HBL FY2019 results highlight the bank’s success in growing its agriculture and SME loan books.
For the 12 months to end December, HBL posts profits before tax of PKR28.9bn ($188m) up 34% year-over-year (2018: PKR21.6bn).
Net income is ahead by 25% y-o-y to PKR15.5bn (2018: PKR12.4bn).
HBL remains the largest bank in Pakistan by deposits with a market share of about 14%. The bank ends 2019 with total deposits of PKR2.44trn, a rise of 14% y-o-y. At the same time domestic deposits increase by 13.5% y-o-y to PKR2.1trn.
Furthermore, the bank’s domestic CASA ratio improves from 84.7% to 86.2% in December 2019.
Meantime, total advances rise by 8% to PKR1.2trn. Corporate loans comprise almost 45% of the loan book. Consumer loans and retail banking loans account for 5.1% and 6.1% respectively.
Total assets increase by 6.7% to PKR3.23trn.
Total fees rise by 13% to PKR20.4bn with strong contributions from trade, cards and investment banking.
HBL’s profits before tax more than double y-o-y at its Branch Banking unit to PKR42.4bn. By contrast, profits before tax of PKR6.2bn are flat at the bank’s Consumer Banking division.
On the other hand, HBL’s International and Correspondent Banking unit remains loss-making. In fiscal 2019 it reports a loss of PKR17.8bn.
HBL FY2019 digital highlights
HBL ends 2019 with total customer numbers of around 20 million, a rise of more than 25% from end 2018.
The bank has a cards base of 5.7 million customers, up by 7.5% from 5.3 million.
With only 170,000 credit cardholders there remains scope for major customer growth.
During 2019 the HBL branch network inches down by 31 net branches to 1,712 outlets.
ATM numbers are flat at 2,136 but POS touchpoints rise by 20% to 25,340.
The bank’s distribution strategy is summarised as the goal to evolve to being a ‘technology company with a banking licence’.
HBL’s commitment to Digital Transformation and Financial Inclusion come together through HBL Konnect and HBL Mobile.
HBL Konnect has enabled close to 7 million new-to-bank customers, of which approximately 60% are women. A major part of this results from its partnership with the largest G2P programme, Ehsaas Kafalat. These accounts are a conduit to the financial inclusion of women across Pakistan.
Of its existing branch banking customers, HBL Mobile achieved the milestone of crossing 1 million app users during 2019. Given Pakistan’s population is around 180 million there remains huge potential for the bank to grow m-banking customer numbers.
HBL FY2019 other highlights
The bank’s net interest margin improves by 70 basis points to 4.4% in fiscal 2019. Reducing HBL’s cost-income ratio remains a work in progress but does improve to 73.5% from 76.2% in fiscal 2018.