National Bank of Pakistan (PSX: NBP) posted a profit of Rs32 billion in the first half of 2026, down 24% from Rs42 billion earned in the same period last year.

Earnings per share stood at Rs15.27, according to a review by Arif Habib Limited.

The bank earned around Rs16 billion in the second quarter, marking a 21% year-on-year decline but a marginal 1% increase from the previous quarter.

Higher operating costs weighed on quarterly earnings, while relatively stable total income provided some support. No dividend was announced for the period.

Interest Income Falls

National Bank’s net interest income dropped 21% year-on-year and 7% quarter-on-quarter to Rs48 billion in the second quarter.

For the first half, net interest income declined 7% year-on-year to Rs183 billion. Interest expenses fell 1% to Rs135 billion.

Non-interest income provided some relief, rising 22% year-on-year during the quarter. Capital gains contributed Rs5.8 billion, while foreign exchange income more than doubled to Rs3.2 billion.

Total income stood at Rs68 billion during the quarter.

Expenses Surge

Operating expenses increased 15% year-on-year to Rs36 billion. This pushed the bank’s cost-to-income ratio to around 54%, compared with approximately 42% a year earlier.

The effective tax rate stood at around 51% during the quarter.

Deposits and Investments

On the balance sheet, deposits fell 10% year-on-year but rose 3% quarter-on-quarter to Rs4.2 trillion.

Investments increased 13% year-on-year to Rs5.7 trillion, while borrowings surged 87% to Rs2.8 trillion.

The bank’s investment-to-deposit ratio stood at 134%, while its advance-to-deposit ratio was 31% in the second quarter.