Key points

  • Earnings estimates for UBL, HBL, and Bank Alfalah have been revised upward by 11 to 30 percent for the years 2026 and 2027.
  • Growth in deposits and higher non-funded income from foreign exchange and investments are the primary drivers of this financial optimism.
  • United Bank Limited is projected to see significant earnings per share increases following a massive expansion in its balance sheet.

Pakistan’s leading commercial banks are poised for a more lucrative future than previously anticipated, with analysts sharply raising profit expectations for the coming years. According to a report by Business Recorder, earnings estimates for United Bank Limited (UBL), Habib Bank Limited (HBL), and Bank Alfalah Limited (BAFL) have been upgraded by 11 to 30 percent for 2026 and 2027. This shift follows an assessment by Topline Research, which highlighted stronger-than-expected balance sheet expansion across the sector.

Key Details

The revised outlook stems from a combination of robust deposit growth and a surge in non-funded income, including capital gains and foreign exchange earnings. Business Recorder reported that UBL’s earnings estimates were increased by 13 to 17 percent, reaching a projected Rs59.5 per share in 2026 and Rs62.6 per share in 2027.

This follows an extraordinary year in 2025, where the bank saw its deposits grow by 96 percent; a further 32 percent growth is expected for 2026. Similarly, for HBL, earnings estimates have been upgraded by 11 to 15 percent, as noted in the banking sector assessment. These revisions reflect recent quarterly results and a shifting outlook for interest rates that appears to favor the sector's current trajectory.

Context and Impact

The banking sector's resilience is being driven by an improved deposit mix and efficient capital management. Topline Research noted that UBL’s current account mix rose to 55.9 percent by September 2026, up from 49.9 percent at the end of 2025. For investors, these figures suggest a stable outlook; Business Recorder noted that at its last closing price, UBL was trading at 6.8 times its estimated 2027 price-to-earnings ratio with a dividend yield of 8 percent.

Higher non-funded income, which excludes capital gains, remains a critical pillar for sustained earnings growth. This income stream has exceeded earlier estimates, primarily due to gains from investments and foreign exchange transactions. The ability of these banks to expand their balance sheets more aggressively than predicted has provided a buffer against broader economic shifts.

Summary and What Next

While the immediate outlook for these financial giants appears strong, the actual results will depend on the trajectory of interest rates and the broader economic climate in Pakistan. Analysts expect the focus to remain on deposit growth and foreign exchange transactions as key performance indicators for the next two fiscal years. The sector's ability to maintain its current account mix will be vital in sustaining these upgraded profit forecasts.