TC May-Jun 2021 Issue

TRADE CHRONICLE
Banking & Insurance
NBP declares Rs7.7bn PAT;
87pc up YoY
For the quarter ended March 31, 2021,
the National Bank declared a profit
before tax of Rs 12.6 bn; whereas profit
after tax closed at Rs 7.7 bn, 87 percent
up, YoY. The Bank’s earnings per share
increased from Rs 1.94 in Q1 ’20 to
Rs 3.62 in Q1 ’21. Net profit translates
into after-tax Return on Average Assets
and Return on Average Equity at 1.0
percent and 15.7 percent, up from 0.5
percent and 10.0 percent in Q1 ’20,
respectively.
Given the significant drop in
the policy rate as compared
to the same period last year,
gross mark-up/interest income
was Rs 48.5 bn being 33.2
percent lower, YoY. Likewise,
the interest/mark-up expense
also dropped by 52.0 percent
at Rs 26.9 bn. Consequently,
net interest/mark-up income of
the Bank stood at Rs 21.6 bn,
i.e. 30.3 percent higher, YoY.
Despite the subdued economic
activity during the year, nonmark-up/non-interest
earning
HBL invests Rs176 million
in Finja
Habib Bank Limited (HBL) has invested
Rs176 million ($1.15 million) in the
last tranche of Finja’s Rs1.56 billion
($10.15 million) Series A1 round, a
statement said. HBL becomes the first
bank in Pakistan to invest in a digital
fintech startup, it added.
Habib Bank joins an
impressive list of leading
global fintech funds that have
invested in Finja, including
BeeNext, Vostok Emerging
Finance, Quona Capital, and
ICU Ventures.
All investors from previous
rounds topped up their
investment in Finja’s
Series A1 round. For HBL,
an investment in Finja
serves two of the bank’s
strategic priorities, making
investments into digital
of the Bank closed 2.4 percent higher
at Rs 8.5 bn (Mar ‘20: Rs 8.3 bn).
Accordingly, total revenue of the Bank
was 21.0 percent up YoY at Rs 30.1 bn
(Mar ‘20: Rs 24.9 bn).
Administrative expenses remained
controlled and recorded a marginal
increase of 3.8 percent YoY to close
at Rs 14.3 bn. Cost-to-income ratio
of the Bank improved to 47.7 percent
from 55.5 percent in Q1 ’20. During
the year, NPLs of the Bank increased
by 6.6 percent to close at Rs 182.5
bn (Dec’20: Rs 171.3 bn). Proactively
financial inclusion and development
finance companies, especially ones
making an impact in agriculture and
SMEs, as these are the backbone of the
economy, and proactively reinventing
HBL to become a “technology company
with a banking licence”, it said.
Since the beginning of the Covid-19
pandemic in April last year, Finja has
scaled its digital lending portfolio by 550
percent, disbursing over 50,000 digital
moving from ‘incurred’ to ‘expected’
credit loss model, the Bank created
provision charge of Rs 3.11 bn to make
its balance sheet more resilient in the
prevailing circumstances.
On the balance sheet side, the Bank’s
capital discipline has improved its
Common Equity Tier 1 capital ratio to
16.50 percent (Dec’20:14.99 percent)
and Total Capital Adequacy Ratio to
21.91 percent (Dec’20:19.78 percent).
This capital position enables the Bank
to absorb shocks in the foreseeable
future and leverage emerging
opportunities to create value
for its shareholders.
The Bank’s liquidity and
net stable funding ratios
improved to 156 percent and
256 percent, respectively. Net
Assets at end March ’21 stood
at Rs 269.8 bn, translating into
break-up value per share at
Rs 126.8, which is 30 percent
up from Rs 97.2 at end 2018.
The Bank’s end of year total
assets closed at Rs 3,340.3 bn
i.e. 11.0 percent higher than
Rs 3,008.5 bn level of the year
end 2020.
loans to Micro, Small, and Medium
Enterprises (MSMEs).
Despite being the backbone of the
economy, small businesses in Pakistan
have traditionally not been able to
obtain credit to grow, the statement
said.
“We are elated to have HBL
participate in this funding round. Our
groundbreaking success in digitally
scoring undocumented small
businesses has resulted in a
64 percent month-on-month
portfolio growth for us since
the outbreak of the pandemic
earlier this year,” said Finja
CEO and Co-Founder Qasif
Shahid.
“Undoubtedly, HBL’s financial
clout, massive network, and
progressive leadership will
help us elevate the country’s
most important segment, the
SMEs.”
TRADE CHRONICLE - May - Jun - 2021 - Page # 39