National Bank of Pakistan (NBP) has reported a 26% year-on-year decline in consolidated profit after tax for the first quarter ended March 31, 2026, as weaker core banking income and falling non-markup gains weighed on performance.
The bank’s profit dropped to Rs16.29 billion, compared to Rs22.11 billion in the same period last year, while earnings per share also declined to Rs7.58 from Rs10.29.
Core income under pressure
NBP’s primary revenue stream came under significant strain as mark-up/return earned fell 16% to Rs178.28 billion. Although interest expenses dropped by 12%, the reduction was not enough to offset the decline in income, leading to a 25% contraction in net interest income to Rs51.99 billion.
Non-funded income also weak
Non-markup income fell 20% to Rs10.38 billion, driven by broad-based declines:
- Fee and commission income: down 7%
- Dividend income: down 51%
- Other income: down 93%
Foreign exchange income provided limited support, rising 14% to Rs2.28 billion, but losses on securities and a swing in associate results further dragged earnings.
Costs and provisions
Operating expenses increased by 7% to Rs31.17 billion, adding further pressure on profitability. However, the bank recorded a net reversal of credit loss allowances worth Rs3.50 billion, compared to a large provisioning charge last year, which helped cushion the overall decline.
Despite the provisioning support, profit before tax still fell 26% to Rs34.68 billion, with taxation also decreasing in line to Rs18.39 billion, resulting in the final 26% drop in net profit for the quarter.
NBP’s Q1CY26 performance reflects:
- Weakening core interest income
- Broad-based decline in fee and investment-related revenues
- Rising operating costs
- Partial offset from improved asset quality provisions
Overall, the bank’s earnings were primarily pressured by shrinking margins in its core lending business.
