Banks post highest-ever quarterly profits

The July-September quarter brought to the country’s banking industry the highest-ever three-month profits, a review of earnings data of 16 commercial banks showed on Wednesday. According to Shameer Alam Zaidi, analyst at Ismail Iqbal Securities Ltd, bank earnings clocked in at Rs85 billion in July-September, up 26 per cent from a year ago. Major drivers for the record-high earnings were higher interest rates and healthy fees and foreign exchange income. “Provisions have increased but (they’re) still on the lower side, especially on loan portfolios… banks have so far remained largely unscathed from the Covid-19 and interest rate shocks,” he said. The only spoiler has been a change in the tax regime, which has led to an effective tax rate of 52pc versus 41pc a year ago. Net interest income of the sample banks increased 17pc in July-September on a quarterly basis owing to the lagged impact of the asset repricing. On the individual bank level, Standard Chartered Bank Ltd (42pc), Habib Metropolitan Bank Ltd (35pc), Askari Bank Ltd (34.9pc), Meezan Bank Ltd (32.2pc) and BankIslami Pakistan Ltd (25pc) were top performers while the Bank of Punjab Ltd (-9.5pc) and National Bank of Pakistan Ltd (0.7pc) remained underperformers.