April 23, 2025 – Habib Metropolitan Bank Limited (PSX: HMB) has announced a modest uptick in its quarterly earnings, reflecting a profit after taxation of Rs6.24 billion, marking a 1.96% year-on-year increase from Rs6.12 billion reported in the same period last year. The bank’s performance highlights resilience amid shifting interest rate dynamics and rising operational costs.
To reward shareholders, the bank declared an interim cash dividend of Rs2.5 per share, translating to a 25% payout ratio, in line with its consistent dividend policy.
The bank’s earnings per share (EPS) also saw a slight rise, coming in at Rs5.8, up 2.11% from Rs5.68 recorded during the corresponding period last year. This increase aligns with the bank’s stable financial performance and effective income diversification strategies.
Despite a significant 28.78% drop in mark-up/return/interest earned, which stood at Rs42.78 billion, HMB managed to report a 7.59% growth in net mark-up/interest income, which totaled Rs18.08 billion. This improvement was largely supported by a sharp 42.9% reduction in mark-up/interest expenses, which decreased to Rs24.7 billion, helping the bank maintain healthy interest spreads.
What truly bolstered the bank’s bottom line this quarter was the exceptional performance on the non-mark-up/interest income side. HMB reported a 45.64% surge in non-interest income, reaching Rs5.45 billion, up from Rs3.74 billion last year. This growth was driven by:
- A 55.25% increase in foreign exchange income, reaching Rs2.02 billion.
- A 15.16% rise in fee and commission income, totaling Rs2.85 billion.
- A 29.93% jump in dividend income, which stood at Rs269 million.
- A recovery in securities, with the bank registering a net gain of Rs250.72 million, compared to a loss of Rs267.14 million in the same quarter last year.
- A notable 131.36% growth in other income, albeit from a smaller base.
These components helped boost HMB’s total income to Rs23.53 billion, a 14.52% increase over the prior year.
However, this strong income performance was partially offset by rising expenses. Operating expenses rose by 25.11% to Rs9.3 billion, while total non-mark-up expenses climbed 23.67% to Rs9.58 billion. Additionally, allocations to the Workers’ Welfare Fund increased by 9.4%, amounting to Rs267.5 million.
On the credit front, the bank reported a 23.9% decline in credit loss allowance and write-offs, which dropped to Rs678 million, suggesting improved asset quality or tighter credit controls.
The bank’s profit before taxation increased by 11.45%, reaching Rs13.26 billion, compared to Rs11.9 billion last year. However, higher tax liabilities—up 21.51% to Rs7.02 billion—dampened the net profit growth rate.
Ultimately, the profit attributable to equity shareholders grew 2.09%, rising to Rs6.08 billion, while profit from non-controlling interest slightly decreased by 2.54%.
Habib Metropolitan Bank’s results reflect a balanced financial performance characterized by strategic cost management, strong growth in non-interest income, and improved credit quality. While interest-based income remains under pressure, the bank’s diversified revenue streams continue to support sustainable profitability.
As Pakistan’s banking sector adapts to macroeconomic shifts and changing regulatory landscapes, HMB’s quarter illustrates how digital diversification and core business strength can help mitigate traditional income volatility.