Karachi August 24 2021: The Bank has achieved significant milestones during the second quarter of 2021 as HBL became the first bank in Pakistan to achieve a balance sheet footing of PKR 4 trillion, a growth of 7 percent over Dec’20. This was achieved on the back of strong deposit mobilization as HBL’s total deposits grew by 10 percent, crossing the PKR 3 trillion threshold, to reach PKR 3.1 trillion.
HBL achieved another industry first, crossing the PKR 1 trillion mark in current accounts, which increased by 10percent over Dec’20 to PKR 1.1 trillion.
With credit demand gathering momentum, domestic advances increased by 4 percent, crossing PKR 1 trillion for the first time. The Bank’s Consumer business continues to perform exceptionally well, with its industry-leading loan book growing by 14 percent over Dec’20 to PKR 90 billion. With continuing rebuilding of the international lending book – which grew by 20 percent – HBL’s total advances increased by 7 percent over Dec’20 to PKR 1.3 trillion.
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HBL has delivered a consolidated profit before tax of PKR 31.2 billion for the first half of 2021, a growth of 21 percent over the PKR 25.8 billion reported for the first half of 2020. This has been achieved as a result of continued strong performance by the domestic franchise – where all key activity drivers remain on an upward trajectory – helped by the absence of New York costs and improvements in the International business. Concurrently, the Bank’s profit after tax has increased from PKR 15.2 billion in H1’20 to PKR 18.0 billion in H1’21, with earnings per share rising from PKR 10.32 to PKR 12.04 over the same period.
Despite the industry-wide margin compression due to the low interest rate environment, HBL’s net interest income grew by 3percent to PKR 64.9 billion in H1’21; an increase of PKR 350 billion in average deposits drove an average balance sheet growth of PKR 400 billion, across both domestic and international businesses. Excluding capital gains, the Bank’s non-fund income demonstrated a robust growth of 62 percent over H1’20. Fees and commissions were the main driver of this strong performance, increasing by 32 percent, to nearly PKR 12.0 billion. The growth in fees was broad-based, with double-digit increases across most key lines, but with standout contributions from Cards and Consumer Finance, and a solid growth in trade, where volumes increased by over 85 percent. Total revenue of the Bank thus increased by 3 percent over H1’20 to PKR 82.5 billion.
HBL’s administrative expenses reduced by 2 percent over H1’20, despite continuing investment in digital initiatives, technology infrastructure upgrades and people. Consequently, the Bank’s cost to income ratio (excluding capital gains) improved from 65.3 percent in H1’20 to 57.8 percent in H1’21. Total provisions reduced by 32 percent over H1’20 to PKR 3.7 billion in H1’21, with the latter mainly emanating from prudent subjective provisioning. Total NPLs of the Bank have declined by PKR 5.5 billion over Dec’20 and, coupled with a rise in lending, resulted in the infection ratio reducing to an all-time low of 5.5 percent in Jun’21. HBL’s specific coverage also improved to 88.2 percent.
