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HBL_CY20 Result Review , (AKD, Off the Analyst's Desk, Feb 17, 2021)

AKD Research - Off the Analyst's Desk

February 17, 2021

HBL: CY20 Result Review                                                                 

 

·         Habib Bank Limited (HBL) announced its CY20 results today, where the bank reported below expected dividend (PkR3/sh, c. CY20 DPS: PkR4.25) and earnings which took toll on its stock performance (down 5.58%DoD).

·         The bank reported CY20 earnings of PkR31.0bn (EPS: PkR21.1) compared to PkR15.5bn (EPS: PkR10.4) last year. For 4QCY20, earnings stood at PkR3.89/sh, down 44.1%QoQ/15.5%YoY. Major deviation in earnings came from lower than expected non-funded income of the bank (down 12.1%QoQ/22.1%YoY).

·         Within non-funded income, significant decline in associates’ profit (down 68.4%QoQ) and FX income (down 58.1%QoQ) overshadowed recovery in fee income (+20.7%QoQ).

·         Gross yield of the bank expectedly diminished to 49.5% in 4QCY20 vs. 55.1% in the previous quarter as assets underwent lagged repricing. As a result, net interest income declined 12.3%QoQ.

·         Operating expenses surged 5%QoQ, surprisingly contained than seen historically in 4Qs. Provisioning expense was +21.6%QoQ which we is attributable to pull up of loss reserves of the bank as seen in previous quarters.

 

Provider
AKD Securities Limited
AKD Securities Limited

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.

Analysts
Hamza Kamal

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