Pakistan’s listed banking sector delivered strong results in the first quarter of 2026, posting a total profit of Rs174 billion. This marks an 8% increase compared to the previous quarter, showing steady performance across major banks despite economic pressure.
Growth was mainly supported by higher non-interest income, which rose 15%, driven by capital gains. Banks such as United Bank Limited (UBL), Bank Alfalah, and Faysal Bank contributed significantly, earning Rs44.5 billion in combined gains.
Even with lower interest rates, net interest income remained stable. Leading banks, including UBL, Habib Bank Limited (HBL), Allied Bank Limited (ABL), and Bank Alfalah, recorded a 4% to 6% rise in this income stream, reflecting stable lending activity.
Operational efficiency also improved as the sector’s cost-to-income ratio dropped to 48% from 50.4% last quarter. Several banks, including National Bank of Pakistan (NBP) and Askari Bank, reduced administrative expenses by up to 16%, helping improve margins.
Provision reversals of Rs1.80 billion further supported profitability, with NBP alone contributing Rs3.40 billion in reversals. On taxation, the effective rate slightly eased to 52.4%.
UBL led the sector with Rs48.4 billion profit, followed by Meezan Bank and HBL. Analysts maintain a positive outlook, highlighting Meezan Bank and Bank Alfalah as strong performers due to stable earnings and solid fundamentals.