Habib Bank Limited (HBL) fell 1.76% on Wednesday to PKR 134.84/share as Pakistan’s leading commercial bank posted profits lower than market expectation for the quarter ended September 30, 2024 due to over five times higher write-offs.

HBL announced a net profit of PKR 14.2 billion ($50.7 million) and EPS of PKR 9.85 for the quarter, which is 14.5% lower than the profit of PKR 16.6 billion (EPS: 11.34) for the same period last year.

The bank also announced interim cash dividend of PKR 4.0/share, which is in addition to interim dividend of PKR 8.0/share already paid to the shareholders.

The results came below market expectation primarily due to higher than estimated credit loss allowance, which surged 545% to PKR 8.9 billion compared with PKR 1.4 billion in the same quarter last year.

An analyst at Insight Securities noted credit loss/write-offs surged amid impact of macro-economic challenges on loan portfolio.

HBL’s net interest income also declined by 1.5% to PKR 63.7 billion against PKR 64.98 billion earned in the corresponding period last year.

Non markup income jumped by 62% to PKR 21.2 billion attributable to 16% jump in fee income and PKR 4.98 billion gain on securities.

The bank recorded loss of PKR 0.5 billion on forex operation during the quarter.

For the nine-month period ended September 30, HBL posted a net profit of PKR 43.25 billion (EPS: 30.03) compared with the profit of PKR 42.97 billion (EPS: 29.20) in the same period last year.