Three of four banks announce better earnings

KARACHI: Banks continue to perform better as three of four banks announced better earnings for the quarter ended March 31 compared to last year. Habib Bank, JS Bank and Bank Al Habib improved earnings compared to the same period last year while Habib Metropolitan Bank’s profits dropped. The main reason for the banks doing better was better net interest income, higher interest rates and lower provisions against bad loans.

Net profit of Habib Bank Limited, Pakistan’s No 2 lender by assets, rose to Rs3.8 billion for the first quarter of the calendar year, up from Rs2.9 billion a year ago. Lower provision against loans was the main reason for the increase in profit. The results of the banks are below market expectations, said Standard Capital Securities Research Head, Faisal Shajee.

The current slow economic growth means less demand for loans which results in less profit for banks, Shajee added. Provision for loans by Habib Bank decreased 38 per cent to Rs1.5 billion in the quarter ended March 31 against Rs2.4 billion in the same period last year. Earnings per share increased Rs0.85 to Rs4.12. Net income increased to Rs22.5 billion against Rs20.8 billion in the same period last year. Habib Bank’s shares on Thursday rose 1.23 per cent to Rs110.66 on the Karachi Stock Exchange.The stock price has dropped Rs24.74 this year.

JS Bank’s losses narrow

JS Bank’s losses fell to Rs188.6 million for the first quarter of the calendar year, down from Rs347.5 million a year ago. Non-mark up expense rose by 4000 per cent to Rs 242.6 million against Rs5.7 million in the corresponding period last year.

Bank Al Habib net profit up

Bank Al Habib’s net profit increased 30 per cent to Rs 880 million in the first three months of 2010 against Rs677 million last year. Non mark-up income rose to Rs2.7 billion against Rs2.3 billion in the same period last year. Earnings per share rose Rs0.27 to Rs1.2 for the first quarter of the calendar year.

Habib Metropolitan Bank’s profit down

Habib Metropolitan Bank’s net profit decreased 33 per cent to Rs697 million in the first quarter of the calendar year against Rs928 million last year. The firms net income decreased to Rs1.7 billion in the quarter ended March 31 against Rs1.8 billion in the corresponding period last year. Non-performing loans also increased 70 percent to Rs 558 million. In the coming week Allied Bank Limited (ABL) and United Bank Limited (UBL) are expected to announce its earnings.

Analysts expect ABL to announce unconsolidated profits of Rs2bn to profits of Rs1.4bn in the first quarter of 2010, a healthy growth of 38 percent year-on-year. Analyst predicts UBL’s earnings to increase 10 per cent to Rs2.8bn in the first quarter against earnings of Rs2.5bn in the corresponding period last year.