Pakistan Banking Sector Posts Record-High Income in Third Quarter

Karachi: Pakistan’s banking sector has reached a new milestone, reporting record-high core income and bottom-line figures for the third quarter of the calendar year 2024. This marks a significant rebound following a brief pause in growth during the first quarter after 12 consecutive quarters of expansion.

According to JS Global, the sector’s performance was driven by declining cost of funds, as the savings deposit rate and borrowing costs are linked to the policy rate, which saw a decline of 250 basis points during the quarter. Additionally, stable asset yields, as anticipated monetary easing had been priced into yields in prior quarters, contributed to the sector’s growth. Non-interest income also played a role, with fee income experiencing its sixth consecutive quarter of growth.

Despite an increase in operating expenses and subjective provisioning, these factors were not enough to counteract the profit growth. The report, covering a sample of 12 banks that represent 87% of the sector’s market capitalization, provides a detailed summary of the sector’s key profitability and balance sheet indicators and ratios for the third quarter.

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