Samba Bank Limited (PSX: SBL) reported a 63.2% year-on-year decline in profit after taxation to Rs174.03 million for the nine months ended September 30, 2026, compared with Rs472.40 million recorded during the corresponding period last year. The bank’s financial results released on October 26 showed a substantial reduction in earnings as lower net interest income, declining non-interest income and higher operating expenses affected its financial performance. Basic and diluted earnings per share fell to Rs0.17 from Rs0.47 in the same period of 2025. The decline in profitability also extended into the third quarter, when the bank recorded a net loss instead of the profit reported a year earlier, reflecting continued pressure on its income and operating performance.
For the nine-month period, Samba Bank’s mark-up, return and interest earned increased by 3% to Rs17.09 billion from Rs16.59 billion in the corresponding period last year. However, the growth in interest earnings was offset by a faster increase in funding costs. Mark-up and interest expenses rose by 11.4% to Rs13.68 billion from Rs12.29 billion, reducing the amount retained by the bank from its interest-generating activities. Consequently, net mark-up and interest income declined by 21% to Rs3.40 billion, compared with Rs4.31 billion in the same period of 2025. This reduction in net interest income was one of the major factors behind the decline in the bank’s overall earnings, as higher expenses on deposits and borrowings limited the benefit of increased gross interest income.
Non-interest income also weakened during the reporting period, with declines in foreign exchange earnings and other income offsetting improvements in fee-based revenue. Foreign exchange income fell by 38.6% to Rs310.43 million from Rs505.33 million in the corresponding period last year. Gains on securities decreased by 4.9% to Rs519.92 million from Rs546.57 million, while other income dropped by 41.7% to Rs24.20 million from Rs41.51 million. On the positive side, fee and commission income increased by 17.6% to Rs327.80 million from Rs278.72 million. Dividend income also rose by 12.2% to Rs45.35 million compared with Rs40.44 million a year earlier. Despite these increases, the declines across other income categories resulted in a 13.1% reduction in total non-mark-up income to Rs1.23 billion from Rs1.41 billion.
The combined impact of weaker net interest income and lower non-interest income pushed Samba Bank’s total income down by 19% to Rs4.63 billion for the nine months ended September 2026, compared with Rs5.72 billion in the corresponding period of the previous year. At the same time, the bank faced an increase in its operating cost base. Operating expenses rose by 9.3% to Rs4.24 billion from Rs3.88 billion, contributing to a 9% increase in total non-mark-up expenses to Rs4.25 billion from Rs3.90 billion. The Workers’ Welfare Fund expense declined by 45.5% to Rs11.32 million from Rs20.78 million, while other charges fell by 98.5% to approximately Rs5,000 from Rs330,000. However, these reductions were not sufficient to counter the increase in operating expenses and the contraction in total income.
As a result, profit before credit loss allowances and provisions declined by 79.2% to Rs376.59 million from Rs1.81 billion in the same nine-month period last year. Samba Bank recorded a net charge for credit loss allowances and write-offs of Rs16.42 million, compared with Rs789.12 million in the corresponding period of 2025. This represented a reduction of approximately 97.9% in the charge for credit losses, providing some relief to the bank’s earnings. Nevertheless, the improvement in this area could not offset the sharp decline in income and the increase in expenses. Profit before taxation consequently fell by 64.9% to Rs360.17 million from Rs1.03 billion a year earlier.
The bank’s taxation expense also decreased substantially during the reporting period, falling by 66.3% to Rs186.14 million from Rs552.71 million in the corresponding period last year. The lower tax charge partially cushioned the impact of the decline in pre-tax earnings, but the reduction in taxation was not enough to prevent a significant fall in net profit. After accounting for taxation, Samba Bank reported profit after taxation of Rs174.03 million for the nine months ended September 30, 2026, compared with Rs472.40 million in the previous year’s corresponding period. Earnings per share declined in line with the reduction in profitability, reaching Rs0.17 against Rs0.47 previously.
The third-quarter results further highlighted the pressure on the bank’s financial performance. Samba Bank recorded a net loss of Rs99.64 million for the quarter ended September 30, 2026, compared with a net profit of Rs286.88 million in the same quarter last year. Earnings per share moved to a loss of Rs0.10 from positive earnings of Rs0.28 in the corresponding quarter of 2025. The quarterly reversal indicates that the bank’s earnings challenges remained significant toward the end of the nine-month reporting period. Overall, Samba Bank’s results reflect the combined effects of declining net interest income, weaker foreign exchange and other non-interest earnings, and rising operating expenses. Although lower credit loss charges and reduced taxation provided some relief, these factors were insufficient to prevent a substantial decline in profitability during the first nine months of 2026.
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