Top five banks’ profitability fell by 12 per cent in the first nine months of the current calendar year, a research report said on Monday. However, excluding National Bank of Pakistan, the rest of the four banks – HBL, MCB Bank, UBL and ABL – showed 6 per cent profit.

The top five banks that hold nearly 60pc of the country’s total deposits and contribute 74pc to the banking sector’s market capitalisation “cumulatively posted a 12pc year-on-year decline in profitability during 9M2013,” said a research report prepared by Shajar Capital.

The main reason for the decline was the sharp fall in the interest rate income as the rate was as low as 9pc till the last quarter. In the third quarter alone, profitability declined by 14pc YoY and 9pc quarter-on-quarter.

Among the overall declining profitability of the banking sector, MCB Bank stood out, posting a 4pc growth in profitability during the nine months, while HBL led the way during the third quarter.

“The NBP came out as the biggest underachiever, witnessing a 50pc YoY slump in its profitability,” said the report.Top five banks’ net interest income declined by 6pc to Rs140 billion during the period compared with Rs148bn a year earlier.

In addition, provisioning against non-performing loans rose by 1pc, while non-interest income grew by a mere 3pc to Rs58bn in the period.

“The reduced profitability of NBP dampened the overall performance of the top-five cluster. Excluding NBP, the profitability of the other four banks rose by 6pc on YoY and 5pc on QoQ basis,” the report said.