Karachi (March 20, 2018): HBL yesterday declared a consolidated profit after tax of Rs 8.2 billion for the year ended December 31, 2017 with earnings per share of Rs 5.34. Pretax profit for the year is Rs 28.8 billion. The results are impacted by the US $ 225 million settlement payment made to the New York State Department of Financial Services in September 2017 which was included in the Q3 2017 results. Along with the results, the Board of Directors declared a Final Dividend of Re. 1 per share, bringing the total dividend for the year 2017 to Rs. 8 per share.
Excluding the impact of the settlement payment, HBL’s consolidated profit after tax for 2017 is Rs 31.9 billion, with pretax profit at Rs 52.5 billion.
HBL’s balance sheet has increased by 7% in 2017, to nearly Rs 2.7 trillion, as deposits have continued their growth trajectory, reaching Rs 2 trillion. This was driven by a growth of Rs 184 billion in domestic deposits and a consequent increase in the Bank’s market share to 14.3%. The domestic CASA ratio improved from 85.5% in December 2016 to 86.4% in December 2017 as the Bank added Rs 172 billion in CASA deposits. Domestic current accounts increased by more than 14% over the year to Rs 628 billion, further improving the deposit mix. Net advances increased by 14% to Rs 852 billion, as a 22% growth in the domestic loan book more than offset significant reductions in the Bank’s overseas lending activities.
A growth of Rs. 180 billion in average domestic CASA deposits has enabled the Bank to mitigate the impact of spread compression caused by a lower interest rate environment and competitive loan pricing. Coupled with the strong balance sheet growth, net interest income for the full year 2017 has increased marginally to Rs 83.1 billion. Non mark-up income increased by 5% to Rs 32.9 billion as the Bank realized capital gains and fees and commissions grew by 3%. With a strong recovery performance, the Bank registered net provision reversals for the full year 2017. The Asset Quality ratio improved from 9.2% in December 2016 to 8.2% at the end of 2017 while the coverage ratio increased to 91.6%.
Since September 2017, the Bank has actively pursued a plan to improve its capital ratios by optimizing its Balance Sheet. Consequently, the Consolidated Total CAR has increased to 15.9% as at December 2017, while Tier 1 CAR has improved to 12.0%. HBL will continue to focus on this critical area to ensure that its Capital Ratios remain well above regulatory requirements.
2017 has been a challenging year for the Bank and HBL’s Board and management have taken serious note of the issues, with steps already initiated to address issues of governance, control and compliance. The Board and senior management have been strengthened with resources having global experience in these areas. HBL has also embarked on a compliance transformation program across the organization to proactively review and further enhance the Bank’s compliance processes and engaged internationally recognized consultants who have experience and expertise in this area. The Board reiterates its objective of promoting a “zero tolerance” compliance culture and will take steps to ensure that this permeates through all levels of the organization.
During the year, HBL welcomed over 1 million new customers, who are at the heart of what we do. We will strive to deliver innovative products and a higher level of service to continuously improve the customer experience.