Ayesha Mudassar

Bank Al Habib Limited (BAHL) earned a revenue of Rs44.4 billion for the three months ended March 31, 2024, with a notable growth of 44% over the corresponding period of last year, reports WealthPK. The remarkable growth was mainly due to a 50% and 20% rise in net markup income and non-markup income, respectively.

As per the quarterly report, the bank posted a before-tax profit of Rs19.1 billion versus Rs16.5 billion in 3MCY23. However, high taxes resulted in a 5% decline in net profit during the period under review. The bank recorded a profit-after-tax of Rs10 billion versus Rs10.5 billion in 3MCY23.

Performance over last four years (2020-23)

The historical analysis of BAHL demonstrates a positive trend in all key financial indicators, including total income, profit after taxation and earnings per share. This indicates that the bank experienced improved operational and financial performance over the years. BAHL earned a total income of Rs67.8 billion in 2020, Rs69.6 billion in 2021, Rs98.5 billion in 2022 and Rs147.3 billion in 2023. The substantial increase in 2023 was mainly due to an enormous rise in net markup and non-markup income.

The bank hit the highest four-year after-tax profit in 2023 at Rs35.3 billion thanks to a considerable rise in total income during the year. In addition, the bank witnessed an increasing EPS over the years, with the highest EPS of Rs31.78 in 2023. This suggests the bank’s financial performance was generally improving during the years under review.

Historical ratios

The historical ratios of Bank Al Habib Limited provide valuable insights into the company’s financial performance and growth patterns over the years. It experienced fluctuations in its net profit margin, reaching 9.45% in CY23, down from 14.22% in CY22 and 16.02% in CY21. This steady downward trend reflects the company’s inability to implement effective cost management and pricing strategies, contributing to a lower bottom line. Regarding EPS growth, BAHL experienced a significant decline from 59.5% in 2020 to 4.99% in 2021. Between 2021 and 2022, the rate further declined to -11.41% and then observed a significant turnaround in 2023, with a 113.15% increase in EPS growth. This suggests that in 2023, the company experienced a substantial increase in profitability.

The price/earnings to growth (PEG) ratio became negative (-0.32) in 2022, indicating an uncertain situation due to the drop in EPS growth.

About the bank

Bank Al Habib is a banking company incorporated in Pakistan on October 15, 1991 as a public limited company under the now repealed Companies Ordinance, 1984. It is a scheduled bank principally engaged in the business of commercial banking.

Future outlook

The bank will continue to play its vital role in creating sustainable value for stakeholders and supporting a robust economic momentum in the country. In the foreseeable future, the bank’s business strategy will remain focused on digitizing and extending financial solutions across all segments.

Credit: INP-WealthPk