Karachi: The banking sector in Pakistan is poised for a slight downturn in profitability, with a projected 9 percent quarter-on-quarter decrease to PkR96.8 billion in the second quarter of the calendar year 2025, according to an analysis by AKD Securities Limited. This expected decline is attributed to lower net interest margins (NIMs) and increased provisioning expenses.

Net interest income (NII) is anticipated to experience a marginal drop of 2 percent from the previous quarter. This is primarily due to declining yields, which are being partially mitigated by a growing asset base.

Despite these challenges, AKD Securities predicts that banks will maintain their dividend payouts in the second quarter. This stability is believed to be supported by strong capitalization levels, ongoing monetary easing, and a recovery in macro-economic conditions. The anticipated resilience in dividends reflects the sector's ability to navigate economic pressures while providing returns to shareholders.