Pakistan Bank Profits Seen Falling 10% in Q2 2026: HBL, MCB, UBL Stocks in Focus

Topline Securities now expects Pakistan's listed commercial banks to post a 10 percent quarter on quarter decline in profit after tax for the second quarter of 2026, at roughly Rs121.9 billion against Rs135.5 billion in the first quarter. On a year on year basis the drop is a smaller 1 percent, and pre tax profit is seen falling 10 percent year on year to Rs254.2 billion. A lower effective tax rate of around 52 percent is expected to cushion some of that decline.

The reason has little to do with how banks are lending and pricing money day to day. It comes down to a base effect: several banks booked unusually large capital gains in the first quarter of 2026, mostly from trading government bonds, and that boost is not repeating. Non interest income, the fee and trading income line that sits alongside lending profit, is projected to fall 13 percent year on year and 31 percent quarter on quarter to about Rs84 billion.

Why Bank Stocks Like HBL and MCB Are in Focus

Set the one off item aside and the underlying lending business looks steady. Net interest income, the difference between what banks earn on loans and investments and what they pay on deposits, is projected to rise 5 percent year on year and 4 percent quarter on quarter to Rs409.4 billion. Topline attributes that to continued loan growth, the effect of policy rate adjustments working through bank balance sheets, and the ordinary repricing of assets and liabilities as older loans and deposits roll onto current rates.

That split matters for how readers should think about names such as Habib Bank, MCB Bank, United Bank and Meezan Bank. A bank whose income leaned more heavily on trading gains booked in the first quarter has further to fall in the reported numbers this quarter, purely on arithmetic, even if its core lending book is unchanged.

Which Stocks, and Why

Large, rate sensitive banks such as Habib Bank, MCB Bank, United Bank, Meezan Bank, Bank Alfalah, Bank Al Habib, Askari Bank, Faysal Bank and National Bank of Pakistan all sit in the same position here. None is singled out in Topline's preview, so this reads as a sector wide print rather than a story about any one lender's own missteps. The quarter on quarter fall is a reported earnings effect tied to how much each bank happened to trade in government securities last quarter, not a sign that lending demand or deposit growth has turned down. Reported profit softness for one quarter, by itself, does not say much about a bank's trajectory over the following year.

What to Watch

The number to track once banks actually report results is net interest income, since that line reflects real lending and deposit activity rather than one off trading gains. If NII comes in close to the projected 5 percent year on year growth, it would support the reading that this is a base effect rather than a genuine slowdown. A bigger than expected miss on NII, on top of the projected non interest income decline, would be the signal that something beyond the capital gains base effect is at work.