Karachi: Habib Bank Limited (HBL) has witnessed a notable improvement in its earnings quality over the past year, driven by more affordable current account-led funding, an increase in foreign exchange income, and a controlled growth in operating expenses. According to JS Research, these factors have contributed to a better financial outlook for the bank, with expectations for net interest income (NII) to rise as floating-rate Pakistan Investment Bonds (PIBs) and loans are repriced. The bank's sound asset quality and a strategic reserve approach to address the Rs6 billion minimum capital requirement gap provide an opportunity for payouts to continue increasing.

HBL reported a consolidated profit after tax (PAT) of Rs54.04 billion for the first nine months of the calendar year 2026, marking a 5.4% increase compared to the previous year, with earnings per share (EPS) standing at Rs36.84. For the third quarter of 2026, the PAT reached Rs19.6 billion, reflecting a 16% year-on-year growth and an EPS of Rs13.33. The bank announced a cash dividend of Rs6.00 per share, bringing the total payout for the first nine months of 2026 to Rs18.00 per share. Notably, the dividend payout ratio has doubled over the past three years.

The bank's domestic current account deposits increased by 15% to Rs2.05 trillion since December 2025, raising the current account mix to 40%. Consumer financing exceeded Rs200 billion, the highest in the industry, while asset quality remained robust with an infection ratio of approximately 4.5% and specific coverage at 85%. HBL's management anticipates that a recent 50 basis point policy rate hike may initially impact net interest margins as deposits are repriced, but NII is expected to benefit in subsequent quarters as variable-rate advances and floating-rate PIBs, which constitute 55% of the investment book, are repriced.