April 29, 2026 (MLN):  National Bank of Pakistan (PSX: NBP) reported a 26% decline in its consolidated profit after taxation for the first quarter ended March 31, 2026, falling to Rs16.29bn compared to Rs22.11bn in the corresponding period last year.

Reflecting this significant bottom-line contraction, the bank's basic and diluted earnings per share (EPS) dropped to Rs7.58 from Rs10.29 in Q1 2025.

The profit decline was primarily driven by a sharp contraction in the bank's core funded income.

Mark-up/return earned fell by 16% year-on-year to Rs178.28bn.

Although the bank managed to reduce its cost of funds (mark-up expensed) by 12% to Rs126.29bn, the drop in interest earned outpaced these savings.

 Consequently, the net mark-up/interest income contracted by a steep 25%, settling at Rs51.99bn compared to Rs69.75bn in the prior year.

The bank's non-funded operations provided little relief, as total non-mark-up income dropped by 20% to Rs10.38bn.

This decline was broad-based across several segments: fee and commission income slipped by 7% to Rs8.60bn, dividend income halved (falling 51% to Rs855.74m), and other income crashed by 93% to just Rs29.13m.

Furthermore, the bank booked elevated losses on securities and saw its share from associates swing from a profit of Rs22.65m last year to a net loss of Rs422.57m.

The only notable bright spot in non-funded income was foreign exchange income, which grew by 14% to Rs2.28bn.

Dragged down by shrinking core margins and plummeting non-funded gains, total income contracted by 25% to Rs62.38bn.

On the operational front, total non-mark-up expenses crept up by 7% to Rs31.19bn, primarily driven by a 7% rise in general operating expenses.

Squeezed by plunging revenues and rising overheads, the profit before credit loss allowance plummeted by 42% to Rs31.19bn.

However, the bank found a massive cushion in its asset quality metrics. NBP booked a net reversal of credit loss allowances amounting to Rs3.50bn, a dramatic turnaround from the heavy Rs6.39bn provision charge recorded in the same period last year.

This significant provision reversal helped absorb the operational shock, limiting the decline in profit before taxation to 26%, settling at Rs34.68bn.

After accounting for a proportionally lower taxation expense of Rs18.39bn (down 26% year-on-year), the bank finalized the quarter with a 26% drop in net profit, closing at Rs16.29bn.