Habib Bank (HBL) has announced 3Q2020 consolidated earnings of Rs6.85/share, an increase of 104%YoY, but down 9% QoQ. The result was above expectations owing to lower than expected Interest Expense of Rs29.1 billion, down 36%YoY and also down 18%QoQ.
The 9MCY20 post tax earnings were reported at Rs25.3 billion (EPS: Rs17.2) as against that was R8.8 billion (EPS: Rs5.9) for the same period last year. Earnings were above the expectation on the back of stronger than expected performance on core metrics (3QCY20 NII growth was up 1.8%QoQ).
Net Interest Income increased by 2%QoQ led by decline in Interest Expense by 18%QoQ, while Interest Earned dropped by 8%QoQ due to the lagged impact on Asset re-pricing amidst decline in interest rates.
In 2Q2020, the Current Accounts for the bank had grown by 14%QoQ, 36.3% in Apr-Jun 2020 as compared to 35.6% in Jan-Mar 2020, which has contributed towards the reduction in overall deposit cost in 3Q2020.
For 3Q2020, Capital Gains declined to Rs655 million, depicting a decline of 85% QoQ. During 2Q2020, the Bank had booked Capital Gains to the tune Rs4.4 billion, largely emanating from the Bank’s Fixed Income portfolio.
Operating Expenses increase was limited to a 3%QoQ. Cost to Income ratio was reported at 53%. Provision expense came down to Rs3 billion, down 37% QoQ, taking 9M2020 provisions to Rs 8.5 billion, up 377%YoY).