HBL says 60% of its investment book is floating-rate as yields set to climb
Habib Bank Limited expects the yield on its investment portfolio to climb gradually as floating-rate securities reprice, management told analysts on Wednesday, with roughly 60% of the book sitting in instruments that move with the market.
At a briefing on the third-quarter results, attended by KTrade, the bank said medium-term bonds made up 15% of investments and fixed-rate securities 25%, with the fixed-rate portion carrying a duration of 3.2 years against 1.12 years for the portfolio as a whole. HBL added about Rs450 billion of Pakistan Investment Bonds between the second and third quarters of 2026.
The bank reported earnings of Rs19.6 billion, or Rs13.33 per share, for the quarter, up 6.5% on the previous three months and in line with market expectations, and declared an interim cash dividend of Rs6 per share. Current account deposits rose 15%, or Rs273 billion, in the nine months to September, lifting their share of total deposits to 40% from 38% at the end of December 2025.
Islamic banking kept expanding, with Islamic deposits at Rs1.3 trillion in September and about 36% of the branch network Islamic - roughly 658 branches and 500 windows. The bank runs more than 2,000 branches and added 84 in the nine months. Its core banking migration to Temenos has moved 800 branches, with further milestones due in 2027.
On lending, domestic advances grew across corporate and commercial segments alongside international lending. Consumer financing passed Rs200 billion, which management described as the largest in the market, with credit card receivables at Rs66 billion and Islamic financing about 20% of the loan book. The infection ratio stood at 4.5% with specific coverage of 85% plus general provisions. Foreign exchange income rose 76% year on year, mobile app throughput was up 36%, and digital channels handled 94.6% of transactions. Management said HBL is already compliant with the State Bank's phased reclassification of banking-book other comprehensive income into the trading book and expects no extra capital requirement or hit to its Common Equity Tier 1 ratio. On a civil liability case in New York, separate from earlier penalty matters, it expects a favourable outcome and a relatively early conclusion, though the US process could take time.
