KARACHI: Pakistan listed banks’ profitability increased to a record Rs 268 billion, up 15 percent on a year-on-year basis in 2021.

This increase was primarily driven by lower provision expenses which declined by 79 percent to Rs 25 billion on the back of macro recovery and improving asset quality, experts said.

Net Interest Income (NII) of the sector clocked in at Rs 777 billion in 2021 as compared to Rs 780 billion in 2020 as average policy rates during 2021 clocked in at 7.42 percent against 8.92 percent in 2020, Umair Naseer, an analyst at Topline Securities said.

Non-interest income of the sector improved by 10 percent to Rs 248 billion driven by growth in fee, commission and brokerage income. On other hand, the non-markup expense was up 9 percent to Rs 547 billion due to higher admin expense.

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In the fourth quarter of 2021, banking sector profitability was up 41 percent on YoY to Rs 68 billion led by higher NII and Non-interest income which was up 9 percent and 30 percent, respectively.

In 2021, the Bank of Punjab (BOP), and the United Bank (UBL) reported the highest earnings growth of 80 percent and 48 percent, respectively.

In terms of NII growth, BOP, JS Bank (JSBL) and SBL reported the highest growth of 16-28 percent.

Copyright Business Recorder, 2022