Pakistan’s listed banks collectively posted a robust profit of Rs168 billion in the second quarter of 2025, reflecting a 22 percent year-on-year increase, according to a report issued by Topline Securities. While the performance underscored resilience in the sector, the figures also showed a slight decline of 3 percent compared with the previous quarter.
The banking sector’s net interest income (NII) rose 19 percent year-on-year. United Bank Ltd (UBL) delivered the most significant growth, reporting a remarkable 213 percent surge in NII to Rs91 billion. National Bank of Pakistan (NBP) followed with a 42 percent increase to Rs61 billion, while the Bank of Punjab (BoP) posted a 158 percent jump to Rs21 billion. However, excluding these three, sector-wide NII declined by 2 percent, highlighting uneven growth across the industry.
On a quarterly basis, NII growth appeared subdued, remaining largely flat as gains at some banks were offset by declines at others. Non-interest income, however, provided additional momentum, climbing 12 percent year-on-year and 9 percent quarter-on-quarter to Rs144 billion. This increase was driven mainly by higher fee and commission income as well as improved capital gains, reflecting the sector’s ability to diversify income streams beyond traditional lending margins.
Breaking down individual bank performance, UBL posted the highest quarterly earnings of Rs28.6 billion. Meezan Bank followed with Rs24.7 billion, while NBP reported Rs20.9 billion. Habib Bank recorded Rs17.8 billion in profit, and MCB Bank registered Rs14.6 billion. In terms of NII growth, UBL’s 213 percent year-on-year increase stood out, followed by BoP at 158 percent, Askari Bank at 68 percent, and NBP at 42 percent. On a sequential quarterly basis, BoP led with a 37.9 percent increase, while UBL, Allied Bank Ltd (ABL), Meezan Bank, and Bank Alfalah all posted gains ranging from 3.5 percent to 8.3 percent.
Dividend distribution also remained strong during the quarter, with most banks maintaining their payout policies. Askari Bank and Bank of Khyber both announced interim dividends, reinforcing market expectations that dividend continuity will remain a trend given the sector’s strong profitability.
NBP’s performance was particularly noteworthy. Its total income for the first half of 2025 jumped 58 percent to Rs157.1 billion compared to Rs99.2 billion in the same period last year. However, its gross interest income fell 27.4 percent to Rs411 billion in response to a declining interest rate environment. Despite this, the bank announced a dividend of Rs8 per share (80 percent), marking the resumption of shareholder payouts after a gap. The move was welcomed by the market, with NBP’s market capitalization crossing the $1 billion mark.
Meanwhile, the Bank of Punjab reported record-breaking results in its half-yearly performance. Operating profit surged 278 percent to Rs15.52 billion compared to the same period last year. For the first time in its history, the bank announced an interim cash dividend of 10 percent, equivalent to Re1 per share. Its NII also rose sharply by 116 percent to Rs35.8 billion, underlining the bank’s ability to build on its core earnings even in a challenging margin environment.
The second quarter of 2025 highlights the resilience and adaptability of Pakistan’s banking sector, where strong performances from select institutions continue to drive overall growth despite uneven trends across the industry. Analysts expect banks to sustain profitability through a mix of stable lending margins, growing fee-based income, and continued dividend commitments, even as interest rate dynamics evolve.
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