Karachi: Pakistani banks are poised to record their highest quarterly core income in the third quarter of 2024, driven by a notable decrease in funding costs relative to asset yields.

According to JS Global, the comprehensive analysis of banks under their coverage for 3QCY24 indicates a double-digit growth in core income, potentially reaching record levels. This growth is attributed to a significant decline in funding costs compared to asset yields, facilitating an expansion in Net Interest Income.

Despite an expected decrease in Non-Interest Income, which does not account for any one-time gains, and a continuous rise in operating expenses, the surge in core income is anticipated to also propel the bottom line to record highs on a quarterly basis. The analysis also notes that this forecast does not factor in any additional taxes associated with lower ADR levels.

Furthermore, dividend strategies and annual dividend yields are expected to remain unchanged during the quarter, despite a forecasted ongoing decline in asset yields that could potentially reduce future quarterly profits.