Karachi: Habib Bank Limited (HBL) revealed robust financial results for the first half of 2025 during an analyst briefing, showcasing a 19% increase in profit and significant improvements across various financial metrics. The bank's profit reached PkR34.4 billion, compared to PkR29.1 billion in the same period last year, driven by a 35% rise in core domestic pre-tax earnings.

HBL's domestic subsidiaries have made a notable turnaround, achieving savings of PkR2.0 billion, a stark contrast to a loss of PkR2.4 billion in the same period the previous year. HBL Microfinance played a pivotal role, reversing its losses to report a profit of PkR1.0 billion.

Net interest income grew by 12%, attributed to an increase in the average balance sheet size, while non-funded income surged by the same percentage, bolstered by a PkR9.4 billion gain under other income. The bank's cost-to-income ratio improved to 55.2%, with the management focused on further optimization.

Deposits saw a 7.1% rise, reaching PkR5.2 trillion, and the advances portfolio grew by 10.9% to PkR2.0 trillion. The investment book demonstrated robust growth, expanding by 35.4% to PkR4.3 trillion, primarily invested in semi-annual floating-rate PIBs.

Management is shifting focus towards Islamic banking, starting with branches in the KPK and Balochistan regions, which has positively impacted deposit growth and mix. Deposit growth is expected to continue at a similar rate, with a target to improve the current account mix.

Digital transactions witnessed a 51% increase, reaching PkR5.3 trillion, though fee income saw an 8% decline. The bank's infection ratio improved to 5.0%, and capital adequacy ratios saw significant enhancements.

HBL anticipates stable interest rates for the year, with a potential minor rate cut if inflation remains low. The bank maintains a 'BUY' stance, given its expanding low-cost deposit base and technological advancements in transaction channels.