Banks’ Core Income Faces Decline in Fourth Quarter

Karachi: The upcoming fourth-quarter financial results for Pakistan’s banks are anticipated to show a year-over-year decrease in core income, primarily due to a contraction in net interest margins (NIMs) and increased taxation. This is expected to overshadow the benefits gained from elevated non-core income and the growth in asset base.

According to a statement by JS Global, despite the anticipated decline in core income and continued reduction in asset yields that could affect future quarterly profits, banks are likely to maintain their dividend strategies for the fourth quarter of the calendar year 2024.

Within the banking sector, several institutions are expected to report significant earnings per share (EPS) growth compared to the previous year. Habib Bank Limited (HBL) is projected to achieve an EPS of Rs7.5, marking a 74% increase year-over-year. United Bank Limited (UBL) is expected to see a 108% rise in EPS to Rs11.9, while Meezan Bank Limited (MEBL) could report an 82% increase, reaching Rs12.3.

Additionally, Askari Bank Limited (AKBL) is projected to report a 72% increase in EPS to Rs3.4. Habib Metropolitan Bank (HMB) is expected to see an 89% rise to Rs4.4, and Faysal Bank Limited (FABL) could report a 46% increase to Rs2.4 for the fourth quarter of 2024.

Despite the challenges posed by NIMs contraction and higher taxation, the robust growth in non-core income and asset base underscores the resilience of Pakistan’s banking sector.

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