Employing an aggressive yet virtually risk-free investment strategy, Bank Al Habib, the country’s seventh-largest bank, was able to post a sizable increase in third quarter earnings.
Profit-after-tax for the nine months ending September (9MCY14) clocked in at around Rs4.45bn, up 20.6pc from Rs3.69bn in 9MCY13. Its earnings-per-share worked out at Rs4, against Rs3.32 last year. The bank did not announce any dividend.
The rise in earnings was mainly a result of a drastic turnabout in the investment book, which saw a big build-up of high yield Pakistan Investment Bonds at the expense of Treasury bills.
And virtually all of the bank’s PIB holdings at end-September — Rs111.9bn — were in the ‘held till maturity’ category (HTM), with only Rs14.6bn under the ‘available for sale’ (AFS) header. That compares with a mere Rs17.7bn worth of such bonds in HTM and Rs12.4bn in AFS by the end of last December.
As per the bank’s third quarterly report, income from the HTM segment almost doubled to Rs8.4bn in 9MCY14, comparable with Rs4.4bn last year. The increase was more pronounced in the third quarter, with income from this segment tripling to Rs3.2bn over the same quarter last year.