Karachi: National Bank of Pakistan (PSX: NBP) reported a profit of Rs. 32 billion for the first half of calendar year 2026, marking a 24 percent decline from the Rs. 42 billion recorded during the same period last year.
According to a results review by Arif Habib Limited, the bank posted earnings per share (EPS) of Rs. 15.27 for the six-month period.
For the second quarter of 2026, National Bank reported a profit of approximately Rs. 16 billion, down 21 percent year-on-year (YoY) but marginally higher by 1 percent quarter-on-quarter (QoQ).
The quarterly earnings were primarily impacted by higher operating expenses, while stable total income provided some support. No dividend declaration was reported for the period.
Net Interest Income Declines
National Bank’s net interest income stood at Rs. 48 billion in the second quarter, declining 21 percent YoY and 7 percent QoQ.
For the first half of the year, net interest income declined 7 percent YoY to Rs. 183 billion, while interest expenses fell 1 percent to Rs. 135 billion.
The bank’s non-fund income provided some offset, increasing 22 percent YoY during the quarter. The improvement was supported by Rs. 5.8 billion in capital gains, while foreign exchange income more than doubled, rising 112 percent YoY to Rs. 3.2 billion.
Despite the improvement in non-fund income, total income remained at approximately Rs. 68 billion during the quarter.
Operating Costs Put Pressure on Earnings
Operating expenses increased 15 percent YoY to Rs. 36 billion, pushing National Bank’s cost-to-income ratio to approximately 54 percent, compared with around 42 percent in the same quarter last year.
The bank’s effective tax rate stood at approximately 51 percent during the quarter, further weighing on bottom-line profitability.
Deposits and Investments
On the balance sheet, National Bank’s deposits declined 10 percent YoY, although they increased 3 percent QoQ to Rs. 4.2 trillion.
Investments rose 13 percent YoY to Rs. 5.7 trillion, while borrowings surged 87 percent YoY to Rs. 2.8 trillion.
The bank’s investment-to-deposit ratio stood at approximately 134 percent, while its advance-to-deposit ratio remained relatively low at 31 percent during the second quarter.
Overall, National Bank’s first-half performance reflects continued pressure on core interest income and rising operating costs, although stronger non-fund income and growth in investments provided some support to the bank’s financial position.
