at Rs11.10bn due to a 34% increase in fee and commission income, 70.7% upsurge in dividend income coupled with foreign exchange income of Rs2.9bn during 9MCY21 against the loss of Rs333mn of the corresponding period last year. However, capital gains on securities plunged by nearly 79% YoY to Rs1.57bn during the said period.

The major highlight was the reduction in provision expenses that dropped by 35.5% YoY to Rs5.50bn due to the absence of general provision which the bank charged last year amid the COVID situation, supporting the bank’s financial health, a report by Darson Securities said.

Alongside financial results, the board of directors has announced an interim cash dividend for the third quarter ended September 30, 2021, at Rs1.75 per share i.e., 17.5%. This is in addition to the interim cash dividend already paid at Rs3.5per share i.e., 35%.

Consolidated Profit and Loss Account for the Nine months ended September 30, 2021 (Rupees '000)

 

Sep-21

Sep-20

% Change

Mark-up/return/profit/interest earned

 192,743,213

 207,931,102

-7.30%

Mark-up/return/profit/interest expensed

 95,591,346

 109,146,648

-12.42%

Net mark-up/return/profit/interest income

 97,151,867

 98,784,454

-1.65%

Non-mark-up/interest income

 

 

 

Fee, commission income

 17,940,372

 13,383,475

34.05%

Dividend income

 491,020

 287,643

70.70%

Share of profits of associates and joint venture

 1,944,752

 2,546,333

-23.63%

Foreign Exchange Income/(loss)

 2,910,528

 (333,426)

(Loss)/ Income from derivatives

 (77,203)

 622,743

Gain on sale of securities – net

 1,569,608

 7,362,042

-78.68%

Other income

 943,492

 198,466

375.39%

Total non mark-up /interest income

 25,722,569

 24,067,276

6.88%

Total income

 122,874,436

 122,851,730

0.02%

Non mark-up/interest expenses

 

 

 

Operating expenses

 70,012,984

 70,284,509

-0.39%

Workers' Welfare Fund

 909,682

 856,682

6.19%

Other charges

 79,104

 292,448

-72.95%

Total non mark-up/interest expenses

 71,001,770

 71,433,639

-0.60%

Profit before provisions and taxation

 51,872,666

 51,418,091

0.88%

Provisions/ (reversals) and write offs-net

 5,495,337

 8,514,690

-35.46%

Profit before taxation

 46,377,329

 42,903,401

8.10%

Taxation

 19,391,383

 17,631,334

9.98%

Profit after taxation

 26,985,946

 25,272,067

6.78%

Earnings per share – basic and diluted (Rupees)

 18.21

 17.17

6.06%

 

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Posted on: 2021-10-15T16:29:53+05:00

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