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HBL set to become future bank with boundless opportunities

Habib Bank Limited, a Karachi based multinational bank and largely referred to as HBL Pakistan. The Bank is now looking towards an even brighter future with boundless opportunities.

With a worldwide presence in over 25 states spanning across 4 continents, the Bank is also the largest domestic multinational. The management is enlarging its presence in principal international markets counting the UAE, UK, South and Central Asia, Africa and the Far East.

The Bank aims to continue serving the state and all the regional markets where it operates with a focus on the needs of its customers and the resolve to inspire them to dream and do more.

NON-PERFORMING LOANS (Domestic and Overseas Operations) (Rs. in Million)
BANKS/DFIs
September 2016
December 2016
NPLs
NET NPLs
NET NPLs TO NET LOANS (%)
NPLs
NET NPLs
NET NPLs TO NET LOANS (%)
All Banks & DFIs
646,230
112,947
2.21
618,550
93,497
1.68
All Banks
631,326
109,123
2.16
604,666
90,399
1.64
All Commercial Banks
591,777
88,837
1.81
568,446
72,323
1.35
Public Sector Banks
205,011
47,148
5.00
189,091
35,111
3.39
Local Private Banks
383,764
41,697
1.06
376,391
37,219
0.87
Foreign Banks
3,002
(8)
-0.02
2,963
(7)
-0.02
Specialized Banks
39,550
20,286
13.98
36,220
18,076
12.23
DFIs
14,904
3,825
6.15
13,884
3,098
4.51

 

HBL is committed to innovation and has embarked on a journey of transforming itself into a bank of the future. An important part of this journey is collaborating with new technology providers to develop exciting solutions to address the evolving needs of its clients and the changing market dynamics.

HBL innovation challenge aims to identify potential partners who can assist the management to solve some critical financial services issues. The challenge is open to all fintech firms at any stage of development. The ultimate goal is to build strong business relationships between HBL and financial technology companies to power the digital financial revolution in Pakistan. Furthermore, HBL is eyeing opportunities connected with CPEC (China-Pakistan Economic Corridor).

 

ELECTRONIC BANKING IN PAKISTAN (Number in Thousands & Amount in Million Rs.
Product/Item
FY2016
Q1
Q2
E-BANKING INFRASTRUCTURE
Real Time Online Branches (RTOB)
11,437
12,442
Automated Teller Machines (ATM)
10,099
10,736
Point of Sale (POS)
44,383
50,072
CREDIT CARDS
Credit Cards
1,391,571
1,394,223
Outstanding Amount
DEBIT CARDS
Debit Cards
25,871,230
26,489,225
Outstanding Amount
Source:  Payment  System  Department

 

Historically, the Government of Pakistan privatized HBL in 2004 by which AKFED acquired 51 percent of the Bank’s shareholding and the management control. The remaining 41.5 percent shareholding by the Government of Pakistan was divested in April 2015. AKFED continues to retain 51 percent shareholding in HBL while the remaining shareholding is held by individuals, domestic and foreign institutions and funds counting CDC Group Plc which holds 5 percent and International Finance Corporation which holds 3 percent.

HBL presently has registered a consolidated profit after tax (PAT) of Rs9.1 billion for the first quarter of 2017, with earnings per share (EPS) of Rs6.16. Along with the results, the Bank recorded a dividend of Rs3.5 per share (35%). HBL’s balance sheet has increased by 2 percent over December 2016 to reach Rs2.6 trillion. Despite a fall in the market, the Bank’s deposits continued to increase, with market share growing to 14.2 percent and total deposits crossing Rs1.9 trillion.

Domestically, the management increased its CASA deposits by Rs30 billion during the quarter and the CASA ratio enhanced to 87.1 percent. Average domestic current accounts rose by 16 percent as against to Q1 2016, enabling the Bank to more decline its cost of deposits.

Lending activity has remained robust, with average domestic loans growing by 24 percent over the first quarter of last year as all business segments delivered excellent performance. HBL was thus able to overcome most of the spread compression caused by low interest rates, recording net interest income of Rs20.1 billion. With excellent performance from treasury related activities, non-markup income rose by 26 percent to Rs8.3 billion. Fees and Commissions for the quarter increased by 9 percent to Rs4.8 billion with continued strong performances by the Bancassurance, asset management and consumer finance businesses.

The Bank’s prudent risk management resulted in a reduction in non-performing loans (NPLs) with provisions also reducing by 26 percent over the first quarter of 2016. The Bank’s infection ratio declined more, to 9.1 percent, while the coverage strengthened, to nearly 92 percent. HBL’s reach now includes greater than 2,000 ATMs and over 14,800 POS machines, augmenting its network of 1,678 branches, to offer access and convenience to its customers across Pakistan.

The consolidated Capital Adequacy Ratio (CAR) as at March 2017 was 15.5 percent, with the Tier 1 CAR at 12.1 percent, both well above regulatory requirements. HBL’s local credit ratings remain in the highest possible AAA/A-1+ categories for long term and short term respectively.

During the quarter, the Bank continued to receive many important awards counting the Best Domestic Bank in Pakistan by Asia money, and the Best Retail Bank in Pakistan, by The Asian Banker.

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