KARACHI: Habib Bank on Tuesday declared a consolidated net profit of Rs34.2 billion for 2016, down 2.5 per cent from a year ago.

Earnings per share remained Rs23.23 against Rs23.93 for 2015.

The bank also declared a final dividend of Rs3.50 per share, or 35pc, bringing the total dividend for the year to Rs14 per share.

In 2016, earnings decreased mainly on the back of lower capital gains, which were down 52pc, due to the high-base effect, said a report by Topline Securities. Despite major maturities of high-yielding PIBs in 2016, HBL posted flat net interest income (NII), which was helped by strong deposit growth, it said.

HBL’s balance sheet grew 13pc over December 2015 to reach Rs2.5 trillion. Overall, the bank added Rs250bn in deposits. In 2016, HBL grew its average domestic current accounts 19pc over 2015, enabling the bank to reduce its cost of deposits.

The fourth-quarter result of the bank showed the profitability of HBL remained in check as non-interest expense was up 18pc year-on-year to Rs13.5bn in Oct-Dec.

NII of the bank remained flat in Oct-Dec, which is in contrast to peer banks that posted significant NII declines due to lower margins.

Non-interest income was also up 4pc as the bank booked higher capital gains during the quarter on the back of PIBs and equities.

A press release by the bank said current account deposits increased more than 16pc, reaching nearly Rs700bn, with the current account mix improving to 37pc of total deposits.

With the improved economic climate, lending growth has accelerated with loans growing by over 17pc, driven by increases in corporate lending and strong support from the SME and consumer segments.

Published in Dawn, February 15th, 2017