HBL 3Q2024 Earnings Drop 13% YoY, Declares Rs4/Share Dividend

ISLAMABAD: Habib Bank (HBL) posted consolidated earnings of Rs9.85 per share for 3Q2024, down 13% year-on-year (YoY) but up 1% quarter-on-quarter (QoQ). This brings the 9M2024 earnings per share (EPS) to Rs30.03, a 3% increase YoY, in line with industry expectations.

Alongside the results, the bank announced a third interim cash dividend of Rs4 per share, taking the total 9M2024 dividend to Rs12 per share.HBL-P@SHA ICT Awards 2024: Celebrating Excellence in Pakistan’s IT Industry.

Net Interest Income (NII) for 3Q2024 settled at Rs64 billion, down 2% YoY due to a decline in asset yields. On a QoQ basis, NII rose by 4% due to a favorable asset repricing gap.

HBL recorded a higher-than-expected provision expense of Rs8.9 billion in 3Q2024, compared to Rs1.4 billion in 3Q2023 and Rs6.4 billion in 2Q2024. For 9M2024, the total provision expense reached Rs19 billion, up 2.6 times YoY.

Other income grew by 63% YoY and 9% QoQ to Rs21.2 billion in 3Q2024, driven by gains on securities and fee & commission income. However, the bank posted a foreign exchange (FX) loss of Rs583 million in 3Q2024, compared to a gain of Rs2,073 million in 2Q2024.

Operating expenses increased by 8% YoY and 4% QoQ, mainly due to inflationary pressures.

HBL’s cost-to-income ratio improved slightly to 56% in 3Q2024, down from 57% in both 3Q2023 and 2Q2024.

The effective tax rate for 3Q2024 stood at 49%, and 50% for 9M2024, with no additional tax recorded due to a lower advance-to-deposit ratio (ADR). HBL’s gross ADR was 35.4% as of June 2024.

We maintain a buy stance on HBL, with the stock trading at a projected 2024 price-to-earnings (PE) ratio of 3.4x and a price-to-book (PBV) ratio of 0.5x.