Askari Bank Limited (PSX: AKBL) has announced its financial results for the half year ending June 30, 2025, posting a 24 percent rise in profit after tax to Rs10.7 billion compared to the same period last year. Earnings per share came in at Rs7.38, up from Rs5.61 previously, underscoring a solid performance despite a challenging interest rate environment. The bank also declared a cash dividend of Rs2 per share, reflecting its commitment to shareholders.
The increase in profitability was primarily supported by an improvement in net interest margins. While mark-up or interest earned dropped 39 percent year-on-year to Rs148.69 billion, interest expenses declined much more sharply by 71 percent to Rs106.07 billion. This divergence led to a notable 40 percent growth in net interest income, which reached Rs42.62 billion during the review period.
Non-interest income also contributed positively, expanding 33 percent to Rs49.66 billion. However, not all segments of this income stream saw gains. Fee and commission income slipped 2 percent to Rs3.59 billion, dividend income contracted 22 percent to Rs415 million, and foreign exchange income fell 38 percent to Rs1.75 billion. Despite these declines, gains on securities improved by 6 percent to Rs962 million, while other income recorded a 24 percent jump to Rs314 million, providing balance to overall earnings.
On the expenses side, Askari Bank continued to face cost pressures. Operating expenses rose 18 percent to Rs20.85 billion, largely driven by inflationary trends and higher administrative costs. Contributions to the workers’ welfare fund increased by 8 percent to Rs292 million, taking total non-interest expenses to Rs21.14 billion, also up by 18 percent.
Even with rising costs, profitability before provisions remained strong. Profit before credit loss allowance surged 44 percent to Rs28.52 billion. After recording a credit loss allowance of Rs637 million, profit before taxation stood at Rs27.88 billion, reflecting a year-on-year increase of 42 percent. Taxation, however, climbed by 32 percent to Rs17.84 billion, partially offsetting gains at the bottom line.
The results highlight Askari Bank’s ability to optimize its balance sheet amid tighter economic conditions and volatile currency markets. By managing funding costs effectively and maintaining discipline in securities and investment income, the bank has sustained a growth trajectory that reinforces its position in the sector.
Analysts note that while the decline in forex-related revenues and fee-based income indicates external pressures on banking operations, the sharp reduction in interest expenses provided significant support. Going forward, the bank’s profitability will likely hinge on the trajectory of interest rates, tax policies, and demand for credit in an economy adjusting to structural reforms.
Askari Bank’s latest performance not only boosts investor confidence but also signals continued resilience of Pakistan’s banking industry, which is increasingly leveraging technology, risk management tools, and financial inclusion strategies to strengthen earnings.