Allied Bank Limited (PSX: ABL) has announced its financial performance for the nine months ended September 30, 2025, reporting a 26.5 percent drop in profit after tax to Rs26.81 billion, compared to Rs36.49 billion in the same period last year. Despite the decline in profitability, the bank has continued its tradition of consistent shareholder returns, declaring a third interim cash dividend of Rs4.00 per share (40%), bringing the total payout for the nine-month period to 120% or Rs12.00 per share.
The result underscores ABL’s commitment to maintaining strong shareholder confidence even in a challenging economic environment marked by tighter margins, higher provisioning, and rising costs. The bank’s earnings per share (EPS) fell to Rs23.41, down from Rs31.87 last year, reflecting reduced income in line with the sector’s overall trend amid declining interest rates and inflationary pressures.
The bank’s mark-up and interest income declined 23.85 percent year-on-year to Rs221.83 billion, down from Rs291.32 billion, primarily due to lower yields as interest rates eased in the domestic market. Similarly, mark-up and interest expenses dropped by 28.81 percent to Rs143.15 billion from Rs201.07 billion, reflecting reduced funding costs. As a result, net mark-up income stood at Rs78.68 billion, down 12.82 percent compared to the previous year.
Non-mark-up income showed resilience, growing by 7.98 percent to Rs23.17 billion from Rs21.46 billion. Fee and commission income rose nearly 20 percent to Rs13.79 billion, supported by expanding digital banking services, higher transaction volumes, and a growing card base. This growth highlights the bank’s focus on diversifying revenue streams through its digital and service-driven initiatives.
However, dividend income and foreign exchange income declined by 15.29 percent and 18.73 percent respectively, while other income dropped sharply by 45.43 percent to Rs470 million. In contrast, gains on securities surged 88.49 percent to Rs2.55 billion, reflecting favorable revaluations in the investment portfolio amid market shifts.
Total income for the nine-month period reached Rs101.85 billion, down 8.82 percent from Rs111.70 billion last year. On the expense side, operating costs climbed by 16 percent to Rs49.05 billion due to inflationary cost pressures, technology modernization, and branch network expansion. Workers’ welfare fund contributions decreased by 21 percent to Rs1.13 billion, while other charges increased 35 percent to Rs299.55 million.
Consequently, total non-mark-up expenses rose by 14.89 percent to Rs50.47 billion. Profit before credit loss allowance fell nearly 24 percent to Rs51.92 billion, while provisioning and write-offs surged 45 percent to Rs4.30 billion, reflecting a cautious approach to potential credit risk amid uncertain macroeconomic conditions.
After provisions, the bank’s profit before taxation stood at Rs56.22 billion, marking a 21 percent decline from Rs71.26 billion last year. Tax expenses also dropped 15.4 percent to Rs29.41 billion, resulting in a post-tax profit of Rs26.81 billion.
Despite the contraction in earnings, ABL’s decision to sustain a cumulative 120 percent dividend demonstrates financial resilience and confidence in its long-term fundamentals. The continued investment in technology and digital channels positions the bank to enhance operational efficiency and improve service delivery as it adapts to a changing financial landscape.
Industry analysts note that while profitability across the sector has softened, ABL’s steady dividend payout reinforces its reputation as a stable performer among Pakistan’s top-tier banks, balancing shareholder returns with prudent risk management.
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