Allied Bank Limited (ABL) has marked a historic milestone in the Pakistani financial sector by surpassing an asset base of Rs 3 trillion, according to its annual performance report for the year ended December 31, 2025. The bank’s total assets climbed to Rs 3.37 trillion, representing a robust 20 percent growth from the previous year. This expansion comes despite a challenging macroeconomic shift characterized by a significantly lower average policy rate, which stood at 11.39 percent in 2025 compared to the much higher 19.67 percent witnessed in 2024.
The downward trend in interest rates had a direct impact on the bank’s core revenue streams. Net markup and interest income settled at Rs 105 billion, reflecting a 9 percent decline from the Rs 115.2 billion recorded in 2024. Total markup income saw a more pronounced drop of 21 percent, falling to Rs 297.2 billion. However, ABL successfully mitigated some of this pressure by reducing its markup expenses by 27 percent, primarily through optimized borrowing costs and a lower cost of deposits, which fell to Rs 192.2 billion during the period under review.
In contrast to the squeeze on interest margins, the bank’s non-markup income streams showed resilience and growth. Fee-based income rose by 17 percent to reach Rs 16.5 billion, fueled by strong performance in card-related services, investment banking fees, and branch banking customer charges. While foreign exchange income and capital gains experienced declines of 23 percent and 15 percent respectively, the cumulative non-interest income managed a slight 2 percent growth, ending the year at Rs 28.5 billion.
The bank’s bottom line reflected the broader industry challenges of 2025. Profit before taxation stood at Rs 74.2 billion, a 16 percent decrease from the previous year’s Rs 87.9 billion. After accounting for a higher effective tax rate of 52.60 percent, the bank reported a profit after tax of Rs 35.175 billion, down from Rs 43.1 billion in 2024. Despite this contraction, ABL remains committed to shareholder returns, declaring a total dividend of Rs 16.00 per share for the year.
Strategic shifts were also evident in the bank’s balance sheet management. ABL recorded a massive 89 percent surge in total investments, which soared to over Rs 2.13 trillion. Conversely, gross advances saw a decline of 25 percent, settling at Rs 802 billion, as the bank pivoted toward government securities and maintained a cautious lending stance. Even with this shift, the bank maintained exceptional credit quality, reporting a low infection ratio of 1.42 percent and a healthy coverage ratio of 109.1 percent.
Operational efficiency remained a key focus as ABL expanded its physical and digital footprint. While total operating expenses grew by 16 percent to Rs 66.9 billion, the bank utilized process automation and technology-led improvements to keep these costs in check. Total deposits grew by 16 percent to reach Rs 2.34 trillion, with current account deposits jumping by 21 percent, highlighting the bank’s success in mobilizing low-cost funding.
Looking at solvency and stability indicators, Allied Bank continues to operate with a very strong capital cushion. Its Capital Adequacy Ratio (CAR) improved to 27.74 percent, significantly higher than the regulatory requirement of 11.5 percent. While the Return on Equity (ROE) moderated to 18.7 percent from the previous year’s 26 percent, the bank’s overall net assets grew by 13 percent, reaching Rs 263.3 billion, reinforcing its position as a stable and resilient player in Pakistan’s evolving banking landscape.
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