These Are the Top 10 Most Profitable Banks in Pakistan

In 2023, the banking industry performed exceptionally well. It set new benchmarks and exceeded historical highs. One of the key highlights was the significant increase in dividends, rising by an amazing 84% compared to the previous year.

With outstanding price performance, the banking sector outperformed the PSX in 2023, achieving an amazing 85 percent return as opposed to the index’s 55 percent. The industry’s profitability enjoyed record-breaking growth.

Arif Habib Limited reports that a notable 85 percent YoY growth in interest income was the primary driver of the notable jump in profitability. The policy rate rising by 600 basis points and the year-over-year growth in deposits are two of the reasons for this increase.

Regretfully, banks’ involvement in funding the private sector is still restricted to boosting the real sector’s GDP. Because of this, most banks had record-breaking profits in the previous year and made significant contributions to the national coffers due to their many tax payments, which also resulted in historically high values.

In order to increase their bottom-line revenue, banks intend to create distinct subsidiaries to boost their foreign exchange operations.

The top ten profitable banks in Pakistan are as follows:

1. Meezan Bank

Meezan continued to be Pakistan’s most profitable bank. Being the premier Islamic bank, it posted an astonishing profit of Rs. 84.5 billion in 2023 compared to Rs. 45 billion in 2022, indicating an 87 percent year-over-year increase.

At the end of the year, the bank had reached a number of significant milestones, with deposits and assets totaling Rs. 2 trillion and Rs. 3 trillion, respectively. The bank expanded its nationwide network as well, adding more than 1,000 locations and ATMs. A total dividend of Rs. 28 per share was also paid to the bank’s stockholders. Additionally, the value of the shares rose from 25.1 to 47.1 during the reviewed year.

Unfortunately, Sukuk’s extremely limited function in providing funding to support enterprises and entrepreneurs continues to be the bank’s primary priority.

2. MCB Bank

MCB Bank continued to hold the second spot. Its profitability increased tremendously by 89 percent to Rs. 65.3 billion in 2022 from Rs. 34.45 billion in 2022. Additionally, the bank raised its ownership of 81 percent in the asset management company, which made a substantial profit contribution. In contrast to the previous year’s reported EPS of Rs. 27.6, the earnings per share climbed to Rs. 50.1. The bank gave stockholders dividends of Rs. 21 per share.

3. Habib Bank Limited

In 2023, Habib Bank Limited recorded its greatest profit of Rs. 57.8 billion, a 68 percent increase over the previous year. The bank’s assets and deposits reached above Rs. 5 trillion and Rs. 4.1 trillion, respectively, its highest-ever levels. In 2023, earnings per share was Rs. 39.32, up from Rs. 23.23 in 2022. The bank gave its stockholder’s dividend payments of Rs. 9.25 per share.

In order to take advantage of new business prospects in the agri-economy, the bank expanded its operations in the agriculture sector by establishing a new specialized subsidiary. Other banks are expected to follow suit. By turning the Pakistan Super League into a national brand, the bank’s leadership upheld its heritage of aiding the country’s interests. Additionally, by giving the IT sector more influence, it advanced the development of Tech Destination Pakistan.

4. United Bank Limited

With a 74 percent increase over the same period last year, United Bank Limited announced its highest-ever year profit after tax of Rs. 56.47 billion in 2023. The bank continued to be generous in its dividend payments to stockholders; in one calendar year, the highest payout amount was Rs. 44 per share. In a year, the bank’s share value rose from 25.4 to 47. By the end of 2023, the bank’s deposits had nearly reached Rs. 2.2 trillion, and its assets had increased to over Rs. 5 trillion. The bank’s management began working hard that same year to establish its currency exchange operation. Like in 2022, the bank remained in fourth place in 2023.

5. National Bank of Pakistan

The National Bank of Pakistan (NBP) experienced a significant increase in profitability as well, with its bottom line reaching a record-breaking Rs. 53.3 billion. When compared to the previous year’s earnings of Rs. 30.9 billion, the bank’s profit increased by 72%.

The bank’s assets increased to more than Rs 6.5 trillion, the biggest amount ever seen in the nation’s banking sector. It now has about Rs. 3.6 trillion in deposits. By the end of 2023, the bank’s earnings per share had likewise increased to 24.96. Regretfully, no dividend announcement was made to shareholders by the bank. Regarding the most profitable banks in Pakistan, the National Bank of Pakistan (NBP) remained ranked fifth.

6. Standard Chartered Bank

Out of all the major banks, Standard Chartered Bank had the highest profit growth, rising by 115% year over year. From an all-time high profit of Rs. 19.8 billion in 2022 to Rs. 45.6 billion in 2023, the bank’s profitability increased.

The bank’s assets now total over Rs. 1 trillion, marking a significant accomplishment. Additionally, deposits increased to Rs. 720 billion. Additionally, the bank’s earnings per share increased by over 100%, from 5.1 to 11. The bank moved up one spot to become Pakistan’s sixth most profitable bank.

7. Allied Bank of Pakistan

One of Pakistan’s oldest banks, Allied Bank of Pakistan (ABL), also experienced a respectable 91 percent increase in profits in 2023 over the previous year. From Rs. 21.9 billion in 2022 to Rs. 40.6 billion in 2023, the bank’s profitability grew. The bank declared 35.53 earnings per share. After the quarterly results were disclosed, it declared a dividend income of Rs. 12 per share for the entire year. The bank saw a historically strong gain in profits, but its ranking fell from fifth to sixth.

8. Bank Alfalah

The bank reported a profit after tax of Rs. 36.456 billion, up almost 100% from Rs. 18.206 billion in the previous year. The earnings per share (EPS) has increased from Rs. 10.27 to Rs. 23.12. In 2023, it distributed a total dividend of Rs. 8 per share.

The bank has established a digitally-enabled lifestyle banking branch. Additionally, it bought more than 7% of the shares in a BNPL company. The bank has achieved two noteworthy benchmarks: one trillion rupees in deposits and one thousand branches.

9. Bank Al Habib

In 2023, Bank Al Habib recorded a respectable 113% increase in profits. The bank’s profit in 2023 was Rs. 35.3 billion, up from the biggest profit the firm had ever declared in 2022 of Rs. 16.5 billion. The bank’s earnings per share increased as well, reaching 31.7. Throughout the year, the bank gave its stockholders dividends of Rs. 14 per share. In 2023, the bank remained ranked in relation to the previous year.

10. Habib Metro Bank

Comparing the Rs. 14.92 billion reported in 2022 to the Rs. 25.2 billion recorded in 2023, Habib Metro Bank also declared its highest-ever profit. The bank’s earnings per share increased to Rs. 23.4 as well. Additionally, stockholders received a notable increase in dividends of Rs. 10.50 per share. The bank was given permission to establish an exchange company as a subsidiary, just like its rival banks.

Conclusion

In 2023, the top 10 banks on the list from the previous year did not change. Surprisingly, the majority of banks held onto their profits positions, with the exception of Standard Chartered Bank and Allied Bank, which moved up from sixth to seventh place, respectively.

The profit differential between the most profitable bank and the second-most profitable bank is substantial. Several rival banks, including Bank of Punjab, Habib Metro Bank, and Faysal Bank, lost their rankings on this list.

Unusually, in 2024, the profits of two banks—HBL and UBL—showed growth in the face of increased competition. Banks are expected to continue growing their profits in 2024, even with a high policy rate regime. Banks that prioritize diversifying their sources of income and utilizing technology will have an advantage over their competitors in terms of profitability.

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