4 major banks post 27% profit growth in 2011

KARACHI: The four big listed private banks in Pakistan have posted above average growth of 27 percent in 2011 despite lacklustre trading at the Karachi Stock Exchange in the bank scrips. The big four banks - Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited and Allied Bank Limited (ABL) cumulative earnings reached Rs 66 billion in 2011, up 27 percent from 2010. The bank-wise profitability shows that UBL posted highest profitability growth of 39 percent, followed by HBL 33 percent, ABL 23 percent and MCB 15 percent. Among the listed private banks, these banks contributed 70 percent of the market capitalisation. Net interest income (NII) up 17 percent, non-interest income up 21 percent. These banks based on deposits and branches contribute more than 50 percent share of the listed private banks’ deposits and represent approximately 60 percent of the total branch network. Thanks to higher return on advances and better yields on government papers, overall NII of these banks grew by 17 percent. This shows impressive core banking operations as average 6-month KIBOR increased by 70 basis points in 2011 as compared to 2010 while cost of funds remained on the lower side. Similarly, with overall improvement in trade activities, better opportunities in forex and money market, non-interest income of these big banks grew by an impressive 21 percent. Moreover, restrictive lending resulted in lower provisioning in 2011, which stood at Rs 21.5 billion, down 10 percent. staff report

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