Banks’ Profit Hits Rs158bn in 3Q2024

Staff Report :

Pakistan’s listed banks recorded a profitability of Rs158bn in 3Q2024, marking a 1% decline YoY but a 16% rise QoQ. Despite lower interest rates, the sector’s Net Interest Income (NII) grew to Rs507bn, up 6% YoY and 13% QoQ, driven by volumetric growth and favorable repricing.

Interest income increased by 17% YoY and 2% QoQ to Rs1.9trn, while interest expenses rose 21% YoY but declined 2% QoQ to Rs1.4trn. In 9M2024, bank profitability grew 7% YoY to Rs447bn, supported by an 11% increase in NII to Rs1.4trn and a 56% surge in Non-Interest Income.

Few Banks at Deep Discount Despite Rally

Banks are currently trading at a 2024E P/E of 3.7x, a P/BV of 0.8x, a dividend yield of 13%, and an ROE of 23%.