Karachi May 2 2022: Bottom-line of the HBL Microfinance Bank was supported by higher net markup income owing to growth in advances portfolio and continued booking of markup on rollover portfolio during 2021.
Markup spread, however, decreased mainly due to increase in secured housing lending carrying relatively lower markup rate vis-à-vis other core products and also lower yield on investment portfolio.
Over half of the incremental deposits were invested in government securities and bank placements in order to improve liquidity and capitalization indicators, which remain adequate in relation to total deposits and borrowings.
Despite increase in risk weighted assets, improvement in CAR was led by equity injection of Rs. 2.0 billion from HBL and healthy profits generation during the outgoing year. The Bank is in the process of issuing right shares amounting to Rs. 1 billion.
The same is in the process of regulatory approval. The Bank already has the statutory approval to issue further right shares amounting to Rs. 1 billion in 2023. The additional capital injection will continue to support the CAR and growth plans of the Bank, going forward.
The banks account strong ownership structure, as majority shareholding of the Bank is held by Habib Bank Limited (HBL) and the Aga Khan Development Network. The Bank has changed its name and rebranded itself to HBL Microfinance Bank Ltd. (HBL MfB) from “The First MicroFinanceBank Ltd.” in January 2022. The rebranded HBL MfB is expected to build upon the strong group association with existing customers and facilitate the growth of outreach and footprint.
The Bank secures 15.1% market share amongst the microfinance banks as at end-Dec`21 in terms of GLP. Majority of NPL pertained to deferred/rescheduled portfolio under the SBP relief package for Covid-19 and since the Bank has recovered major portion, stress on asset quality is expected to further ease-off during the ongoing year. The Bank will continue its growth momentum in FY22, while continuing to focus on disbursements of higher-ticket size housing and MSME loans.
