Habib Metropolitan Bank Limited (PSX: HMB) has announced its financial results for the half-year ended June 30, 2025, posting a profit after taxation of Rs12.01 billion, a marginal increase of 0.36% compared to Rs11.96 billion in the same period of the previous year. The result comes despite a challenging operating environment marked by higher expenses and fluctuating income streams.
The bank declared an interim cash dividend of Rs2.5 per share (25%) for the reporting period, in addition to an earlier interim dividend issued at the same rate. Basic and diluted earnings per share stood at Rs11.11, slightly lower than Rs11.12 a year earlier, representing a marginal decrease of 0.09%. Earnings attributable to equity shareholders remained steady at Rs11.64 billion, while non-controlling interest rose by 17.22% to Rs370.77 million.
Net mark-up and interest income grew by 11.88% to Rs36.03 billion, supported by Rs83.86 billion in mark-up/interest earned. However, this was 31.72% lower than the Rs122.82 billion recorded last year, highlighting the impact of reduced lending yields. The improvement in net interest income was largely driven by a sharp 47.21% drop in mark-up/interest expenses to Rs47.83 billion.
Non mark-up/interest income rose by 24.04% to Rs11.73 billion, reflecting diversified revenue streams. Fee and commission income increased by 14.44% to Rs5.63 billion, dividend income was up 26.11% to Rs447.42 million, and foreign exchange income rose by 22.52% to Rs4.19 billion. Gains on securities more than doubled to Rs1.39 billion, while other income increased by 36.47% to Rs80.39 million.
On the expense side, operating costs climbed by 23.07% to Rs19.89 billion, indicating rising administrative and operational pressures. Contributions to the Workers’ Welfare Fund increased by 14.69% to Rs529.99 million, and other charges surged by 295.53% to Rs287.9 million, bringing total non mark-up/interest expenses to Rs20.71 billion, up 24.02% year-on-year.
Profit before credit loss allowance amounted to Rs27.05 billion, an increase of 8.36% from last year’s Rs24.96 billion. Credit loss provisions dropped significantly by 45.74% to Rs1.12 billion, helping boost profit before taxation to Rs25.93 billion, up 13.24%. However, taxation expenses rose sharply by 27.32% to Rs13.92 billion, which weighed on the bottom line.
The results reflect a mixed financial performance, with growth in both interest and non-interest income offset by higher expenses and tax charges. While the bank maintained stable earnings and a consistent dividend policy, the significant rise in costs suggests ongoing challenges in sustaining profitability margins in the coming quarters.
Habib Metropolitan Bank’s focus on expanding fee-based income and managing funding costs appears to have cushioned the impact of lower lending income, but future performance will likely depend on cost controls, asset quality, and market interest rate trends.