KARACHI: Habib Bank Limited’s (HBL) consolidated profit after tax for 9 months, ended September 30, 2017, reduced to Rs 1.6 billion as a result of the $225 million settlement payment made to the New York State Department of Financial Services. Consolidated profit before tax for this period was Rs 18.8 billion, with earnings per share of Rs 0.87. As a result of the settlement payment, the consolidated Tier 1 capital adequacy ratio (CAR) as of September 30, 2017 reduced to 10.6%, with the total CAR at 13.6%. Excluding the impact of the settlement payment, HBL’s consolidated profit after tax for the first nine months of 2017 was Rs 25.3 billion, and pre-tax profit for the first nine months of 2017 was 42.5 billion, both 2% lower than for the same period in 2016. HBL’s deposits continued to grow, reaching Rs 2.03 trillion, and the bank’s market share increased to 14.4%. The growth in deposits came entirely through increases in CASA, with the domestic Current Account, Savings Account (CASA) ratio improving from 85.5% in December 2016 to 87.4% in September 2017. Domestic current accounts crossed Rs 600 billion and the current account ratio as of September 2017 was 35.0%, compared to 34.8% in December 2016. HBL also stepped up its lending activities, with net domestic advances increasing by 14% over December 2016 and total net advances reaching Rs 847 billion. Net interest income for the nine months ended September 30, 2017 reduced marginally to Rs 62.0 billion, due to the spread compression caused by falling investment yields and competitive loan pricing. Non-markup income of Rs 26.3 billion for 9M 17 was 18% higher than for 9M 16. Fees and commissions rose 13% to Rs 15.5 billion. The main contributors to the fee growth were home remittances, card related and consumer financing fees and asset management. Treasury related income increased by 43%; although capital gains contributed to the majority of this growth, all segments demonstrated strong performances. The asset quality ratio improved to 8.2% as of September 30, 2017 and the coverage ratio was 91.4%. While HBL’s capital ratios remained above regulatory requirements, the bank would be taking all measures necessary to restore its capital ratios to their previous levels as early as practically possible, HBL said in a statement. Consequently, the board of directors, in a meeting held on October 20, did not declare an interim cash dividend for the quarter ended September 30, 2017. HBL had already declared and paid interim cash dividends of Rs 7.00 per share (70%) for the first two quarters of 2017. HBL’s board and management have taken serious note of the control and compliance issues, the bank said. The board and the bank are committed to pursuing the highest standards of governance and have taken steps of structural changes and necessary remediation measures to ensure HBL moves swiftly to bring those to a closure, HBL said. The bank’s board reiterated its objective of promoting a ‘zero-tolerance’ compliance culture and will take steps to ensure that this permeates through all levels of the organization, HBL stated. Published in Daily Times, October 21st 2017.