Karachi, 29 July 2021
HBL today declared its H1 2021 results, continuing its momentum from the previous quarter and growing its consolidated profit before tax (PBT) for Q2 2021 by 15% over Q1 2021. Total PBT for H1 2021 increased by 21% to Rs. 31.2 billion. HBL’s profit after tax crossed Rs. 18.0 billion, with earnings per share growing from Rs. 10.32 in H1 2020 to Rs. 12.04 in H1 2021. Along with the results, the Bank declared a dividend of Rs. 1.75 per share (17.5%).
The Bank’s fortress balance sheet grew by nearly Rs. 600 billion during the quarter, crossing the Rs. 4 trillion mark, a growth of 7% over Dec 2020. This was driven by strong deposit growth as HBL became the first bank in Pakistan to mobilize a deposit base of over Rs. 3 trillion, while achieving another industry first – current accounts exceeding Rs. 1 trillion. Domestic advances achieved a landmark of Rs. 1 trillion. The Bank’s Consumer business delivered a strong performance, with its industry-leading loan book growing by 14% over Dec 2020 to Rs. 90 billion.
HBL grew its average balance sheet by more than Rs. 400 billion, achieving a growth of 3% in net interest income to Rs. 64.9 billion. Excluding capital gains, the Bank’s non-fund income has risen by an impressive 62% over H1 2020. Fees and commissions increased by 32% YoY to nearly Rs. 12 billion with standout contributions from Cards and Consumer Finance and a solid growth in trade, where volumes increased by over 85%.
Total expenses remained under check, declining by 2% over the same period of last year. HBL successfully continued the reduction in its cost to income ratio which fell from 59.8% in H1 2020 to 56.8% in H1 2021. Total NPLs of the Bank declined by Rs. 5.5 billion over Dec 2020 and the infection ratio fell to an all-time low of 5.5%.
During the quarter, the Bank’s credit ratings were re-affirmed by VIS Credit Rating Company Ltd at AAA/A-1+ for long term and short term respectively. The rating of its TFCs issued as Additional Tier 1 Capital have been reaffirmed as AA+. The Outlook on all ratings is Stable.
Commenting on the Bank’s performance, Muhammad Aurangzeb, President & CEO – HBL said, “HBL continued its strong business momentum from the previous quarter ending H1 2021 on a solid footing. This performance is impressive as it comes against a backdrop of significant spread compression across the banking sector. HBL has achieved several significant milestones during this period, notable being strengthening of the Bank’s balance sheet and an excellent performance in fees and commissions.”
HBL’s Consumer Financing grew 14% closing at Rs. 90 billion. The Bank remains a market leader in personal loans, merchant acquiring, credit cards and debit cards. Its auto financing business is #2 in the country with the highest number of cars financed. The usage of both Debit & Credit cards was over Rs. 80 billion, up by 65% over the same period last year. The Bank’s merchant acquiring business has the largest Point of Sale network of 33,000 terminals in the country and recorded a growth of 44% with a volume of Rs. 78 billion which is the highest in the country.
The Bank is committed to growing both its SME and Rural banking being priority sectors. These businesses closed with Rs. 59 billion and Rs. 35 billion respectively. Under SME banking, various initiatives were taken to grow this segment with the overall strategic intent which included overachieving the target under the Prime Minister’s Kamyab Jawan Scheme and grew its POS Financing, a product targeted towards the needs of merchants and retailers. SME trade volume recorded a growth of nearly 30%. The bank’s leading rural banking business launched new initiatives including Dairy Financing and lending under Rural Value Chain to ensure financial inclusion of small agricultural entrepreneurs.
HBL Mobile and Internet Banking volumes more than doubled from Rs. 215 billion in H1 2020 to Rs. 466 billion in H1 2021. The Bank achieved a landmark milestone of crossing 2 million users on its Mobile & Internet Banking apps.
Konnect by HBL, the Bank’s branchless banking platform, continued its growth with transactions nearly doubling and volumes reaching Rs. 210 billion. An aggressive acquisition strategy led to a 61% increase in app registrations and 34% increase in overall account portfolio.
Konnect entered an exclusive partnership with Punjab Agriculture division to provide an instant agriculture subsidy directly to registered farmers. Rs 9.5 billion in subsidies have been disbursed to more than 800,000 eligible farmers under the scheme. Konnect continued to work with the Government of Pakistan to deliver the Ehsaas Kafalat and Emergency Cash Program.
The Roshan Digital Account (RDA) portfolio maintained its growth momentum and stood at Number 1 both in accounts opened and activated. The Bank has brought in over USD 219 million since the inception of the proposition in September 2020.
The Bank launched HBL Prestige, a Priority Banking proposition for High Net Worth Individuals, providing exclusive bespoke banking services to cater to these clients.
HBL Islamic Banking is on track to convert 200 Islamic windows to dedicated branches expanding its reach to over 300 cities. The Bank drives the Government’s low-cost housing initiatives through various channels, including 916 dedicated Islamic branches and Islamic windows and its branchless banking proposition, Konnect by HBL, and has added another trade hub in the heart of the trade center of Karachi.
HBL’s financial inclusion thrust is being led through the Development Finance initiative. The Bank scaled up its 2020 proof-of- concept interventions by over 30 times through mid-scale pilots led by a team of field-based, full-time agronomists who used handheld tablets to digitally on-board farmers onto HBL Pay. With tailored crop plans linked to loan applications, small scale farmers were advised on how to significantly increase crop yields. Pilot projects of 3,200 acres (maize crop) and 7,000 acres (rice crop) are underway in this initiative.
In H1 2021 the Bank successfully concluded several transactions across various sectors including Oil & Gas, Telecom, Cement, Renewable Energy and Real Estate. Notable transactions include Pakistan’s first Green Eurobond Issuance of USD 500 million, without a Government of Pakistan guarantee. HBL played an instrumental role as a Co-Manager of the transaction. Similarly, HBL was the Joint Mandated Lead Advisor & Arranger, as well as the Agent Bank in the largest Telecom sector financing of Rs. 50 billion.
Trade business at HBL increased its market share to over 12%. The business showed 89% YoY growth in volumes (from USD 3.4 Billion to USD 6.4 Billion) whereas the number of transactions increased by 35% over the same period last year.
HBL became the first Pakistani bank to open a branch in Beijing, China. HBL Beijing is the Bank’s second branch in China. HBLPSL 6 successfully concluded during the quarter.
During H1 2021, HBL won the 2021 Euromoney Award for “Best Bank in Pakistan” and the 2021 Asiamoney Award for “Best Domestic Bank.” HBL was also awarded “Best Investment Bank” by Finance Asia and won four awards at the Pakistan Digital Awards 2021. The HBLPSL digital show won awards at the prestigious Effie and the Pakistan Digital Awards.
Karachi, 20 April 2021: HBL today declared a consolidated profit before tax of Rs 14.5 billion for the quarter ended March 31, 2021, more than double that for the same period last year. Profit after tax recorded a growth of 108% over Q1 2020 to Rs 8.6 billion. The Bank’s earnings per share increased from Rs 2.79 to Rs 5.68 in Q1 2021. Along with the results, the Bank declared a dividend of Rs 1.75 per share (17.5%). Helped by the strong profitability, the Bank’s Tier 1 CAR rose to 13.9%, with Total CAR increasing to 17.9%.
The Bank’s total deposit base closed at Rs 2.8 trillion, with robust CA and CASA ratios of 35.1% and 83.1% respectively. Average domestic deposits increased by a multi-year high of nearly 20% over Q1 2020, with average current accounts rising by more than Rs 120 billion. This led to a nearly Rs 500 billion expansion in the Bank’s average balance sheet in Q1 2021. Consequently, despite a much lower interest rate environment, net interest income rose to Rs 32.5 billion, a 16% growth over Q1 2020
HBL’s market-leading Consumer business continues to outperform in multiple aspects, with loans growing to nearly Rs 85 billion; total advances of the Bank were maintained at Dec 2020 levels of Rs 1.2 trillion. Total non-fund income of the Bank has grown by 42% over Q1 2020 to Rs 8.2 billion. Fees and commissions continued to accelerate, increasing by 25% over Q1 2020 to Rs 5.9 billion.
Expenses remain well contained despite the Bank’s continued investments in people and technology. The Bank reduced its administrative expenses by 7% over Q1 2020 as the cost to income ratio (excluding capital gains) improved to 58.4% in Q1 2021 from 81.4% in Q1 2020. Total NPLs of the Bank declined by Rs 0.7 billion over Dec 2020, with the infection ratio remaining stable at a record low of 6.3%. The Bank’s total coverage improved to over 100%, with the specific coverage at 86%.
Commenting on the bank’s performance, Muhammad Aurangzeb, President & CEO – HBL said, “The Bank’s growth momentum continues in the new year with all activity drivers showing an upward trajectory. The growth was broad-based across all business lines, with strong performance from the deposits, cards, trade and consumer finance businesses. The revenue growth was ably supported by a more stringent operating cost regime. Q1 2021 saw the landmark opening of HBL’s Beijing branch in China. Continuing with our response to the challenge of the Pandemic, with the strong support of the Board, HBL arranged to make available Covid-19 vaccines to all staff working at the Bank, adding to its industry-leading benefits for its employees.”
HBL is actively working on enhancing the digital experience of its clients across the network. Digital transactions continue exponential growth with HBL’s Mobile Banking and Internet Banking volumes more than doubling from Rs 95 billion in Q1 2020 to Rs 212 billion in Q1 2021. Konnect App users reached 1.8 million with transaction volumes portraying a 77% growth over Q1 2020. HBL Mobile app users also reached 2 million with a 127% growth in traction volume over the same period last year. Transactions through the Bank’s E-commerce merchants also doubled over the same period last year. HBL expanded its POS network to nearly 31,000 terminals and spend on the Bank’s 6.2 million debit and credit cards grew nearly 40%. In Q1 2021, the Bank increased its trade market share to over 12% with a nearly 50% YoY growth in volumes, while home remittances and cash management also exhibited high double-digit growth.
Under ‘HBL Pay’ all onboarding and payment solutions for businesses were consolidated under a single platform. In Q1 2021, the Bank launched a Cognitive Robotics initiative for internal process digitization, to complement the digital initiatives being undertaken for customer channels. HBL continues to be the only bank in Pakistan enabling its customers to avail both a credit card and personal loan through its app.
In Q1 2021 the Bank successfully launched a refreshed website. The new easy-to-navigate UI and UX helps customers find products and services best suited to their needs and enjoy a seamless banking experience.
HBL retained its #1 position in Consumer Finance. The Bank came first in Credit Cards, Debit Cards, Merchant Acquiring, Personal Loans and second in Auto Loans. Personal loans at Rs. 38.7 billion, delivered a growth of 16% over the same period last year. Auto finance recorded an increase of Rs. 3 billion, 57% over the same period last year. Credit and Debit Cards business recorded the highest ever spend / usage generated on any card in Pakistan.
Through the eBanc Roshan Digital Account (RDA), a special investment account created for overseas Pakistanis, since its launch over 21,000 Pakistanis from 130 countries have set up RDA accounts and remitted more than USD 130 million in a short span of three months.
HBL’s Islamic Banking, with the addition of a dedicated HBL Islamic Commercial Centre, Trade Hub and Branch in Karachi, now provides Shariah compliant financial services from over 911 branches/windows nationwide. Supporting the Government of Pakistan’s vision of providing Affordable Housing Units, to underserved segments of society through Naya Pakistan Housing and Development Authority, HBL also became the first bank in Pakistan to enter a partnership with Akhuwat Foundation.
HBL maintained its position as the lead private sector financier of the agriculture sector, with a 30% market share. The Bank’s Development Finance Group (DFG) has successfully launched pilots on major food crops involving optimized agronomy advisory for each farmer by agronomists employed by HBL.
HBL continues to retain its leadership position in the corporate and investment banking space in Pakistan. In Q1 2021 the Bank successfully concluded several transactions across various sectors including oil & gas, real estate and renewable / conventional power generation, and maintained momentum by securing several advisory & arrangement mandates. HBL maintains its lead in the market in adopting Environmental, Social & Governance (ESG) principles. During Q1 2021 HBL successfully completed a series of modules on Social Risk Management led by CDC UK under its capacity building initiative. The Bank has also initiated a phase wise roll out of its SEMS Policy across its international network.
In Q1 2021, HBL extended its international footprint by becoming the first Pakistani bank to open a branch in Beijing, China. HBL Beijing has become HBL’s second branch and its managing branch in China; both branches in Beijing and Urumqi are equipped with foreign exchange and RMB license to better facilitate customers’ requirements in multiple currencies.
During Q1 2021, HBL won the 2021 Asiamoney Award for Best Domestic Bank. HBL also won the “Best Customer Franchise”, “Best Bank for SME” and “Best Investment Banking” by the Pakistan Banking Awards