KARACHI: Pakistani listed banks have posted combined net profits of Rs93.7 billion in nine months of calendar year 2012 as against profit of Rs75.5 billion in the corresponding period of yesteryear, reflection a strong growth of 24 per cent on yearly basis with non-interest income remaining the main earnings driver coupled with lower provisions That said, Net Interest Income (NII) surprisingly remained flat sequentially with balance sheet growth countering some Net Interest Margins (NIM) compression With non-interest income remaining largely unchanged on a quarterly basis, it appears banks are keeping capital gains in stock for utilisation across the next quarter and first half of calendar year 2013, particularly if NII starts to come off, analysts said. All listed banks will round off 2012 on a strong note with potential to sustain earnings in 2013 even if interest rates remain close to single digit. Analysts retained their preference for the larger banks with a selective liking for United Bank Limited, Bank Alflaha Limited and National Bank of Pakistan. The big six banks having assets approximately Rs400 billion posted combined net profit after tax of Rs75.0 billion in nine months of 2012, up 17 per cent and accounting for 80 per cent of listed commercial bank profits. While NII came off by 3 per cent on yearly basis, the earnings growth in nine months of calendar year 2012 has been driven by a 41 per cent yearly basis reduction in total provisions and a 34 per cent increase in non-interest income. In the third quarter of 2012, combined big six profits clocked in at Rs24 billion, down 5.0 per cent on quarterly basis on lower NII (tighter NIMs) even as total provisions came off by 8.0 per cent on quarterly basis. The 10 medium banks with assets vary from Rs100 billion to Rs400 billion posted combined profit of Rs16.4 billion in nine months of 2012, up a strong 31 per cent. The growth was broad-based with NII up 10 per cent on yearly basis, provisions lower by 32 per cent and non-interest income up 22 per cent. The six small banks with assets ranging from Rs100 billion posted combined profit of Rs2.3 billion in nine months of 2012 versus a combined loss of Rs1.0 billion in the corresponding period of pervious year. The smaller banks continue to be plagued by relatively weak capital strength, low coverage levels and lack of scale efficiencies. However, NII has done well -up 33 per cent YoY in 9MCY12 and 12 per cent QoQ in 3QCY12. All banks have posted strong results in third quarter of 2012 even as NIMs have come off due to monetary easing. Despite NIM compression concerns amidst asset re-pricing and potential cuts in the discount rates.