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Financial Management Anjum Hakim

This document analyzes key financial metrics of HBL, Pakistan's largest bank, for 2018 and 2019. It finds that HBL's earnings per share and dividend yield both increased from 2018 to 2019, indicating improved profitability and higher returns on investment. However, the bank's price-to-earnings ratio and market value per share decreased over this period, possibly due to raising more equity by trading more shares on the market. The book value per share increased from 2018 to 2019 due to growth in the bank's equity exceeding the increase in outstanding shares.

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118 views4 pages

Financial Management Anjum Hakim

This document analyzes key financial metrics of HBL, Pakistan's largest bank, for 2018 and 2019. It finds that HBL's earnings per share and dividend yield both increased from 2018 to 2019, indicating improved profitability and higher returns on investment. However, the bank's price-to-earnings ratio and market value per share decreased over this period, possibly due to raising more equity by trading more shares on the market. The book value per share increased from 2018 to 2019 due to growth in the bank's equity exceeding the increase in outstanding shares.

Uploaded by

imbisat
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FINANCIAL MANAGEMENT ASSIGNMENT

SUBMITTED BY
ANJUM HAKIM
01-111172-013

ABOUT COMPANY
HBL, Pakistan’s largest bank, was the first commercial bank to be established in Pakistan in
1947. Over the years, HBL has grown its branch network to over 1,700 branches and +2,100
ATMs globally, serving 14 million customers and clients.
The Bank is a leading full-service commercial bank. The key areas of operation are Branch
Banking, Corporate & Investment Banking, Treasury, SME & Rural Banking, Financial
Institutions & Global Trade Services, Transaction Banking and Islamic Banking.
The Branch Banking business is the mainstay of the Bank, positioning HBL as the largest retail
bank in Pakistan catering to all market segments. HBL Corporate and Investment Banking Group
is a leading provider of financial services to multinational and local corporate clients across the
country. The Bank also has the largest Treasury operations in Pakistan and plays a key role in
Pakistan domestic markets.

EARNING PER SHARE


Earnings per share measure a company's net income per share of outstanding stock, indicating
a company's profitability to investors. To calculate earnings per share, divide the company's net
income by the number of outstanding shares (the stock currently held by all shareholders).
2018: 8.04 Rs
2019: 10.27 Rs
HBL’s EPS has improved over the year which indicates the improvement in its profitability. It is returning
more on its investment. It can be due to increases in its revenues and profits in 2019. Increase in
revenues and profits is no surprise considering the bank’s deposits keeps increasing with each passing
year which is reflected in its increasing market share.

DIVIDEND YIELD:
The dividend yield ratio by dividing the total dividend payments paid per year by the market
price of the stock. Knowing this ratio helps you understand the return on your investment.

2018: 2.5%
2019: 3.8%
The dividend yield ratio increased in 2019 for HBL. It is giving or returning more on its share. As
already mentioned in the reasons for the EPS ratio, the same can be applied here. This will
further solidify its share prices in the future and is a indicator of its performance.

PRICE TO EARNING RATIO:


The price-earnings ratio is the current price of the stock divided by the earnings per share.
Earnings generally are calculated by looking at the last four quarters of financial results.

2018: 20.7
2019: 12.5

BOOK VALUE PER SHARE:


The book value is a company's equity (not including preferred stock) divided by the shares
outstanding in the market.

2018: 135.8
2019: 153.2
The book value of HBL’s share increased in 2019. This was due to increase in equity of the bank
in the year not as much in value as compared to its outstanding shares which has led to a
greater value.

MARKET VALUE PER SHARE:


Market value per share is the market value of a company divided by the total number of
outstanding shares. This quite simply is the going rate for a share of common stock. The market
value of the company can be determined by multiplying the price of its common stock by the
number of outstanding shares. 

2018: 229.7
2019: 168.4
The market value dropped significantly in 2019 which is most probably due to more shares
being traded in order to raise equity, this could be the only reason because other profitability
indicators have all improved so they couldn’t adversely affect this ratio

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