How To develop portfolio

1. SECTOR:
COMMERCIAL BANKS
SCRIP LDCP Open High Low Curr. Chng Vol.
Habib Bank Limited. 210.71 209.60 210.90 208.75 209.17 -1.54 851,700
MCB Bank Limited.(XD) 218.55 218.10 218.64 214.50 214.94 -3.61 391,500
United Bank Ltd.(XD) 208.01 207.08 208.00 204.00 204.51 -3.50 2,546,800
Pakistan is at the forefront of spearheading innovation and developing the Islamic banking sector
globally. In terms of volume and numbers alone, countries such as Malaysia and the UAE may be
further ahead, but as far as the breadth and depth of the product portfolio and institutional
capabilities are concerned, Pakistan is not lacking in any area.
HBL has been a frontrunner in FinTech. They established their Innovation and Financial Inclusion
Department almost two years ago, with the sole purpose of digitizing their processes and services
and to make it convenient for customers to bank with them. HBL’s Islamic banking division has
started working with this department on a few projects and through this collaboration, they will be
able to improve customer service and efficiency while making Islamic banking products more
easily available to customers, even in remote areas.
Why invest in HBL?
HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL
has grown its branch network and maintained its position as the largest private sector bank with
over 1,700 branches and 2,000 ATMs globally and a customer base exceeding ten million
relationships.
HBL’s balance sheet has grown by 7% over December 2016 to Rs. 2.7 trillion. Domestic deposits
have increased by 12%, with market share improving from 14.1% in December 2016 to 14.3% in
December 2017. The growth in domestic deposits has been mainly through an increase in CASA
deposits with the CASA ratio improving from 85.5% to 86.4%. Domestic current deposits have
increased by 14% to Rs. 628 billion and now constitute 35.6% of the mix. In Q4 17, post the
cessation of US Dollar clearing by HBL’s New York branch, the Bank carried out an extensive
de-risking exercise in its international business, with deposits falling by more than $750 million
from September 2017 levels. Consequently, HBL’s total deposits grew by 6%, to nearly Rs. 2.0
trillion.
Non-mark-up income for 2017 was Rs. 32.9 billion. Fees and commissions increased by 3% to Rs.
19.5 billion, with contributions from account operations and card related fees and higher asset
management fees. Income from treasury related activities increased by 31% to Rs. 10.5 billion,
with the majority of growth coming from capital gains on fixed income bonds.
Administrative expenses rose by 13% over 2016 including the impact of the full year consolidation
of the First MicroFinance Bank and higher spend on remediation efforts at the New York branch.

2. Excluding these, expense growth was contained to under 9%. An excellent recovery performance
in the domestic business resulted in a reduction of Rs. 2.1 billion in domestic non-performing loans
and 57% reduction in total provisions for the year, to Rs. 0.4 billion. The Asset Quality ratio
improved to 8.2%, its lowest level since HBL’s privatization. The coverage ratio as at December
31, 2017 further improved to 91.6% compared to 91.2% in December 2016.
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