Bank AL Habib Limited (PSX: BAHL) has announced its financial results for the nine months ended September 30, 2025, reporting a profit after tax (PAT) of Rs26.68 billion, down 22% year-on-year from Rs34.41 billion in the same period last year. The decline comes amid lower interest margins, rising costs, and a challenging macroeconomic environment that continues to weigh on Pakistan’s banking sector.
Earnings per share (EPS) fell to Rs23.99, compared to Rs30.95 last year, reflecting the contraction in bottom-line performance. Despite the dip in earnings, the bank’s Board of Directors declared a cash dividend of Rs3.5 per share, reaffirming BAHL’s focus on maintaining strong shareholder returns even in a period of profitability pressure.
The bank’s total income for the nine-month period came in at Rs124.20 billion, an 11% decrease from Rs139.24 billion in the corresponding period of 2024. The decline was primarily driven by a 15% reduction in net mark-up/interest income, which stood at Rs99.59 billion compared to Rs117.53 billion a year earlier.
Mark-up/return/interest earned dropped 29% to Rs260.63 billion from Rs367.17 billion, while mark-up/return/interest expensed decreased 35% to Rs161.05 billion from Rs249.63 billion. The sharper decline in funding costs provided some cushion to interest margins, though lower asset yields and a moderated rate environment weighed on overall profitability.
On the non-mark-up side, income showed resilience, rising 13% to Rs24.61 billion from Rs21.71 billion, supported mainly by higher foreign exchange gains and stable fee-based revenues. Foreign exchange income surged 47% year-on-year to Rs5.66 billion, benefiting from increased trade and currency market volatility. Fee and commission income rose modestly by 3% to Rs16.26 billion, reflecting the bank’s continued focus on transactional banking and service-based revenue streams.
Dividend income increased 7% to Rs387.74 million, while share of profit from associates remained almost unchanged at Rs1.01 billion. Gains on securities reversed from a loss of Rs234.24 million last year to a gain of Rs541.09 million this period, driven by improved market sentiment and revaluation of investment portfolios. However, other income fell 17% to Rs744.07 million, mainly due to lower recoveries and miscellaneous receipts.
On the expense front, non-mark-up/interest expenses grew 14% to Rs70.99 billion from Rs62.31 billion, largely due to a 15% rise in operating expenses. The increase was attributed to inflationary pressures, higher administrative costs, and ongoing investments in digital infrastructure and branch network expansion. Workers’ welfare fund declined 22% to Rs1.12 billion, while other charges dropped sharply by 75% to Rs76.27 million, providing minor relief to the cost base.
Profit before credit loss allowance stood at Rs53.21 billion, down 31% from Rs76.94 billion last year. The bank recorded a net credit loss allowance and write-offs reversal of Rs2.20 billion, compared to a reversal of Rs11.88 billion in the same period last year, indicating a normalization of provisioning trends.
Profit before taxation (PBT) was reported at Rs55.41 billion, marking a 15% decline from Rs65.06 billion in 9MFY24. Tax expenses decreased slightly by 6% to Rs28.73 billion, resulting in a profit after taxation of Rs26.68 billion, down 22% year-on-year.
Despite the earnings slowdown, BAHL remains well-capitalized and continues to demonstrate operational resilience amid a transitioning economic landscape. The bank’s consistent dividend payout reflects confidence in its long-term financial position and balance sheet strength.
Going forward, Bank AL Habib is expected to maintain its focus on sustainable profitability, prudent risk management, and ongoing digital transformation as part of its broader strategic direction.
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