The Bank of Punjab (BOP) has reported a strong financial performance for the first half of 2026, with profit after tax rising 40% year-on-year to Rs. 9.53 billion, supported by higher interest income, growing fee-based revenues and continued cost discipline.

According to the bank’s unaudited half-yearly report for the six months ended June 30, 2026, profit before tax increased 35% to Rs. 20.45 billion, compared with Rs. 15.16 billion in the same period last year. Earnings per share also improved to Rs. 2.91 from Rs. 2.08.

The bank’s operating performance remained particularly encouraging. Operating profit before provisions and gains climbed 67% year-on-year to Rs. 22.5 billion. Net interest income increased 29% to Rs. 46.1 billion, while non-markup income excluding gains surged 61% to Rs. 11.9 billion. The report attributes the improvement to proactive asset-liability management, stronger fee generation and diversification of revenue streams.

Deposits and lending continue to expand

BOP also strengthened its balance sheet during the period. Total assets stood at Rs. 2.504 trillion at the end of June 2026, while deposits reached Rs. 2.154 trillion. Current deposits increased 20% year-on-year, with average current deposits recording even stronger growth of 26%.

On the lending side, gross advances rose 28% to Rs. 996 billion. The increase reflects the bank’s continued focus on financing businesses and priority sectors of the economy.

The bank maintained a Capital Adequacy Ratio of 13.69% and a leverage ratio of 3.65%, both above the regulatory requirements cited in the report. It also remained compliant with IFRS 9 provisioning requirements.

Record interim dividend announced

For shareholders, one of the most notable developments was the declaration of BOP’s highest-ever interim cash dividend of 16%.

The bank said the enhanced dividend reflects confidence in its earnings trajectory and its commitment to creating sustainable value for shareholders.

PACRA upgrades BOP to AAA

BOP’s financial position also received recognition from Pakistan Credit Rating Agency (PACRA), which upgraded the bank’s long-term entity rating to AAA with a Stable Outlook, while maintaining a short-term rating of A1+.

The report links the upgrade to improvements in the bank’s financial profile, market standing, risk management and governance framework.

Expansion beyond Pakistan

The bank is also looking to strengthen its international presence. BOP received in-principle approval from the State Bank of Pakistan to establish an Overseas Wholesale Banking Unit in Bahrain, a move aimed at expanding cross-border banking opportunities and strengthening institutional relationships in the Middle East.

At the same time, the Board has proposed issuing ordinary shares to the Government of Punjab against an equity subscription of up to PKR 30 billion. Subject to regulatory and shareholder approvals, up to PKR 20 billion is planned by December 31, 2026, with the remaining amount by June 30, 2027.

Focus on financial inclusion

Beyond its headline financial results, BOP continued to expand its role in inclusive finance. Through the Kissan Card, Livestock Card and Karobar Card schemes, the bank has disbursed more than Rs. 400 billion to over one million borrowers, many of whom were first-time borrowers.

The bank also disbursed Rs. 82 billion under Asaan Karobar Finance, supporting SMEs and agriculture. Another Rs. 24 billion was provided to around 32,000 borrowers under a low-cost housing programme, while Rs. 3.2 billion was disbursed through the government’s E-Taxi Programme.

Its branchless banking network now includes more than 16 million wallets. During the first half of 2026, BOP disbursed Rs. 30 billion to more than three million people under the Nigehban Ramzan Programme of the Government of Punjab.

Stronger Islamic banking footprint

Islamic banking is another area where BOP continued to expand. As of June 30, 2026, the bank operated 212 Islamic banking branches and 674 Islamic banking windows, up from 210 branches and 534 windows at the end of 2025.

Outlook remains cautiously optimistic

BOP’s first-half results come against a challenging economic backdrop, with the bank noting global uncertainty, higher oil prices and renewed inflationary pressures. Nevertheless, the report describes Pakistan’s economic position as resilient and expects the banking sector to benefit from deposit growth, stable yields and improving private-sector confidence.

Overall, BOP’s first-half performance points to a bank combining stronger profitability with balance-sheet growth, capital strength and an expanding role in financial inclusion. With a record interim dividend, an upgraded AAA rating, proposed fresh capital from the Punjab government and plans for a Bahrain operation, the bank enters the second half of 2026 with several important growth initiatives already underway.