Habib Bank Limited (PSX: HBL) has outlined an ambitious roadmap for strengthening its position in Pakistan’s banking sector, placing particular emphasis on deposit growth, digital expansion, and improved operational efficiency. During the bank’s latest corporate briefing, management detailed a multi-layered strategy that centers on increasing its current account (CA) mix, accelerating the shift toward Islamic banking, and enhancing digital financial services for its rapidly expanding user base.
A key focus for the bank moving forward is raising its current account mix to more than 40 percent. Management noted that a higher share of CA deposits will play a critical role in preserving margins and ensuring stable, low-cost funding. This forms a cornerstone of HBL’s balance sheet strategy, especially in a competitive deposit environment. Strengthening core deposits is expected to reinforce the bank’s funding resilience as it continues to scale its local and international operations.
HBL also highlighted the growing importance of Islamic banking in its long-term strategy. The bank has already converted 458 branches to Islamic operations and plans to convert an additional 143 branches as part of its commitment to serving a customer base that now exceeds 40 million individuals. Much of this expansion is expected to focus on Khyber Pakhtunkhwa, a region with strong demand for Shariah-compliant financial services. The bank views its Islamic banking arm as a high-growth segment, especially as customer preferences shift toward faith-based financial products.
Digital banking remains another central pillar of HBL’s growth strategy. The bank reported remarkable progress in digital adoption, with mobile banking payments climbing to Rs8 trillion in the first nine months of 2025. Digital transactions now account for 92 percent of all banking activity, reflecting HBL’s ongoing shift from traditional branch-based banking to a technology-driven model. The bank plans to continue expanding its digital payments footprint while strengthening consumer lending products that are increasingly delivered through mobile channels.
Management shared a positive outlook for the broader economic environment, expecting interest rates to remain stable in the near term. Inflation is projected to rise modestly toward year-end, but this is not expected to disrupt the bank’s operating performance. The stable rate environment is anticipated to help maintain predictable margins, especially as the bank increases its allocation toward floating-rate government securities.
Financial performance for the first nine months of CY25 remained strong. HBL reported a consolidated profit after tax of Rs51 billion, representing a 19 percent increase year-on-year. Net interest income grew 11 percent, supported by growth in CA deposits, reduced cost of deposits, and higher investment in government securities. Total deposits rose to Rs5.1 trillion from Rs4.4 trillion a year ago, with current accounts increasing to Rs1.9 trillion.
Asset quality also improved during the quarter. The infection ratio stood at 4.9 percent in September 2025, slightly lower than in June. The bank’s capital adequacy ratio reached 18.32 percent, comfortably above regulatory requirements and 62 basis points higher compared to December 2024. Strong capitalization continues to support balance sheet expansion and future lending capacity.
HBL further announced a third-quarter dividend of Rs5 per share, bringing its cumulative dividends for the first nine months of 2025 to Rs14 per share. This consistent payout reflects the bank’s ongoing profitability and strengthened financial position.
Overall, HBL’s strategy for the coming period underscores an integrated approach built around deposit growth, digital banking transformation, expansion in Islamic finance, and disciplined cost management. With improvements in asset quality, strong capital buffers, and growing consumer engagement, the bank remains well-positioned as one of the leading institutions shaping Pakistan’s financial ecosystem.
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