HBL Posts 10.52% Profit Growth to Rs16.63B in Q1CY25

Habib Bank Limited (PSX: HBL) delivered a robust 10.52% surge in consolidated profit after tax, reaching Rs16.63 billion for the quarter ending March 31, 2025, up from Rs15.04 billion a year earlier. The announcement sparked a sharp 7% rise in HBL’s stock price, accompanied by a significant spike in trading volume, reflecting strong market approval.

The bank’s board approved an interim cash dividend of Rs4.50 per share (45%), reinforcing investor trust. Earnings per share (EPS) climbed to Rs11.32, compared to Rs10.37 last year. HBL’s total income grew 11.05% to Rs90.36 billion, propelled by a dramatic 36.17% reduction in interest expenses, despite a 21.25% decline in mark-up income. This drove a 12.33% increase in net mark-up income to Rs68.75 billion.

Non-markup income rose 7.18% to Rs21.61 billion, fueled by a turnaround in securities gains at Rs4.17 billion (from a loss last year) and higher dividend and associate income. However, foreign exchange income plummeted 46.79%, and derivative income fell 67.71%, exposing vulnerabilities in non-core segments.

Operating expenses increased 7.28% to Rs50.27 billion, reflecting inflationary pressures and expansion costs, while total non-markup expenses, including Workers’ Welfare Fund, rose 7.09% to Rs50.98 billion. A 24.83% drop in credit loss allowances to Rs2.74 billion bolstered the bottom line. Profit before tax soared 21.67% to Rs36.64 billion, but a 32.80% surge in taxation to Rs20.01 billion capped net profit growth at 10.52%.

HBL’s results highlight effective cost management and resilient core banking income, despite interest revenue pressures. The sharp decline in interest expenses and improved securities gains provided critical support, though forex and derivative income declines signal volatility. The dividend payout underscores confidence, but regulatory and macroeconomic shifts loom as challenges. Analysts view the performance as solid, with earnings quality holding firm amid sector-wide margin pressures.