PACRA Maintains the Entity Ratings of Habib Metropolitan Bank Limited

Habib Metropolitan Bank ("HABIBMETRO" or the "Bank"), along with its formidable position in meeting trade-related needs and being a frontrunner in the industry, offers a full range of Corporate, Commercial, and Retail products and has a strong customer base across these segments. Its strong brand, skilled bankers, and being part of the Habib Bank AG Zurich (HBZ) group contribute to its success. HBZ is a global financial institution, a strong and well-capitalized bank, with over 580 branches across eight countries. Owned and managed by the Habib Family, HABIBMETRO is recognized as one of the financially strongest banks in Pakistan, bolstered by strategic support from HBZ. The long-standing tenure of its personnel further reflects the stability and continuity of its management team. In CY24, the Bank saw strong growth in digital banking, driven by platform enhancements, improved security on the Insta Mobile App, and the promotion of user-friendly digital solutions. Mobile app transactions hit a historic high, 20.8mln, with a 60% increase in volume and a 50% rise in value to PKR 855bln. A foreign currency debit card was launched to support freelancers and exporters. The Bank also served around 1,300 business clients through its Transaction Banking services and upgraded its corporate collections platform, Net2Bank, to offer advanced, efficient solutions for both integrated and non-integrated collection needs.
During CY24, the Bank’s Capital Adequacy Ratio (CAR) improved to 19.3% (CY23: 18.3%) and has consistently remained well above the regulatory requirement without relying on subordinated debt. This financial strength is complemented by regular dividend payouts and a strong foothold in the trade business, which serves as a sustainable and diversified revenue stream. The deposit base of the Bank stood at PKR 927.1bln (CY23: PKR 1,012.3bln), with a more balanced composition as Current Accounts (CA) increased to 43.7% (CY23: 36.9%) and Savings Accounts (SA) adjusted to 34.8% (CY23: 36.6%). The gross performing advances increased by 14.3% to PKR 478.6bln (CY23: PKR 418.8bln), while the infection ratio was reported at 5.0% (CY23: 4.5%). Notably, the Bank strategically shifted its investment focus toward longer-term and Shariah-Compliant instruments such as Pakistan Investment Bonds (PIBs) and Ijarah Sukuk, reflecting a preference for stable returns, while reducing exposure to short-term Market Treasury Bills. Non-markup income of the Bank increased by 39.2% to stand at PKR 21.3bln (CY23: PKR 15.3bln), with major contributions coming in from fee and commission income being PKR 10.8bln (CY23: PKR 9.4bln). Non-markup expenses increased by 16.1% YoY to stand at PKR 34.8bln (CY23: PKR 30.0bln). This increase is mainly driven by an increase in operating expenses and branch expansion initiatives during the year. The Profit After Tax (PAT) inclined by 1.2% to stand at PKR 24.7bln (CY23: PKR 24.4bln), while the equity base of the Bank increased by 23.3% to PKR 115.0bln (CY23: PKR 93.3bln). The Bank aims to strengthen its deposit base and customer relationships through digital innovation and customized solutions. Sustained growth in trade-related income and focus on non-fund-based exposures and operational efficiency will support its long-term sustainability.
The ratings are contingent upon the management’s ability to strengthen the Bank’s position in the banking industry as a whole and specifically in its market niche of trade finance, amidst rising competition. Any deterioration in asset quality would consequently impact the Bank’s profitability and its capacity to absorb risks.

About the Entity
HABIBMETRO, a subsidiary of HBZ, began operations in 1992 and is listed on the PSX. It significantly contributes to HBZ’s consolidated assets. The Bank has a branch network of 551 (CY23: 525) branches, including 223 (CY23: 117) Islamic branches. Its Board of Directors comprises eight members, including five non-executive directors, four representing HBZ, and two independent directors, and one executive director, the CEO. Mr. Mohamedali R. Habib serves as the Chairperson of the Board.