HBL declared a consolidated profit after tax of Rs25.3 billion for the first nine months of 2020, an almost threefold growth over the same period last year.
Profit before tax for the first nine months of 2020 more than doubled, to Rs42.9 billion. The bank’s earnings per share increased to Rs17.17 compared to Rs5.89 in 9M’19. Aided by the strong earnings stream, the bank’s CAR rose by 125 bps in the third quarter, to 17.8pc.
HBL added more than Rs300 billion in domestic deposits during the first nine months of 2020, increasing total domestic deposits to Rs2.5 trillion and boosting its market share to 14.4pc; HBL’s total deposits reached Rs2.7 trillion. The bank continues to maintain strong current account and CASA ratios of 34.6pc and 81.7pc, respectively.
HBL has continued to support customers through these difficult times, and fully leveraged the various schemes that the SBP has launched to support the economy and businesses. HBL supported its retail customers’ financing needs through these difficult times, in the process showing growth of 16pc in just one quarter, driven by personal and auto loans
HBL recorded net interest income of nearly Rs100 billion driven by a strong 14pc growth in its average domestic deposits. Lower footfall and restricted business volumes during the first half of the year due to lockdowns and the economic downturn has resulted in fee income being lower than last year. However, total non-fund income increased by more than 50pc to Rs24.1 billion helped by realization of capital gains from the proactive build-up of the treasury portfolio over the last year.
Administrative expenses were well controlled and grew by a mere 2pc over 9M’19, while the bank continued to invest in its digital initiatives and strengthen compliance and controls. During 9M’20, the Bank spent over Rs500 million in protective measures for staff and customers across the network and in direct contributions to protect the vulnerable in these very difficult times. Consequently, the cost/income ratio reduced from 76.8pc in 9M’19 to 57.2pc in 9M’20.
Domestic provisions have remained well contained and are nearly 50pc lower than for 9M’19. However, HBL has prudently taken a general provision of Rs6.0 billion as a buffer against potential provisions arising from the impact of the pandemic, thus increasing its coverage to 100pc of non-performing loans.
Q3 2020 continued with a strong business momentum, backed by HBL’s transformative digitization efforts. The quarter saw gains through partnerships with multiple business stakeholders on affordable housing, ground breaking interventions through development finance initiatives and financial inclusion.
HBL has cemented its position as the leading digital bank in Pakistan; its digital payment solutions enable HBL customers the ability to enjoy a cash-less, convenient lifestyle. The bank’s customer base has risen to 27 million customers, driven primarily by an increase in its digital platforms usage. There has been a 93pc increase in HBL Mobile and Internet Banking transactions volume YoY. Konnect by HBL has also seen a 157pc increase in its throughput YoY.
The bank maintains a leadership position in HBL Pay, its cash management proposition. HBL Pay attained175pc growth in volume. Transaction & Employee Banking also showed double-digit growth in digital receivable management, payments, and salary processing through its digital channels.
HBL retained its #1 position in Consumer Finance. The bank ranks #1 in Credit Cards, Debit Cards, Merchant Acquiring, Personal Loans and #2 in Auto Loans. The bank has the largest credit card portfolio in the country (Rs11 billion) with 50,000 cards issued YTD, the highest in the industry. The bank occupies pole position in the industry with its portfolio of 5.9 million debit cards in use. POS acquiring maintains its market leader position with the highest number of POS terminals at 28,500. Rural banking continues to lead the market with a 30pc share. The auto loans business financed an impressive number of 4,550 vehicles.
HBL leads in the corporate & investment banking sphere. The bank continues to work on energy, infrastructure and power projects. China remains an important country for the bank and HBL is the largest executor of CPEC related financing in Pakistan. To underscore the bank’s prowess in this important sector, HBL won the Asiamoney New Silk Road Finance Awards for Best Local Bank in the Region for BRI (South Asia), Best Bank for BRI-related financing in the Region (South Asia), and Best Bank for Infrastructure/Project Finance in the Region (South Asia).
HBL is the predominant market maker in treasury products. The bank’s fixed income has the largest market share and has transacted a large volume of Rs6.5 trillion. HBL Infinity, Pakistan’s first online trading platform, has also seen a sharp increase in its number of users who processed transactions worth $1.7 billion.
While offering a wide range of Islamic banking services, HBL Islamic Banking is forging ahead by providing affordable housing to all. In a first for Pakistan, and on the heels of the historic NAPHDA agreement, HBL Islamic Banking is providing Shariah compliant fixed home finance rentals. Flexible payment tenures are making home ownership a foreseeable reality, whilst expanding the market.
HBL’s innovative Development Finance Group (DFG) is implementing disruptive interventions targeting Pakistan’s agriculture and SME sectors, while serving the underserved farmers of the country. To improve the selling capacity of the financed farmers, HBL has partnered with multiple business partners in various capacities.
During Q3 2020, HBL was recognized for its superior brand, products and services, and ability to execute landmark deals. HBL won the International Banker Award for Best Commercial Bank (Pakistan). HBL also won the Global Islamic Finance Award (GIFA) for Best Islamic Bank for Trade Finance. Furthermore, HBL won Best Banking Tech of the Year and Best Digital Campaign for Konnect by HBL awarded by Pakistan Digital Awards 2020.