Karachi: Pakistan's banking sector has reached a significant milestone in the third quarter of 2024, recording unprecedented levels of core income and bottom-line figures. This achievement follows a temporary pause in growth during the first quarter, after 12 consecutive quarters of expansion, signaling a robust recovery.

According to JS Global, the primary factors contributing to this growth were the declining cost of funds, as the savings deposit rate and borrowing costs are closely tied to the Policy Rate, which saw a decrease of 250 basis points during the quarter. Additionally, stable asset yields played a role as anticipated monetary easing was reflected in yields from previous quarters.

The sector also benefited from a rise in Non-Interest Income, marking the sixth consecutive quarter of growth in Fee Income. Despite facing increased operating expenses and subjective provisioning, these challenges were not sufficient to offset the profit growth experienced by the banks.

The report provides a summary of the sector's key profitability and balance sheet indicators, with a sample size of 12 banks representing 87 percent of the sector's market capitalization.