KARACHI: Habib Bank Limited (HBL) is currently trading at a decade low CY22F P/B of 0.54x, according to a report released by AKD Research . Consequently, implied risk premium currently being charged by investors on the stock stands at 11.8% – at similar scale to that witnessed towards the end of CY08 and continued till CY10 (and even higher than 2017-18 when DFS imposed penalty on the bank). During the aforementioned period, an external account crisis (c. 30% currency depreciation, CAD reaching close to 6% of GDP) warranted action by authorities to put brakes on growth, increasing the discount rate to a high of 15.0% from 10.0% in CY07-end. However, the lagged impact of measures to address economic woes and a consequent improvement in economic outlook resulted in risk premium diminishing to avg. at 4.2% in CY11. TLTP
