The National Bank of Pakistan (NBP) faced a challenging first half of the year. NBP recorded a 24% decline in its net profit for the 1st half of this calendar year (1HCY26), which ended on June 30, 2026. Profit after taxation fell to Rs. 32.84 billion. During the same period last year, NBP posted a profit of Rs. 43.08 billion.
Consequently, this softer bottom-line impacted shareholder returns. The bank’s basic and diluted earnings per share (EPS) contracted to Rs. 15.27. Previously, it stood at Rs. 20.05 in 1HFY25. Furthermore, total income dropped 18% year-on-year to Rs. 130.97 billion, down from Rs. 160.41 billion.
NBP Profit Drops as Core Banking Spread Takes a Heavy Hit
The primary driver of this earnings decline was a sharp contraction in the core banking spread. Mark-up/return/interest earned declined 12% to Rs. 361.73 billion. Meanwhile, mark-up/return/interest expensed fell at a slower pace of 7% to Rs. 261.63 billion.
As a result, net mark-up/return/interest income shrank severely. It contracted 23% to Rs. 100.10 billion, compared to Rs. 130.63 billion in the prior period. This specific drop served as the main headwind for the bank’s financial performance.
Mixed Trends in Non-Markup Income
Unlike the core spread, non-markup and interest income showed a mixed picture. Overall, this category rose a modest 4% to Rs. 30.88 billion.
Several segments experienced notable growth. Foreign exchange income surged an impressive 56% to Rs. 5.52 billion. Additionally, net gain on securities grew 15% to Rs. 5.33 billion. Dividend income also rose 18% to Rs. 3.77 billion.
However, other areas faced significant declines. Fee and commission income dropped 7% to Rs. 17.05 billion. Other income plummeted sharply by 71% to just Rs. 220.19 million. Moreover, the net loss on derecognition of financial assets (measured at amortised cost) widened 60% to Rs. 1.05 billion. Finally, the share of profit from associates declined 43% to Rs. 31.09 million.
Rising Expenses & Provision Swings
Expenditures added further pressure to the earnings line. Total non-markup/interest expenses rose 11% to Rs. 67.90 billion. Specifically, operating expenses increased 11% to Rs. 67.88 billion. Other charges did decline 36% to Rs. 20.15 million, but this provided little relief. Consequently, profit before credit loss allowance and provisions fell sharply by 36% to Rs. 63.07 billion.
A decisive swing in the provisions line compounded the earnings decline. Last year, the bank enjoyed a net reversal of Rs. 5.95 billion, which boosted pre-tax profit. This year, however, NBP recorded a net credit loss allowance and provision charge of Rs. 5.26 billion. This turnaround of over Rs. 11 billion pulled profit before taxation down 27% to Rs. 68.32 billion.
Fortunately, taxation provided a partial cushion. Taxes declined 29% to Rs. 35.48 billion from Rs. 50.19 billion. However, this tax saving failed to fully absorb the combined drag of core spread compression and the adverse provision swing.
Here is a detailed NBP 1HCY26 Financial Summary table:
| Description | 2026 (PKR) | 2025 (PKR) | Change (%) |
| Mark-up / return / interest earned | 361,727,363,000 | 410,941,321,000 | -11.98% |
| Mark-up / return / interest expensed | 261,630,413,000 | 280,311,315,000 | -6.66% |
| Net mark-up / return / interest income | 100,096,950,000 | 130,630,006,000 | -23.37% |
| Fee and commission income | 17,050,930,000 | 18,241,725,000 | -6.53% |
| Dividend income | 3,770,025,000 | 3,205,976,000 | 17.59% |
| Foreign exchange income | 5,520,812,000 | 3,530,867,000 | 56.36% |
| Gain on securities – net | 5,331,765,000 | 4,629,815,000 | 15.16% |
| Total non-mark-up / interest income | 30,875,536,000 | 29,775,248,000 | 3.70% |
| Total income | 130,972,486,000 | 160,405,254,000 | -18.35% |
| Operating expenses | 67,884,457,000 | 61,151,420,000 | 11.01% |
| Total non-markup / interest expenses | 67,904,610,000 | 61,183,106,000 | 10.99% |
| Profit before credit loss allowance / provisions | 63,067,876,000 | 99,222,148,000 | -36.44% |
| PROFIT BEFORE TAXATION | 68,324,074,000 | 93,271,170,000 | -26.75% |
| Taxation | 35,481,885,000 | 50,193,053,000 | -29.31% |
| PROFIT AFTER TAXATION | 32,842,189,000 | 43,078,117,000 | -23.76% |
| Basic and diluted earnings per share | 15.27 | 20.05 | -23.84% |
