HBL Profits Up by A Mammoth 287% During COVID-19 Pandemic

HBL today declared a consolidated profit after tax of Rs. 15.18 billion for H1’20, an almost threefold or (287%) increase over the same period last year. The bank had booked a profit of Rs. 3.92 billion in the same period in 2019.

The Bank’s earnings per share increased to Rs. 10.32 compared to Rs. 2.53 in H1’19. The strong results are underpinned by HBL’s strong domestic franchise where the growth trajectory continues across the range of activity drivers and reflects the strength of the brand. Profit before tax for the first six months of 2020 increased by more than 2.5 times, to Rs. 25.8 billion.

During the first half of 2020, domestic deposits grew by Rs. 219 billion to reach Rs. 2.4 trillion, increasing HBL’s market share to 14.12%; over 40% of the growth came from current accounts, improving the current account mix to 36.0% and maintaining a strong CASA ratio of 85.7%. Total advances closed at Rs. 1.1 trillion.

Compared to the same period last year, the Bank’s average domestic balance sheet grew by Rs. 294 billion driven by an 11% growth in average deposits. The Bank’s net interest income for the first six months of 2020 thus accelerated by 32% over the first half of 2019, to Rs. 63.1 billion, on the back of volume growth and 79bps increase in net interest margin.

Despite a reduction in fee income resulting from slower economic activity, total non-fund income more than doubled to Rs. 16.6 billion through the timely realization of capital gains. Total consolidated revenue thus rose by 43%, to nearly Rs. 80 billion, for the first half of 2020.

With the New York branch closed and its Business Transformation program nearly complete, HBL’s administrative expenses reduced by 14% over the previous quarter. The cost/income ratio reduced from 80.8% in H1’19 to 59.8% in H1’20. The Bank has also prudently taken general provisions to cater to the impact of COVID-19 on borrowers and the economy, improving its coverage ratio to 95.0%, said the statement issued by the bank.

The Bank’s customer base has grown by 40% since Dec 2019 and now stands at over 27 million. This increase has been driven by accelerated adoption of the Bank’s digital offers like HBL Mobile, Internet Banking, HBL Konnect and payment and collection platforms. This also includes the Ehsaas Emergency Cash Program customers, read the released statement.

HBL is a market leader in Consumer Banking. The Bank offers its customers Credit Cards, Debit Cards, Personal Loans, Car Financing and Merchant Acquiring products. In H1 2020, the Bank acquired the highest number of credit cards and car financing in the industry.

HBL also remains a leader in the Merchant Acquiring business with the highest volumes processed across its Point of Sale network.  HBL continues to invest in e-commerce with major online partners to facilitate increased online shopping needs of our customers with added peace of mind of 3D Secure technology.

According to the released statement, HBL’s Corporate & Investment Banking maintained its position at the forefront of the market, continuing to be the largest and most active in Pakistan. During H1 2020 Investment banking closed a number of deals, a few notable transactions include the financial close of a Power Project established under CPEC for which HBL was the Exclusive Financial Advisor and Lead Local Currency Arranger as well as a private equity placement for hospital expansion projects.

Digital Payments

HBL also continues to maintain a leadership position in Cash Management Collections, HBL Pay – Business Banking, and HBL @ Work (employee banking proposition). During the COVID-19 lockdown situation in the country, HBL Transaction & Employee Banking showed high double-digit growth in digital receivable management, payments, and salary processing through its digital channels. Digital payment alone grew by 191% year on year.

HBL’s Treasury and Global Markets is the #1 market maker in the FX and Money markets for corporates and financial institutions. According to the State Bank of Pakistan (SBP), the Bank is also the top primary dealer, responsible for 25% of secondary market activity for the fiscal year 2019-2020.

HBL Konnect, the Bank’s branchless banking solution has partnered with the Government of Pakistan on key initiatives such as Ehsaas to deliver the Ehsaas Emergency Cash Program, the largest social safety net initiative in Pakistan’s history. HBL is leading this effort across Sindh, Balochistan, Punjab and Islamabad and to date has disbursed over Rs. 125 billion to more than 10 million households.

HBL won the Euromoney award for Asia’s Best Bank Transformation 2020 and Pakistan’s Best Bank 2020. HBL has won these awards on the back of the tremendous convenience the Bank provides its customers through its work done in the digital space, and through its partnership with Ehsaas. The Bank was also recognized for its work in China and with Chinese corporates and financial institutions. The Bank also won multiple other international and local awards during this period.