Habib Bank Limited (HBL) has reported strong financial performance in its HBL third quarter results 2026, posting earnings of Rs19.6 billion, or Rs13.33 per share, for the quarter. The bank’s profit increased 6.5% compared with the preceding quarter, while management highlighted growing deposits, expanding digital banking services and expectations of improved investment returns.
During an analyst briefing held to discuss its third-quarter performance, HBL also announced an interim cash dividend of Rs6 per share. Management provided updates on the bank’s investment portfolio, lending activities, Islamic banking operations and technology transformation.
HBL Expects Higher Investment Returns
One of the key points discussed during the briefing was the expected improvement in yields from HBL’s investment portfolio as floating-rate securities undergo repricing.
As of September 2026, floating-rate securities represented approximately 60% of the bank’s investment portfolio. Medium-term bonds (MTBs) accounted for 15%, while fixed-rate securities made up the remaining 25%.
The fixed-rate portfolio had a duration of 3.2 years, whereas the overall investment portfolio had a duration of approximately 1.12 years.
HBL also increased its Pakistan Investment Bond (PIB) holdings by around Rs450 billion between the second and third quarters of 2026.
Management expects the repricing of floating-rate investments to support a gradual increase in portfolio yields. This could provide additional support to the bank’s earnings as existing securities adjust to prevailing interest-rate conditions.
Current Account Deposits Show Strong Growth
Deposit growth remained another important contributor to the bank’s performance.
HBL’s current account deposits increased by 15%, equivalent to Rs273 billion, during the nine months ended September 2026. As a result, current accounts represented 40% of total deposits, compared with 38% at the end of December 2025.
Growth in current accounts is important for banks because these deposits generally provide a relatively stable funding base and support lending and other banking activities.
The HBL third quarter results 2026 briefing also highlighted continued expansion in Islamic banking. Islamic deposits reached Rs1.3 trillion in September, demonstrating the growing contribution of this segment to the bank’s overall operations.
Approximately 36% of HBL’s branch network was dedicated to Islamic banking, comprising around 658 Islamic branches and 500 Islamic banking windows.
Branch Network and Digital Transformation Expand
HBL operates more than 2,000 branches across its network and added approximately 84 branches during the first nine months of 2026.
Alongside physical expansion, the bank is investing in technology to modernise its core banking infrastructure.
Its migration to the Temenos core banking system is progressing, with approximately 800 branches already transferred to the new platform. Further implementation milestones are expected during 2027.
Digital banking activity also recorded significant growth. HBL reported a 36% increase in mobile application transaction throughput, reflecting greater customer engagement with its digital services.
Digital over-the-counter transactions accounted for 94.6% of total transactions, while only 5.4% were conducted through physical branches.
These figures highlight the increasing role of digital channels in the bank’s daily operations and customer service strategy.
Lending Growth and Asset Quality Remain Strong
On the lending side, HBL recorded growth in domestic advances across corporate and commercial banking segments, alongside expansion in international lending.
The consumer financing portfolio crossed Rs200 billion, making it the largest in the market, according to the bank. Credit card receivables also reached Rs66 billion.
Islamic financing represented approximately 20% of HBL’s overall loan portfolio, reflecting the increasing contribution of Shariah-compliant financial products.
The bank also reported stable asset quality. Its infection ratio stood at 4.5%, while specific coverage reached 85%. Management said general provisions provided additional support against potential credit risks.
In addition, foreign exchange income increased by 76% year-on-year, while fee income also recorded strong growth.
Regulatory Compliance and Legal Proceedings
HBL management confirmed that the bank was already compliant with the State Bank of Pakistan’s phased requirement to reclassify its banking-book other comprehensive income portfolio into the trading book.
The bank does not expect this reclassification to create an additional capital requirement or affect its Common Equity Tier 1 (CET1) ratio.
Management also discussed an ongoing civil liability case in New York, expressing expectations of a favourable outcome. It clarified that the proceedings were separate from previously discussed penalty-related matters.
According to the bank, the case is progressing according to schedule, although the US legal process could take time before reaching a conclusion.
HBL’s Outlook for the Coming Quarters
The HBL third quarter results 2026 demonstrate growth across several areas, including deposits, consumer financing, Islamic banking and digital transactions.
Management’s expectations of gradually improving investment yields could provide further support to financial performance in upcoming quarters.
With continued investment in technology, an expanding branch network and growing digital activity, HBL is also working to strengthen its position across Pakistan’s banking sector.
The bank’s future performance will depend on investment returns, deposit trends, lending activity and broader economic conditions. For now, its third-quarter earnings and operational developments indicate continued activity across its major banking segments.
