Habib Bank Limited gross spread stands at 59 percent

LAHORE: Gross spread of the Habib Bank Limited (HBL) stood at 59 percent in 1QCY11 versus 56 percent in 1QCY10 due to increase in earning assets and yield on the same. Average yield on earnings assets stood at 10.24 percent in 1QCY11 versus 9.93 percent in 1QCY10. Average yield on interest bearing liabilities; fell by 19bps to 4.58 percent in 1QCY11 mainly attributable to 25 percent growth in current account deposits. Consequently, average spread stayed at 5.66 percent in 1QCY11, depicting an increase of 51bps.

Interest expenses of the bank showed an increase of 7 percent to Rs9.26 billion in 1Q/CY11 due to 12 percent increase in interest bearing liabilities. The bank booked a provision of Rs2.37 billion in 1QCY11 which is 63 percent higher than last year. In addition to this, non interest expense also rose by 8 percent to Rs6.68 billion in 1QCY11 from Rs6.18 billion in 1QCY10.

HBL posted PAT of Rs5 billion translating into an EPS of Rs4.54 as against PAT of Rs3.82 in the same period last year, depicting a substantial growth of 31 percent. The surge in the earnings was mainly driven by higher net interest income and non interest income.

The interest income of the bank grew by 16 percent YoY to reach PKR22.52bn for 1QCY11 as against Rs19.43bn achieved in 1QCY10 on account of 12 percent and 32bps growth in earning assets and average yield on earning assets respectively. In addition to this, non interest income of the bank also posted an upsurge of 13 percent to PKR3.07bn over 1QCY10. Increase in non interest income was due to gain on investment and gain on foreign currencies as they grew by 13 percent and 102 percent respectively.

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