HBL sees NIM boost ahead on higher lending rates

Habib Bank Limited expects its net interest margin to improve in the third quarter, according to Mettis Global, which covered the bank's briefing on first-half 2026 results. Management linked the outlook to the recent 100bps rate increase, noting that deposit rates have already adjusted while lending rates lag behind. The briefing also said the future rate path will depend largely on developments tied to the Iran conflict.

For the second quarter alone, consolidated profit after tax reached Rs18.4bn, with earnings per share at Rs12.51, rising 3% year on year and 14% quarter on quarter. The bank also declared a cash dividend of Rs6 per share, which lifts the half-year dividend to Rs12 per share. Profit after tax for the half came to Rs34.5bn, only 0.3% higher year on year, while net interest income climbed 2% to Rs140bn.

Total deposits reached Rs5.9trn at the end of June 2026, up 14% year on year, with domestic current accounts rising to Rs2.2trn. Lending exposure totalled Rs2.14tr, while the infection ratio was 4.6% and coverage 84.7%, with management seeing asset quality holding firm unless major external shocks hit. Of the Rs4.5tr investment portfolio, 54% is in Floater PIBs, and the branch network grew by 53 to 2,000 during the half.