The Bank of Khyber (PSX: BOK) has posted a strong financial performance for the first quarter of 2025, registering a profit after tax of Rs1.6 billion. This reflects an impressive year-on-year increase of 107.52% compared to Rs772.23 million reported during the same period in the previous year. The earnings per share (EPS) similarly rose by 105.97%, climbing to Rs1.38 in Q1 2025 from Rs0.67 in Q1 2024, underlining the bank’s ability to deliver robust shareholder returns.
This remarkable improvement in profitability was supported primarily by a significant rise in the bank’s net mark-up or interest income, which jumped 45.2% year-on-year to Rs5.11 billion. This growth was achieved despite a decline in the mark-up or return/interest earned, which dropped 20.38% to Rs13.5 billion. The bank successfully managed to slash its corresponding expenses more aggressively, down 37.53% to Rs8.39 billion, allowing for an expanded net interest margin.
In addition to the boost in net interest income, non-markup or interest income also saw healthy growth. It increased by 64.05% year-on-year, amounting to Rs899.91 million during the first quarter. This performance was driven chiefly by a gain of Rs520.72 million on securities and Rs50.97 million from the derecognition of financial assets. However, some segments under this category recorded declines, with fee and commission income falling by 18.90% and foreign exchange income dropping substantially by 68.16% compared to the same quarter last year.
Operating expenses increased moderately during the quarter, rising 15.25% year-on-year to Rs2.72 billion. This increase is in line with BoK’s ongoing investments in infrastructure and digital transformation as it gears up for future growth. Meanwhile, the bank reported a reversal of credit loss allowances amounting to Rs117.99 million in Q1 2025, contrasting with a provision of Rs190.08 million during the same period in 2024. This reversal suggests improvements in credit quality and overall asset health.
As a result of these combined factors, profit before taxation surged by 124.72% to Rs3.4 billion in Q1 2025. However, due to the higher earnings, the bank also experienced a sharp increase in taxation, which rose 142.62% to Rs1.8 billion. Even with this elevated tax burden, the bank managed to more than double its net profit, showcasing effective fiscal and operational management.
Looking ahead, the Bank of Khyber is setting the stage for future growth with several forward-looking initiatives. The bank has already begun transitioning from conventional to Islamic banking, a strategic move that aligns with evolving customer preferences and market trends. Additionally, BoK plans to expand its footprint significantly by opening 52 new branches across Khyber Pakhtunkhwa in 2025. These initiatives not only position the bank as a leader in ethical banking solutions but also aim to enhance accessibility and financial inclusion in the region.
Overall, the Bank of Khyber’s first quarter results for 2025 highlight strong fundamentals, prudent financial management, and a clear strategic vision. With both profitability and expansion in focus, BoK appears well-positioned to continue its upward momentum through the rest of the year.