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COMMERCIAL BANKS
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Symbol: HMB
Current Price: Rs.53.78
Market Cap (PKR bn): 56.35
Total Shares (bn): 1.04
Free Float (mn): 471.52
52 Week Low: PKR 27.33
52 Week High: PKR 62.00
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Habib Metropolitan Bank
Limited (HMB)
In CY23, HMB reported a record unconsolidated profit of
PKR 24.38 billion (EPS: PKR 23.27), marking a 71% YoY
increase from PKR 14.26 billion (EPS: PKR 13.61) in the
corresponding period of the previous year.
Profit before tax reached PKR 51.99 billion, marking an
88% YoY increase from PKR 27.62 billion last year. The
bank experienced income growth of 61% YoY to PKR
86.71 billion in CY23, up from PKR 53.83 billion last year,
driven by robust growth in NII.
Net Interest Income (NII) surged by 76% to PKR 71.42
billion in CY23, propelled by a 54% YoY increase in
interest earnings (PKR 205.62 billion).
Non-markup income increased by 16% to PKR 15.29
billion, fueled by fee commission income (PKR 9.40
billion). The bank witnessed an increase in dividend
income and foreign exchange of 97% and 2% to PKR
625.58 million and PKR 5.20 million respectively in CY23.
Conversely, HMB experienced a decline of 98% and 16%
in securities and other income.
Total income increased by 61%, resulting in a
cost-to-income ratio of 34.6% in CY23, compared to
42.1% last year. The infection ratio reached 4.5%, lower
than 4.8% in CY22, due to robust recoveries, cautious
lending, and asset quality.
On a consolidated basis, the bank's PBT increased by
87% YoY to PKR 53.12 billion in CY23 from PKR 28.47
billion in CY22.
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 Corporate Briefing Notes
March 25, 2024

Total deposits and current deposits grew by 15% (PKR

1.01 trillion) and 22% respectively, predominantly from
low-cost deposits. Total deposits slightly lag behind
industry levels.

Gross advances stood at PKR 439 billion, down 4% YoY,

with an ADR of 43.3% in CY23. Advances remained
subdued due to macroeconomic challenges. However,
the CAGR of advances, 11.8%, exceeds industry levels.
Although advances in the textile sector have decreased,
management believes this sector will remain pivotal in
Pakistan's economy.

The loan portfolio comprises Textile (42%), others (18%),

edibles (9%), commodity finance (8%), utilities (6%),
electronics (4%), individuals (4%), and commercial trade
(4%).

The investment mix comprises federal government

securities (97%) and others (3%). Investment in treasury
bills constitutes 37% of federal government securities,
Islamic Naya Pakistan Certificates 1%, PIBs (53%), and
Ijarah Sukuks (9%).

Fixed PIBs constitute 27%, while floaters constitute 37%

of the total investment bonds portfolio. Management
reported that 35% of the PIBs are maturing in CY24.

The bank made significant recoveries in CY23 and

expects to sustain this momentum in CY24.

The CAR, ROA, and ROE stood at 18.26%, 1.7%, and 30.3%
respectively in CY23. The bank's operating expenses
increased by 31% YoY to PKR 28.75 billion.

Islamic banking deposits grew by 38% YoY and CA

deposits by 67%, while Islamic financing increased by
7% YoY. Islamic banking assets constitute 14% of total
assets and grew by 32% YoY in CY23. Management

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 Corporate Briefing Notes
March 25, 2024

reported that 9% of the total bank’s foreign trade is

Islamic.

HMB operates 117 Islamic branches (22% of the total

network). The bank witnessed an 81% increase in Islamic
profit before taxation in CY23. The branch network spans
Pakistan with 525 branches in over 200 cities. The bank
plans to invest in 26 new branches by year-end.

In digital banking, the bank observed an increase in

transaction volume via Mobile and IB. The
implementation of IFRS-9 is unlikely to affect the bank's
financials as it is fully compliant and does not anticipate
major changes in its capital structure.

HMB plans to expand in the current financial year by

opening new branches (Conventional and Islamic). HMB
invested PKR 1 billion equity in its exchange, which will
commence operations after regulatory approvals.

Looking ahead, HMB anticipates a reduction in interest

rates and plans to grow revenue by increasing volume,
given the macroeconomic conditions. Additionally, it
expects dividend sustainability.

Moreover, the bank management foresees no

government debt restructuring. Additionally,
management aims to grow deposits while fostering
robust advances in the corporate sector.

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 Corporate Briefing Notes
March 25, 2024

Financial Highlights
PKR million CY23 CY22 YoY
Interest Earned 205,612 133,165 54.40%
Interest Expensed 134,195 92,554 44.99%
NII 71,418 40,611 75.86%
Fee & Commission Income 9,396 7,931 18.47%
Dividend Income 626 318 96.65%
Forex Income 5,203 5,094 2.15%
Gain(Loss) on Securities 5 217 -97.57%
Other Income 75 89 -15.83%
Total Non-Markup Income 15,295 13,215 15.73%
Total Income 86,712 53,826 61.10%
Operating Expenses 28,753 22,021 30.57%
Workers Welfare Fund - Net 1,102 588 87.32%
Other Charges 123 68 81.93%
Total Non ark-up/ Interest Expense 29,978 22,677 32.19%
Profit before Provisions 56,734 31,149 82.14%
Provisions and Write-Offs - Net 4,739 3,531 34.20%
PBT 51,995 27,617 88.27%
Taxation 27,611 13,357 106.73%
PAT 24,384 14,261 70.99%
EPS 23.27 13.61 -
* Source: Habib Metropolitan Bank Limited, PSX

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 Corporate Briefing Notes
March 25, 2024

Important Disclosures
Disclaimer:

This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for
information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or
solicitation or any offer to buy. While reasonable care has been taken to ensure that the information
contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes
no representation as to its accuracy or completeness and it should not be relied upon as such. From
time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws,
have a position, or otherwise be interested in any transaction, in any securities directly or indirectly
subject of this report Chase Securities as a firm may have business relationships, including investment
banking relationships with the companies referred to in this report This report is provided only for the
information of professional advisers who are expected to make their own investment decisions without
undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or
indirect consequential loss arising from any use of this report or its contents At the same time, it should
be noted that investments in capital markets are also subject to market risks This report may not be
reproduced, distributed or published by any recipient for any purpose.

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