Pakistan, Karachi – 27 April 2023:
HBL today declared another record quarterly profit in Q1’23 with a profit before tax (PBT) of Rs 21.5 billion, 47% higher than the PBT of Rs 14.6 billion last year. This strong performance was driven by excellent results across all domestic businesses and sustainable operating profit from the international franchise. The Bank’s profit after tax rose by 54% to Rs 13.3 billion with earnings per share improving from Rs 5.78 in Q1’22 to Rs 9.00 in Q1’23. Along with the results, the Bank declared a dividend of Rs 1.50 per share (15%).
The Bank’s balance sheet grew by 7% to Rs 4.96 trillion with deposits increasing to Rs 3.6 trillion. A growth of Rs 260 billion in average low-cost domestic deposits enabled HBL to contain the rise in deposit cost. The record policy rate of 21% has resulted in muted credit demand with a net reversal in private sector credit growth. However, total advances were maintained at December 2022 levels of Rs 1.8 trillion.
In the rapidly rising rate environment, a combination of significantly higher net interest margins and a 13% growth in the average domestic balance sheet drove a 53% growth in net interest income. This was well supported by a 46% higher interest income from international business. Consequently, HBL’s total net interest income increased to Rs 55.8 billion. HBL continues to lead the market in fees, with another robust growth of 27% to Rs 9.3 billion. The flagship Cards business continued to deliver stellar results, accounting for two-thirds of the fee increase. Trade cash management and consumer finance made solid contributions, delivering high double-digit fee growth. The Bank’s total revenue for Q1’23 thus increased by 38% over Q1’22, to Rs 64.4 billion.
HBL continues to invest in its people and its digital infrastructure while ensuring it gives back to the communities in which it operates. In Q1’23, unprecedented inflation levels and Rupee devaluation further impacted administrative expenses which increased to Rs 39.2 billion. However, with the strong revenue growth, the cost/income ratio improved from 65.1% in Q1’22 to 60.8% in Q1’23. With the slowdown in loan growth, the infection ratio has increased to 5.4% but remains below industry levels; prudent provisioning ensured that the Bank’s total coverage was maintained at above 100%.
Commenting on the Bank’s performance, Muhammad Aurangzeb, President & CEO - HBL said, “We have remained steadfast in the course we have set for ourselves i.e. setting new benchmarks in challenging times. Given this was achieved while Pakistan faces perhaps the most challenging economic conditions in its history, speaks for the continued patronage of our clients, the robustness of our business model and the dedication of the entire HBL team. As we navigate the current environment, we remain live to risks; we will pursue a course that ensures the highest possible standards of client experience whilst ensuring that business controls are robust across the franchise.”
Business Developments
The Bank is in good health with solid business fundamentals, enjoying leadership positions across most areas of our operations.
HBL’s investments in technology over many years are coming to fruition. During Q1’23, HBL’s Mobile and Internet Banking user base increased by 25% to 3.4 million users; transactions grew by 46% YoY, channeling a total value of over Rs 940 billion. HBL is driving Pakistan’s e-commerce payments landscape, with its recently launched HBL Digital Invoicing. HBL’s Billing Aggregator continues to make online bill payments accessible to millions of Pakistanis across the world. During Q1’23, the channel processed around Rs 400 billion, a 60% YoY rise, and recorded another industry-first by enabling clients of other banks to use their own app to pay education fees for HBL-registered institutions.
Konnect provides services to over 8.9 million clients, of which 23% are women. Konnect has been instrumental in implementing the government’s welfare programs; in Q1’23, HBL disbursed Rs 102 billion to over 6.3 million BISP beneficiaries, to support underprivileged women. HBL also collaborated with BISP on the Waseela-e-Taleem Program to promote education and literacy, disbursing Rs 9.4 billion to 4.8 million beneficiaries in Q1’23.
HBL’s cards remain the first choice of clients as usage of both debit and credit cards grew by 54% over the same period last year with spend reaching nearly Rs 94 billion in Q1’23. HBL is growing the SME business in a significant and sustainable way; the business registered a 20% YoY. New cashflow-based lending products witnessed good momentum, growing the portfolio to over 3,000 clients by the end of Q1’23. Supply chain financing has also recorded the highest ever growth by any bank in the country.
HBL made significant growth in Agriculture financing, with new business acquisition of Rs 3.7 billion during Q1’23. HBL maintains a dominant role in Agriculture financing with a market share of 35% and the largest portfolio amongst commercial banks. As the champion bank for Balochistan, HBL continues to lead the industry with the highest agriculture disbursements in the province. After the hugely successful agriculture pilot interventions in Punjab, which saw farmer incomes double, HBL is expanding this to KPK.
HBL maintained its dominance in the Investment Banking space by closing 8 deals worth over Rs 300 billion. Despite a plethora of headwinds, the Bank secured 8 mandates covering the entire Investment Banking spectrum and valuing over USD 1 billion. Transaction & Employee Banking has maintained its leadership position with cash management throughput up by 40% to Rs 3.6 trillion in Q1’23; 70% of this was through digital transactions. HBL’s market-leading employee banking proposition, HBL@Work, provided payroll services to 3.2 million employees, and tablet-based real-time account opening, and activation were commercially launched to facilitate implementation.
HBLPSL 8 was successfully held in Q1’23. This year for the first time ever, the month long, 34 match tournament was played across 4 cities in the country. HBLPSL has put Pakistan back on the map of world cricket and brought untold joy to tens of millions of Pakistanis.
Pakistan, Karachi – 03 May 2023:
HBL launches Digital Invoicing, an innovative payment solution designed for social media sellers, small businesses, and freelancers. The service enables them to offer their customers a convenient, secure, and cost-effective alternative to traditional payment methods, i.e. Cash-on-Delivery and account transfers. Merchants can create e-invoices for each order and send them to their customers as a shareable link over SMS, WhatsApp, email, or any communication channel for instant digital payment; the customer clicks on it to make a payment using their MasterCard or Visa credit/debit card.
HBL Digital invoicing has been developed to enable digital payments for sellers that conduct business over Facebook, Instagram, WhatsApp, and other platforms in the social commerce domain. It’s a low-investment solution that is specially designed to empower budding entrepreneurs with improved record-keeping and regular reporting, thereby enabling them to keep the focus on their business, rather than on tracking payments and deliveries.
Commenting on the initiative, Syed Kamran Mehdi Jaffery, Head Enterprise Solutions and Digital Channels – HBL, said, “HBL leads in exploring new markets to address the needs of niche participants with technological innovation. Our Digital Invoicing solution is one such product. It has been designed to facilitate sellers on social media and WhatsApp with digital payments. HBL will continue to innovate and offer digital products and services that are designed to uplift businesses, consumers, and Pakistan’s economy.”
The agreement was signed by Khaqan Muhammad Khan Head Financial Institutions and Global Remittance Business - HBL (standing 2nd from right) and Dr. Kamran Shams, CEO - Akhuwat Islamic Microfinance (standing 3rd from left). Senior members from both organizations were also present at the ceremony.
Pakistan, Karachi 31 May 2023:
HBL and Akhuwat Islamic Microfinance have signed an agreement to provide interest-free financing to individuals and small businesses under the Prime Minister’s Youth Business and Agriculture Loan Scheme (PMYB&ALS). The partnership represents a significant milestone in HBL’s mission to foster economic growth and social progress, with the potential to positively transform the lives of countless individuals.
While sharing his thoughts on the collaboration, Khaqan Khan, Head Financial Institutions and Global Remittance Business - HBL, said “We are pleased to join hands with Akhuwat Islamic Microfinance and extend interest-free financing through the PMYB&ALS scheme. This partnership reflects HBL’s unwavering commitment to promoting financial inclusion and uplifting the lives of individuals and communities. We believe in empowering entrepreneurs and enabling them to realize their dreams and this agreement is another significant step in that direction.
Kamran Shams, CEO - Akhuwat Islamic Microfinance, expressed his gratitude for the collaboration with HBL by saying, “We are honored to partner with HBL and be a part of the PMYB&ALS scheme. This agreement presents a remarkable opportunity to advance financial inclusion for the marginalized segments of society. By providing interest free financing, we aim to empower individuals and communities, enabling them to create sustainable livelihoods. Together with HBL, we are determined to make a meaningful difference and contribute to the socioeconomic development of our nation.
Dr. Najeeb Samie, member of the Board of Directors – HBL (standing 3rd from left), Muhammad Aurangzeb, President & CEO – HBL (standing 2nd from right) accompanied by Dr. Mufti Muhammad Zubair Usmani, Chairman Shariah Board – HBL (standing 4th from left) inaugurated the 5th HBL Islamic Prestige Lounge located in Dolmen Mall, Karachi. Nadeem Riaz, Chairman & CEO - Dolmen Group along with valued clients and senior leaders of the Bank were also present at the inauguration.
Pakistan, Karachi – 02 June 2023:
HBL inaugurated its 5th Islamic Prestige Lounge located in Dolmen Mall, Karachi. This is the 39th Prestige Lounge including an international lounge in Jumeirah, Dubai. The Prestige footprint is now spread across 17 cities, with plans to expand further. The inauguration of the lounge was done by Dr. Najeeb Samie, member of the Board of Directors – HBL, Muhammad Aurangzeb, President & CEO – HBL accompanied by Dr. Mufti Muhammad Zubair Usmani, Chairman Shariah Board - HBL. Nadeem Riaz, Chairman & CEO - Dolmen Group along with valued clients and senior leaders of the Bank were also present at the inauguration.
HBL Prestige provides a world-class banking experience to high-net-worth individuals (HNWIs). This exclusive Islamic proposition offers shariah-compliant banking solutions to our clients. The proposition includes seamless instant account opening with tailored solutions through dedicated digital & physical channels and portfolio managers. The account offers personalized banking services to its clients including but not limited to instant world elite debit card issuance, dedicated conference rooms, and top-notch alliances. The state-of-the-art Prestige Lounges are located strategically in high-visibility areas of key cities.
Commenting on the occasion, Muhammad Aurangzeb, President & CEO – HBL said, “HBL Prestige is exclusively designed and tailored to meet the financial and lifestyle needs of our high-net-worth clients across Pakistan. We are delighted to inaugurate our state-of-the-art HBL Islamic Prestige Lounge in Dolmen Mall, Karachi. The demand for Shariah-compliant solutions and services has seen a sharp increase, and this expansion highlights HBL Islamic Banking’s commitment to support our clients’ strategic needs. We hope to remain true to HBL Prestige’s motto of ‘With you, in what you value’.”
Pakistan, Karachi – 05 June 2023:
HBL becomes the first Bank in Pakistan to launch a dedicated customer care Twitter handle “@HBLCare”. The Twitter handle will provide customers with a convenient platform to interact with HBL and get their queries answered quickly.
HBL is the only bank in Pakistan with two Twitter handles. The existing handle @HBLPak, which has more than 131,000 followers, will now be used for news and information.
Elaborating on the initiative, Ali Habib, Chief Marketing & Communications Officer - HBL, said, “We are excited to leverage the potential of Twitter to unlock value for our customers. HBL believes in the power of social media and through two dedicated Twitter handles, we will deliver more value to our customers”.
Pakistan, Karachi – 10 July 2023:
Asiamoney awards HBL the accolade of ‘Best Bank for Digital Solutions Pakistan’ for 2023. The Bank has also won, for the fifth consecutive year the ‘Best Domestic Bank Pakistan’ for 2023.
In the Asiamoney citation for the ‘Best Bank for Digital Solutions Pakistan’, HBL was appreciated for its relentless pursuit of innovation, particularly as a pioneer in providing seamless, secure, and integrated digital platforms. By working closely with regulators on enhancing security requirements, HBL continues to maintain its leadership position in banking, guiding customers towards a digital-first approach.
Commenting on the achievements, Muhammad Aurangzeb, President & CEO – HBL, said “HBL is honored to be recognized as ‘Best Bank for Digital Solutions Pakistan’ and ‘Best Domestic Bank Pakistan’. The Bank continues to provide innovative products and solutions to its customers whose banking needs are moving beyond traditional channels. Digital is and will be, at the heart of how HBL strives to serve its customers even better. These wins are a tribute to our millions of customers’ continued trust and confidence in HBL.”
Asiamoney is a global English-language publication focused on business and finance.
Pakistan, Karachi – 17 July 2023:
HBL has contributed over Rs 4 billion - spread over a decade - for the social uplift of Pakistan. In 2022 alone, the Bank contributed over Rs 580 million. This contribution is a testament to HBL’s commitment to being “More Than Just a Bank” making a real difference in the communities it serves. HBL shared this information at an event to mark the launch of its Impact & Sustainability Report - 2022 in Karachi.
In pursuance of HBL’s commitment to inclusion, sustainability, and community development, the Bank is pledged to reducing its own emissions; expanding its Green Banking portfolio; expanding its customer base to over 34 million including 4 million women; and contributing to the communities in which it operates by supporting healthcare, education, arts, and social development initiatives through the HBL Foundation.
Upholding the ethos of the Aga Khan Development Network (AKDN), HBL’s good governance and Corporate Social Responsibility is not confined to charitable giving, but also directed at conducting our daily business and living our daily lives with constant care for our physical and social environments. The HBL Microfinance Bank has contributed tremendously to ensuring that we are the single largest provider of microfinance and SME services in Pakistan. As the country’s largest banking group, we can foster positive change by example, leading with our walk as well as our talk.
Our unwavering commitment to sustainability is enabling us to play a leading role in developing the agricultural sector and promoting food security through investing in relevant learning and infrastructure.
Sultan Ali Allana, Chairman – HBL, commenting on the report said, “Last year in our review, we emphasized the urgent need to reflect on sustainability challenges in the future. This year, we lived in that future as unprecedented flooding devastated the country. We must come together and commit to positive action if we are to leave a functional planet for future generations.
Our priority remains consistent: to innovate and provide solutions that support growth and improve quality of life for our employees, those we serve, and the people of Pakistan.”
HBL invites you to read its Impact and Sustainability Report – 2022 to learn how profitability and sustainability together make a real difference.
Highlights of Impact and Sustainability Report 2022
- As part of the HBL’s Development Finance initiative, the Bank has completed 17 pilot projects, supporting 550 farmers through in-kind financing for crops spanning over 45,000 crop acres.
- HBL has developed its own Green Taxonomy (GT) which will facilitate directing capital flows to green projects.
- With a 27% increase in funding, HBL Foundation has deepened its contribution across key areas of need, ranging from health to education.
- HBL is following the path that has been defined by the Aga Khan Development Network (AKDN) Environment and Climate Change Commitment, envisaging a Net Zero goal by 2030.
- HBL’s sustained effort to steadily improve its gender ratio (from 3% in 2004 to 22% in 2022) was recognized at the 2022 GDEIB Awards with the “Most Inclusive Organization” award.
- HBL partnered with the Government of Pakistan and the National Disaster Management Authority (NDMA) to assist flood-affected families through Benazir Income Support Programme (BISP) and disbursed Rs 54 billion in relief to flood affectees.
- HBL has funded the building of two purpose-built villages, comprising 100 homes each in Qamber Shahdadkot and Larkana in Sindh. The cost of these refabricated villages that are equipped with solar panels is over Rs 264 million.
- In a significant move aimed at supporting its experienced workforce and promoting job security, HBL extended its staff service age from 60 to 65 years in 2022.
Pakistan, Karachi – 26 July 2023:
HBL today declared a consolidated profit before tax (PBT) of Rs 51.5 billion, nearly 50% higher than the PBT for H1’22. The PBT of Rs 30 billion for the second quarter of 2023 was the highest in the Bank’s history based on superb performance of its core business lines. Along with the results, the Bank declared an interim dividend of Rs 2.00 per share (20%), taking the total payout for H1’23 to Rs 3.50 per share. This excellent performance was driven by its market-leading domestic franchise which grew profits by 63%; the international business is now delivering sustainable and improved operating performance, making a positive contribution to the Bank’s bottom line. Despite excessive and unfair taxation introduced in the Federal Budget the Bank’s profit after tax doubled to Rs 26.3 billion over the corresponding period last year which was also marred by excessive and retrospective tax measures. Earnings per share for the half year were Rs 17.86 compared to Rs 8.10 for H1’22.
HBL’s balance sheet grew by 7% over December 2022 to Rs 4.9 trillion, driven by a Rs 224 billion growth in deposits. Domestic deposits crossed the Rs 3 trillion mark, with low-cost deposits increasing by Rs 162 billion. Average domestic deposits increased by more than Rs 300 billion; 90% of this growth was from cheaper deposits enabling the Bank to keep its funding cost at manageable levels. Advances declined as private sector demand reduced in light of the record-high borrowing costs. Most of this decline was in lending to corporates; agriculture and consumer lending held steady even in the face of macroeconomic headwinds while microfinance loans increased by 7%.
In the rising interest rate environment, net interest margins widened by 192 bps and, combined with a Rs 460 billion growth in the average domestic balance sheet, resulted in a 53% increase in net interest income. With a strong contribution now coming from international markets as well, HBL’s total interest income rose to Rs 114 billion. HBL’s enviable fee franchise continued to deliver excellent results, with fees growing by 31% to nearly Rs 20 billion. Its flagship Cards business accounted for more than 60% of the growth along with solid performances from trade, cash management, and consumer finance. The Bank’s total revenue for H1’23 thus increased by 41% to Rs 138 billion.
During the quarter, inflation continued to rise, with a weaker rupee further impacting the cost base. Despite these headwinds, proactive cost management efforts contained expense growth to only 2.5% over the previous quarter, improving the cost/income ratio from 60.8% in Q1’23 to 54.5% in Q2’23. The net infection ratio of 0.8% remains below industry levels and prudent provisioning has ensured that coverage remains in excess of 100%.
Commenting on the Bank’s performance, Muhammad Aurangzeb, President & CEO - HBL said, “HBL’s H1’23 results, underpinned by client centricity, were driven by strong organic growth. Exceptional performance across all business segments further cemented the Bank’s leadership position. We will continue to invest in our digital capabilities and are committed to providing the best possible banking experience. The recognition by Asiamoney as the ‘Best Bank for Digital Solutions Pakistan’ is a tribute to millions of clients’ continued trust and confidence in HBL. The Bank continues to help its customers navigate challenging periods, emphasizing sustainability and giving back to the community.”
Our priority remains consistent: to innovate and provide solutions that support growth and improve quality of life for our employees, those we serve, and the people of Pakistan.”
Business Developments
In H1’23, HBL won Pakistan’s Best Digital Bank for clients thus validating its progress towards becoming a ‘technology company with a banking license’. The Bank’s digital channels played a significant role in shaping the financial landscape and enabled clients to process more than 115 million digital financial transactions for a staggering volume of Rs 2.75 trillion. This growth has resulted in processing about 85% of all HBL’s transactions through digital channels, compared to conventional branches.
HBL Mobile introduced an Urdu language option and witnessed a growth in user base by 26% to more than 3.6 million users. Financial transactions and service requests through the app grew by 50% to over 430 million and channeled a remarkable total value of over Rs 2.02 trillion.
HBL has taken the lead in becoming the first Bank to offer aggregator services to other financial institutions across the country through 1link. In H1’23, Rs 825 million worth of digital payments were processed through this channel. HBL also introduced Digital Invoicing – a new digital payments solution for the e-commerce sector.
The Bank is committed to delivering more value to its clients by enhancing its presence on social media. HBL is leading in the use of Tiktok platform in the banking industry and also became the first Bank in Pakistan to launch a dedicated client care Twitter handle “@HBLCare”.
HBL’s flagship cards business remained the first choice of clients as usage grew by 50% over the same period last year. HBL Personal Loan reached a milestone of Rs 20 billion disbursement, digitally, to its 100,000 plus clients.
HBL made significant growth in Agriculture financing, with a new business acquisition of Rs 8.5 billion in H1’23. The outstanding gross loans are now close to Rs 50 billion, a 12% growth over H1’22.
HBL’s ambition to grow SME business has led to delivering accelerated growth with average advances for H1’23 rising by 13% over the corresponding period last year, while the number of borrowers registered a growth of 24% YOY.
Under the HBL Islamic initiative, the Bank successfully established its flagship Prestige branch at Dolmen Mall Clifton, Karachi. Furthermore, HBL Islamic CarFinance achieved a milestone of Rs 3 billion in disbursements in H1’23.
HBL Nisa, Bank’s leading platform for women clients, is one of the largest in the industry with Rs 53 billion in deposits and over 300,000 accounts. During the year, the Bank introduced the Konnect Nisa initiative offering banking services via mobile phones, POS devices, and electronic channels.
HBL sets a new industry record by surpassing Rs 3 billion mark in Roshan Apni Car loans for Non-Resident Pakistanis (NRPs). In H1’23, HBL also facilitated approximately USD 139.7 million in transactions and opened over 12,000 new Roshan Digital Accounts (RDA).
During H1’23, HBL’s Investment Banking arm closed multiple deals across the energy, oil & gas, real estate, insurance, and road infrastructure sectors. These deals included syndications and debt capital market/Sukuk issuances worth over Rs 325 billion.
The HBL Transaction & Employee Banking maintained its leadership position in cash management and employee banking with market shares above 30%. The throughput in cash management increased from Rs 5.9 trillion in 2022 to Rs 7.1 trillion in 2023, showing a 20% volume growth.
The international franchise witnessed substantial improvement in operating profit for H1’23, mainly supported by a 45% higher interest income compared to H1’22. This year marks the 10th anniversary since CPEC was kicked off. During this time, HBL has been a key financial partner to major Chinese Entities as well as Government Ministries & Departments.
HBL Foundation demonstrated its commitment to the welfare of society by allocating a substantial amount of Rs 193.6 million for healthcare initiatives, alongside an allocation of Rs 64.43 million for educational programs.
The Bank won ‘Best Domestic Bank Pakistan’ at the Asiamoney Awards 2023. HBL’s digital channels were recognized globally and locally by winning 7 awards. During this period, HBL’s Investment Banking has won 8 awards from various international publishers including ‘Best Investment Bank in Pakistan’ by FinanceAsia Awards 2023. HBL was ranked #1 among large banks in Pakistan by the State Bank of Pakistan in Banking on Equality Scorecard; this is a testament to HBL’s commitment to women in the workplace and financial inclusion.
Faisal N. Lalani, Head International Banking – HBL (sitting on left), and Amin Khowaja, Chief Executive Officer, Pakistan - J.P. Morgan (sitting on right) signed the agreement. Senior officials from both organizations were also present on the occasion.
Pakistan, Karachi – 5 October 2023:
HBL, the largest bank in Pakistan has entered into an agreement with J.P. Morgan Payments, to provide secure, and cost-effective cross-border payments via J.P. Morgan’s Xpedite Remit. The agreement extends an existing relationship between the two financial institutions to provide remittance services in Pakistan.
Commenting on this collaboration, Faisal N. Lalani, Head International Banking – HBL, said, “We are extremely proud of this engagement with J.P. Morgan Payments. J.P. Morgan’s Xpedite Remit solution will enable individuals across the globe to send remittances to Pakistan in a secure and cost-effective manner. Remittances can be sent to HBL and other bank accounts or as Cash Over Counter from any of the Bank’s 1750+ branches in Pakistan.”
Commenting on this collaboration, Amin Khowaja, Chief Executive Officer, Pakistan - J.P. Morgan, said, “With the signing today, J.P. Morgan is very excited to enter into a strategic engagement with HBL. Pakistan is one of the largest remittance recipient corridors and we will work together to streamline remittances.”
Pakistan, Karachi - 11 October 2023
HBL has launched a new accessibility feature on its digital banking app, HBL Mobile. This feature will enable talkback audio assistance for the visually impaired individuals. In another industry first in Pakistan, HBL Mobile is the country’s first banking app to enable this capability.
To enable talkback (audio) on their app, users need to go to their phone’s accessibility settings of their smartphones and turn on the screen reader. When the screen reader is active, users will hear a description of what is on the screen when they tap on different elements. This includes features such as sending money, paying bills, and checking account balances. HBL customers who may be visually impaired or prefer sound based assistance can now bank digitally without assistance from others.
Commenting on the initiative, Abrar Ahmed Mir, Chief Innovation & Financial Inclusion Officer – HBL, said, “Financial inclusion and diversity are essential for a thriving economy and HBL Mobile’s new accessibility feature will empower visually impaired individuals to use our app and manage their finances independently. By making our banking app more accessible, HBL is empowering everyone to participate fully in society.”