KARACHI: The commercial banks of Pakistan have shown an impressive growth in their earnings. The big banks have shown an improvement of 24% on their earnings for the six months ended June 30, 2011. The aggregate profit has reached to the level of 40 billion.
The data of big banks National Bank of Pakistan (NBP), United Bank Limited (UBL), Muslim Commercial Bank (MCB), Habib Bank Limited (HBL) and Allied Bank Limited (ABL); analyzed on sample basis, which contributes to the 57% of the total deposits of banking sector and also represent 80% of the market capitalization shows that:
Allied Bank Limited has posted highest profitability growth of 39%, MCB 33%, UBL 29%, HBL 25% and National Bank of Pakistan posted 3% growth in the profitability.
The overall net interest income (NII) of the banks grow by 17%, the major reasons behind this growth are higher return on advances and better yield on government securities. Large banks have continued their strategy of investing in non-risk base government securities, instead of investing in risky commercial loans. This has contributed to higher NII.
Similarly the Trade business generated 22 percent growth in non-interest income of big banks.
On the other side, the provision level has also reached to the level of 19 billion which is 20% higher than reported previously.