Banks Earn Rs170B in Q3’25 on Govt Debt Surge

KARACHI: Pakistan’s banking sector cemented its crown as the economy’s profit juggernaut and safest haven in 3Q2025, gorging on government debt and high-yield securities, per Topline Securities’ Friday report.

Listed banks raked in Rs170 billion in profit—8% YoY surge, 2% QoQ bump—as assets ballooned faster than any sector, while private lending cratered to historic lows, with net credit off-take near zero four months into FY26.

Analysts pinpoint the credit drought: banks feast on risk-free government paper with juicier returns, while businesses shun borrowing amid sky-high rates and policy fog stifling growth.

Net Interest Income (NII) climbed 6% YoY but stalled QoQ. UBL detonated 78% to Rs92 billion, NBP 74% to Rs61 billion, BoP 61% to Rs23 billion. Strip them out—sector NII plunged 10% YoY. QoQ, gains neutralized losses, with current account shifts and volume spikes aiding some.

Non-interest income soared 13% YoY, 1% QoQ to Rs146 billion via capital gains, fees, FX. Non-interest expenses exploded 19% YoY, 5% QoQ to Rs329 billion on remittance costs, jacking cost-to-income ratio to 47.9% from 45.9% last quarter, 43.3% a year ago.

Profitability stands unshaken despite credit freeze, buoyed by endless government borrowing and fixed-income bounty.