KARACHI: The profitability of listed banks increased by 5 percent YoY to Rs597 billion in 2024, mainly driven by a 9 percent growth in Net Interest Income (NII) to Rs1.9 trillion and a 50 percent jump in Non-Interest Income to Rs560 billion.
However, effective tax rate for 4Q 2024 stood at 56 percent, compared to 53 percent in 3Q 2024. This higher effective tax rate is due to an increase in the overall tax rate for banks from 49 percent (including super tax) to 54 percent (including super tax) at the end of the quarter.
According to Topline Securities, Pakistan’s listed banks profitability clocked in at Rs153 billion, down by 1 percent YoY and 2 percent QoQ in the fourth quarter of CY24 (4Q 2024).
Q3CY23: Listed banks’ profitability up 95pc to record Rs163bn YoY
Topline has taken all listed banks that have announced their financial results except for Bank of Khyber (BOK), Samba Bank (SBL), and Silk Bank (SILK), which have not yet announced their results.
The report revealed that despite the decline in interest rates, the sector’s NII clocked in at Rs523 billion, up 5 percent YoY and 4 percent QoQ in 3Q2024, led by volumetric growth and favourable re-pricing impact.
During the last quarter, interest income declined by 4 percent YoY and 13 percent QoQ to Rs1.6 trillion, whereas interest expense declined by 8 percent YoY and 20 percent QoQ to Rs1.1 trillion.
On the other hand, non-interest expense rose by 30 percent YoY and 42 percent QoQ to Rs329 billion in 4Q2024 due to NBP’s one-time pension expense. In the full year 2024, NBP has booked total pension expanse of Rs57 billion. This takes the sector’s Cost-to-Income ratio to 47 percent in 4Q2024, compared to 40 percent in 4Q2023 and 42 percent in 3Q2024.
The sector recorded a provisioning charge of Rs34 billion in 4Q2024, up 39 percent YoY and 29 percent QoQ. This increase is primarily due to the implementation of IFRS-9 and some stress in sectors like textile and steel, according to our channel checks.
Bank wise, Meezan Bank (MEBL), United Bank (UBL), MCB Bank (MCB), Habib Bank (HBL), and Standard Chartered Bank (SCBPL), posted highest profits of Rs101.5 billion, Rs75.8 billion, Rs63.5 billion Rs57.8 billion and Rs46.1 billion, respectively in 2024. On the other hand, only Bank Makramah (BML) recorded loss of Rs5.2 billion in 2024.
In terms of NII growth, Meezan Bank (MEBL), Bank Al Habib (BAHL), JS Bank (JSBL), United Bank (UBL), and Bankislami (BIPL) recorded highest YoY growth of 27 percent, 26 percent, 22 percent, 16 percent and 15 percent, respectively in 2024.
In 2024, most banks maintained their dividend payouts. NBP also resumed its payouts after 7 years (last paid in 2016) by announcing a dividend of Rs8/share, the highest ever declared by the bank. Moving forward, we expect this trend to continue amid the sector’s healthy profitability.
Copyright Business Recorder, 2025
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