HBL - CY22 Result Review, (AKD Off the Analyst's Desk Feb 24, 2023)
AKD, Off the Analyst's Desk
HBL - CY22 Result Review
Habib Bank Limited (HBL) has reported its earnings earlier today, wherein the bank posted 4QCY22 NPAT of PkR10.8bn (EPS: PkR7.3), lower by 7%QoQ—in line with our expectations. This takes the full-year earnings to PkR34.4bn (EPS: PkR23.2), 3% lower than the earlier year.
- Net interest income for the final quarter clocked in at PkR48bn, higher by 14%QoQ and 40%YoY. The increase can be attributed to an expansion in the bank’s NIMs to 5.1% in 4QCY22 compared to ~4.2% in 3QCY22.
- Non-interest income for the final quarter was reported at PkR11.1bn, which was higher than expected, as a drop in FX income was offset by higher fee income. To note, the FX income declined from a positive contribution of PkR4.8bn in 3QCY22 to a negative contribution of PkR772mn in 4QCY22, whereas fee income increased by 13%QoQ to PkR8.7bn in 4QCY22.
- Provisions for the quarter were recorded at PkR4.9bn, higher by 5.2x compared to the earlier quarter. The higher provisioning was on account of PkR1.9bn provisioning against GoP US$ bonds and PkR1.4bn provisioning against foreign currency government bonds.
- The Operating Expenses for the bank clocked in at PkR34.3bn, higher by 6% compared to the earlier quarter. Hence, the cost-to-income ratio for the final quarter clocked in at 56.6%, compared to 59.7% in the earlier quarter.
- The bank was able to improve its deposit mix in favor of the current accounts—making up 40.3% of total deposits at the end of CY22, compared to 38.5% in the earlier quarter.
- The bank’s ADR at the end of the quarter stood at 51.4% at the end of the year, compared to 50.9% in 3QCY22. The infection ratio stood at 4.8% as of Dec’22, compared to 5.1% in 3QCY22, while the coverage as at Dec’22 stood at 101%.
- The consolidated Total CAR of the bank has dropped to 14.8% at the end of the year, compared to 15.3% at the end of 3QCY22 (regulatory limit: 13.0%).
- Alongside the earnings, the bank announced a cash dividend of PkR1.5/sh for the quarter, taking the full year payout to PkR6.75/sh.
AKD Research
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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