HMB’s Earnings Weaken As Rising Costs Outpace Deposit Growth

Posted by: Aamir Hayat Like: 0 Post Date: April 22, 2026

HMB’s Earnings Weaken As Rising Costs Outpace Deposit Growth

Ticker: Habib Metropolitan Bank Limited HMB
Analyst Briefing Date: April 15, 2026

This article summarizes HMB Habib Metropolitan Bank Limited’s corporate briefing, focusing on CY25 earnings decline, strong deposit growth, trade finance positioning, and forward outlook on digital expansion, funding mix, and cost efficiency. It reflects a bank maintaining operational strength while facing margin and cost pressures.

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What did the management say?

Management stated that the bank continues to prioritize low-cost deposit mobilization, with deposits growing 21% to PKR 1.12 trillion and CASA ratio reaching 62%. Current accounts contribute 38% of total deposits, supporting funding stability. The bank also emphasized its leadership in trade finance, with growing volumes across key economic sectors. They highlighted plans to accelerate digital banking adoption to enhance customer experience and improve efficiency. Expansion of the branch network will remain targeted, particularly in key trade hubs, to strengthen market positioning. Management also noted that the investment portfolio is heavily tilted toward floating-rate instruments to protect margins in a volatile interest rate environment.

What did the numbers say?

Habib Metropolitan Bank reported a profit after tax of PKR 22.6 billion for CY25, down 8% from PKR 24.7 billion in the previous year. Net mark-up income declined 5% to PKR 66.5 billion, while non-mark-up income increased 15% to PKR 24.4 billion. Total income remained largely flat at PKR 90.9 billion. Operating expenses increased 15% to PKR 47.7 billion, driving a rise in the cost-to-income ratio to 52.5% from 45.2%. EPS declined 8% to PKR 21.55, while dividend remained unchanged at PKR 12 per share. The investment portfolio stood at PKR 1,034 billion, with 88% allocated to floating-rate instruments and an average yield of 11.5% to 12.0%.

What should investors expect going forward?

Investors should expect continued focus on deposit growth and CASA expansion to support margins and funding efficiency. The bank’s positioning in floating-rate instruments may provide resilience in a changing interest rate environment. Trade finance operations are expected to remain a core driver of business activity. Efficiency improvements will depend on the success of digital initiatives and the controlled expansion of the branch network. While cost pressures may persist in the near term, management aims to improve operational leverage over time. Future performance will be influenced by deposit mix, cost management, and stability in interest rate conditions.

What are analysts saying about HMB stock?

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According to the KSEStocks Database, HMB is covered by 3 analysts in Pakistan and they have an average price rating of PKR 140. This average price target suggests an upside of 17.1% from the last close of PKR 119.64. According to EPS estimates from 5 different brokers, HMB has an average 2026 EPS expectation of 19.9. This suggests the stock is now trading at a forward PE of 6.

Why do we compile research firms’ forecasts? Broker research is fragmented across different houses. Compiling it in one place helps investors see consensus, identify divergence, and think independently rather than relying on a single view.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →