March 20, 2025 (MLN): The banking sector wrapped up 2024 on a strong note, backed by higher interest earnings and increased non-mark-up income.

The KSE-100 banking sector, which includes 14 listed banks, recorded a consolidated Profit After Tax (PAT) of Rs594.6 billion, indicating a 5% year-over-year (YoY) increase.

Higher earnings led to a 12% increase in taxes, reaching Rs648.4bn. Despite this, profit before taxation grew by 9% to Rs1.24 trillion.

Total banking sector income rose by 16% to Rs2.39tr from Rs2tr last year, mainly due to a 9% rise in net mark-up/interest income, which reached Rs1.84tr.

However, rising costs impacted profits. Non-mark-up/interest expenses increased by 29% to Rs1.09tr, driven by a 30% jump in operating expenses to Rs1.06tr.

Meezan Bank Limited (MEBL) emerging as the most profitable bank in Pakistan for 2024. The Islamic banking giant posted a record-breaking profit after tax (PAT) of Rs103.7bn, marking a 20.6% increase from Rs86bn in 2023.

This solidified its position as the top profit-earning bank, as strong growth in both markup and non-markup income drove its financial performance.

Meezan’s total income surged 27.3% to Rs318.89bn, fueled by a 26.7% rise in net markup income to Rs287bn and a 32.8% increase in non-markup income to Rs31.85bn.

United Bank Limited (UBL) secured the second position, reporting a 32.5% rise in PAT to Rs74.8bn, up from Rs56.5bn in 2023.

The bank’s total income saw a remarkable 48.8% jump to Rs257bn, largely driven by a 132% surge in non-markup income, which reached Rs83.7bn.

Meanwhile, MCB Bank Limited (MCB) held onto the third position, though its profit declined by 2.8% to Rs63.47bn from Rs65.27bn in 2023. Despite a slight 1.5% rise in net markup income to Rs167.95bn, higher markup expenses weighed on its overall earnings.

Beyond the top three, several banks posted significant growth. Along with UBL (32.5%) and MEBL (20.6%), Faysal Bank Limited (FABL) and The Bank of Punjab (BOP) were also among the fastest-growing, each recording an 18% rise in PAT.

FABL’s profits rose to Rs23.89bn from Rs20.25bn, while BOP’s earnings climbed to Rs13.28bn from Rs11.25bn.

While most major banks enjoyed a strong year, the National Bank of Pakistan (NBP) struggled with a sharp 50.3% decline in PAT, falling from Rs53.32bn to Rs26.5bn.

This steep drop resulted from a 48% decrease in profit before provisions and taxation, coupled with an 88.7% increase in non-markup expenses to Rs180.14bn. Rising costs and lower profitability put significant pressure on NBP’s financials.

UBL dominated as the highest dividend-paying bank with an outstanding Rs44 payout. MCB and MEBL followed closely, offering Rs36 and Rs28, respectively.

Future Outlook

The State Bank of Pakistan (SBP) has reduced the policy rate from a peak of 22% to 12%, indicating strong disinflationary trends.

However, with core inflation remaining stubborn and headline inflation expected to fluctuate, the central bank is likely to adopt a cautious approach toward further rate cuts.

This monetary environment presents both opportunities and challenges for the banking sector, requiring prudent risk management and forward-thinking strategies.

MEBL continues to set benchmarks in employee experience and operational excellence. The introduction of AI-powered HR Helpdesk and personalized learning initiatives will empower employees, ensuring an enriched work environment.

Expansion of cloud-based services will enhance scalability, flexibility, and cost-effectiveness, allowing MEBL to optimize its digital capabilities.

Additionally, the bank is making strategic investments in cybersecurity to safeguard critical assets and counter emerging threats.

By strengthening IT governance and compliance, MEBL aims to align with regulatory requirements and industry best practices, solidifying its position as a leader in Islamic banking.

UBL remains committed to expanding its branch network while focusing on acquiring low-cost deposits to maximize earnings potential.

The bank’s emphasis on speed, stability, security, and sustainability in its technological infrastructure will provide a strong foundation for continued growth and resilience.

As the financial landscape evolves, UBL’s digital platforms will ensure that the bank remains at the forefront of the industry, delivering exceptional financial services to its customers.

Amidst global economic disruptions and industry uncertainties, MCB Bank is unwavering in its pursuit of growth. The bank’s strategy revolves around customer-centricity, digital transformation, asset quality, and talent retention.

By leveraging technology and making strategic investments, MCB ensures compliance, efficiency, and innovation-driven progress.

Habib Bank Limited (HBL) has once again demonstrated resilience in a highly challenging economic landscape, delivering another record-breaking year.

Looking ahead, HBL is poised to harness the latest advancements in brand building and communication, ensuring that it remains connected with both current and future client segments.

Allied Bank Limited (ABL) is committed to deepening relationships with its existing customers by offering an extensive suite of financial products, including the Allied Visa Credit Card, Allied Personal Finance, Allied Car Finance, Allied Home Finance, Allied Solar System Finance, Allied Scooty Finance, and Allied Electric Bike Finance.

These tailored solutions will meet the diverse financial needs of ABL’s growing customer base.

A game-changer in ABL’s customer service strategy is the introduction of the Intelligent Virtual Assistant (IVA), powered by Kore.ai.

This AI-driven assistant will provide 24/7 support, ensuring seamless, human-like interactions for inquiries, requests, and complaint resolutions. By leveraging artificial intelligence, ABL is set to redefine customer engagement and service efficiency.

Copyright Mettis Link News

Posted on: 2025-03-20T13:21:38+05:00