Habib Bank Limited (HBL) over the years, has grown its branch network and maintained its position as the largest private sector bank in Pakistan and is also shaping the future by a paradigm shift as a technology company with a banking license. HBL’s multiple digital channels are assisting it get closer to its customers by innovative and frictionless ways. No doubt, the bank is a leading full-service commercial bank. The key areas of operation are Branch Banking, Corporate & Investment Banking, Treasury, SME & Rural Banking, Financial Institutions & Global Trade Services, Transaction Banking and Islamic Banking.
Presently in the financial statements for the nine months ended September 30, 2020, the financial experts of HBL noted that despite the Covid-19 situation and challenging environment, HBL’s focus on customers and key activity drivers has delivered strong results, with profit-before-tax for the first nine months of 2020 greater than doubling to Rs 42.9 billion over the corresponding period previous year. The Bank’s domestic franchise continues to gather momentum, leveraging HBL’s innate brand strength. Profit after tax of Rs 25.3 billion for 9M’20 is almost three times higher than for 9M’19.
HBL enjoys a significant international footprint and is the largest domestic multinational. The Bank’s international footprint is important as it provides opportunities to effectively serve its core customers across its network. As the leading financial intuition of Pakistan, HBL is at the forefront of all development initiatives which includes growth of priority sectors and targeting the unbanked population in the country. As the leading financial institution of Pakistan, HBL remains committed to its objective of financial inclusion for all segments of society. The financial experts of HBL also calculated that earnings per share (EPS) for 9M’20 grew to Rs 17.17 as against to Rs 5.89 for the corresponding period previous year. Domestic deposits increased by over Rs 300 billion during the first nine months of 2020, to Rs 2.5 trillion, with HBL’s market share rising from 13.9 percent in December 2019 to 14.4 percent in September 2020.
The experts also mentioned in the statistics that the bank’s total deposits grew to Rs 2.7 trillion, growing by 12.2 percent over December 2019. Consumer lending has grown 16 percent in just the last quarter, mostly driven by personal and auto loans – the Bank’s market positioning in auto financing has jumped from fourth to second. However, subdued domestic demand resulting from the pandemic’s impact has resulted in a 4.5 percent decline in the HBL’s total domestic advances, to Rs 932 billion. International advances grew by 2.1 percent over December 2019, to $ 1.3 billion. Total advances, consequently, declined slightly to Rs 1.1 trillion. At HBL, the management is seeing an acceleration of digital usage, adoption and transaction volumes as customers adapt to the new reality. It is expected that the management will continue to invest in developing market-leading solutions for its clients while ensuring that technology infrastructure and security are robust to support these initiatives. HBL considers itself an integral part of this nation’s fabric and has always been in the forefront of supporting Pakistan. It is also recorded that the management of the bank has stepped up with its mantra of public-private partnership, offering thought leadership across a broad spectrum of areas, from hosting Pakistan’s leading Information Security conference to supporting the government in developing a national compliance framework to playing a leading role in low cost housing finance and attracting inflows by the new Roshan Digital Account scheme.
On the other hand, the financial experts also calculated in the financial report that led by a growth of over Rs 260 billion in average deposits, HBL’s average domestic balance sheet increased by 15 percent over 9M’19. Net interest margin enhanced over last year as the steep rate cuts in 1H’20 resulted in interest bearing liabilities repricing earlier than interest earning assets. Consequently, domestic net interest income for 9M’20 grew by 37 percent to Rs 93 billion with HBL’s total net interest income growing by 33 percent over 9M’19, to nearly Rs 100 billion. Fee income for 9M’20 reduced by 13 percent over the same period last year, primarily because of lower transaction volumes and business activities induced through the lockdowns; however, with their lifting, fee income is normalizing, growing by 8 percent over the last quarter in 3Q’20.
Statistics also showed that total non-fund income grew through greater than 50 percent as HBL realized capital gains of Rs 8.2 billion on its fixed income portfolio. Total revenue for the first nine months of 2020 thus grew to Rs 122.9 billion. In the financial statement of the bank , it is also noted that the management of the bank is also humbled and honoured to have led the government’s efforts in Sindh, Punjab and Balochistan to enable delivery of the Ehsaas Emergency Cash program, the largest social safety net initiative in the country’s history, during which HBL distributed Rs 176 billion to 12 million beneficiaries. At this critical time, HBL has been a leading institution in using the liquidity and funding assistance made available by the SBP, particularly in its Rozgar Scheme, to ensure that workers continue to get paid and that funds continue to flow wherever they are needed by businesses. HBL has also taken on a number of development finance initiatives in the agriculture sector to fulfil its role in the development of Pakistan. During 9M’20, the bank furthermore spent over Rs 500 million in protective measures for staff and customers across the network and in direct contributions to protect the vulnerable in these very hard times. However, administrative expense growth was contained to only 2 percent as costs related to New York and the Business Transformation programs have receded. HBL has prudently recorded a COVID-19 related general provision of Rs 6.0 billion in its domestic business. The coverage ratio improved from 93.2 percent in December 2019 to 100.0 percent in September 2020.