NBP profit falls 24% to around Rs33bn in 1HCY26

August 27, 2026 (MLN): National Bank of Pakistan (PSX: NBP) recorded a 24% decline in its net profit for the half year ended June 30, 2026, with profit after taxation falling to Rs32.84bn from Rs43.08bn in the corresponding period last year.

Showing this softer bottom-line, the bank's basic and diluted earnings per share (EPS) contracted to Rs15.27 from Rs20.05 in 1HFY25.

Total income declined 18% year-on-year to Rs130.97bn from Rs160.41bn in the prior period.

On the core banking spread, mark-up/return/interest earned declined 12% to Rs361.73bn, while mark-up/return/interest expensed fell at a slower pace of 7% to Rs261.63bn, causing net mark-up/return/interest income to contract sharply by 23% to Rs100.10bn from Rs130.63bn the primary headwind of the period and the most significant driver of the earnings decline.

Non-markup/interest income showed a mixed picture, rising a modest 4% to Rs30.88bn from Rs29.78bn. Foreign exchange income surged 56% to Rs5.52bn, gain on securities net grew 15% to Rs5.33bn, and dividend income rose 18% to Rs3.77bn.

Fee and commission income, however, declined 7% to Rs17.05bn, other income fell sharply by 71% to Rs220.19m, and net loss on derecognition of financial assets measured at amortised cost widened 60% to Rs1.05bn from Rs655.45m.

Share of profit from associates declined 43% to Rs31.09m.

On the expenditure side, operating expenses rose 11% to Rs67.88bn, while other charges declined 36% to Rs20.15m. Total non-markup/interest expenses rose 11% to Rs67.90bn from Rs61.18bn, adding further pressure on the earnings line.

Profit before credit loss allowance and provisions fell sharply by 36% to Rs63.07bn from Rs99.22bn. The development that compounded the earnings decline was a decisive swing in the provisions line.

Against a net reversal of Rs5.95bn in the prior period which had provided a significant boost to last year's pre-tax profit the bank recorded a net credit loss allowance and provision charge of Rs5.26bn in the current period.

This turnaround of over Rs11bn in the provisions line pulled profit before taxation down 27% to Rs68.32bn from Rs93.27bn.

Taxation declined 29% to Rs35.48bn from Rs50.19bn a proportionally larger reduction than the pre-tax decline providing a partial cushion.

However, this tax saving was insufficient to fully absorb the combined drag of core spread compression and the adverse swing in provisions, resulting in the 24% decline in profit after taxation for the half year.

Copyright Mettis Link News