National Bank of Pakistan has announced its consolidated financial results for the first quarter ended March 31 2026, recording a post tax profit of 16.29 billion rupees. This performance marks a 26 percent decrease compared to the 22.11 billion rupees earned during the same period in the previous year. Reflecting this bottom line contraction, the bank’s basic and diluted earnings per share dropped to 7.58 rupees from 10.29 rupees in the first quarter of 2025. The downturn was primarily attributed to a sharp reduction in core funded income and broader weaknesses across non mark up income streams.
The bank’s core revenue faced significant pressure as mark up and interest earned fell by 16 percent year on year to 178.28 billion rupees. While the institution managed to lower its cost of funds by 12 percent, the reduction in interest expenses was insufficient to offset the decline in earned interest. Consequently, the net mark up income contracted by 25 percent, settling at 51.99 billion rupees. This squeeze on margins highlights the challenging interest rate environment and shifting asset yields that have impacted the bank’s primary revenue generation capabilities during the start of the 2026 fiscal year.
Non funded operations provided little relief during the quarter as total non mark up income fell by 20 percent to 10.38 billion rupees. The decline was observed across multiple segments, including a 7 percent slip in fee and commission income and a 51 percent drop in dividend income. Other income also experienced a significant crash, falling 93 percent to just 29.13 million rupees. Additionally, the bank faced elevated losses on securities and saw its share from associates swing to a net loss of 422.57 million rupees. A minor highlight in this category was foreign exchange income, which grew by 14 percent to reach 2.28 billion rupees.
On the operational side, the bank saw a 7 percent rise in total non mark up expenses, which reached 31.19 billion rupees, largely driven by higher general operating costs. The combination of falling revenues and rising overheads caused the profit before credit loss allowance to plummet by 42 percent. However, the bank’s final results were significantly cushioned by its asset quality metrics. A net reversal of credit loss allowances amounting to 3.50 billion rupees was recorded, representing a major turnaround from the heavy 6.39 billion rupee provision charge seen in the corresponding quarter last year.
This substantial provision reversal served as a critical buffer, helping to absorb the operational shock and limiting the pre tax profit decline to 26 percent. After accounting for a proportionally lower taxation expense of 18.39 billion rupees, the bank closed the quarter with a net profit of 16.29 billion rupees. While the 26 percent decline reflects ongoing structural and market challenges, the improvement in credit loss metrics suggests a stabilizing loan portfolio. Moving forward, the bank will likely focus on managing its core margins and non funded income to stabilize its bottom line in a volatile financial landscape.
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