Bank AL Habib is one of the banks which exhibited remarkable financial performance in 2020, cashing in on the opportunities from COVID-19, showing a double-digit profit growth of around 60 percent in 2020.
According to the financial results, the bank made a profit of Rs. 17.81 billion as compared to a profit of Rs. 11.1 billion recorded in 2019.
The bank’s profit before tax was recorded at Rs.28.58 billion, showing a growth of 50.34 percent as compared to last year, driven by the mark-up income as well as fees and commission income translating into an EPS of Rs. 16.03 per share as against Rs. 10.05 per share for the year 2019.
Net mark-up income increased by 39.90 percent as compared to last year, bringing it to Rs. 57.62 billion, reflecting the bank’s success in maintaining sustainable growth. Despite the challenging conditions, pressure on country trade, and free online offerings during the pandemic COVID-19, the bank managed to increase its fee and commission income by 9.60 percent as compared to last year.
The Board of Directors of Bank AL Habib Ltd. also announced a final cash dividend of Rs. 4.5 per share.
Bank’s Assets and Deposits
The bank, in the backdrop of the COVID-19 pandemic, recorded solid growth in terms of both balance sheet size and annual profit.
The total assets of Bank AL Habib reached Rs. 1.52 trillion, an increase of 17.20 percent as compared to December 31, 2019. Loans and advances grew by 4.42 percent to Rs. 510.25 billion, while the investments increased by 30.51 percent to Rs. 764.94 billion, leading to overall growth in the total assets.
Due to the bank’s sound risk management practices and prudent financing strategy, the NPL ratio was recorded at 1.41 percent. The bank opted to build more general provisions of Rs. 2.75 billion during the year 2020, bringing the total of such provisions to Rs. 5.75 billion as the provision is in addition to the requirements of the Prudential Regulations. The bank achieved a coverage ratio of 171.28 percent, reflecting the prudent approach adopted towards non-performing loans.
Deposits of the bank increased by Rs. 195.98 billion bringing the total deposits to Rs. 1.10 trillion as of December 31, 2020, showing a growth of 21.69 percent. The bank’s Non-Remunerative Current deposit recorded at Rs. 418.90 billion showing an increase of 23.78 percent as compared to December 31, 2019.
The Bank’s Capital Adequacy Ratio (CAR) was 15.09 percent as of December 31, 2020, against the regulatory capital requirement of 11.50 percent (including capital conversion buffer of 1.50 percent as reduced under the BPRD circular letter no. 12 of 2020). Gross Advances to deposit ratio stood at 47.55 percent. Total equity reached Rs. 79.86 billion, up by 29.84 percent from December 31, 2019.
The bank continued with its strategy for outreach expansion, adding a significant number of branches every year. The bank’s branch network has now reached 847 branches/sub-branches and two booths having coverage in 334 cities in Pakistan in addition to 3 foreign branches (one each in Bahrain, Malaysia, Seychelles) and four representative offices (one each in Dubai, Istanbul, Beijing, Nairobi) outside Pakistan.
In line with the bank’s vision to provide convenience to customers, the bank is operating a network of over 1,015 ATMs across Pakistan.