AHL Research’s report on the National Bank of Pakistan highlights a strong turnaround in its 2QCY25 results, with earnings of PKR 20.8bn (EPS: PKR 9.8), compared to a loss of PKR 9.0bn in the same quarter last year. Overall profitability for the bank reached PKR 42.7bn, marking an impressive 61x YoY increase.

The improved earnings were mainly due to the absence of last year’s one-off pension provisioning and solid growth in net interest income (NII) and non-funded income. Deposits also hit an all-time high of over PKR 4.7trn as of Jun’25.

NII rose 34% YoY to PKR 60.8bn due to better spreads, despite a 32% decline in interest earned and a 44% drop in interest expenses. Non-funded income grew 29% YoY, with capital gains up 233% YoY to PKR 4.7bn, while fee income rose 23% YoY to PKR 9.0bn. However, FX income fell 37% YoY to PKR 1.5bn.

Provisioning showed a reversal of PKR 443mn compared to a charge of PKR 47.3bn in 2QCY24. Operating expenses increased by 7% YoY to PKR 32bn, but efficiency improved, with the cost-to-income ratio dropping to 41%. The effective tax rate was 54.6% during 2QCY25.