Habib Metropolitan Bank Limited (PSX: HMB) has announced a net profit of Rs7.71 billion (EPS: Rs7.14) for the third quarter ending September 30, 2024 (3QCY24), reflecting a slight increase of 1.17% compared to Rs7.62 billion earned in the same period last year.
Key Financial Highlights
- Interim Dividend: The Board of Directors has recommended an interim cash dividend of Rs2.5 per share, representing a 25% payout.
Income Statement Overview
- Net Interest Income (NII): The bank’s NII decreased to Rs19.91 billion in Q3 CY24, a decline attributed to monetary easing, compared to Rs21.03 billion in the previous year.
- Non-Markup Income Surge: Total non-markup income experienced a significant increase of 89.89%, rising to Rs5.66 billion from Rs2.98 billion in the previous year. This surge was driven primarily by a substantial increase in foreign exchange income, which jumped to Rs1.67 billion from Rs137.6 million in the same period last year.
- Growth in Other Income Sources: Other components under non-markup income also saw positive movements, including fee and commission income rising to Rs2.96 billion and dividend income increasing by 5.02%.
Expense Overview
- Non-Markup Expenses: The bank’s total non-markup expenses increased by 17.11% to Rs9.37 billion in Q3 CY24, up from Rs7.99 billion in the previous year.
- Operating Expenses: Operating expenses alone rose by 15.93%, reaching Rs8.97 billion, compared to Rs7.74 billion in Q3 CY23.
- Workers’ Welfare Fund: Contributions towards the Workers’ Welfare Fund and other charges also increased during the review period, with other charges skyrocketing by 2735.62% to Rs82.94 million.
- Credit Loss Allowance: The bank recorded a provision expense of Rs1.07 billion, a decrease from Rs1.14 billion in the same quarter last year.
Taxation
HMB paid Rs7.42 billion in taxes during the quarter, a 2.34% increase from Rs7.25 billion in Q3 CY23.
Consolidated Profit and Loss Summary
| Metric | Q3 FY24 (‘000 Rupees) | Q3 FY23 (‘000 Rupees) | % Change |
|---|---|---|---|
| Mark-up/return/interest earned | 64,815,637 | 53,378,676 | 21.43% |
| Mark-up/return/interest expensed | (44,905,891) | (32,348,388) | 38.82% |
| Net mark-up/interest income | 19,909,746 | 21,030,288 | -5.33% |
| Fee and commission income | 2,961,041 | 2,533,938 | 16.86% |
| Dividend income | 196,034 | 186,655 | 5.02% |
| Foreign exchange income | 1,667,370 | 137,600 | 1111.75% |
| Total non-markup income | 5,656,290 | 2,978,718 | 89.89% |
| Total income | 25,566,036 | 24,009,006 | 6.49% |
| Total non-markup expenses | 9,366,637 | 7,998,473 | 17.11% |
| Profit before provisions | 16,199,399 | 16,010,533 | 1.18% |
| Credit loss allowance / provisions | (1,067,542) | (1,137,697) | -6.17% |
| Profit before taxation | 15,131,857 | 14,872,836 | 1.74% |
| Taxation | (7,422,660) | (7,253,105) | 2.34% |
| Profit after taxation | 7,709,197 | 7,619,731 | 1.17% |
| Earnings per share (EPS) | 7.14 | 7.11 | – |
Conclusion
Habib Metropolitan Bank’s earnings reflect steady growth despite a decline in net interest income due to monetary policy changes. The significant rise in non-markup income, particularly foreign exchange earnings, highlights the bank’s ability to adapt to market conditions. The recommended dividend further indicates the bank’s confidence in its financial stability moving forward. Investors will be keen to monitor how HMB manages its operating expenses and provisions in the coming quarters.
