Pakistani Banks Report Rs137B, 4% YoY Profit Growth in Q2 2024

Staff Report
Pakistan’s listed banks’ profitability reached Rs137 billion, up 4% year-on-year (YoY) in Q2 2024. Excluding the National Bank (NBP), profitability increased by 26% YoY in Q2 2024. This growth was primarily driven by an increase in Net Interest Income (NII) and Non-Interest Income.SBP imposes over Rs465m Penalties on Banks

On a quarter-on-quarter (QoQ) basis, listed banks’ profitability was down 10%, mainly due to a one-time loss booked by NBP. Excluding NBP, profitability was up 2% QoQ. In the first half of 2024 (1H2024), the profitability of banks increased by 12% YoY to Rs289 billion, mainly driven by a 13% growth in NII to Rs881 billion and a 56% jump in Non-Interest Income.

Deposit growth of banks was 22% YoY in Q2 2024. Banks are currently trading at a 2024E price-to-earnings (P/E) ratio of 3.4x, a price-to-book (P/B) ratio of 0.7x, a dividend yield of 14%, and a return on equity (ROE) of 23%.