Faysal Bank Limited (PSX: FABL) has announced its financial results for the half year ended June 30, 2025, reporting a sharp decline in profitability as rising operating costs and weaker returns weighed on performance. The bank posted a profit after tax of Rs10.42 billion, down 23.13% from Rs13.56 billion recorded in the same period last year.
Earnings per share also fell significantly, standing at Rs6.87 compared to Rs8.94 a year earlier, reflecting a year-on-year decline of 23.15%. Despite the drop in earnings, the bank declared an interim cash dividend of Rs1.5 per share (15%), in addition to the 15% interim dividend already paid to shareholders earlier in the year.
The bank’s total income slipped by 3.40% to Rs46.65 billion, compared to Rs48.29 billion in the first half of 2024. Net profit and return decreased by 10.52% to Rs34.45 billion, despite a notable rise in other income, which climbed 24.59% to Rs12.20 billion. The growth in other income was largely driven by stronger fee and commission income, which surged by 34.68%, alongside a 34.11% increase in foreign exchange income.
However, the gains were partially offset by weaknesses in other segments. Dividend income declined 8.48%, while gains on securities saw a steep fall of 67.14%. Other income also contracted by 57.19%, highlighting pressure on non-core earnings.
On the expense side, the bank faced rising costs as operating expenses climbed 22.06% to Rs27.29 billion. While the Workers’ Welfare Fund expense decreased by 17.22% and other charges dropped sharply by 88.52%, these savings were insufficient to counterbalance the surge in operating costs.
Profit before credit loss allowance fell 25.47% to Rs19.03 billion. However, the reversal of credit loss allowance and write-offs stood at Rs3.51 billion, a significant increase from Rs798 million in the same period of 2024, providing some relief to overall results. Even so, profit before taxation amounted to Rs22.55 billion, down 14.39% compared to Rs26.34 billion last year.
The bank’s taxation for the period stood at Rs12.12 billion, a decline of 5.11% year-on-year. After accounting for taxes, the net profit of Rs10.42 billion underscored a challenging first half for the bank, reflecting a subdued operating environment and rising cost pressures.
Despite the earnings slowdown, Faysal Bank maintained a dividend payout to reassure investors of its stable capital base. Analysts note that while the bank’s fee-based income and foreign exchange earnings show resilience, volatility in securities income and climbing expenses remain significant challenges.
The results highlight the broader pressures faced by Pakistan’s banking sector in 2025, where elevated costs, tighter margins, and regulatory shifts continue to impact profitability. Going forward, the bank’s ability to manage expenses and strengthen non-interest income streams will be key to stabilizing earnings in the second half of the year.