Pakistan’s banks managed to keep profits stable in the second quarter of 2021 despite the net interest income plummeting by 10 percent.

After tax, the profits of Pakistan’s banks totaled Rs. 69.60 billion in the second quarter, according to a report based on earnings by 18 listed banks that was released by the brokerage firm Topline Securities. This is slightly less than the Rs. 69.77 billion earned in the same quarter last year.

In contrast, the net interest income dropped to Rs. 195.15 billion from Rs. 216.01 billion last year.

However, profits were bolstered by a 77 percent decline in the provision expenses to Rs. 10.04 billion from Rs. 43.67 billion. This was despite the worries of an anticipated increase in non-performing loans due to the pandemic.

On a quarterly basis, the banks’ profits climbed by eight percent in the second quarter of 2021 from the first quarter, driven by an eight percent increase in the net interest income. Similarly, their profits in the first half of 2021 rose by 13 percent as compared to in the first half of the previous year.

The banks’ non-interest income slipped by two percent from Rs. 62.52 billion to Rs. 61.50 billion in the second quarter of 2021, and the non-interest expenses grew by eight percent to Rs. 130.22 billion in line with the indicator’s historical trend.

Habib Bank Limited (HBL) reported Rs. 9.47 billion profit in the second quarter, the highest among all the banks sampled. However, its profits slid by 15 percent year-over-year (YoY).

It was followed by the National Bank of Pakistan (NBP) whose profits fell by 16 percent YoY to Rs. 9.20 billion, while MCB Bank Limited managed to increase its profits by 15 percent to Rs. 7.91 billion.

The Bank of Punjab (BoP) raised its profits the most with a 74 percent YoY boost, followed by Soneri Bank Limited’s (SNBL) and United Bank Limited’s (UBL)’s profit growths of 44 percent and 28 percent, respectively.

Source: Pro Pakistani