HBL reported consolidated earnings per share of PKR 34.97 in 9MCY25 (9MCY24: 30.03). In 3QCY25, the EPS remained PKR 11.53 (3QCY24: 9.85). The 11% YoY growth in NII occurred despite margin compression, fueled by a 23% YoY growth in Average Domestic Current Accounts (CA) and strategic build-up in floating rate government securities at healthy spreads. Timely realization of capital gains amounted to PKR 14 billion in 9MCY25, significantly higher than PKR 6.6 billion realized in 9MCY24.
Domestic subsidiaries showed a significant turnaround, supported by HBL Microfinance Bank returning to profitability. Profit before tax in 9MCY25 grew by 31% to PKR 112 billion. However, due to high taxation, profit after tax grew by 19% to PKR 51 billion. As of Sep’25, total deposits stood at PKR 5.1 trillion (16% growth vs Dec’24).
Total Capital Adequacy Ratio stands at 18.32%, up 62bps since Dec’24, supporting rising ROE levels. The ROE for 3QCY25 was 16.9%. Current account deposits increased by 24%, rising from PKR 1.57 trillion in Dec’24 to PKR 1.94 trillion as at Sep’25. The ratio of Domestic CA improved from 37.3% in Dec’24 to approximately 40.4% in Sep’25. The total lending portfolio stood at PKR 1,974 billion as of Sep’25. The portfolio is well diversified, with Corporate (29%), Commercial (30%), and Consumer (19%) being the largest segments.
The Infection Ratio declined from 5.3% in Mar’25 to 4.9% in Sep’25. Specific Coverage remains high at 90.6%. Investment portfolio mix as of Sep’25 entails 58% floaters, 22% T bills, 10% fixed income and 9% others. The Digital vs OTC ratio has reached 92:8 as of 9MCY25, indicating high digital penetration. Overall digital payments are up 34%. Mobile banking payments crossed PKR 8 trillion in 9MCY25.
The bank is focusing on sectors like Agricultural Financing, SME Financing, Infrastructure Financing, Remittances, and promoting Sustainability/ESG and Financial Inclusion. Going forward, management confirms the current account strategy will continue, aiming to keep the deposit mix north of 40% in 2026.
HBL will respond based on strategy rather than reacting to aggressive, knee-jerk moves by competitors focused solely on high deposit rates, prioritizing growth with profitability. Management views that the SBP will maintain a steady and stable policy rate in the foreseeable future, following a conservative and prudent approach to avoid bubbles forming and to support the currency.
Future rises or cuts will be strictly data dependent. The domestic cost-income ratio is already below 50%. Management avoids setting a specific forward-looking target. The focus is on eliminating waste while making selective investments. HBL is not chasing a specific ADR. The focus is on financing priority sectors (Agri, SME) and making large strategic investments.
Important Disclosures
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