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Pakistan’s banking sector had a profitable 2024, but the latest Q4 numbers showed that while Meezan Bank Limited, UBL – United Bank Limited, and HBL made hefty profits, Bank Makaramah Ltd and The Bank of Punjab (BOP) posted steep losses, raising concerns.
Meezan Bank topped the charts with Rs101.5 billion in net profit, followed by UBL at Rs89.3 billion and MCB Bank Limited at Rs57.8 billion due to their strong net interest margins, cost control, and diverse revenue streams. On the other hand, Bank Makaramah lost Rs5.2 billion, making it the sector’s worst performer, while BOP lost Rs2.2 billion, due to weak loan recovery and soaring expenses.
Analysts warn that while overall profitability looks solid, the widening gap between top and struggling banks signs towards deeper financial concerns. Liquidity issues, rising defaults, and over-reliance on high interest rates could draw trouble.
Even with a 5.7x PE ratio and 1.0x PB ratio for 2025E, caution is key. For the year 2025 the banking sector would need to learn to balance profits while keeping financial instability from spreading like wildfire.
