HBL Earnings Up 9% in 1Q2025
Staff Report
Karachi: Habib Bank (HBL) has recorded consolidated earnings of Rs16.6bn (EPS of Rs11.3), up 9% YoY and 15% QoQ.
It announced its 1Q2025 results on Friday.
The result came higher than industry expectations due to higher-than-expected Net Interest Income (NII) and Gain on securities.
Net Interest Income (NII) for 1Q2025 settled at Rs69bn, up 12% YoY and 14% QoQ, as interest earned declined by 21% YoY and 17% QoQ to Rs157bn, while interest expense fell by 36% YoY and 31% QoQ to Rs88bn.hbl asaan digital account
Non-interest income of the bank grew by 7% YoY to Rs21.6bn in 1Q2025, primarily driven by a gain on securities of Rs4,168mn in 1Q2025, compared to a loss of Rs283mn in 1Q2024.
Non Interest expense increased of 7% YoY while down by 6% QoQ, which we believe was driven by inflationary pressures.
This takes HBL’s cost to income ratio to 56% in 1Q2025 as compared to 59% in 1Q2024 and 56% in 4Q2024.
HBL recorded a provision expense of Rs2.7bn in 1Q2025, down 25% YoY and 64% QoQ.
HBL’s effective tax rate stood at 55% in 1Q2025, compared to 50% in 1Q2024 and 58% in 4Q2024. It appears that the bank has not recorded any windfall income tax on its foreign exchange income for the years 2021 and 2022; we await detailed accounts for further clarity.
Alongside the 1Q2025 results, the bank also announced a first interim cash dividend of Rs4.5 per share, which is also higher than expectations.
We have buy stance on HBL, with the stock currently trading at a 2025E PE ratio of 4.0x, PBV ratio of 0.4x, and dividend yield of 12%,” Topline Research said in a report.
