The Bank of Punjab (PSX: BOP) recorded a 44% increase in consolidated profit after taxation for the half year ended June 30, 2026, with earnings rising to Rs9.37 billion from Rs6.52 billion in the corresponding period last year. The stronger financial performance was supported mainly by higher net mark-up income, growth in fee and commission revenue, a substantial increase in foreign exchange income and a sharp reduction in credit loss charges.
The bank’s basic and diluted earnings per share increased to Rs2.86 during the six month period, compared with Rs1.98 in the same period of 2025. Alongside the improvement in profitability, the Board of Directors declared an interim cash dividend of Rs1.60 per share, representing 16%, for the half year ended June 30, 2026. Total income also recorded strong growth, increasing 23.77% year on year to Rs56.13 billion from Rs45.35 billion.
The bank’s core banking income benefited from a favourable movement between mark-up earned and mark-up expense. Mark-up, return and interest earned declined 3.29% to Rs130.57 billion from Rs135.01 billion, while mark-up, return and interest expense fell at a significantly faster pace of 14.87% to Rs84.45 billion from Rs99.20 billion. As a result, net mark-up income increased 28.76% to Rs46.12 billion from Rs35.82 billion, making it the main contributor to the bank’s earnings growth during the period.
Non-mark-up or interest income also improved, although the performance across individual components remained mixed. Total non-mark-up income increased 5.05% to Rs10.01 billion from Rs9.53 billion. Fee and commission income rose nearly 50% to Rs9.55 billion from Rs6.37 billion, while foreign exchange income more than doubled by 170.28% to Rs1.95 billion from Rs723.25 million. Other income also increased 81.22% to Rs313.09 million from Rs172.77 million.
These gains were partly reduced by weaker securities related income and other items. The bank recorded a net loss on securities of Rs1.16 billion during the first half of 2026, compared with a net gain of Rs2.66 billion in the corresponding period last year. The net loss on derecognition of financial assets measured at amortised cost increased 37.45% to Rs782.17 million from Rs569.05 million, while dividend income declined 17.22% to Rs140.18 million from Rs169.34 million. Income or loss from derivatives remained unchanged at zero in both periods.
On the expense side, Bank of Punjab reported higher operating costs during the period. Operating expenses increased 19.93% to Rs35.34 billion from Rs29.46 billion in the first half of 2025. Workers’ Welfare Fund expenses, however, declined 14.81% to Rs454.35 million, while other charges fell sharply by 72.10% to Rs1.11 million. Overall, total non-mark-up or interest expenses increased 19.30% to Rs35.79 billion from Rs30.00 billion.
Despite the increase in expenses, the substantial rise in net mark-up income and growth in other revenue streams resulted in a 32.51% increase in profit before credit loss allowance. The figure reached Rs20.34 billion compared with Rs15.35 billion a year earlier. The bank also benefited from a sharp reduction in its credit loss allowance and write offs, which fell 89.48% to a net charge of Rs48.91 million from Rs464.75 million in the corresponding period.
After accounting for the credit loss charge and a marginal share of loss from an associate amounting to Rs198,000, the Bank of Punjab recorded profit before taxation of Rs20.29 billion. This represented a 36.32% increase from Rs14.89 billion in the same period of 2025. The stronger pre tax result provided the foundation for the bank’s higher earnings despite an increase in taxation during the reporting period.
Taxation on a net basis increased 30.54% to Rs10.92 billion from Rs8.37 billion in the previous year. The increase in tax expense remained below the pace of growth in pre tax profit, allowing a larger portion of the bank’s improved operating performance to flow through to profit after taxation. Consequently, consolidated profit after taxation rose 43.74% to Rs9.37 billion from Rs6.52 billion.
The results show that the Bank of Punjab’s first half performance was primarily driven by stronger core banking spreads and improved fee based and foreign exchange income. The faster decline in mark-up expense compared with mark-up income allowed the bank to expand its net mark-up income considerably, while the lower credit loss charge provided an additional boost to profitability.
The interim dividend declaration of Rs1.60 per share also accompanies the bank’s stronger financial performance for the first half of 2026. With total income reaching Rs56.13 billion and profit after taxation rising to Rs9.37 billion, the latest results represent a significant improvement in the Bank of Punjab’s earnings compared with the corresponding period of the previous year.
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