The Bank of Khyber (PSX: BOK) delivered a strong financial performance for the nine months ended September 30, 2025, with profit after tax soaring 89% year-on-year to Rs4.97 billion, compared to Rs2.63 billion in the same period last year. Earnings per share (EPS) also surged 89%, reaching Rs4.29 against Rs2.27 in 9MCY24, underscoring the bank’s robust profitability and improved financial efficiency despite a lower interest rate environment.
The financial results reflect the bank’s successful strategy of balancing its asset mix, optimizing funding costs, and capitalizing on treasury opportunities, which together helped sustain growth in a challenging operating environment marked by monetary easing and market volatility.
During the review period, BOK’s mark-up or interest income declined 18% year-on-year to Rs41.19 billion, compared to Rs50.05 billion in 9MCY24. The fall in income was largely attributed to lower yields due to a reduction in benchmark interest rates. However, this decline was offset by an even steeper drop of 30% in mark-up or interest expense, which fell to Rs26.66 billion from Rs37.82 billion last year. This reduction significantly boosted the bank’s net interest margins, leading to a 19% rise in net mark-up or interest income to Rs14.52 billion from Rs12.23 billion a year earlier.
Non-interest income was another key driver of profitability. The bank’s total non-mark-up income rose sharply to Rs3.65 billion, up 2.8 times from Rs1.31 billion in 9MCY24. The increase was primarily fueled by a massive gain on securities, which jumped more than 52 times to Rs2.22 billion from just Rs41.8 million last year, reflecting effective treasury operations and strong market positioning. Fee and commission income also increased 14% to Rs800.6 million, supported by growth in digital transactions and trade-related activities. Foreign exchange income edged up slightly by 1% to Rs486.6 million, showing stability in core banking operations.
On the expense side, the bank maintained a disciplined approach to cost management. Operating expenses increased moderately by 12% to Rs8.53 billion from Rs7.60 billion, in line with inflationary trends and branch network expansion. The overall cost-to-income ratio improved due to strong top-line growth, demonstrating operational efficiency.
Profit before taxation climbed 74% to Rs10.6 billion from Rs6.08 billion a year ago, while credit loss allowances showed a significant reversal, enhancing bottom-line performance. After accounting for taxation of Rs5.63 billion, which rose 63% year-on-year, the bank posted a net profit of Rs4.97 billion for the nine-month period.
The impressive profit growth reflects The Bank of Khyber’s improved asset quality, reduced cost of funds, and higher treasury income. The reversal of credit loss provisions also highlights stronger risk management and stable portfolio performance. The bank’s ability to sustain profitability amid declining interest rates underscores its strategic focus on diversification, digital enablement, and balance sheet optimization.
Analysts believe BOK’s performance positions it favorably among mid-tier banks in Pakistan, with its growing focus on regional expansion, SME banking, and digital transformation expected to further enhance future earnings stability.
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