Aga Khan fund intends to acquire additional shares of HBL worth nearly Rs3.5bn

Habib Bank Limited announced on Wednesday that one of its key sponsors – the Aga Khan Fund for Economic Development (AKFED) – has expressed its intention to purchase additional shares of the bank amounting to nearly Rs3.5 billion from the open market.

The development was shared by HBL in its notice to the Pakistan Stock Exchange (PSX).

“Aga Khan Fund for Economic Development (AKFED) has informed Habib Bank Limited (HBL) vide its letter dated August 2, 2023, of its intention to acquire additional shares of HBL from the open market, by utilizing the accumulated dividends that have not been repatriated, amounting to Rs3,472,172,945,” read the notice.

“The said purchase of HBL shares shall be in accordance with applicable regulatory approvals,” added the notice.

The Aga Khan Fund for Economic Development SA is a Swiss for-profit entity and international development finance institution which invests in countries of East Africa, West Africa, Central Asia, and South Asia.

Back in May, HBL informed its stakeholders that the Aga Khan fund intended to acquire additional shares of the bank worth Rs3,534,747,825 from the open-market.

“This is a part of the ongoing shares buyback trend in the market, sponsors are interested to purchase their own shares amid low valuation in the market,” Sana Tawfik, analyst at Arif Habib Limited told Business Recorder.

The market expert said that the move was expected, and it reflects the confidence of the sponsor on the company.

“Fundamentally speaking, HBL results were also strong,” said Tawfik, while adding that the trend of buybacks would continue across the board.

The share price of HBL, which was around Rs96 earlier in the day, saw a massive jump to trade at Rs102.40 following the announcement in the afternoon, an increase of Rs5.75 or 5.95%.

HBL declared a consolidated profit before tax (PBT) of Rs51.5 billion for the first half of 2023, nearly 50% higher than the same period of the previous year.

The PBT of Rs30 billion for the second quarter of 2023 (April-June) was the highest in HBL’s history based on performance of its core business lines.