The banking sector concluded 2024 on a positive note, driven by higher interest earnings and increased non-mark-up income.
The KSE-100 banking sector, which represents 14 listed banks, reported a consolidated Profit After Tax (PAT) of Rs594.6 billion, reflecting a 5 per cent increase compared to the previous year.
The rise in earnings resulted in a 12 per cent increase in tax payments, bringing the total to Rs648.4bn. Despite this, profit before taxation rose by 9 per cent to Rs1.24 trillion.
Total sector income grew by 16 per cent, reaching Rs2.39 trillion from Rs2 trillion the previous year. This growth was primarily driven by a 9 per cent increase in net mark-up/interest income, which amounted to Rs1.84 trillion.
However, rising costs took a toll on profits. Non-mark-up/interest expenses surged by 29 per cent to Rs1.09 trillion, largely due to a 30 per cent rise in operating expenses, which totalled Rs1.06 trillion.
Meezan Bank Limited (MEBL) emerged as the most profitable bank in Pakistan for 2024, posting a record PAT of Rs103.7 billion, up 20.6 per cent from Rs86 billion in 2023. This secured its position as the top profit-earner, with strong growth in both mark-up and non-mark-up income contributing to its performance.
Meezan Bank’s total income increased by 27.3 per cent to Rs318.89 billion, driven by a 26.7 per cent rise in net mark-up income, which reached Rs287 billion, and a 32.8 per cent increase in non-mark-up income, totalling Rs31.85 billion.
United Bank Limited (UBL) took the second spot, reporting a 32.5 per cent increase in PAT, which rose to Rs74.8 billion from Rs56.5 billion in 2023. UBL’s total income jumped by 48.8 per cent to Rs257 billion, largely due to a 132 per cent surge in non-mark-up income, which reached Rs83.7 billion.
MCB Bank Limited (MCB) secured third place despite a 2.8 per cent drop in profits, which fell to Rs63.47 billion from Rs65.27 billion in 2023. While the bank saw a modest 1.5 per cent increase in net mark-up income, reaching Rs167.95 billion, rising mark-up expenses negatively impacted its overall performance.
Other banks also saw notable growth. Along with UBL and Meezan Bank, Faysal Bank Limited (FABL) and The Bank of Punjab (BOP) posted strong results, each recording an 18 per cent increase in PAT. FABL’s profits grew to Rs23.89 billion from Rs20.25 billion, while BOP’s earnings rose to Rs13.28 billion from Rs11.25 billion.
On the other hand, the National Bank of Pakistan (NBP) faced significant challenges, with its PAT dropping by 50.3 per cent, falling from Rs53.32 billion to Rs26.5 billion. The sharp decline was attributed to a 48 per cent reduction in profit before provisions and taxation, alongside an 88.7 per cent rise in non-mark-up expenses, which totalled Rs180.14 billion, putting substantial pressure on the bank’s financial performance.
