Samba Bank Limited (PSX: SBL) recorded a 47.5% year-on-year increase in profit after taxation for the half-year ended June 30, 2026, with net profit rising to Rs273.67 million from Rs185.53 million in the corresponding period of 2025. The bank’s basic and diluted earnings per share also increased to Rs0.27 from Rs0.18 in the previous year, representing a 50% improvement in EPS. The increase in bottom-line earnings came despite a substantial decline in total income and weaker net mark-up income, with the primary support coming from a reversal in credit loss provisions during the latest six-month period.
Samba Bank’s total income declined by 21% year-on-year to Rs3.02 billion in 1HCY26 from Rs3.83 billion in the corresponding period last year. The bank’s core mark-up or return and interest income increased modestly by 2.6% to Rs11.07 billion from Rs10.79 billion. However, mark-up, return and interest expense increased at a considerably faster rate, rising 12.8% to Rs8.85 billion from Rs7.85 billion. The faster growth in financing costs reduced net mark-up or interest income by 24.6% to Rs2.22 billion from Rs2.94 billion, making the contraction in the core banking spread one of the main pressures on the bank’s financial performance during the period.
Non-mark-up or interest income also declined during the six months, falling 9.1% to Rs804.64 million from Rs884.79 million in 1HCY25. Within this segment, several revenue streams recorded positive growth. Fee and commission income increased 25.3% to Rs219.23 million from Rs174.94 million, while dividend income rose 37.1% to Rs42.80 million from Rs31.23 million. Gain on securities also increased 13.3% to Rs328.55 million from Rs289.87 million. These improvements, however, were offset by a sharp decline in foreign exchange income, which fell 45.1% to Rs190.87 million from Rs347.67 million, while other income declined 43.6% to Rs23.19 million from Rs41.09 million.
The reduction in income was accompanied by higher operating expenses. Samba Bank’s operating expenses increased 6.4% to Rs2.69 billion during 1HCY26 from Rs2.52 billion in the corresponding period of 2025. Workers’ Welfare Fund expenses declined 23.4% to Rs11.32 million from Rs14.78 million, while other charges fell 98.5% to only Rs5,000 from Rs330,000. Despite these reductions, total non-mark-up or interest expenses increased 6.2% to Rs2.70 billion from Rs2.54 billion, adding further pressure to the bank’s earnings before provisions.
As a result of lower net mark-up income, weaker non-mark-up income and higher expenses, profit before credit loss allowance and provisions dropped sharply by 74.7% to Rs326.52 million from Rs1.29 billion in the same period last year. The decline at this stage of the income statement indicated significant pressure on the bank’s underlying operating profitability. However, the provisions line produced a major improvement compared with the previous year and became the key factor behind the increase in Samba Bank’s final earnings.
Samba Bank recorded a net reversal of Rs228.23 million against credit loss allowance and provisions during 1HCY26, compared with a net charge of Rs883.53 million in the corresponding period of 2025. The movement represented a substantial turnaround in the provisions line and more than offset the decline in profit before credit loss allowance and provisions. The reversal helped lift profit before taxation by 36.9% to Rs554.75 million from Rs405.20 million in the previous year.
The bank’s taxation expense increased during the period, rising 28% to Rs281.08 million from Rs219.68 million. Although the tax charge increased at a faster pace than the bank’s overall revenue, its proportional increase remained below the growth in profit before taxation. This allowed Samba Bank to retain a higher level of earnings after tax and close the first half of 2026 with a 47.5% increase in net profit.
The latest results show that Samba Bank’s higher bottom-line profit was primarily driven by the reversal of credit loss provisions rather than growth in its core banking income. Net mark-up income contracted by almost one-quarter, total income declined by more than one-fifth and operating expenses increased during the period. At the same time, the bank recorded improvements in fee and commission income, dividend income and gains on securities, although these gains were not sufficient to offset declines in foreign exchange and other income.
Samba Bank ended the half-year with profit after taxation of Rs273.67 million compared with Rs185.53 million a year earlier, while earnings per share increased to Rs0.27 from Rs0.18. Profit before taxation stood at Rs554.75 million, supported by the Rs228.23 million net reversal in credit loss allowances and provisions. The financial results therefore reflect a significant improvement in reported profitability despite continued pressure on the bank’s core income and operating cost structure during 1HCY26.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.