Habib Bank Limited (HBL) has announced a notable financial performance for the first nine months of 2024, declaring a consolidated profit before tax of Rs. 85.9 billion, marking a 3% increase compared to the same period last year. This upward trajectory highlights HBL’s commitment to robust financial management and strategic growth across its diverse business segments.
The bank’s profit after tax soared to Rs. 43.3 billion, translating to earnings per share of Rs. 30.03 in the first three quarters of 2024. This impressive financial outcome has allowed HBL to declare an interim dividend of Rs. 4 per share, equivalent to 40%. This dividend is in addition to a previously declared interim cash dividend of Rs. 8 per share, or 80%, illustrating HBL’s solid performance and commitment to shareholder returns. The bank also reported contributing Rs. 52.9 billion in taxes to the national exchequer, underscoring its role as a key player in the economy.
HBL’s balance sheet exhibited substantial growth, expanding by 12% from December 2023 to reach Rs. 6.2 trillion. This growth was bolstered by a remarkable Rs. 660 billion increase in deposits, which climbed to Rs. 4.8 trillion. Notably, domestic deposits surged by 18% during the same period, amounting to Rs. 4.1 trillion. A significant portion of this increase was attributed to low-cost deposits, with the CASA (Current Account Savings Account) ratio improving to 87.3%. The reduction in policy rates has also spurred lending activity, as evidenced by a 3.9% increase in advances during the quarter, bringing the total to Rs. 1.8 trillion.
The bank’s net interest income experienced a growth of 4.2%, reaching Rs. 185.3 billion, driven by increased volumetric expansion in both domestic and international markets. HBL’s non-fund income soared to Rs. 60.7 billion, reflecting a staggering 60% increase compared to the same period last year. This growth in non-fund income was propelled by a 20% rise in fees, totaling Rs. 36.6 billion in the first nine months of 2024. The bank’s flagship Cards business emerged as a significant contributor, with branch fees, remittances, and Bancassurance also bolstering total fee income. Consequently, HBL’s total revenue surged by 14% to Rs. 246.0 billion.
HBL’s focus on cost optimization has effectively contained expenses, leading to a reduction in the cost-to-income ratio to 55.6% for the third quarter of 2024. The bank’s Capital Adequacy Ratio (CAR) reached a four-year high of 16.39%, while the Tier-1 CAR increased by 11 basis points to 12.55%, significantly exceeding minimum regulatory requirements.
Muhammad Nassir Salim, President & CEO of HBL, attributed the bank’s strong results to its leadership position across various business segments and a steadfast commitment to enhancing client service. He emphasized HBL’s ongoing digital transformation, stating that a majority of transactions are now conducted through digital platforms. Salim reaffirmed the bank’s strategic priorities, focusing on sectors such as agriculture, small and medium enterprises (SMEs), and sustainability, further contributing to the national exchequer through substantial tax payments.
In terms of business developments, HBL’s mobile and internet banking platforms experienced impressive year-on-year growth, with a 34% increase in financial transactions and a 26% rise in service requests, processing over Rs. 2 trillion in the third quarter of 2024. Konnect by HBL processed a significant volume of Rs. 586 billion, reflecting a 16% year-on-year growth.
Furthermore, HBL’s commitment to the agriculture sector remains strong, with total lending exceeding Rs. 57 billion. The bank’s initiatives to boost the SME sector have resulted in a remarkable 19% year-on-year increase in advances, totaling Rs. 91 billion. HBL continues to maintain its leadership in Transaction and Employee Banking, with transaction banking throughput rising by 28% to Rs. 13.7 trillion compared to the same period last year. Digital transactions accounted for 84% of overall business, underscoring the bank’s successful digital strategy.
In conclusion, HBL’s exceptional performance in the first nine months of 2024 highlights its resilience, adaptability, and strategic focus on growth, setting a positive tone for the bank’s future endeavors in an evolving economic landscape.