Here Are Pakistan’s Most Profitable Banks of 2021

Pakistan’s banking industry remained robust in 2021 amid competition among peer banks mainly in profitability, assets, and penetration. Banks with successful strategies gained an edge over their rivals through their business plans and varied offers and products for customers across a wide range, in addition to innovation and technology in operations and customer services. Nine of the top 12 most profitable banks reported growth in profitability while only three reported a drop in their profit growth during 2021. Here is a review of the most profitable banks of Pakistan in 2021. HBL retained its position as the most profitable bank of Pakistan in 2021 with a profit of Rs. 35.5 billion — the highest-ever profitability of the bank with a yearly growth of 15 percent. It had previously made the highest-ever profit of Rs. 34.2 billion in 2016. HBL continued to extend its operations and business in untapped areas, mainly in agriculture and small and mid-size enterprise (SMEs). It explored various schemes of the government that introduced to benefits various segments of customer and sector to boost the economic impact through its financing. Contrarily, it ranked ‘Number 1’ when it comes to issues with customers. Its customers had lodged a total of 8,763 complaints with the Pakistan Banking Ombudsman in 2021 and its digital services were a nightmare for its customers in the outgoing year. MCB Bank become the second-most profitable bank in Pakistan and improved its position from the last year in which it had stood third. It also recorded the highest-ever profit of Rs. 30.8 billion in 2021, with a modest yearly growth of 6.20 percent. UBL also reported an all-time high profit of Rs. 30.6 billion in 2021 with staggering profit growth of 47 percent year-on-year. The bank stood close to MCB Bank jumping from fifth position last year to the third-most profitable bank in the country. UBL’s profit grew to Rs. 30.6 billion in 2021, compared to the Rs. 20.7 billion it reported last year. It also came second in customers complaints which were 4,971. This public sector bank has lost its position as the second-most profitable bank of 2020 and now stands in fourth place. It reported a profit of Rs. 28.6 billion in 2021 according to its financial results, as compared to the profit of Rs. 30.5 billion it recorded in 2020, which showed a six percent drop in profitability from last year. Along with competition with other banking peers, the operations issues of the bank have hit its profitability. The bank underwent a cyberattack in October 2021 that cost it its functions and profitability. Meezan Bank maintained the profitability close to the NBP, resulting in its ranking down by one place to fifth position in 2021. It maintained a remarkable profitability journey in 2021 by posting its highest-ever profit of Rs. 28.2 billion for the year that ended on 31 December 2021. The bank marked a record 26 percent year-on-year (YoY) profit growth for 2021 as compared to the Rs. 22.1 billion it earned in 2020, and its share value stood at Rs.17.4 by end of 2021. Bank Al Habib Limited improved its ranking from the seventh-most profitable bank in 2020 to sixth place in 2021. It posted a profit after tax of Rs. 18.70 billion, showing a modest increase of five percent as compared to the previous year. The bank continued with its strategy for outreach expansion, adding 107 branches in 2021 with handsome investment. Allied Bank Limited’s ranking dropped from sixth to seventh in 2021. It failed to sustain its profitability and posted negative profit growth of four percent YoY in 2021. According to the financial results, the bank made a profit of Rs. 17.5 billion ($99 million) in 2021 as compared to Rs. 18.3 billion recorded during 2020. Allied Bank Limited is the leading bank that initiated banking services on WhatsApp in Pakistan — a trend that is being adopted by various market players. It is also the first bank to implement an image-based clearing system for the entire branch network connected with NIFT for all types of ‘Inward Clearing’ and ‘Electronic Returns’. Bank Alfalah jumped from the eleventh position in 2020 to the eighth position in 2021. It posted a profit after tax of Rs. 14.217 billion (Earning Per Share Rs. 8.00) for 2021 as compared to the Rs. 10.475 billion (EPS Rs. 5.89) that it reported last year, which was an improvement of 35.8 percent YoY. SCB did not sustain its ranking of the previous year and slipped to ninth place in 2021 from eighth position last year. In terms of profitability, it continued a declining trend in the last couple of years down from fourth place to ninth place during the period. Maintaining a modest annual profit growth of 4.4 percent, SCB achieved a profit of Rs. 13.7 billion in 2021 as compared to its profit of Rs. 13.13 billion reported in 2020. The BoP made a comeback in the ranking list of the top ten banks of Pakistan and went from twelfth place to tenth place. It made outstanding profitability of Rs. 12.3 billion in 2021 as compared to its profit of Rs. 6.88 billion reported in 2020, showing a staging profit growth of 80 percent, which is the highest profit growth among the list of big banks. Habib Metropolitan Bank has reported the highest-ever profit of Rs. 12 billion, with outstanding growth in profitability by 82 percent YoY. According to the financial results, its profit for 2019 stood at Rs. 6.58 billion. Before this, its highest profit of Rs. 7.65 billion in 2015. However, it was unable to sustain this profit in successive years and slipped from ninth place to eleventh place in 2021. Askari Bank has reported a 10 percent drop in profits to Rs. 9.71 billion for the year that ended on 31 December 2021. It also dropped its ranking from tenth to twelfth place in 2021, and recently had a retrenchment of human resources which might hurt its profitability in the outgoing year. Pakistan’s banks have made huge profits every progressive year but the standard of their services is completely compromised, with no active role of banking regulatory. This year, a series of banks imposed a slew of ridiculous charges to enhance their unstoppable profitability, besides changes this year that include charges for printings and IBTF charges. These charges could be replaced by innovative digital solutions if these banks plan to facilitate their customers, but banks in Pakistan have a history of leaving no stone unturned to charge their customers. Customers with great contributions to these banks’ profitability deserve gratitude-based complimentary services but this will only be a farfetched dream in Pakistan. Although customers will not mind paying charges, they would still prefer uninterrupted banking services in return, which they have failed to receive.