HBL reports 24pc increase in quarterly earnings

KARACHI: Habib Bank (HBL) announced its 2Q2025 results today, reporting consolidated earnings of Rs17.8 billion [earnings per share (EPS): Rs12.1], up 24 per cent year-over-year (YoY) and 10 per cent quarter-over-quarter (QoQ). This takes 1H2025 earnings to Rs34.4 billion (EPS: Rs23.4), up 16 per cent YoY, a Topline Securities report said.

The 2Q2025 results came higher than industry expectations due to higher-than-expected Net Interest Income (NII) driven by 17 per cent QoQ increase in deposits to Rs5.2 trillion in Jun 2025.

NII has remained flattish QoQ despite decline in policy rate by 100bps in last quarter. Topline attributed this growth to increase in low cost deposits which have led to sustainability in NIMs.

Non-Interest Income has also increased 5 per cent QoQ and 17 per cent YoY largely due to capital gains on securities to the extent of Rs5.3 billion in 2Q2025. The share of profit from associates has also increased to Rs2 billion, up 30 per cent YoY and 48 per cent QoQ.

The cost of income ratio has declined by 210bps to 55.7 per cent in 2Q2025 compared to 57.7 per cent in 2Q2024 and 56.4 per cent in 1Q2025. In absolute terms, non-interest expenses have remained flattish QoQ and up 9 per cent YoY.

Effective tax rate has clocked in at 54 per cent in the outgoing quarter compared to 54.6 per cent in 1Q2025 and 49.5 per cent in 2Q2024. This takes 1H2025 tax rate to 54.3 per cent (vs. 49.8 per cent in 1H2024).

The bank has recorded a provision expense of Rs1.9 billion, down 71 per cent YoY and 31 per cent QoQ. In 1H2025, the provisions have fallen 54 per cent YoY to Rs4.6 billion.

Alongside the results, the bank also announced a dividend of Rs4.5 per share, in line with our expectations, bringing the total 1H2025 DPS to Rs9.0 per share, the report added.

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