KARACHI: Profits of listed banks went down 38 per cent on a year-on-year basis in the April-June quarter, thanks to the imposition of super tax in the 2022-23 budget.

The drop in quarterly income was 46pc on a sequential basis, according to data released by Topline Securities on Thursday.

The government has imposed a 10pc super tax on profit-before-tax, which has reduced the sector’s overall earnings.

Pre-tax profits of the 19 listed banks went up 37pc and 19pc on an annual and quarterly bases to Rs160 billion in the April-June quarter.

Growth in pre-tax profits of the sector was led by a strong balance sheet growth driving net interest income as well as higher non-interest income.

Total assets of the sector grew 24pc year-on-year whereas total deposits of the sector rose 17pc. The sector-wide ratio of non-performing loans dropped to 6.6pc in April-June versus 7.8pc a year ago with the total coverage ratio of 95pc.

Data showed the Pakistani lender with the highest market capitalisation was Meezan Bank Ltd. Its total value of all shares was more than $1 billion, followed by United Bank Ltd ($713 million), MCB Bank Ltd ($711m) and Habib Bank Ltd ($666m).

Among larger commercial banks, Meezan Bank Ltd also held the highest price-to-earnings (P/E) ratio, which is (P/E) ratio is a benchmark that measures a firm’s current share price relative to its income per share.

The Islamic lender’s P/E was 5.4 versus the sector-wide average of 3.8. A higher P/E shows either the company’s stock is overvalued or that investors expect high growth rates in the future.

Published in Dawn, September 2nd, 2022