HBL’s Earnings Growth Faces Limits Despite Strong Deposit Expansion

Posted by: Aamir Hayat Like: 0 Post Date: April 27, 2026

HBL’s Earnings Growth Faces Limits Despite Strong Deposit Expansion

Ticker: Habib Bank Limited HBL
Analyst Briefing Date: March 12, 2026

This article summarizes Habib Bank Limited’s corporate briefing, focusing on CY25 earnings growth, deposit expansion, asset quality trends, and forward outlook on lending discipline, market positioning, and digital execution. It highlights a year of stronger profitability supported by balance sheet growth.

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What did the management say?

Management highlighted that HBL continued to strengthen its market position through scale, network reach, and balance sheet expansion. Deposits rose sharply during the year, reflecting successful mobilization efforts and reinforcing the bank’s funding base. The bank also maintained a selective approach toward lending growth, prioritizing disciplined credit expansion in the prevailing environment. They stated that digital integration remains a core focus area to improve customer experience and operational efficiency across retail and corporate businesses. Management emphasized continued use of scale advantages to support growth while balancing profitability, risk management, and service delivery across segments.

What did the numbers say?

HBL reported earnings per share of PKR 45.48 for CY25, up 14% from PKR 39.85 in CY24. Profit after tax increased 16% to PKR 66.8 billion, while total revenue rose 6% to PKR 361.1 billion. Mark-up income increased 12% to PKR 275.5 billion, supporting the rise in overall profitability. Total deposits expanded 27% to PKR 5.55 trillion from PKR 4.37 trillion, making it one of the strongest balance sheet moves in the year. Gross advances increased 7% to PKR 2.08 trillion. Asset quality improved, with the infection ratio declining to 4.8% from 5.2%. Dividend per share increased 23% to PKR 20.00.

What should investors expect going forward?

Investors should expect continued focus on deposit mobilization, which remains central to HBL’s scale advantage and earnings capacity. Lending growth may remain measured if management continues its selective credit stance. This suggests a preference for balance sheet quality over aggressive asset expansion. Digital initiatives are likely to remain important for efficiency gains and customer retention across segments. Future performance will depend on sustaining revenue growth, preserving asset quality, and converting the larger deposit base into profitable earning assets while maintaining disciplined risk controls.

What are analysts saying about HBL stock?

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According to the KSEStocks Database, HBL is covered by 14 analysts in Pakistan and they have an average price rating of PKR 375. This average price target suggests an upside of 25.8% from the last close of PKR 298.54. According to EPS estimates from 19 different brokers, HBL has an average 2026 EPS expectation of 46.3. This suggests the stock is now trading at a forward PE of 6.5.

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 →