KARACHI: The Habib Bank Limited (HBL) on Thursday declared 13 per cent growth in its net profit for the year ended December 31, 2021, a bourse filing said.

The profit-after -tax of the bank increased to Rs35 billion for the year under review, compared with Rs30.89 billion in the preceding year.

The bank declared the earnings per share (EPS) of Rs23.88 for the year ended December 31, 2021, compared with Rs21.06 in the previous year.

It also announced a dividend of Rs2.25/share, taking the total payout to Rs7.5/share during the year under review.

Analysts at Arif Habib Limited said that the jump in the earnings on a yearly basis is primarily due to the reduced provisioning charges, as last year saw elevated expenses on the part of building general coverage along with improved net fee income.

The net interest income (NII) of the bank settled at Rs131.4 billion for the year, marginally up one per cent on a year-on-year basis. The flattish year-on-year rise in the spread is mainly due to the 7 per cent year-on-year increase in the interest expense.

The NFI of the bank surged 19 per cent on a year-on-year basis to Rs36 billion during 2021.

On a yearly basis, fee income saw a marked improvement of 35 per cent on a year-on-year basis due to the resumption in the economic activity and improved trade volumes, while foreign exchange income clocked-in at Rs5.3 billion, compared with a loss of Rs161 million in the same period of the last year.

Meanwhile, the capital gains clocked-in at 86 per cent lower on a year-on-year basis to Rs1 billion during 2021. On a sequential basis, the NFI was significantly up 31 per cent.

The provisions saw a 34 per cent year-on-year reduction during 2021, as last year aggressive charges were booked to enhance coverage. However, the bank booked 47 per cent higher charges on a quarter-on-quarter basis in the outgoing quarter of 2021.

The operating expenses remained flattish in 2021, posting a growth of 2 per cent on a year-on-year basis. However, the operating expenses went up 19 per cent on a sequential basis. With this, the cost and income settled at 58 per cent in 2021, compared with 59 per cent in the same period of the last year.

The effective tax rate was set at 43 per cent for 2021.