Habib Bank Limited (HBL): 3Q2020 EPS at Rs6.85, down 9% QoQ (Results above expectation)
- Habib Bank Limited (HBL) has announced 3Q2020 consolidated earnings of Rs6.85/share, an increase of 104% YoY (-9% QoQ).
- The result was above our expectations and industry’s consensus owing to lower-than-expected Interest Expense of Rs29.1bn (-36% YoY and -18% QoQ).
- Net Interest Income increased by 2% QoQ led by decline in Interest Expense by 18% QoQ, while Interest Earned dropped by 8% QoQ due to the lagged impact on Asset re-pricing amidst decline in interest rates.
- In 2Q2020, the Current Accounts for the bank had grown by 14% QoQ (36.3% in Jun-2020 vs. 35.6% in Mar-2020 as a percentage of total deposits) which has also contributed towards the reduction in overall deposit cost in 3Q2020.
- In 3Q2020, Capital Gains clocked in at Rs655mn, depicting a decline of 85% QoQ. During 2Q2020, the bank had booked Capital Gains to the tune Rs4.4bn, largely emanating from the bank’s Fixed Income portfolio.
- Operating Expenses increase was limited to a 3% QoQ. Cost to Income clocked in at 53%.
Provision expense came in at Rs3bn (-37% QoQ), taking 9M2020 provisions to Rs8.5bn (+377% YoY).
Habib Bank Limited is engaged in commercial banking and asset management related services in Pakistan and overseas. The Bank's segments include Branch Banking, which consists of loans, deposits and other banking services to agriculture, consumer, small and medium-sized enterprise (SME), and commercial customers; Corporate Banking, which consists of lending for project finance, trade finance and working capital to corporate customers and it also provides investment banking services, including services provided in connection with mergers and acquisitions; Treasury, which consists of trading, fixed income, equity, derivatives and foreign exchange businesses, and it also includes credit, lending and funding activities with professional market counterparties; International Banking, which is engaged in monitoring and reporting purposes and consists of its operations outside of Pakistan, and Head Office/Others. It operates in Pakistan; Europe, Middle East and America, and Asia and Africa.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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