HBL Q1 2022 Profit Rises to Rs. 8.6 Billion Driven by Strong Business Volumes

HBL today declared a consolidated profit after tax of Rs. 8.6 billion for the first quarter of 2022, higher than in the same period last year.

The bank had reported a profit of Rs. 8.55 billion in the corresponding period of last year.

According to an official statement released by the bank, the Q1’22 results include a one-time severance charge of Rs. 2.6 billion. Excluding the impact of this one-time charge, the Bank’s profit before tax is 18 percent more than in Q1’21. Along with the results, the Bank declared a dividend of Rs. 2.25 per share (22.5 percent).

Earnings per share of the bank were increased to Rs. 5.78 from Rs. 5.68.

Following a breakthrough performance in 2021, the Bank continued to build on its growth story, with its fortress balance sheet increasing by another 5 percent over December 2021 to Rs. 4.5 trillion. Beating historical trends, HBL was able to grow current accounts beyond the previous year-end peak to nearly Rs. 1.2 trillion, 37.4 percent of the total deposit base of Rs. 3.2 trillion. Advances grew by 4 percent in one quarter alone, well ahead of the market, to nearly Rs. 1.6 trillion, with broad-based growth across all segments.

The Bank’s flagship Consumer business continued to break records with loans crossing Rs. 110 billion; agriculture lending achieved a new high of Rs. 41 billion. HBL Microfinance Bank, the largest microfinance provider of housing loans, posted double-digit growth with deposits crossing Rs. 100 billion and a loan portfolio of Rs. 65 billion.

The net interest income of the Bank increased by Rs. 3.8 billion to Rs. 36.3 billion in the first three months of 2022, driven by an exceptional growth of over Rs. 450 billion in average volumes. Fee income continued to break barriers, rising 24 percent to Rs. 7.3 billion; the fee engine is firing on all cylinders, with an outstanding performance from the Cards business, and double-digit growth in all key businesses. A spectacular Treasury performance resulted in income rising by 42 percent. Total revenue of the Bank thus increased by Rs. 6 billion over Q1’21 to Rs. 46.6 billion.

Administrative expenses (excluding severance charge of Rs. 2.6 billion) increased to Rs. 27.8 billion on the back of rising inflationary pressures, higher sales-driven costs, and continued investment in people and technology. Total provisions reduced by 36 percent to Rs. 1.2 billion; the infection ratio remains well-controlled at 5.2 percent with total coverage at over 100 percent. Demonstrating its commitment to giving back to the community, the endowment fund of the HBL Foundation was doubled to Rs. 100 million, while the annual contribution was raised by 50 percent, to 1.5 percent of post-tax profits.

Commenting on the Bank’s Q1’22 performance, Muhammad Aurangzeb, President & CEO – of HBL said,

The Bank’s business volumes have set new benchmarks on the back of very strong performance across all client segments and activity drivers. We continue to work diligently on building technological innovation, working with the Government of Pakistan on public-private partnerships, and most importantly serving our clients with excellence.  HBL’s digital channels, being our strategic priority, processed an unprecedented Rs. 2.8 trillion from 109 million transactions, representing a YoY growth of 64 percent.

HBL solidified its dominant position in all aspects of its Consumer business. HBL Cards remained the first choice for clients, registering a 58 percent growth in Credit Card spending over the same period last year. HBL’s Debit Card remains the market leader with 6.1 million cards and a 21 percent market share. Spend volumes increased by 53 percent over Q1’21, with e-commerce volumes growing by 56 percent.

There has been a considerable focus on formal finance to Small Enterprises under HBL POS finance and SBP’s SAAF scheme with disbursements of Rs. 1.4 billion under each program. HBL maintained its leadership position in Supply Chain Financing, registering a growth of 20 percent over Dec’21 to reach Rs. 7.4 billion. HBL’s total SME-funded advances in Q1’22 stood at Rs. 73 billion.

During the quarter, HBL Nisa opened 37,000 new accounts with deposits of over Rs. 6 billion. HBL has remained amongst the highest contributors to the RDA initiative with 20 percent of all RDA accounts; during Q1’22, we channeled an additional USD 100 million into the country. HBL Prestige branches were inaugurated in Multan and Faisalabad, taking the total presence to 27 lounges in 12 cities.

HBL maintained its pole position in cash management, with throughput rising by 49 percent to nearly Rs. 2.6 trillion in Q1’22. HBL has become the first bank in Pakistan to allow asset management companies to process real-time redemption payments by successfully integrating the HBL Pay Business Banking platform with CDC (Central Depository Company).

HBL Investment Banking maintained its dominant position and closed a number of offshore and onshore transactions across sectors, including a $35 million offshore leveraged buyout facility in the Telecom and Internet space. The Bank also arranged syndicate financing for an automobile manufacturer and provided a comprehensive advisory for a Public-Private-Partnership project in the mining space. HBL made major headway in its real estate initiatives, developer finance, and low-cost housing.

During the quarter, HBL disbursed over Rs. 7 billion for sustainable financing projects

HBL Digital

Digital transactions continued exponential growth with HBL’s Mobile Banking and Internet Banking registering a growth of 97 percent in transaction value, to Rs. 417 billion in Q1’22. HBL Mobile app users crossed 2.6 million with a 61 percent growth in transaction volume to 26 million in Q1’22.

The Konnect account portfolio witnessed a growth of 33 percent reaching a total of 7.4 million accounts at the end of Q1’22. Total throughput registered a growth of 103 percent, from Rs. 166 billion in Q1’21 to Rs. 337 billion in Q1’22. Total collections at Konnect channels crossed Rs. 25 billion during Q1’22.

Konnect Debit Cards portfolio reached 1.2 million at the end of Q1 2022.  The Bank also launched an Islamic Banking mobile app empowering Islamic banking clients to meet their digital banking needs via a dedicated solution.

The Bank processed e-commerce transactions worth Rs. 8 billion recording a 57 percent growth in volumes compared to the same period last year. In addition, 30 percent growth was recorded in the number of merchants. HBL also launched a state-of-the-art mPOS solution to accept e-commerce payments from clients at their doorstep.