Bank of Punjab Reports Strong Financial Performance, Plans Expansion

Lahore: The Bank of Punjab (BOP) unveiled its financial results and future strategies during a corporate briefing, highlighting a significant 42% increase in profit after tax, reaching Rs5.15 billion. The bank’s earnings per share (EPS) for the outgoing quarter was reported at Rs1.57, bringing the EPS for the first nine months of the current year to Rs3.65.

The bank’s investment portfolio is heavily weighted towards floater Pakistan Investment Bonds (PIBs), comprising 60-65%, while fixed PIBs and T-bills make up 22-25%. The floater PIBs offer a spread of approximately 70-80 basis points over a two-year maturity, with fixed PIBs yielding around 12%.

A notable development in the bank’s term deposit receipts (TDRs) was the maturity of 85% of higher-costing TDRs during the second and third quarters, reducing the current TDR rate to 9.65%. The bank anticipates the remaining instruments to mature soon.

The deposit mix is balanced equally between MDR and non-MDR, with the management aiming to increase the current account mix to around 24% by year-end and further to 27% next year. As of September 2025, the bank’s expected credit loss (ECL) provision under IFRS-9 stands at Rs1.8 billion, with a non-performing loan (NPL) to book ratio of 6.5%, slightly above the market average. However, the NPL ratio is not expected to rise further, with Rs40 billion in NPLs linked to an older portfolio.

The bank’s portfolio is well-secured, with 70% enjoying first-loss protection and 95% of the remaining 30% backed by collaterals. The Kissan Card portfolio is valued at Rs60 billion, with 85% of collections made ahead of the November 15 deadline, and plans to expand the portfolio to Rs100 billion.

The cost-to-income ratio stands at approximately 60%, with expectations of a decline. The management also reiterated a historical annual dividend policy and is considering quarterly payouts due to the improving financial position.

Lastly, the bank plans to expand its rural presence, which is considered more attractive than urban locations, by opening 50 new branches in 2026.