Ayesha Mudassar

Habib Bank Limited (HBL), the country's largest commercial bank, reported a profit of Rs43.3 billion during the first nine months of the ongoing calendar year 2024 compared to Rs42.8 billion during the same period last year, reports WealthPK.

The bank's improved performance can be attributed to several key factors, including strong volumetric growth in average earning assets, improved spreads and effective management of investment durations. According to the results available with the Pakistan Stock Exchange (PSX), HBL registered a profit-before-tax of Rs86.6 billion for 9MCY24 compared to Rs83.01 billion in 9MCY23. Moreover, the bank announced earnings per share (EPS) of Rs29.58 for the period under review. The bank's net markup income grew by 5%, reaching Rs173.2 billion in 9MCY24, up from Rs164.2 billion in 9MCY23.

Non-markup income increased significantly, rising 43% year-on-year (YoY) to Rs53.2 billion. This growth was primarily driven by a substantial increase in foreign exchange income and a significant reduction in losses on securities. Habib Bank's prudent investment strategy and strong transactional banking have contributed to its asset base surpassing Rs6.2 trillion as of September 30, 2024. This growth was largely fuelled by a 24% rise in net investments, which reached Rs3.1 trillion during the period under review.

Furthermore, driven by effective marketing campaigns and customer acquisition efforts, the bank's deposit base grew by 16%, reaching Rs4.8 trillion as of September 30, 2024. Amidst challenging operating conditions, HBL has demonstrated resilience and achieved significant growth in both its balance sheet and net profits.

Performance over last four years

The historical analysis of HBL reveals a consistent positive trend in total income over the past four years. It grew from Rs147.7 billion in 2020 to Rs151.6 billion in 2021, before leaping to Rs190.3 billion in 2022 and Rs227.2 billion in 2023. The substantial rise in 2023 was primarily attributed to enormous growth in both net markup and non-markup income. Regarding profit-after-taxation, the bank achieved its highest profit in 2023, amounting to Rs56.8 billion, reflecting the strong increase in total income for the year.

Additionally, the bank witnessed increasing earnings per share, with the highest EPS of Rs38.76 achieved in 2023. This suggests the bank's improved financial performance and greater value generated for shareholders. The bank's robust financial results highlight its customer-centric approach, coupled with effective risk management practices.

Future outlook

The bank will continue to play a pivotal role in creating sustainable value for its stakeholders while supporting the country's economic growth. Looking ahead, the bank's strategic focus will be on advancing digitisation and expanding its range of financial solutions across all segments.

Credit: INP-WealthPk