HBL declared another record quarterly profit for Q3CY23 with a profit before tax (PBT) of Rs 32.0 billion, stated a press release issued on Wednesday. The Bank’s consolidated PBT of Rs 83.5 billion for the nine months of 2023 was 50% higher than the PBT for 9M’22.
“Despite continued excessive taxation on the banking sector, the Bank’s profit after tax (PAT) for 9M’23 grew by 82% to Rs 43.0 billion over the same period last year.
“Earnings per share for the first nine months were Rs 29.20 compared to Rs 15.95 for 9M’22. Along with the results, the Bank declared an interim cash dividend of Rs 2.25 per share (22.50%). This is in addition to the Interim Cash Dividend already paid at Rs 3.50 per share (35%).
“HBL’s balance sheet grew by 19% over December 2022 to cross Rs 5.5 trillion, on the back of robust deposit growth. Domestic deposits grew by more than Rs 400 billion over December 2022 and now stand at Rs 3.3 trillion; HBL’s total deposits reached ~Rs 4.0 trillion. During the quarter, domestic advances increased by 5%; even in the face of macroeconomic headwinds, Consumer loans grew by Rs 4 billion over December 2022, agriculture lending touched new highs and microfinance loans increased by 12%.
“The impact of rising rates continues to flow through to asset prices; the average domestic balance sheet grew by Rs 433 billion, while net interest margins improved by 194 bps. This was well supported by substantially higher interest income from the international business. Consequently, HBL’s total net interest income grew by 53% to Rs 178 billion. Trade, consumer finance and cash management also made solid contributions, delivering high double-digit fee growth. Total fees increased by 34% to Rs 30 billion, and the Bank’s total revenue for the first nine months of 2023 increased by 42%, to Rs 216 billion.
“Despite record inflationary levels, proactive cost management and strong revenue growth enabled us to reduce the cost / income ratio from 60.0% in 9M’22 to 57.1% in 9M’23. With the growth in loans during the quarter, the infection ratio reverted down to 5% from 5.5% in Q2’23. Prudent provisioning has ensured that coverage remains in excess of 100%. The strong profitability also improved the Bank’s Capital Adequacy Ratio by 91 bps, to 16.1%,” the press release added.
Commenting on the Bank’s performance, Muhammad Aurangzeb, President & CEO - HBL said, “HBL had a record quarter, driven by excellent results across all domestic business segments and a further improvement in profitability from the international franchise. The Bank continues to provide innovative products and financial solutions to its clients whilst promoting sustainable practices within the HBL community and across the financial services industry. We are investing in cutting-edge methods, practices and technologies to support Pakistani farmers and address the related challenges of agriculture, food security, and climate change. In Q3’23 HBL became a signatory of the UN Principles of Responsible Banking; this commitment will help us accelerate the transition to a net zero economy. The Bank’s Impact & Sustainability Report – 2022 illustrates the new standards for sustainable banking that we are setting in Pakistan, on our journey to being ‘More Than Just a Bank’.”
Business developments
The press release added that HBL’s digital channels continued to play a significant role in shaping Pakistan’s financial landscape, connecting both clients and businesses. HBL Mobile, and Konnect by HBL’s user base expanded to over 4 million users, resulting in 49% more digital transactions than to the same period last year. This led to over Rs 1.3 trillion processed by our mobile apps, double the amount in Q3’22.