KARACHI, June 3: Habib Bank Limited — one of the last big issues on offer for the public — began the CY08 with strong earnings momentum as the 1Q08 showed net profit growth of about 30 per cent year-on-year. Net interest income rose by 12 per cent

Analysts from a leading stock brokerage firm which held a recent meeting with the management of the Bank wrote in their report: “With the completion of Voluntary Separation Scheme (VSS)-related payments (CY06: Rs1.72 billon; CY07:0.57 bn), the Bank is expected to display improving cost efficiencies going forward.

Analysts said that rising interest rates were suppressing advances, corporate segment was driving profit which posted year-on-year increase of 48.6 per cent. (31 per cent contribution to bank’s incremental earnings), which resulted in decline in liabilities and lower cost added value to segment’s profitability.

The bank provided Rs459mn (+50 per cent YoY) against NPLs in 1QCY08 as higher provisioning improved the coverage ratio of the bank to 75 per cent. Retail banking was said to be still in focus as the bank added 12 branches in CY07, which raised the number of branches to 1,489.