Habib Bank Limited recorded zero growth in profits during the first quarter of the current fiscal year (January – March) and stands at PKR 9.07 billion through interest and non-interest income. Surprisingly, the bank has been successful in preventing loss in profit despite the heavy expenses it incurred during Pakistan Super League (PSL).
According to the financial results that the bank announced, HBL made a profit of approximately PKR 9.07 billion during the first quarter of 2017, compared to PKR 9.03 billion that it made during the similar time frame, last year.
In 2016, the bank reported a drop of 9% in its quarterly profit because of sponsoring PSL. The financial institution reported a drop of 2.5% in FY16 profits which stood at PKR 32.4 billion. Nevertheless, the slight growth of 0.5% might lead to an increase in profits growth by the end of next quarter.
Furthermore, the financial institution experienced an increase in its net interest income (NII) to PKR 19.8 billion because of low interest rates which have stayed at 5.75 % for almost a year now. HBL earned PKR 8.3 billion from non-interest sources mainly through the sale of its securities, brokerage income, and fee commission.
Interestingly enough, many analysts believe that the profit that HBL announced is above their expectation as a surge in profit is currently the biggest challenge in the current scenario of higher taxation and low interest rates. In addition, the financial institution experienced a significant surge in its expenses and saw an increase in its income from non-interest avenues.
The bank incurred expenses worth PKR 14.06 billion during the first quarter of FY16 from PKR 12.26 billion, which marks an increase of 12.8% or PKR 1.6 billion. Also, the accumulated revenue earning of the bank stands at PKR 28.1 billion and its earnings per share (EPS) stand at PKR 6.16. HBL also announced cash dividends of PKR 3.5 per share.