Habib Bank Limited (HBL) announced its CY16 results today, posting earnings of Rs 31.8 billion and earnings per share (EPS) of Rs 21.7). It also announced a final cash dividend of Rs 3.5 per share.
On a quarterly comparison the bank recorded an EPS of Rs 5.32 in the fourth quarter of 2016 as compared to Rs 5.69 in the third quarter of the year as well as the fourth quarter of the previous year. The Net Interest Income (NII)was 3pc lower on a quarter over quarter basis. According to Taurus Securities Limited report, this happened on account of full quarter impact of PIB maturity which was partially negated through reduction in cost of deposits, and also because of higher administrative expenses owing employee related costs.
The bank also recorded provision reversals in the second consecutive quarter which the report terms as an effect of the improvement in domestic landscape. “Hefty increase of 16.7pc is witnessed in fee income (4Q: PKR4.6bn) on sequential basis which can be tallied to historical trends. Higher capital gains of PKR1.7bn led NFI income to surge by 13% QoQ to PKR7bn,” the report added.
The Effective tax rate for the quarter stands at 32.6pc vs. 37.0pc in the previous quarter which could be attributed to deferred tax income of Rs 169 million as compared to a charge of Rs 135 million in the third quarter of 2016. The expenses for the bank increased on a quarterly basis but the non-interest income for the bank also showed an increase as compared to the third quarter of 2016.
Analysts Umair Naseer agreed to the fact that this result came in line with the market expectations, thereby making HBL a better performer compared to MCB and ABL. Both had announced their annual results last week. He said that the Net Interest Margin (NIM) results came because of the higher than average growth in deposits for the bank along with the provision reversals. Another analyst Adnan Sami Sheikh reiterated that the result was in line with the expectations despite the reduction in the NIM on a quarter over quarter comparison.
