Askari Bank Limited (PSX: AKBL) has reported a substantial surge in profitability for the first quarter of 2025, with profit after tax rising by an impressive 91.37% year-on-year (YoY) to reach Rs7.16 billion. The corresponding earnings per share (EPS) stood at Rs4.94, compared to Rs2.58 in the same period last year, indicating a near-doubling in value for shareholders within just one year.
The bank’s stellar performance was largely driven by a sharp increase in net mark-up or interest income, which climbed 69.72% YoY to Rs21.92 billion. This growth came despite a 24.44% decline in gross mark-up income, which fell to Rs75.94 billion. The drop in interest income was effectively offset by a much steeper 38.33% reduction in interest expense, which dropped to Rs54.01 billion. This interest expense contraction significantly widened the bank’s net interest margin, contributing to the strong bottom-line results.
While the bank’s interest income metrics showed strong improvement, its non-mark-up income declined slightly by 3.66% YoY to Rs3.71 billion. This was mainly due to a 51.26% fall in foreign exchange income, which has been volatile due to currency market fluctuations. Fee and commission income also recorded a minor dip of 3.7%. However, these declines were partially mitigated by other segments such as a 202.94% increase in gains on securities and a 52.69% rise in other income, signaling well-timed investment decisions and efficient asset management strategies.
On the cost side, Askari Bank reported an increase in operating expenses, which rose by 23.14% YoY to Rs9.94 billion. Total non-mark-up expenses stood at Rs10.1 billion, up 23.04% from the same quarter in 2024. The rise in costs reflects ongoing investments in digital banking infrastructure, compliance systems, and workforce expansion. Despite this uptick in expenses, the bank achieved strong operating leverage, as evident in the 81.50% jump in profit before credit loss allowances and taxation, which rose to Rs15.53 billion from Rs8.55 billion.
Crucially, Askari Bank saw a dramatic reduction in credit loss provisions, which dropped by 78.21% to Rs256 million. This improvement suggests enhanced credit risk assessment and better-performing loan portfolios. As a result, the bank’s profit before tax more than doubled to Rs15.27 billion, up from Rs7.38 billion in the corresponding period last year.
Tax expenses also surged in line with the higher profits, more than doubling to Rs8.12 billion, but still leaving a net profit of Rs7.16 billion attributable to the bank’s equity holders. This marks a 91.79% increase from Q1 2024, confirming the bank’s strong financial recovery and operational momentum.
The robust earnings demonstrate Askari Bank’s successful navigation through an evolving interest rate environment and its strategic focus on cost control, asset quality, and diversified revenue streams. As macroeconomic conditions continue to evolve, the bank’s strong capital base and improved risk management framework position it well for continued growth.
Askari Bank’s Q1 2025 results reflect a well-managed balance between cost efficiency and income generation, placing it firmly among Pakistan’s leading modern banking institutions amid a shifting financial and regulatory landscape.