Despite a significant cut in interest rates by the State Bank of Pakistan over the past year, banks have reported an overall increase in profits. While some major banks recorded gains, others experienced a decline in earnings.
In the first half of the current fiscal year, banks collectively earned Rs210 billion in profit — a 10% increase compared to the same period last year. On a quarterly basis, banks earned Rs102 billion in the second quarter of 2025 (April–June), which is 5% less than the first quarter (January–March 2025) but 7% higher compared to the first quarter of 2024.
According to banking sources, when the State Bank’s interest rate was at its peak of 23%, banks were earning high profits effortlessly. The government is the largest borrower from banks, and during that time, banks were earning attractive returns by lending to the government. However, as interest rates have gradually declined, banks’ profit margins have also started to shrink.
How Much Did Major Banks Earn in the Last Six Months?
According to a report by Topline Securities, United Bank Limited (UBL) led in terms of profitability during the first half of 2025, with its profit increasing by 137% compared to last year. Habib Bank Limited (HBL) also saw a 7% rise in profit.
On the other hand, several banks experienced a drop in earnings:
- Bank Alfalah recorded a 35% decrease in profit.
- MCB Bank’s profit fell by 19%.
- Meezan Bank saw an 18% decline.
- Bank Al Habib Limited reported a 5% drop in profit during the same period.
Banking experts note that while the policy rate has dropped nearly 100% over the past year, banks have still benefited from increased deposits and returns from earlier high-interest loans, keeping the overall profits stable. Some larger banks also sustained their profits through stock market investments. However, experts caution that maintaining these profit levels may become increasingly difficult in the coming months.
