KARACHI: Pakistan’s listed banks posted a combined profit of Rs170 billion in the third quarter of 2025 (3Q2025), up 8 percent year-on-year and 2 percent from the previous quarter, reflecting steady growth in earnings despite a challenging economic environment.
According to Topline Securities, the Net Interest Income (NII) on YoY basis improved 6 percent YoY while remains flattish on QoQ basis.
The improvement on YoY basis (in absolute terms) is led by United Bank Limited’s NII growth of 78 percent YoY or Rs40 billion to Rs92 billion followed by National Bank (NBP)’s NII growth of 74 percent YoY or Rs26 billion to Rs61 billion and Bank of Punjab’s NII growth of 61 percent or Rs9 billion to Rs23 billion. Excluding UBL, NBP, and BOP, NII of the sector has declined by 10 percent YoY.
Profitability of listed banks rises 5pc YoY
On QoQ basis, NII has remained largely flattish as growth in few banks was offset by decline in other banks. Bank wise, Askari Bank (AKBL) has posted growth of 11 percent QoQ(or Rs2 billion), BOP 9 percent QoQ (or Rs1.9 billion) and MCB bank (MCB) 3 percent QoQ (or Rs1.3 billion).
While NII of Bank Islami (BIPL) fell 16 percent QoQ (or Rs1.5 billion), Habib Metropolitan Bank(HMB) 9 percent (or Rs1.6 billion) and Meezan Bank (MEBL) 2 percent (or Rs1.5 billion).Few banks managed to grow their NII on QoQ basis on the back of higher volumetric growth along with favorable shift in deposit mix towards current account.
The report said that non-interest income of the sector increased by 13 percent YoY and 1 percent QoQ to Rs146 billion in 3Q2025. The slight QoQ improvement is due to realization of capital gains by few banks coupled with higher fee and FX income.
On the other hand, non-interest expense rose by 19 percent YoY and 5 percent QoQ to Rs329 billion in3Q2025. The QoQ increase is mainly attributed to remittances related. This takes the sector’s Cost-to-Income ratio to 47.9 percent in 3Q2025, compared to 45.9 percent in 2Q2025 and 43.3 percent in 2Q2024.
Sector recorded a provisioning reversal of Rs3.1 billion in 3Q2025 compared to charge of Rs26.9 billion in 3Q2024 and reversal of Rs8.0 billion in 2Q2025. The banks have recorded reversals considering no major risk to their loan book after decline in interest rates and as they had booked subjective provisions previously.
Effective tax rate for 3Q2025 stood at 53 percent, compared to 56 percent in 2Q2025 and 53 percent in 3Q2024. To recall, at the end of 2024, the government removed the ADR-related taxwhile increasing the overall tax rate from 49 percent (including super tax) to 53 percent (including super tax) for calendar year 2025.
Copyright Business Recorder, 2025
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