Habib Metropolitan Bank Limited has reported a 19.2% decline in consolidated profit after taxation for the half-year ended June 30, 2026, as pressure on net mark-up income weighed on overall earnings. The bank recorded a profit after taxation of Rs9.70 billion during the first half of 2026, compared with Rs12.01 billion in the corresponding period of 2025.
Alongside its financial results, Habib Metropolitan Bank declared an interim cash dividend of Rs2.50 per share. The decline in profitability was also reflected in earnings per share, with basic and diluted earnings per share attributable to equity shareholders falling to Rs8.83 from Rs11.11 in the same period last year, representing a decline of approximately 20.5%.
The primary pressure on the bank’s earnings came from a contraction in net mark-up income. Mark-up, return and interest earned declined by 1.3% to Rs82.78 billion during the six-month period, compared with Rs83.86 billion in the corresponding period of 2025. At the same time, mark-up, return and interest expensed increased by 8.7% to Rs52.01 billion from Rs47.83 billion.
As a result, net mark-up income fell 14.6% year on year to Rs30.77 billion from Rs36.03 billion. The decline in the bank’s core mark-up income had a direct impact on total income during the period and remained the main factor behind the reduction in overall profitability.
Habib Metropolitan Bank’s non-mark-up income, however, showed comparatively stronger performance during the first half of 2026. Total non-mark-up and interest income increased by 4.2% to Rs12.23 billion from Rs11.73 billion in the same period last year. The improvement was supported by higher foreign exchange income and dividend income.
Foreign exchange income increased by 16.4% to Rs4.88 billion from Rs4.19 billion, while dividend income rose by 41.9% to Rs634.68 million compared with Rs447.42 million in the corresponding period. Fee and commission income remained broadly stable at Rs5.61 billion, compared with Rs5.63 billion previously.
These gains were partly offset by a decline in net gains on securities. Net gains on securities fell by 25.7% to Rs1.03 billion from Rs1.39 billion in the first half of 2025. Other income also declined slightly to Rs76.29 million from Rs80.39 million.
Despite the improvement in non-mark-up income, the sharp decline in net mark-up income resulted in total income falling by 10% to Rs43.00 billion during the first half of 2026. Total income stood at Rs47.76 billion in the corresponding period of the previous year.
The bank also recorded higher operating costs during the period. Operating expenses increased by 13.4% to Rs22.56 billion from Rs19.89 billion. Workers’ welfare fund expenses declined by 22.7% to Rs409.76 million, while other charges dropped substantially to Rs1 million from Rs287.90 million.
Overall, total non-mark-up and interest expenses increased by 10.9% to Rs22.97 billion from Rs20.71 billion. The increase in operating expenses, combined with lower total income, resulted in profit before credit loss allowance declining by 25.9% to Rs20.04 billion from Rs27.05 billion.
The bank received some support below the pre-provisioning line through a significant reduction in credit loss allowance and write-offs. Net credit loss allowance and write-offs declined by 96.4% to Rs40.13 million from Rs1.12 billion in the corresponding period of 2025.
The substantial reduction in credit loss charges helped limit the impact of lower operating profitability. Despite the much lower provisioning requirement, profit before taxation still declined by 22.9% to Rs20.00 billion compared with Rs25.93 billion in the first half of the previous year.
Taxation expense also decreased during the period. Habib Metropolitan Bank recorded taxation of Rs10.30 billion, down 26% from Rs13.92 billion a year earlier. The lower tax expense, together with the significant reduction in credit loss provisions, provided some support to the bank’s bottom-line performance. After accounting for taxation, the bank reported consolidated profit after taxation of Rs9.70 billion for the six months ended June 30, 2026. This compares with Rs12.01 billion in the same period of 2025, representing a year-on-year decline of 19.2%.
The financial results show that Habib Metropolitan Bank’s first-half performance was affected primarily by pressure on its core mark-up income, while foreign exchange income and dividend income provided partial support. At the same time, higher operating expenses contributed to the reduction in pre-provision profitability. The sharp fall in credit loss charges and lower taxation helped cushion the overall decline in earnings. However, these improvements were not sufficient to fully offset the reduction in net mark-up income and the increase in operating expenses.
Habib Metropolitan Bank’s declaration of a Rs2.50 per share interim cash dividend accompanies the financial results and provides shareholders with a distribution despite the year-on-year decline in earnings. The bank’s first-half results will remain relevant to investors assessing profitability, income composition, operating costs and future earnings performance across Pakistan’s banking sector.
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