Habib Metropolitan Bank’s Profits Hold Steady Despite Rising Costs

Habib Metropolitan Bank (HMB) has released its financial results for the second quarter of 2025, showing that profits stayed almost the same compared to last year, even as expenses climbed.

Earnings at a glance

For the April–June 2025 period, the bank earned a profit after tax of PKR 5.76 billion, equal to an EPS of PKR 5.3. This is just 1% lower than the same quarter last year and 8% lower than the previous quarter. For the first half of the year, total profits reached PKR 12 billion, which is slightly higher than last year. Shareholders also received an interim cash dividend of PKR 2.5 per share, bringing the total payout so far this year to PKR 5.0 per share.

📢 Announcement: We're on WhatsApp – Join Us There! 

Income from lending and investments

The bank’s net interest income, the profit it makes from lending after paying depositors, rose by 17% compared to last year, thanks to higher spreads. However, this was slightly lower than the previous quarter as the effect of recent interest rate cuts began to balance out.

Non-interest income, which includes fees, capital gains, and dividends, was up 10% from last year and 15% from the last quarter. A big boost came from capital gains of PKR 1.2 billion, although fee income and dividends saw a slight dip.

Higher expenses put pressure on profits

Operating expenses went up sharply, 24% higher than last year, mainly due to inflation and business expansion costs. This pushed the cost-to-income ratio to 46%, which means almost half of the bank’s income is now spent on running the business.

Better loan quality

On the bright side, the bank’s asset quality improved. Provisions for bad loans dropped by 46% compared to last year, showing fewer defaults and better credit control.

Don't miss:

• Which cars are driving the rally in auto stocks?
• 5 High ROE stocks according to Topline Securities
• Why TPLP could go higher.

Taxes take a big bite

The effective tax rate for the quarter was 54%, which continues to weigh heavily on net profits.

Source: Taurus Securities Limited

⚠️ 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 →