Habib Metropolitan Bank Limited (PSX: HMB) has reported a profit after tax of Rs23.16 billion for the year ended December 31, 2025, reflecting a 10.1% decline compared to Rs25.77bn recorded in the previous year. The bank’s earnings per share (EPS) also moved lower to Rs21.63 from Rs23.80, translating into a 9.1% year-on-year contraction in per-share profitability.
Despite the earnings dip, the board announced a final cash dividend of Rs4.50 per share, representing 45%. This comes in addition to interim dividends of Rs7.50 per share already distributed during the year, bringing the total payout for CY25 to Rs12.00 per share, equivalent to 120%. The payout underscores the bank’s continued focus on shareholder returns even amid a shifting interest rate environment.
The bank’s mark-up, return, and interest earned declined sharply by 32.2% year-on-year to Rs163.62bn, compared to Rs241.20bn in CY24. The drop reflects the impact of lower benchmark interest rates and reduced asset yields across the banking sector. However, mark-up and interest expensed fell at a faster pace of 43.4%, decreasing to Rs95.51bn from Rs168.76bn a year earlier. This helped cushion the overall impact on spreads.
As a result, net mark-up and interest income, also referred to as gross profit, stood at Rs68.11bn, marking a 6.0% decline from Rs72.45bn last year. While margins compressed due to the softer rate cycle, the bank demonstrated relative resilience in maintaining its core spread-based income.
Non-mark-up and non-interest income provided notable support during the year. Total non-mark-up income increased 15.4% to Rs24.73bn from Rs21.43bn. Fee and commission income rose 5.4% to Rs11.42bn, while dividend income climbed 23.4% to Rs956.7 million. Foreign exchange income also improved by 16.2% to Rs8.24bn, reflecting stronger treasury and currency-related activity.
A significant boost came from gains on securities, which surged 60.9% to Rs3.99bn compared to Rs2.48bn in the preceding year. This substantial increase played a key role in expanding non-funded income streams. However, other income declined 49.4% to Rs122.6 million, partially offsetting gains from other segments.
Overall, total income edged down 1.1% to Rs92.84bn from Rs93.88bn in CY24, as lower net interest income outweighed the improvement in non-mark-up revenues.
On the expense side, total non-mark-up and interest expenses rose 15.3% to Rs40.84bn from Rs35.43bn. Operating expenses climbed 16.0% to Rs39.52bn, reflecting inflationary pressures and costs associated with branch expansion. The workers’ welfare fund expense declined 13.2% to Rs1.02bn, while other charges increased 56.6% to Rs294.1 million.
Profit before credit loss allowance decreased 11.0% to Rs52.0bn from Rs58.45bn, aligned with the reduction in core income. Encouragingly, net credit loss allowance and write-offs fell sharply to Rs1.99bn from Rs4.34bn last year, indicating improved asset quality and lower provisioning requirements.
Consequently, profit before taxation stood at Rs50.01bn, down 7.6% year-on-year. Taxation expense also declined by 5.3% to Rs26.85bn, compared to Rs28.34bn previously, offering partial relief to the bottom line.
The bank closed CY25 with a profit after tax of Rs23.16bn, reflecting the broader recalibration underway in Pakistan’s banking landscape as institutions navigate a lower-rate cycle while maintaining dividend continuity and balance sheet stability.
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