KARACHI (January 31 2003) : Habib Bank Limited (HBL) established a new record in the banking sector by achieving a pre-tax profits of Rs 4.1 billion for the year 2002.
This represented an increase of 84% over 2001. Post-tax profits climbed to Rs 2.04 billion from Rs 1.1 billion with the net worth of the bank soaring to Rs 19.7 billion.
At the meeting of the Board of Directors, held in Karachi on Thursday (January 30, 2003) to approve the accounts, the HBL's President, Zakir Mahmood, expatiated on this very strong performance along all lines of businesses in Pakistan and in international operations.
The directors were informed that customer deposits grew from Rs 273 billion to Rs 306 billion, an increase of 12 percent, and assets from Rs 333 billion to Rs 403 billion, an increase of 21 percent; Net Revenues increased from Rs 14.1 billion to Rs 16 billion (+ 13%).
Administrative Expenses were tightly controlled and remained unchanged at Rs 11.8 billion.
Intermediation costs declined from 3.9 percent to 3.4 percent.
The Bank also had continued success in the recovery of defaulted loans in 2002, with cash recoveries of Rs 3 billion.
Since 2000, HBL has recovered a total of Rs 11 billion in cash on defaulted loans and has restructured a further Rs 10 billion.
With gross revenues (before provisions) growing from Rs 28.8 billion in 1999 to Rs 30.1 billion in 2002, the Bank managed to strengthen it Balance Sheet with additional provisions of Rs 2.6 billion.
Total provisions of Rs 6.5 billion in the last three years come to, which have been all taken from additional earnings generated by the Bank.
Thus the bank is now adequately provisioned with cash provisions constituting 62 percent of NPL portfolio and the balance covered by forced sale value of collateral as per regulations of the State Bank of Pakistan.
It was also highlighted that losses on new loans, of Rs 46 billion, booked in recent years were only Rs 250 million or less than 0.5 percent which reflected the high quality of systems and credit management processes now put in place.
Operating in an environment where loan demand has not just been stagnant but below State Bank of Pakistan's credit allocation in the National Credit Plan, HBL has managed to expand its loan portfolio by Rs 29 billion over a three-year period.
Zakir Mahmood, further stated that the 2002 results were a further confirmation of the solid turnaround at HBL as a result of the measures taken by management to improve all aspects of the Bank's operations. In 2002, the Bank had launched several new products and initiatives; in Consumer Banking HBL introduced Auto Financing and Life Style Financing Scheme for consumer durables and further expanded the Flexi Loan Scheme.
The Bank also had recorded substantial increase in its SME lending, as branches dedicated to serving the SME sector were expanded to 25. New units were opened to serve the Gujrat and Gujranwala areas.
HBL's corporate group is now acknowledged by the business community as the top corporate banking unit in the market.
HBL was the first bank to offer cheap dollar financing to help exporters and now has over Rs 12 billion disbursed in such loans, the largest of any bank in Pakistan.
This has been of great value to exporters, helping them at low cost to offset the strengthening of the Rupee.
HBL also launched Online Banking, Internet Banking and PC Banking in 2002.
These services area available in 100 branches in 14 cities to 500,000 customers. The HBL President, Zakir Mahmood, also indicated that this facility will be further expanded to 350 branches in 50 cities within the next twelve months.
HBL was the first bank to offer these services and on a country wide basis which reflects the progress the bank has made and the importance it attaches to providing efficient, high quality, modern banking services to its customers in Pakistan.
Remittances through HBL, increased to US $678 million from $304 million which reflects the efforts of the international network of the Bank to facilitate payments by overseas Pakistanis.
HBL is also credited with another record. It is the first time that any major Pakistani bank has published its accounts in January, ie within one month of the year-end.
Given the wide geographical expanse of operations in 25 countries, this shows the success in inducting modern technology in all operations of the Bank.
================================================================== Key Performance Indicators 1999 2000 2001 2002 ================================================================== Intermediate Cost (Deposits + Borrowings) (%) 4.1 4.1 3.9 3.3 Revenue: Cost Ratio 0.9:1 1.2:1 1.4:1 1.5:1 Gross Advances to Deposits (%) 74.7 77.0 70.3 66.7 Deposits Per Branches (PKR Million) 143.1 151.6 187.0 211.0 Pre-Tax/Provisions Return on Total Assets (%) (0.20) 0.72 1.48 1.52 After-Tax Return on Shareholders Equity (%) - 5.62 11.71 33.25 Number of Branches 1,760 1,755 1,516 1,474 Head Count 23,033 22,758 19,352 19,005 ==================================================================