HBL delivers stellar performance with Q1 2021 profit doubling to Rs14.5 b

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Observer Report
Karachi

HBL declared a consolidated profit before tax of Rs 14.5 billion for the quarter ended March 31, 2021, more than double that for the same period last year. Profit after tax recorded a growth of 108% over Q1 2020 to Rs 8.6 billion.

The Bank’s earnings per share increased from Rs 2.79 to Rs 5.68 in Q1 2021. Along with the results, the Bank declared a dividend of Rs 1.75 per share (17.5%).

Helped by the strong profitability, the Bank’s Tier 1 CAR rose to 13.9%, with Total CAR increasing to 17.9%.

The Bank’s total deposit base closed at Rs 2.8 trillion, with robust CA and CASA ratios of 35.1% and 83.1% respectively. Average domestic deposits increased by a multi-year high of nearly 20% over Q1 2020, with average current accounts rising by more than Rs 120 billion.

This led to a nearly Rs 500 billion expansion in the Bank’s average balance sheet in Q1 2021.

Consequently, despite a much lower interest rate environment, net interest income rose to Rs 32.5 billion, a 16% growth over Q1 2020.

HBL’s market-leading Consumer business continues to outperform in multiple aspects, with loans growing to nearly Rs 85 billion; total advances of the Bank were maintained at Dec 2020 levels of Rs 1.2 trillion.

Total non-fund income of the Bank has grown by 42% over Q1 2020 to Rs 8.2 billion. Fees and commissions continued to accelerate, increasing by 25% over Q1 2020 to Rs 5.9 billion.

Expenses remain well contained despite the Bank’s continued investments in people and technology.

The Bank reduced its administrative expenses by 7% over Q1 2020 as the cost to income ratio (excluding capital gains) improved to 58.4% in Q1 2021 from 81.4% in Q1 2020.

Total NPLs of the Bank declined by Rs 0.7 billion over Dec 2020, with the infection ratio remaining stable at a record low of 6.3%. The Bank’s total coverage improved to over 100%, with the specific coverage at 86%.