Habib Bank Limited (PSX: HBL) has announced a strong financial performance for the nine months ended September 30, 2025, recording a profit after tax (PAT) of Rs51.38 billion, reflecting an 18.78% year-on-year increase from Rs43.25 billion in the same period last year. This marks a notable improvement in the bank’s profitability despite ongoing challenges in Pakistan’s economic and financial environment.
Earnings per share (EPS) for the period stood at Rs34.97, up from Rs30.03 in the same period last year, supported by improved net interest margins and a reduction in credit loss provisions.
The bank’s Board of Directors announced a third interim cash dividend of Rs5.00 per share (50%) for the quarter ended September 30, 2025. With this declaration, HBL’s cumulative dividend payout for the nine-month period has reached an impressive 140% (Rs14.00 per share), including earlier interim dividends totaling 90%. The payout underscores the bank’s consistent commitment to shareholder value and its strong capital position.
HBL’s total income demonstrated growth across key areas, despite the broader decline in interest rate trends. The bank’s mark-up or interest earned dropped 19.76% to Rs503.40 billion from Rs627.34 billion in the same period last year, reflecting the impact of lower yields in a declining policy rate environment. However, mark-up or interest expensed decreased at a sharper pace—falling 32.73% to Rs296.08 billion from Rs440.16 billion—leading to a 10.77% increase in net mark-up income, which reached Rs207.33 billion.
The bank’s non-mark-up income also grew by 11.25% to Rs67.54 billion from Rs60.71 billion, showing strength in revenue diversification. Within this segment, foreign exchange income rose 21.44% to Rs6.77 billion, supported by currency market volatility and robust trade finance activity. Gains on securities showed a major jump of 113.98% to Rs14.05 billion, reflecting favorable investment performance and strategic portfolio management.
On the other hand, fee and commission income slipped 6.36% to Rs34.25 billion, attributed to slower transaction-based activity. Dividend income grew 7.65% to Rs2.91 billion, while profit from associates climbed 26.41% to Rs4.88 billion, showing solid returns from equity-linked investments.
HBL’s total operating expenses rose by 8.38% to Rs152.66 billion from Rs140.86 billion, mainly due to inflationary pressures, ongoing technology investments, and business expansion costs. However, this increase remained below the growth rate of total income, indicating improved operational efficiency. Total non-mark-up expenses increased by 8.34% to Rs154.89 billion, while the Workers’ Welfare Fund rose 20.33% to Rs2.13 billion.
The bank’s profit before credit loss allowances and taxation grew 14.36% to Rs119.97 billion from Rs104.91 billion. A key positive factor in the results was the substantial decline in credit loss allowances and write-offs, which dropped 58.95% to Rs7.81 billion from Rs19.03 billion last year. This reflects improved loan book quality and stronger risk management amid a gradually stabilizing credit environment.
Following provisions, profit before taxation (PBT) surged 30.60% to Rs112.16 billion, compared to Rs85.88 billion in the previous year. Taxation expenses, however, increased 42.59% to Rs60.78 billion, bringing net profit after taxation to Rs51.38 billion.
The profit attributable to equity holders of the bank stood at Rs51.29 billion, up 16.46% year-on-year, while non-controlling interests accounted for Rs86.99 million, reversing a loss of Rs789.95 million in the same period last year.
HBL’s robust financial results for 2025 reflect strategic execution in managing costs, strengthening asset quality, and optimizing its investment and lending portfolios. With a strong dividend payout and sustained profitability growth, the bank remains a leading player in Pakistan’s financial sector.
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