{"id":10147,"date":"2025-07-21T10:20:44","date_gmt":"2025-07-21T05:20:44","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=10147"},"modified":"2025-07-21T10:20:46","modified_gmt":"2025-07-21T05:20:46","slug":"banking-sector-earnings-preview-what-to-expect-in-2qcy25","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/banking-sector-earnings-preview-what-to-expect-in-2qcy25\/","title":{"rendered":"Banking sector earnings preview: what to expect in 2QCY25?"},"content":{"rendered":"\n

Pakistan\u2019s listed banks are about to report their earnings for the second quarter of 2025, and the numbers may not impress.<\/p>\n\n\n\n

Taurus Securities expects the banks under its coverage to report 13% lower earnings QoQ<\/strong> and a 9% drop YoY<\/strong> in 2QCY25. Even the first half of the year is likely to show a small 1% earnings decline YoY<\/strong>.<\/p>\n\n\n\n

Why the slowdown?<\/h2>\n\n\n\n
    \n
  1. Tighter Margins<\/strong>: Net Interest Margins (NIMs), the difference between what banks earn from loans and what they pay on deposits, are expected to shrink. The State Bank of Pakistan (SBP<\/a>) <\/strong>cut its policy rate by 1% to 11%, which reduces how much banks earn from lending.<\/li>\n\n\n\n
  2. Flat Fee Income<\/strong>: Non-markup income (like fees, commissions, and capital gains) is expected to stay flat. Weak trading income and lower capital gains hurt profitability.<\/li>\n\n\n\n
  3. Rising Costs<\/strong>: Operating expenses are expected to rise 10% quarter-on-quarter due to seasonal factors, pushing the cost-to-income ratio to 49%<\/strong>.<\/li>\n\n\n\n
  4. More Lending to Government, Less to Businesses<\/strong>: Industry Advance-to-Deposit Ratio (ADR) fell to 38%<\/strong>, showing that banks continue to favor lending to the government rather than private businesses.<\/li>\n<\/ol>\n\n\n\n

    Company-wise Expectations<\/h2>\n\n\n\n

    Here\u2019s a snapshot of expected EPS and dividends from major banks:<\/p>\n\n\n\n

    Bank<\/strong><\/th>EPS (2QCY25E)<\/strong><\/th>EPS (1QCY25A)<\/strong><\/th>DPS (2QCY25E)<\/strong><\/th><\/tr><\/thead>
    MCB<\/td>11.1<\/td>12.4<\/td>9.0<\/td><\/tr>
    HBL<\/td>10.5<\/td>11.3<\/td>4.5<\/td><\/tr>
    UBL*<\/td>11.4 (Actual)<\/td>14.6<\/td>8.0<\/td><\/tr>
    MEBL<\/td>12.2<\/td>12.3<\/td>7.0<\/td><\/tr>
    ABL<\/td>6.1<\/td>7.4<\/td>4.0<\/td><\/tr>
    BAFL<\/td>4.3<\/td>4.5<\/td>2.5<\/td><\/tr>
    FABL<\/td>3.0<\/td>3.6<\/td>1.5<\/td><\/tr>
    HMB<\/td>4.9<\/td>5.8<\/td>2.5<\/td><\/tr>
    BAHL<\/td>8.2<\/td>9.7<\/td>3.5<\/td><\/tr>
    BOP<\/td>0.6<\/td>0.5<\/td>NIL<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    (*UBL\u2019s numbers are already out and included for reference.)<\/p>\n\n\n\n

    Investment takeaway<\/h2>\n\n\n\n

    Despite the temporary dip in earnings, dividend payouts are expected to stay strong<\/strong>, reflecting the solid histories of most banks. UBL <\/a><\/strong>has already announced a generous PKR 8\/share<\/strong> dividend.<\/p>\n\n\n\n

    Long-term investors may find value in stable, high-dividend banks like MCB<\/a><\/strong>, MEBL<\/a><\/strong>, and HBL<\/a><\/strong>. With interest rates expected to gradually fall and economic activity recovering, better performance may follow in the second half of 2025.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Taurus Securities expects the banks under its coverage to report 13% lower earnings QoQ and a 9% drop YoY in 2QCY25. Even the first half of the year is likely to show a small 1% earnings decline YoY.<\/p>\n","protected":false},"author":9252,"featured_media":9294,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,138],"tags":[73,61,28,194,181],"class_list":["post-10147","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-financials","tag-hbl","tag-mcb","tag-mebl","tag-sbp","tag-ubl"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks1-1140x445.jpg",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks1-463x348.jpg",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks1-300x188.jpg",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2025\/05\/Top-X-Stocks1.jpg",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=10147"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10147\/revisions"}],"predecessor-version":[{"id":10148,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/10147\/revisions\/10148"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/9294"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=10147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=10147"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=10147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}