KARACHI: The profit of listed banks in Pakistan has increased by 31 percent or Rs15.2 billion on year-on-year basis during the first quarter of 2021 to reach Rs64.4 billion.

The profit is up by 32 percent on quarter-on-quarter basis during this period.

Aided by a strong deposit growth of 18 percent on YoY, Net Interest Income (NII) recorded an increase of 7 percent YoY (or Rs11.4 billion) despite a sharp decline in interest rates, an analyst at Topline Securities said. However, NII reported a decline of 2 percent on QoQ as re-pricing of assets reach its completion.

Non-Interest Income too reported improvement of 14 percent on YoY (or Rs7.1 billion) led by higher dividend income (up 59 percent on YoY), forex income (up 21 percent on YoY) and fee income (up 13 percent on YoY). The same also increased by 10 percent on QoQ on the back of higher capital gains on government securities.

The provision charge during the quarter declined by 59 percent on YoY (or Rs9.9 billion) and 74 percent on QoQ as banks had booked General Provisions in the first quarter of 2020 in light of COVID-19 outbreak.

In absolute terms, the highest quarterly profit was earned by HBL (Rs8.6 billion), followed by NBP (Rs7.8 billion), UBL (Rs7.6 billion), MCB (Rs7.1 billion) and MEBL (Rs6.1 billion). In terms of profit growth, the highest increases were seen in HBL (up 108 percent), HMB (up 103 percent), SNBL (up 92 percent), NBP (up 90 percent) and BAHL (up 64 percent). “This review of profit of listed banks in Pakistan for the first quarter of 2021 includes a sample of 18 listed banks (out of a total of 20 listed banks), representing 99 percent of the banking sector’s capitalization at the PSX,” said the analyst.