Habib Bank Limited (PSX: HBL) reported a slight 3% dip in its consolidated profit after taxation, logging Rs16.15 billion for the three-month period ended March 31, 2026, compared to Rs16.63 billion in the same period last year. The bank’s basic and diluted earnings per share (EPS) edged down to Rs11 from Rs11.32 , while the board declared a dividend of Rs6 per share.
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| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Profit After Taxation | Rs16.15bn | Rs16.63bn | -3% |
| EPS | Rs11.00 | Rs11.32 | -3% |
| Dividend | Rs6/share | – | – |
| Net Mark-up Income | Rs71.37bn | Rs68.75bn | +4% |
| Total Income | Rs91.88bn | Rs90.36bn | +2% |
Margin Pressures
HBL’s core lending business saw moderate growth, but margin pressures were evident. The bank’s mark-up/interest earned grew by a solid 18% to Rs184.23 billion from Rs156.69 billion. However, the cost of funding outpaced this growth, with mark-up/interest expensed surging 28% to Rs112.86 billion from Rs87.94 billion. As a result, net mark-up/interest income expanded by a modest 4% to Rs71.37 billion compared to Rs68.75 billion in the prior year.
Non-Funded Income Performance
On the non-funded front, total non-mark-up/interest income fell by 5% to Rs20.50 billion from Rs21.61 billion. This contraction was primarily dragged down by a massive 93% plunge in net gains on securities , which dropped to just Rs296.57 million from Rs4.17 billion, along with an 84% drop in income from derivatives (Rs121.26 million).
| Non-Markup Component | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Net Gains on Securities | Rs296.57m | Rs4.17bn | -93% |
| Income from Derivatives | Rs121.26m | Rs780.77m | -84% |
| Dividend Income | Rs3.58bn | Rs1.38bn | +158% |
| Fee & Commission Income | Rs12.58bn | Rs11.59bn | +9% |
These steep declines overshadowed strong performances in other areas, such as a 158% surge in dividend income (Rs3.58 billion) and a 9% increase in fee and commission income (Rs12.58 billion). With core income slightly up and non-core income down, HBL’s total income edged up by just under 2% to Rs91.88 billion.
Expense Control and Asset Quality
Operating overheads remained relatively controlled, with total non-mark-up expenses rising 6% to Rs53.81 billion, driven by a 6% increase in operating expenses (Rs53.13 billion). Consequently, profit before credit loss allowance and taxation dipped 3% to Rs38.07 billion.
Asset quality provisioning placed an additional burden on the bottom line. The bank’s net credit loss allowance and write-offs spiked by 58% to Rs4.33 billion from Rs2.74 billion in the prior year, pushing profit before taxation down by 8% to Rs33.74 billion.
Tax Relief
However, HBL received a significant cushion from a lower tax burden. Taxation for the quarter dropped 12% to Rs17.59 billion from Rs20.01 billion, helping to contain the final net profit decline to just 3%.
About Habib Bank Limited
Habib Bank Limited (PSX: HBL) is Pakistan’s largest private sector bank, offering a comprehensive range of banking products and services to retail, corporate, and institutional clients. With a nationwide network of branches and international presence, HBL plays a vital role in Pakistan’s financial sector.
