Islamabad: Pakistan’s banking sector showed strong performance in 2024 despite economic challenges. Several banks recorded impressive profits, while the industry witnessed major shifts, including a growing focus on Islamic banking.
Record-Breaking Profits in 2024
Banks in Pakistan faced fluctuations in policy rates but still reported substantial profits and asset growth. The total banking sector profit crossed Rs. 600 billion, while tax contributions surpassed Rs. 650 billion.
Higher deposit rates attracted significant inflows, increasing tax liabilities. Many banks adjusted their loan portfolios to minimize tax implications. Government-issued Sukuks also played a key role in boosting bank earnings.
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Top Performing Banks in 2024
The Pakistan Stock Exchange (PSX) saw increased investor interest in the banking sector. The following banks led in profitability:
1. Meezan Bank – The Most Profitable Bank
- Pakistan’s largest Islamic bank set a record with Rs. 101.5 billion profit.
- Pre-tax profit stood at Rs. 222 billion, while tax contributions reached Rs. 121 billion.
- Earnings per share (EPS) rose to Rs. 57, and the bank announced a Rs. 28 payout.
2. United Bank Limited (UBL)
- Profit surged 34% to Rs. 75.7 billion.
- Pre-tax profit reached Rs. 150 billion, and Rs. 74.3 billion was paid in taxes.
- EPS increased to Rs. 61, and shareholders received a Rs. 44 dividend.
- UBL expanded Islamic banking operations, fully transitioning in KPK and Balochistan.
3. MCB Bank
- Profit dropped slightly to Rs. 57.6 billion.
- Pre-tax profit stood at Rs. 118.4 billion, with over Rs. 60 billion in tax payments.
- EPS declined to Rs. 48, and the bank announced a Rs. 36 dividend.
4. Habib Bank Limited (HBL)
- Reported flat profit growth at Rs. 57.8 billion.
- Balance sheet expanded to Rs. 6.1 trillion, with total deposits at Rs. 4.4 trillion.
- Pre-tax profit reached Rs. 120 billion, with Rs. 62.5 billion in tax contributions.
- EPS stood at Rs. 38, and the bank paid a Rs. 16.5 dividend.
5. Standard Chartered Bank
- Highest-ever profit of Rs. 46 billion, marking a 7.9% increase.
- Pre-tax profit hit Rs. 100 billion, with Rs. 54 billion in taxes paid.
- EPS stood at Rs. 11.90, with a Rs. 9 dividend.
- The bank is actively transitioning to Islamic banking.
Islamic Banking and Future Outlook
The 26th constitutional amendment, which mandates a shift to a Riba-free banking system by 2028, is driving increased interest in Islamic banking. Banks with strong Sharia-compliant operations are expected to benefit.
Islamic banks and conventional banks offering Sukuks will have an advantage in the coming years. The transition to interest-free banking is expected to reshape Pakistan’s financial landscape.
Conclusion
Despite economic challenges, Pakistan’s banking sector remained resilient in 2024. The industry is moving towards Islamic finance, aligning with the government’s Riba-free banking vision. As more banks shift to Sharia-compliant practices, investors and depositors are likely to show greater confidence in the sector.
