KARACHI: Pakistan banks have posted a record profit of Rs81 billion during first quarter of the calendar year 2022, analysts said at Topline Securities.
The profitability of the listed banks surged by 28 per cent on year on year (YoY) basis and 19 per cent on Quarter on Quarter (QoQ) basis.
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Net Interest Income (NII) of the banks drove sector’s profitability growing by 21 per cent YoY to Rs220 billion due to rising asset yields. Markup interest earned on earnings assets was up 48 per cent YoY to Rs564 billion whereas markup interest expense on interest bearing deposits and liabilities were up 72 per cent YoY to Rs344 billion.
The analysts expect NII of the sector to remain strong in the second quarter of 2022 and third quarter of 2022 as well as asset reprising is likely to complete by third quarter of 2022 given recent hike in Kibor and T-Bill/PIB rates.
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Sharp drop in provisioning expense also supported sector’s profitability as it declined by 80 per cent to Rs1.6 billion in first quarter of 2022 led by macro recovery and improved asset quality.
With sector’s coverage ratio close to 100 per cent, risk to abrupt increase in provision charge going ahead is minimal.
Non-interest expense of the sector was also up 19 per cent YoY with major contributions coming from Habib Bank (+27 per cent to Rs31 billion), National Bank of Pakistan (+16 per cent to Rs17 billion), and Bank Al-Habib (+25 per cent to Rs11.9 billion).
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In terms of NII growth, MEBL, Bank Alfalah (BAFL) and SCBPL posted growth of 42 per cent, 38 per cent, and 36 per cent respectively on YoY basis.
In first quarter of 2022, Standard Chartered Bank (SCBPL) and Meezan Bank (MEBL) posted highest earnings growth of 119 per cent and 51 per cent YoY, respectively. On other hand, Soneri Bank (SNBL) and Bank of Khyber (BOK) registered YoY earnings decline of 31 per cent and 11 per cent.
The analysts said they had taken all listed banks that have announced their results.
