HBL Posts Record Quarterly Profit of Rs18.3bn
KARACHI: Habib Bank Limited (HBL) posted its highest-ever quarterly consolidated profit in the second quarter of 2026. The bank announced its earnings of Rs 18.3 billion, translating into earnings per share (EPS) of Rs 12.5.
The profit is recorded 3 per cent higher than the same period last year and 14 per cent above the previous quarter, reflecting steady business growth despite a challenging interest rate environment.
The bank’s financial performance for the quarter was broadly in line with market expectations. For the first half of 2026, HBL recorded a consolidated profit of Rs 34.5 billion, with EPS of Rs 23.5, remaining almost unchanged compared with the corresponding period of last year.
The bank’s Net Interest Income (NII) stood at Rs 69 billion during the second quarter. While NII remained largely unchanged on a year-on-year basis, it declined by 3 per cent compared with the previous quarter, mainly due to the impact of an increase in the policy interest rate, which affected the bank’s net interest margins.
On the balance sheet side, HBL continued to strengthen its deposit base. Total deposits rose by 14 per cent year-on-year and 10 per cent quarter-on-quarter, reaching Rs5.9 trillion by the end of June 2026. At the same time, the bank significantly reduced its borrowings, which declined to Rs1.1 trillion in June 2026 from Rs1.8 trillion recorded at the end of March 2026. The reduction in borrowings reflects improved liquidity management and a stronger funding profile.
HBL also posted strong growth in Non-Interest Income, which increased by 15% from a year earlier and 27 per cent from the previous quarter to reach Rs26 billion. The improvement was largely driven by higher foreign exchange (FX) income, along with continued growth in fee and commission earnings. Fee and commission income increased by 23 per cent year-on-year and 5 per cent quarter-on-quarter, highlighting healthy business activity across the bank’s operations.
The bank also recorded a significant increase in capital gains during the quarter. Capital gains reached Rs2.8 billion, compared with Rs300 million in the first quarter of 2026. Meanwhile, HBL’s revaluation surplus rose sharply by 35 per cent over the previous quarter to Rs 72 billion by the end of June 2026, further strengthening its financial position.
Operating expenses remained under control despite inflationary pressures. Non-interest expenses increased by 7 per cent year-on-year and 2 per cent quarter-on-quarter. As a result, the bank’s cost-to-income ratio improved to 57.5 per cent during the second quarter, compared with 58.6 per cent in the previous quarter, although it remained slightly higher than 55.7 per cent recorded in the same quarter last year.
The bank also reported a substantial decline in provisioning expenses during the quarter. HBL booked Rs1.0 billion in provisions, representing a 47 per cent decline year-on-year and a 77 per cent decrease compared with the previous quarter. However, for the first six months of 2026, total provisioning expenses increased by 15 per cent to Rs 5.3 billion, indicating continued prudence in managing credit risk.
HBL’s effective tax rate stood at 53.3 per cent during the second quarter, slightly lower than 54 per cent recorded in the corresponding quarter last year but marginally higher than 52.1 per cent in the first quarter of 2026. For the first half of the year, the effective tax rate was 53.9 per cent, compared with 54.3 per cent in the same period of 2025.
Alongside the financial results, the bank announced an interim cash dividend of Rs6.0 per share, matching market expectations. This brings the total dividend payout for the first half of 2026 to Rs12.0 per share, reaffirming HBL’s commitment to delivering consistent returns to shareholders.
Market analysts maintained a positive outlook on the bank following the results. HBL continues to be viewed as an attractive investment, supported by its strong earnings, expanding deposit base, healthy non-interest income growth, and improved liquidity position. The stock is currently trading at an estimated 2026 price-to-earnings (P/E) ratio of 7.1 times and a price-to-book value (PBV) of 0.9 times, while offering a dividend yield of around 8%, making it appealing for both value and income-focused investors.
Overall, HBL’s record quarterly earnings, stronger balance sheet, robust fee-based income, and consistent dividend payout demonstrate the bank’s resilience and its ability to deliver stable financial performance despite changes in the interest rate environment.
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