According to Topline Research the banking sector’s first quarterly profits on Wednesday remained flat at Ra 47.8 million as Net Interest Income (NII) has restricted the profit and growth.
This report covers almost 98pc of all the banks with their reports except for the Bank of Punjab (BoP) and BIPL (Bank Islami) when the first quarter came from Rs 16.7 billion to Rs 13.3 billion in comparison to last year due to high times earned that year through PIB (Pakistan Investment Bonds) when the interest came down to 3 pc to reach Rs 48 billion in the first quarter of 2016.
Growth remained stagnant at YoY 2 pc while it was 30 pc last year due to cut in policy rates by 350 bps that year. Fix deposits and other non-remunerative deposits came down to 33 pc of all whereas non-interest expenses of banks was up by 9 pc to reach Rs 78 billion while this higher non-expense rate restricted the NII growth.
The total expense went down by 71 pc coming to Rs 2.9 billion with due recovery in non-performing loans while lower provisioning expense was down by 3 pc too. There was also a sharp fall in HBL’s capital gain, due to which even the top seven banks including NBP, UBL, BAHL, MCB, ABL, BAFL & HBL went down by 2 pc in their first quarter earnings too.
On the other hand smaller banks gained 9 pc increases to reach Rs 11.4 billion due to expense provisioning.