Karachi: The banking sector is set to maintain robust dividend payouts in the second quarter of 2024, with AKD Securities projecting a significant 26% year-over-year jump in net profit after tax (NPAT) for its banking universe. The anticipated NPAT for the first half of 2024 is expected to reach PKR 186.8 billion, a 25% increase from the previous year, driven by stable net interest income and a substantial rise in non-markup income.

According to AKD Securities Limited, the stability in net interest income is supported by nearly unchanged net interest margins (NIMs) and a substantial 67% year-over-year increase in non-markup income to PKR 72.3 billion. However, the growth is partially offset by slightly higher operational expenses due to seasonal trends. The firm also notes a remarkable growth in the investment book, fueled by a strong increase in deposits and borrowings, raising questions about the applicability of the Advance Deposit Ratio (ADR) based taxation for the current year.

The report further highlights a strategic shift among banks in the AKD universe to secure their Current and Saving Account (CASA) ratios in anticipation of falling net interest margins beyond 2024. Notably, United Bank Limited (UBL) and Bank AL Habib Limited (BAHL) are leading this initiative, significantly enhancing their low-cost deposit bases. The investment perspective remains positive, with AKD Securities identifying Meezan Bank Limited (MEBL), Muslim Commercial Bank (MCB), and Habib Bank Limited (HBL) as top picks, offering substantial returns by June 2025.