Habib Bank Q3 profit soars 82 percent as net interest income surges

KARACHI: Habib Bank Ltd on Wednesday reported a record quarterly profit for the third quarter of 2023, driven by strong growth in net interest income and fee income. 

The bank's profit before tax rose 50 percent to Rs83.5 billion in the nine months ended September, compared with the same period a year earlier, according to a statement. Profit after tax jumped 82 percent to Rs43 billion, while earnings per share increased to Rs29.20 from Rs15.95.

The bank declared an interim cash dividend of Rs2.25 per share, in addition to the Rs3.50 per share paid earlier this year.

HBL's total assets grew 19 percent to Rs5.5 trillion as of September, supported by robust deposit growth. Domestic deposits increased by more than Rs400 billion to Rs3.3 trillion, while total deposits reached about Rs4 trillion. Domestic advances rose 5 percent, with consumer loans, agriculture lending and microfinance loans showing strong performance.

The bank's net interest income surged 53 percent to Rs178 billion, as the average domestic balance sheet expanded by Rs433 billion and net interest margins improved by 194 basis points. Interest income from the international business also increased significantly. Fee income grew 34 percent to Rs30 billion, boosted by trade, consumer finance and cash management activities.

The bank's cost-to-income ratio improved to 57.1 percent from 60 percent a year ago, despite high inflationary pressures. The infection ratio declined to 5 percent from 5.5 percent in the previous quarter, while the coverage ratio remained above 100 percxent. The capital adequacy ratio improved to 16.1 percent from 15.2 percent.

"HBL had a record quarter, driven by excellent results across all domestic business segments and a further improvement in profitability from the international franchise," Muhammad Aurangzeb, president and chief executive officer of HBL, said in the statement. "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."

MCB Bank boosts dividend as profit jumps 122pc

MCB Bank Ltd. (MCB) announced a third interim cash dividend of 80 percent for the nine months ended Sept. 30, 2023, bringing the total payout to 210 percent, as the lender posted a record profit before tax of Rs88.1 billion.

The bank's profit after tax surged 122 percent to Rs44.1 billion, or Rs37.25 per share, from Rs16.75 a year earlier, according to a statement on Wednesday.

The bank attributed the strong performance to higher net interest income, which rose 73 percent year-on-year, and growth in fee commission income, which increased 38 percent.

MCB's non-performing loan ratio improved to 8.45 percent from 9.93 percent at the end of 2022, while its coverage ratio rose to 82.86 percent from 80.57 percent.

The bank's total assets grew 15 percent to Rs2.39 trillion, driven by a 29 percent increase in net investments. The bank's current deposits grew 30 percent year-on-year, while its cost of deposits rose to 8.63 percent from 6.21 percent.

The bank's return on assets and return on equity improved to 2.63 percent and 31.84 percent, respectively, while its book value per share was reported at Rs167.81.

NBP profit doubles to record Rs38.2bn in nine months

National Bank of Pakistan (NBP) reported a record profit before tax of Rs70.6 billion for the nine months ended September 30, 2023, up 46 percent from a year earlier, as it benefited from higher interest income and lower provisioning.

The bank's board of directors declared an interim cash dividend of Rs5 per share for the nine-month period of 2023.

The state-owned lender said in a statement that its net interest income, the difference between interest earned and interest paid, rose 49.6 percent to Rs120.6 billion, while its non-interest income declined slightly to Rs24.7 billion. The bank's operating expenses increased 19.2 percent to Rs65.2 billion, but its cost-to-income ratio improved to 44.9 percent from 51.7 percent a year ago.

The bank's net profit after tax doubled to Rs38.2 billion, or Rs17.9 per share, from Rs19.2 billion , or Rs9 per share, in the same period of 2022. The bank's return on equity, a measure of profitability, jumped to 23.8 percent from 13.1 percent a year ago.

The bank's asset quality also improved, as its non-performing loans (NPLs) ratio declined to 13.4 percent from 14.4 percent at the end of 2022. The bank's provision coverage ratio, which shows how much it has set aside for bad loans, increased to 92.6 percenr from 88.8 percent.

The bank said it has prudently maintained general loan loss reserves to buttress its balance sheet amid the prevailing economic conditions.

The bank's total assets grew 26.7 percent year-to-date to reach Rs6.6 trillion, making it the first Pakistani bank to cross the Rs6 trillion mark. The bank's investments increased 19.5 percent to Rs4.2 trillion, while its advances grew 6 percent to Rs1.5 trillion. The bank's deposits rose 18.8 percent to Rs3.3 trillion, with a current and savings account (CASA) ratio of 78.9 percent.

The bank said it is making significant investments in upgrading its IT systems and infrastructure to enhance its operational efficiency and customer service.

UBL posts 126pc profit growth in Q3

United Bank Limited (UBL) on Wednesday reported a consolidated profit after tax (PAT) of Rs15 billion for the third quarter of 2023, up 126 percent from the same period last year.

The bank's earnings per share (EPS) rose to Rs12 from Rs5.3 a year ago. The bank also announced a dividend of Rs11 per share, taking the total dividend for the first nine months of 2023 to Rs33 per share.

The bank's strong performance was driven by higher net interest income (NII), which grew by 37 percent year-on-year and 6 percent quarter-on-quarter to Rs40 billion rupees in the third quarter, reflecting rising asset yields and deposit growth.

The bank also booked reversals in loan provisions amounting to Rs9.1 billion in the third quarter, offsetting a loss of Rs7.8 billion on securities.

The bank's non-interest income, however, remained subdued, as fees and commission income stayed flat at Rs4.9 billion and foreign exchange income declined by 24 percent year-on-year and 12 percent quarter-on-quarter to Rs2.3 billion in the third quarter.

The bank's operating expenses increased by 29 percent year-on-year and 11 percent quarter-on-quarter to Rs36.5 billion in the third quarter, mainly due to inflationary pressures.

The bank's cost-to-income ratio jumped to 48 percent in the third quarter, compared to 42 percent in the previous quarter and 40 percent in the same quarter last year.