Habib Bank Limited (HBL) announced its financial results for the year ended December 31, 2022. The bank increased its total income by 27% to Rs 212 billion. However, increase in expenses coupled with a 49% super tax resulted in a slight decline of 3% in the bank’s net profit to Rs 34.39 billion.
Before tax profit, on the other hand, registered an increase of 24% to Rs 77 billion compared to last year. The bank also announced a final cash dividend of Rs 1.5, taking the total dividend payout for the year to Rs 6.75.
Although the bank’s profit after tax (PAT) is still impressive, it hasn’t been able to perform well compared to other big banks such as Meezan bank (58.3% increase in PAT) and Bank Alfalah (28.1% increase in PAT).
During the past year, HBL’s balance sheet grew by 7.4% to Rs 4.6 trillion with total deposits at Rs 3.5 trillion. The bank increased current accounts by over Rs 200 billion and low-cost savings by Rs 136 billion, closing the year with total domestic deposits of Rs 2.9 trillion. HBL also continued its supply of credit, growing domestic advances by Rs 241 billion to Rs 1.4 trillion, a growth of more than 20% over 2021. The bank’s Advances to Deposit Ratio (ADR) rose to 52.9%.
The flagship consumer business increased lending by Rs 20 billion to Rs 122 billion, while commercial lending crossed a key milestone of Rs 100 billion. HBL Microfinance also continued to support the most vulnerable, increasing its inclusion efforts and growing loans by 50% to Rs 85 billion.
Net Interest Income increased by 26% to Rs 166 billion, driven by a Rs 540 billion growth in average balance sheet volumes and margin expansion of 81 bps. The Bank continues to retain its leadership in fee income, which posted a double-digit growth of 24% to reach Rs 31.5 billion. Nearly 50% of the growth came from its market leading Cards business, where HBL’s Platinum Card is in constant demand. This helped total non-fund income to rise by 29% to Rs 46.7 billion. Total revenue thus grew by 27% over 2021 to Rs 212 billion, HBL’s highest ever.
HBL’s total administrative expenses were Rs 124.8 billion as persistent inflation and rapidly escalating fuel and utility costs created pressure across all categories. The bank’s infection ratio improved from 5.1% to an all-time low of 4.8% while provision coverage was prudently maintained at above 100%.
Commenting on the bank’s performance, Muhammad Aurangzeb, President & CEO – HBL said, “The bank has delivered excellent results despite the challenging macroeconomic environment. As a testament to our client-centric approach, HBL’s performance was propelled by strong organic growth across all business segments and activity drivers, solidifying our leading position in all client segments. Moreover, HBL is actively working on financial inclusion initiatives supported by significant investments in technology and digitalization. During 2022, HBL remained conscious of its responsibility to support clients and the broader economy.”
Business Development
HBL’s digital channels continued to play a significant role in shaping Pakistan’s financial landscape in 2022, processing over 310 million financial transactions worth more than Rs 4.3 trillion. Throughput saw a collective growth of over 55%, a testament to our commitment to becoming a ‘Technology Company with a Banking License’.
During the year, Mobile Banking witnessed a growth of 107% YoY. The bank launched the HBL Islamic Mobile app to provide convenience for clients with Shariah-compliant needs. In another industry first, HBL enabled financial transactions through the HBL WhatsApp banking channel; it continues to grow with a 43% increase in the user base in 2022.
The bank made significant strides in Agriculture financing, increasing its portfolio by 27% YoY and surpassing the Rs 50 billion milestone, a new record. HBL was declared the ‘Best Bank in Agriculture’ under the Large Banks category for 2021-22 by SBP, while HBL Microfinance received the same award in the Microfinance Banks segment. As the champion Bank for Balochistan, HBL led the industry with the highest-ever disbursements in the province. HBL also scaled up its agriculture pilot interventions in three districts in Punjab. These covered more than 25,000 acres and resulted in yield enhancements of more than 14%.
HBL continued to reinforce its leadership position across its multiple business areas. It became the first Bank to cross 100,000 RDA accounts, with over USD 900 million channeled into the country. In cash management, the Bank maintained its dominant position, increasing throughput by 56% to Rs 12.3 trillion. HBL remains the “go-to” bank for Investment Banking transactions and closed deals valued at over Rs 200 billion in 2022. The Bank also advised and closed Pakistan’s first and largest hybrid REIT issuance.
In the Pakistan Stock Exchange (PSX), HBL’s share price declined 5.21% during the Friday trading session to close at Rs 69.56.
