Samba Bank Limited (PSX: SBL) has announced its financial results for the nine months ended September 30, 2025, recording a notable decline in profitability as interest earnings contracted. The bank posted a profit after tax of Rs472.4 million, down 38.4 percent from Rs766.59 million in the same period last year. Earnings per share decreased to Rs0.47, compared to Rs0.76 a year earlier, reflecting a challenging interest rate environment.
The total income for the nine-month period fell 18.4 percent to Rs5.72 billion from Rs7.01 billion last year. This was primarily driven by a drop in net mark-up and interest income, which decreased 24.4 percent to Rs4.31 billion. The decline came as mark-up earned dropped 26.1 percent to Rs16.59 billion, while interest expense decreased 26.7 percent to Rs12.29 billion. The contraction in these figures highlights the pressure on banking spreads amid a shifting rate structure.
Despite the decline in interest income, the bank managed to strengthen its non-markup income base. Non-markup income grew 7.3 percent year-on-year to Rs1.41 billion, supported by significant gains on securities amounting to Rs546.57 million. Additionally, other income surged to Rs41.51 million from just Rs1.64 million last year. However, foreign exchange income registered a sharp decline of 43.2 percent, settling at Rs505.33 million, reflecting reduced market volatility and lower transaction volumes in this segment.
Operating expenses during the period were marginally lower, amounting to Rs3.88 billion, down 0.9 percent year-on-year. Total non-markup expenses, including the Workers’ Welfare Fund and other charges, declined slightly by 1.5 percent to Rs3.90 billion. This cost containment helped cushion some of the pressure from declining revenues.
Credit loss allowances and write-offs showed a significant improvement, dropping 48.8 percent to Rs789.12 million. This reflects better asset quality and lower provisioning requirements, a positive sign for the bank’s balance sheet stability. As a result, profit before taxation stood at Rs1.03 billion, representing a 31.9 percent decline compared to Rs1.51 billion in the same period last year. After taxation of Rs552.17 million, net profit settled at Rs472.4 million.
The bank’s earnings structure for the period reveals a mixed picture: while traditional interest income has come under stress, gains in securities and reduced credit provisions offer some resilience. This trend reflects a broader pattern in Pakistan’s banking sector, where institutions are navigating tightening monetary conditions, slower credit growth, and evolving market dynamics.
Financial analysts note that the bank’s strong capital position and strategic asset reallocation will be crucial in sustaining performance in the coming quarters. Moreover, maintaining operational efficiency and expanding fee-based income streams may become key levers for profit stabilization as interest margins remain under pressure.
The latest results underline the changing nature of banking profitability in Pakistan, with income diversification becoming increasingly essential. As the economic and rate environment evolves, banks like Samba are expected to recalibrate their strategies to manage risks and explore new revenue channels.
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