National Bank of Pakistan (PSX: NBP), the country’s largest state-owned bank, published its results for the three and nine months to 30 September 2026 on 28 October 2026. Figures below are for the bank on its own (unconsolidated), as presented in the directors’ report, unless marked as group figures.
The headline: a profit after tax of Rs 16.48 bn, or Rs 7.75 a share, for July to September, down 28.8% from Rs 23.16 bn (Rs 10.89) a year earlier. For the nine months, profit fell 26.6% to Rs 48.9 bn (Rs 22.98 a share against Rs 31.32). No interim dividend was announced.
The quarter in numbers
| Rs M | Jul to Sep 2026 | Jul to Sep 2025 | Change |
|---|---|---|---|
| Mark-up / interest earned | 200,894 | 190,390 | +5.5% |
| Mark-up / interest expensed | (144,891) | (129,665) | +11.7% |
| Net interest income | 56,003 | 60,725 | −7.8% |
| Fee and commission income | 4,273 | 4,979 | −14.2% |
| Gain on securities | 4,451 | 7,966 | −44.1% |
| Dividend, foreign exchange and other income | 1,233 | 1,841 | −33.0% |
| Total non-interest income | 9,957 | 14,786 | −32.7% |
| Operating expenses and other charges | (31,295) | (29,829) | +4.9% |
| Profit before credit loss allowance | 34,665 | 45,682 | −24.1% |
| Credit loss allowance, net reversal | 775 | 3,863 | smaller reversal |
| Profit before tax | 35,439 | 49,546 | −28.5% |
| Tax (effective rate 53.5% against 53.2%) | (18,956) | (26,383) | −28.2% |
| Profit after tax | 16,484 | 23,162 | −28.8% |
| Earnings per share, Rs | 7.75 | 10.89 | −28.8% |
The dividend, foreign exchange and other income line also includes a Rs 510 M loss on derecognising assets held at amortised cost (Rs 328 M a year earlier).
What drove the result
Funding costs rose faster than income. In the quarter, interest earned rose 5.5% but interest paid rose 11.7%, so net interest income fell 8% to Rs 56.0 bn. Over nine months the gap is wider: net interest income fell 18.4% to Rs 156.1 bn. The bank says the main cause is a lower average policy rate in 2026 than in the first nine months of 2025, which reduced the yield on its large holdings of government securities. Its investments averaged Rs 4,849 bn and earned Rs 427.1 bn, 6.4% less than a year earlier, while its loan book earned 7.1% less as average loans and rates fell.
Other income fell by a third. Gains on securities almost halved in the quarter, to Rs 4.45 bn from Rs 7.97 bn, and fee income fell 14%. For nine months, non-interest income was Rs 37.5 bn against Rs 41.4 bn; dividend and foreign exchange income rose, but capital gains fell 26% and fees 9%.
Costs kept rising. Operating expenses for nine months rose 8.8% to Rs 96.8 bn, with staff costs, about 62% of the total, up 10% to Rs 59.5 bn. With income falling and costs rising, the cost-to-income ratio jumped to 50.0% from 38.2%.
Provisions helped, but less than last year. The bank released Rs 775 M of credit loss allowances in the quarter, against a Rs 3.86 bn release a year earlier. For nine months there was a net release of Rs 6.0 bn against a Rs 0.9 bn charge. Even so, bad loans rose: non-performing loans increased 7% since December to Rs 239.3 bn, taking the infection ratio to 14.7% from 13.8%. The bank points to a large stock of legacy bad loans, including loans to some state-owned entities.
Tax takes more than half. Tax was 53.5% of pre-tax profit in the quarter, high even by the standards of Pakistani banks, so every rupee lost before tax costs shareholders only about 47 paisa after tax.
The balance sheet
- Bigger, funded by borrowing. Total assets grew 9.7% in nine months to Rs 7,753 bn. Deposits fell 9.4% to Rs 4,012.7 bn as the bank let high-cost deposits go, while borrowings rose to Rs 2,911.3 bn from Rs 1,689.7 bn. Current accounts, which pay no interest, are 47.3% of deposits.
- Loans flat, investments up. Gross advances were Rs 1,629.4 bn, up 0.9%. Investments rose to Rs 5,370.1 bn at carrying value, mostly government securities held at amortised cost.
- Capital lower after the big dividend. Net assets fell to Rs 470.2 bn from Rs 531.4 bn, mainly because of the Rs 74.5 bn dividend for 2025 (Rs 35 a share) and a smaller revaluation surplus on investments. The capital adequacy ratio fell to 21.12% from 26.21%, and Tier-1 to 16.46% from 19.65%; both remain well above the regulatory minimum.
Other points in the report
- New chief executive. The federal government appointed Imran Sarwar as President and CEO for three years on 3 September 2026, and a new chairman, Naved Abid Khan, in March.
- Pension case. The Federal Constitutional Court dismissed the bank’s appeal in a case concerning increases in pensions for six pensioners. The bank is filing a review. This is part of a long-running pension dispute that could carry a much larger cost if the principle applies more widely.
- Ratings. VIS and PACRA rate the bank AAA, their highest rating.
Valuation snapshot
At the 28 October close of Rs 164.97, up 6.6% on the day:
| Measure | Value |
|---|---|
| Group earnings per share, last 12 months (October 2025 to September 2026) | about Rs 31.9 |
| Price to earnings | about 5.2 times |
| Book value per share (the bank) | about Rs 221, so price to book of about 0.75 |
| Dividends in the last 12 months | Rs 35 a share for 2025, paid as a single final dividend |
| Market value (2.13 billion shares) | about Rs 351 bn |
| Share price, last 52 weeks | low Rs 147.10, high Rs 287.80 |
The stock is about 43% below its 52-week high, partly because the Rs 35 dividend was paid out earlier this year. It trades at a quarter below book value and about 5 times earnings. The market is weighing a falling profit, a high cost base, a rising stock of bad loans and the pension case against a strong capital position and a history of large payouts.
What to watch next
- Net interest margin. Whether funding costs come down after the bank’s shift from high-cost deposits to borrowing, or keep squeezing interest income.
- Costs. A 50% cost-to-income ratio is high for a large bank; staff costs are the main driver.
- Bad loans. The infection ratio of 14.7% and whether provisions turn from releases back to charges.
- The pension review. Any ruling with wider application would affect capital and future dividends.
- The 2026 dividend. After the very large payout for 2025 and a lower capital ratio, the size of the next one is uncertain.
The bottom line
NBP’s profit is falling on almost every line: lower net interest income, smaller trading gains and fees, higher costs and smaller provision releases. Nine-month profit is down 27% and the quarter was 29% lower than a year ago, though about level with the first two quarters of 2026. The bank remains well capitalised and cheap against its book value, but the drivers of next year’s earnings, margins, costs, bad loans and the pension case, all lean the wrong way for now.
You can follow NBP’s price, Pulse Score, dividend history, results calendar and off-market trades in the Market Pulse Hub dashboard under PSX.
Bilal, Market Pulse Hub
Source: National Bank of Pakistan, quarterly report for the nine months ended 30 September 2026 (directors’ report and unaudited unconsolidated and consolidated condensed interim financial statements). Earlier quarters from company filings. Prices from the PSX data portal. Per-share, twelve-month and valuation figures are our calculations. This article is for education and information only and is not investment advice.