Learn · Track 7: Research a company · lesson 2 of 5 · Intermediate
Bank stocks on PSX: what drives the banking sector
19 listed banks, Rs 4.69 trillion in market cap and a 6.6x median P/E on 9 Oct 2026. The SBP raised its rate to 12% on 26 Oct. What moves bank earnings.
By the SuperX research team · Reviewed by Umair Aslam, Co-founder & CEO · Published
Bank stocks on PSX (the “banking sector psx” question, or “PSX mein bank ke shares” in Roman Urdu) are the shares of the 19 commercial banks actively trading on 9 October 2026. Together they were worth Rs 4.69 trillion, about a quarter of all active PSX market capitalisation, and carried 30.8% of the KSE-100’s weight. Their median trailing P/E was 6.6x and median trailing dividend yield 7.8%. Bank earnings depend most on the State Bank of Pakistan (SBP) policy rate, which the Monetary Policy Committee (MPC) raised by 50 basis points to 12% on 26 October 2026, effective 27 October, after holding it at 11.5% on 14 September 2026. The market figures below are dated 9 October 2026, before that decision. Below: what moves bank profits, every listed bank with dated figures, and where to verify each fact.
What is the SBP policy rate now, and why does it matter to banks?
The SBP’s Monetary Policy Committee (MPC) raised the policy rate by 50 basis points to 12% on 26 October 2026, with effect from 27 October, by a majority of nine of ten members. Its statement on sbp.org.pk cited the Middle East conflict and persistently high global energy prices, and put headline inflation at 10.3% year on year in September. The decision before it, on 14 September 2026, kept the rate at 11.5% by seven of ten members, and that statement put headline inflation at 11.1% in August, up from 9.2% in July. The 26 October decision is the latest this guide could find on 3 November 2026; the SBP’s website lists the next meeting date, and any later change supersedes the figure here.
A bank earns the difference between what it receives on its assets (loans and holdings of government securities) and what it pays on its liabilities (mainly deposits). The policy rate sets the base for both sides. Rates on many loans are linked to a market benchmark that follows the policy rate, and government securities are repriced as they mature, while deposit rates usually move more slowly. When the policy rate rises, the speed of each side’s repricing decides whether margins widen or narrow in the quarters that follow, and that differs from bank to bank. That is why the same rate decision can lift one bank’s profit estimates and trim another’s.
What drives listed bank profits?
| Driver | How it works | Where to check it |
|---|---|---|
| SBP policy rate | Sets the base for asset yields and deposit costs; the pace of repricing on each side moves the net interest margin | SBP monetary policy statements |
| Spread | Yield on earning assets minus cost of funds; wider spreads raise net interest income | Each bank’s quarterly accounts, filed on PSX |
| Tax rate | A higher corporate tax rate takes a larger share of the same pre-tax profit | FBR and the Finance Act |
| Deposit mix | Current accounts cost little; savings and term deposits cost more | Bank annual reports and SBP banking statistics |
| Islamic banking growth | Shifts deposits and financing toward profit-sharing structures | SBP Islamic Banking Bulletin |
| Asset mix | The share of lending versus government securities changes how rate moves feed through | Bank accounts and SBP monthly data |
Spreads and the policy rate
The spread is the engine. A bank that holds many floating-rate loans benefits quickly when rates rise; a bank that holds long-dated government bonds benefits when it can reinvest at higher yields. Reading a quarterly result therefore means looking at net interest income and the average cost of deposits, not only the headline profit.
ADR-linked taxation: what changed
Banks used to face an extra tax tied to their advances-to-deposits ratio (ADR), which measures lending as a share of deposits. The idea was to push banks to lend more to the private sector than to hold government securities. Changes made through an ordinance in December 2024, now the Income Tax (Amendment) Act, 2025 (Act XIII of 2025), ended that link from tax year 2025: the proviso to rule 6A of the Seventh Schedule says that from tax year 2025 a banking company’s profits are taxed at the Division II rates and the ADR-linked rates do not apply. Division II of Part I of the First Schedule sets the rate for a banking company at 44% for tax year 2025, 43% for tax year 2026 and 42% for tax year 2027 onwards. Banks also pay a super tax: the Finance Act 2026 lists 10% of income for a banking company with income above Rs 150 million (section 4C, Division IIB). These rates are from FBR’s Income Tax Ordinance 2001 as amended to 20 February 2026 and the Finance Act 2026, read on 3 November 2026. Check the current text on FBR’s site before using them in a model. Even without the penalty, ADR remains a number analysts watch, because it shows how much of a bank’s balance sheet is lending to businesses and households rather than to the government.
Deposit mix
Not all deposits cost the same. Current accounts pay little or nothing, so a bank with a larger share of them funds itself cheaply. Savings and term deposits pay more and track rates more closely. The proportion matters most when rates change: a bank with cheap, sticky deposits keeps more of a rate rise than one that has to raise deposit rates to hold its funding.
Islamic banking growth
The SBP’s Islamic Banking Bulletin for the period ending 30 June 2026 reports that Islamic banking institutions held Rs 16.3 trillion in assets (23.7% of the banking sector) and Rs 12.7 trillion in deposits (29.2% of the sector) (SBP bulletin, 30 June 2026). That share has been rising: the SBP’s December 2025 bulletin put it at 22.9% of assets and 27.8% of deposits. The June 2026 bulletin counts seven full-fledged Islamic banks, and its branch list names Meezan Bank, Faysal Bank and BankIslami among them; it also counts 16 conventional banks that offer Shariah-compliant services through Islamic branches or windows. The growth matters to investors because Islamic deposits, financing and sukuk holdings follow different structures from conventional ones, so the same policy rate reaches the profit and loss account by a different route. The KMI-30 methodology on PSX’s site lists, as its first filter, that it is “not permissible to acquire the shares of the companies providing financial services on interest like conventional banks”, so conventional banks are outside the Shariah-compliant KMI-30 index; the post on KMI-30 screening rules explains.
Which banks are listed on PSX? Market cap, P/E and dividend yield
The table lists every commercial bank with an active listing in SuperX’s market snapshot, as of 9 October 2026. Rows are ordered by market capitalisation, which is a sorting rule and not a ranking of merit. “P/E” is the price over trailing twelve-month earnings per share; “yield” is the cash dividends per share paid over the trailing twelve months divided by the price. A yield of 0.0% means no cash dividend in that window. Three banks with dormant listings (no trading) are left out.
| Bank | Symbol | Market cap (Rs bn) | P/E (trailing) | Dividend yield (trailing) |
|---|---|---|---|---|
| United Bank Limited | UBL | 1,044 | 7.0x | 7.7% |
| Meezan Bank Limited | MEBL | 991 | 10.8x | 3.9% |
| MCB Bank Limited | MCB | 449 | 8.4x | 7.1% |
| Habib Bank Limited | HBL | 434 | 6.7x | 7.8% |
| National Bank of Pakistan | NBP | 337 | 4.5x | 22.1% |
| Standard Chartered Bank (Pakistan) Ltd | SCBPL | 226 | 10.4x | 10.3% |
| Allied Bank Limited | ABL | 198 | 5.9x | 9.3% |
| Bank Alfalah Limited | BAFL | 178 | n/a | 10.2% |
| Bank AL Habib Limited | BAHL | 167 | 6.5x | 10.0% |
| Askari Bank Limited | AKBL | 153 | 6.0x | 6.7% |
| Faysal Bank Limited | FABL | 140 | 6.4x | 7.1% |
| Habib Metropolitan Bank Limited | HMB | 100 | 4.9x | 10.0% |
| The Bank of Punjab | BOP | 95 | 5.1x | 10.7% |
| Bank Makramah Limited | BML | 59 | 14.1x | 0.0% |
| The Bank of Khyber | BOK | 31 | 7.9x | 6.4% |
| BankIslami Pakistan Limited | BIPL | 27 | 10.2x | 11.2% |
| JS Bank Limited | JSBL | 25 | 5.6x | 0.0% |
| Soneri Bank Limited | SNBL | 21 | 4.7x | 7.8% |
| Samba Bank Limited | SBL | 14 | 24.7x | 0.0% |
Reading the table:
- “n/a” for Bank Alfalah means the snapshot has no trailing P/E for it on that date. It does not mean a loss.
- A very high yield, such as National Bank of Pakistan’s 22.1%, needs care. A trailing yield is dividends already paid divided by today’s price. A special payout, or a price that has fallen since, inflates it, and it does not tell you what the next twelve months will pay. Read the declared dividends on the company’s page and the notices on PSX.
- Bank Makramah’s 14.1x sits on a balance sheet that changed sign: its filings show total equity of minus Rs 12.9 billion at 31 December 2023 and plus Rs 23.7 billion at 31 December 2025 (PSX filing, page 205), so its trailing EPS is not comparable with banks that have earned steadily.
- The median P/E of 6.6x is across the 18 banks with a P/E. It is the same figure as in the sector table in P/E ratio on PSX by sector.
What did each bank last pay?
This table is from SuperX’s snapshot of PSX corporate-action records dated 19 October 2026. It lists each bank’s latest cash dividend with a per-share amount, by ex-date, before tax. Bank Makramah, JS Bank and Samba Bank have no payout in the snapshot. Meezan Bank has a later dividend row, with an ex-date of 18 August 2026, that carries no per-share amount, so the table shows its last row that has one. Each bank’s symbol links to its SuperX page.
| Bank | Symbol | Latest cash dividend (Rs per share) | Ex-date |
|---|---|---|---|
| United Bank Limited | UBL | 8.00 | 31 Jul 2026 |
| Meezan Bank Limited | MEBL | 7.50 | 5 May 2026 |
| MCB Bank Limited | MCB | 9.00 | 18 Aug 2026 |
| Habib Bank Limited | HBL | 6.00 | 13 Aug 2026 |
| National Bank of Pakistan | NBP | 35.00 | 17 Mar 2026 |
| Standard Chartered Bank (Pakistan) Ltd | SCBPL | 3.00 | 3 Sep 2026 |
| Allied Bank Limited | ABL | 4.00 | 28 Aug 2026 |
| Bank Alfalah Limited | BAFL | 1.50 | 12 Aug 2026 |
| Bank AL Habib Limited | BAHL | 3.50 | 31 Aug 2026 |
| Askari Bank Limited | AKBL | 2.00 | 12 Aug 2026 |
| Faysal Bank Limited | FABL | 1.50 | 19 Aug 2026 |
| Habib Metropolitan Bank Limited | HMB | 2.50 | 24 Aug 2026 |
| The Bank of Punjab | BOP | 1.60 | 10 Sep 2026 |
| The Bank of Khyber | BOK | 1.70 | 19 Mar 2026 |
| BankIslami Pakistan Limited | BIPL | 1.50 | 1 Sep 2026 |
| Soneri Bank Limited | SNBL | 1.50 | 4 Mar 2026 |
A per-share amount is not a yield: Bank AL Habib’s Rs 3.50 and Bank Alfalah’s Rs 1.50 sit on share prices of Rs 150.88 and Rs 55.88 on 19 October 2026. For the full history of any bank, open its dividend page, for example United Bank’s payouts, or the all-company dividends hub.
Bank dividends arrive in instalments through the year, so the dates matter: see ex-date, book closure and record date for the buy-by arithmetic, and withholding tax on dividends for what is deducted before cash reaches your account.
How big is the banking sector in the KSE-100?
On 9 October 2026, 14 of the 100 KSE-100 constituents were commercial banks, and together they carried 30.8% of the index’s free-float weight, the largest sector share (SuperX’s KSE-100 constituents data, from PSX index data). Two banks, United Bank (7.75%) and Meezan Bank (5.23%), were among the four largest weights. The index is weighted by free-float market capitalisation, so a move in a handful of banks moves the whole index; KSE-100 heavyweights shows how concentration works. PSX also publishes a banking sector index, the Banking Tradable Index (BKTI), which according to PSX’s brochure “tracks at least 80% free-float market capitalization of the Banking Sector”.
For the live version of everything above, the commercial banks sector page on SuperX lists each bank with price, market cap, P/E and yield and updates with the market.
Frequently asked questions
What is the SBP policy rate today?
The SBP’s Monetary Policy Committee raised the policy rate by 50 basis points to 12% on 26 October 2026, effective 27 October. It had held it at 11.5% on 14 September 2026. Check sbp.org.pk for any later decision.
How many banks are listed on PSX?
The snapshot dated 9 October 2026 shows 19 commercial banks with active trading and three more with dormant listings. The sector page lists all of them.
Why are bank P/E ratios low compared with other sectors?
The median bank P/E was 6.6x on 9 October 2026, against 9.4x for all active companies with positive earnings. Bank profits move with rates and tax, and investors tend to apply a lower multiple to earnings that can change quickly.
What is ADR and does it still affect bank tax?
ADR is advances divided by deposits. An extra tax tied to it applied until the amendments of December 2024, now the Income Tax (Amendment) Act, 2025, ended it from tax year 2025, with the bank rate set at 44% for tax year 2025, 43% for 2026 and 42% from 2027 (FBR, Income Tax Ordinance as amended to 20 February 2026).
Do Islamic banks have a different business model?
They earn and share profit from asset-backed financing and sukuk rather than lending at interest, but they still depend on the same rate environment. Islamic banking held 23.7% of banking assets at 30 June 2026, according to the SBP’s Islamic Banking Bulletin.
Education, not investment advice.
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