Karachi, July 29, 2021 (PPI-OT): HBL: 2QCY21 Result Review, (above expectation)

Habib Bank Limited (HBL) announced its 1HCY21 results where the bank posted NPAT of PkR18.0bn (EPS: PkR12.0) compared to PkR15.2bn (EPS: PkR10.3) in the same period last year. The result came above our expectation on account of higher than expected capital gains (PkR1.7bn in 2QCY21 vs. -ve PkR206mn in the previous quarter).

Together with the result, the bank announced a dividend of PkR1.75/sh, taking cumulative CY21TD payout to PkR3.5/sh.

For 2QCY21, HBL reported earnings of PkR6.35/sh, +10.6%QoQ but down 14.5%YoY where sequential uptick is primarily attributable to capital gains (as highlighted above) and contained administrative costs (overall non-markup expense diminished 4.1%QoQ).

Net Interest income remained flat on a sequential basis with gross yield exhibiting similar behavior, flat at 51.1% in 2QCY21.

Escalation in non-funded income (+14.2%QoQ) through capital gains was partly offset by normalization in net FX income (2QCY21: PkR279.5mn vs. PkR2.0bn in the previous quarter).

Effective tax rate for the quarter stood at 43.3% vs. 41.0% in 1QCY21.