HBL - 1QCY23 Result Review, (AKD Off the Analyst's Desk Apr 27, 2023)
Habib Bank Limited (HBL) posted its 1QCY23 earnings earlier today, where the bank announced NPAT of PkR13.3bn (EPS: PkR9.0)—in line with our estimates. The earnings showed growth of 23%QoQ and 54%YoY.
- Net interest income at HBL clocked in at PkR55.8bn, showing an increase of 13%QoQ and 54%YoY, in line with our estimates. The bank’s NIMS improved from 5.5% in 4QCY22 vs. 5.1% in 1QCY23, owing to the increasing interest rates in the country.
- The bank’s profitability during the three-month period was also buoyed by lower provisioning, clocking in at PkR3.2bn in 1QCY23, lower by 35%QoQ and higher by 1.6x on a YoY basis.
- The dampener to earnings during the period was the lower-than-anticipated non-interest income, which clocked in at PkR8.6bn, lower by 23% as compared to the earlier quarter. This sequential decline can be attributed to a loss of ~PkR6bn reported against the bank’s derivatives book. Some respite to the non-interest income at HBL came in the form of a 7%QoQ increase in Fee income, clocking in at PkR9.3bn.
- Operating expenses during the quarter were recorded at PkR39.7bn, higher by 16%QoQ and 29%YoY. This corresponds to a cost-to-income ratio of 62% during the period, compared to 57% in the earlier quarter.
- Lower taxation during the period lent a helping hand to HBL’s bottomline during the Mar’23 quarter, with the ETR clocking in at 38% in 1QCY23 as compared to 50% in 4QCY22.
- Alongside the earnings, the bank also announced a cash dividend of PkR1.5/sh, in line with our estimates, corresponding to a payout ratio of 17% for the quarter, as the bank continues to struggle with its capital position.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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