State Bank of Pakistan (SBP) reported a consolidated net profit of Rs1.999 trillion for the fiscal year ended June 30, 2026, marking a decline of around 20% from the Rs2.505 trillion profit recorded in the previous fiscal year. The central bank’s financial results show that the reduction in earnings was primarily driven by a significant fall in net interest and mark-up income, although the impact was partly offset by a strong recovery in foreign exchange earnings and a substantial increase in dividend income.
SBP’s net interest and mark-up income declined by 26% during FY26, falling to Rs1.92 trillion from Rs2.60 trillion in FY25. The decline came despite a reduction in interest and mark-up expenses, which decreased by 19.8% to Rs196.83 billion from Rs245.43 billion a year earlier. Income earned on financial assets also declined across key areas. Earnings from assets measured at amortised cost fell 27.4% to Rs2.04 trillion from Rs2.81 trillion, while income from assets measured at fair value through other comprehensive income increased significantly by 189.4% to Rs74.94 billion.
The central bank’s non-interest revenue provided important support to its overall earnings during the year. Net exchange earnings recorded a major turnaround, moving from an exchange loss of Rs54.96 billion in FY25 to an exchange gain of Rs76.40 billion in FY26. This represented a significant improvement in foreign exchange earnings and helped offset part of the decline in interest-based income.
Dividend income also recorded substantial growth during the fiscal year. SBP’s dividend income increased by 319.8%, or more than four times, to Rs57.29 billion compared with Rs13.65 billion in FY25. Commission income also increased by 16.1% to Rs13.05 billion, up from Rs11.24 billion, while other operating income rose by 93.9% to Rs15.88 billion from Rs8.19 billion. Share of profit from associates, however, declined by 21% to Rs855.08 million.
Despite the improvement in several non-mark-up revenue streams, total gross income declined by 19% to Rs2.11 trillion in FY26 from approximately Rs2.60 trillion in the previous fiscal year. The decline reflects the substantial reduction in net interest and mark-up income, which remained the largest component of SBP’s overall earnings.
SBP also recorded an increase in operating expenses during FY26. Total operating expenses reached Rs103.13 billion, representing a 12.9% increase from Rs91.38 billion in FY25. General administrative and other expenses increased by 17.8% to Rs61.53 billion from Rs52.25 billion. Expenses related to banknote and prize bond printing also increased by 17.6% to Rs29.01 billion compared with Rs24.67 billion a year earlier.
Agency commissions were one of the few major operating expense categories to decline, falling 6.4% to Rs13.40 billion from Rs14.32 billion in FY25. The impact of higher operating expenses was partly offset by reversals related to doubtful assets and financial instruments. SBP reported a reversal of provision against other doubtful assets amounting to Rs285.30 million, while the reversal of credit loss allowance on financial instruments stood at Rs528.66 million.
The central bank’s profit before taxation stood at Rs2.003 trillion for FY26, compared with Rs2.508 trillion in the previous fiscal year, representing a decline of 20.1%. SBP also recorded a taxation credit of Rs3.20 billion during the year, compared with a taxation credit of Rs2.27 billion in FY25.
Following the taxation adjustment, profit after taxation stood at Rs1.9998 trillion, down 20.2% from Rs2.5054 trillion recorded a year earlier. Despite the year-on-year decline, SBP remained highly profitable during FY26, with the recovery in foreign exchange earnings and substantial increase in dividend income providing support against weaker net interest income.
According to a press release issued by SBP, the surplus profit generated during the fiscal year has been remitted to the Federal Government. The transfer represents an important contribution from the central bank to government finances.
The FY26 results highlight a shift in the composition of SBP’s earnings, with lower net interest and mark-up income being partly compensated by stronger foreign exchange gains, dividend income, commission revenue and other operating income. At the same time, higher administrative and printing-related expenses contributed to the decline in overall profitability. SBP ultimately closed FY26 with a profit after taxation of nearly Rs2 trillion and transferred its surplus profit to the Federal Government.
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