Karachi: The National Bank of Pakistan Limited (NBP) has reported a decline in its Profit After Tax (PAT) for the first half of 2026, reflecting a challenging macroeconomic environment marked by interest rate fluctuations and subdued credit demand. The bank's directors presented the condensed interim standalone financial statements for the period ending June 30, 2026, highlighting key financial and strategic developments.
The financial report, dated August 28, 2026, reveals that NBP recorded a PAT of PKR 32.4 billion, representing a 25.5% year-on-year decline. This decrease is attributed primarily to margin compression and the normalization of income levels following a high base in the previous year. Despite these challenges, NBP maintained a disciplined approach to balance sheet management, focusing on liquidity, funding resilience, and deposit stability.
The macroeconomic backdrop showed signs of recovery, with the State Bank of Pakistan's (SBP) policy rate reduced to 11.5% by June 2026. The exchange rate remained stable at approximately PKR 278 per US dollar. According to information available from the Pakistan Stock Exchange (PSX), the KSE-100 index closed June at approximately 180,000 points, marking a gain of around 5% during FY26. This reflects a recovery from earlier market volatility.
NBP's total income for the first half of 2026 was reported at PKR 127.63 billion, down 18.8% from the previous year. The bank's non-funded income showed resilience, with a 3.8% increase to PKR 27.57 billion, supported by improved forex income and dividend payments. However, the bank's administration expenses rose by 10.8% to PKR 65.54 billion, reflecting targeted investments in technology and infrastructure.
The bank's proactive risk management resulted in a net reversal of PKR 5.26 billion in credit loss allowances, reflecting improved asset quality and recoveries. The overall cost of funds decreased, providing an offset to asset-side yield compression.
Despite a substantial tax charge of PKR 34.94 billion, NBP's business fundamentals remained resilient, translating to Earnings per Share (EPS) of Rs. 15.23. The bank's management expressed a commitment to maintaining a robust risk posture and sustaining long-term value creation.
The bank's future outlook emphasizes an activity-driven operating environment, with a focus on credit recovery, deposit mobilization, and investment portfolio optimization as key earnings drivers.