Samba Bank Limited (PSX: SBL) has announced its financial results for the half year ended June 30, 2025, posting a profit after tax of Rs185.53 million, reflecting a sharp 72 percent decline compared to Rs662.93 million in the same period last year. The bank’s earnings per share (EPS) dropped significantly to Rs0.02 from Rs0.30, marking a 93.3 percent plunge, underlining the difficult operating environment faced by the institution.
The performance was largely impacted by falling interest margins. Net mark-up and interest income decreased 25.8 percent year-on-year, settling at Rs2.94 billion against Rs3.96 billion last year. This decline was driven by a 28.7 percent drop in mark-up earned, which fell to Rs10.79 billion, while interest expenses were down 29.7 percent to Rs7.85 billion.
Non-markup income remained broadly unchanged at Rs884.79 million compared to Rs889.82 million a year earlier. Within this category, some components showed positive momentum. Fee and commission income inched up by 0.9 percent to Rs174.94 million, while dividend income grew 21.4 percent to Rs31.23 million. Gains on securities surged more than tenfold to Rs289.87 million, offering some relief to the overall income stream. However, these improvements were offset by a steep 47.7 percent fall in foreign exchange income, which dropped to Rs347.67 million from Rs665.28 million. Other income stood out with a strong jump, rising to Rs41.09 million compared to just Rs1.18 million last year.
On the expense side, Samba Bank managed to contain costs, with operating expenses declining slightly by 2.4 percent to Rs2.52 billion. Workers’ welfare fund charges fell 67.1 percent to Rs14.78 million, further easing the burden on the bottom line. Total non-markup and interest expenses also reflected a dramatic fall, settling at Rs2.54 billion compared to Rs26.31 billion in the previous year, highlighting a significant reduction in one-off charges.
As a result of the income and expense dynamics, profit before provisions stood at Rs1.29 billion, down 42 percent from Rs2.22 billion in the corresponding period last year. Provisions and write-offs eased marginally by 4 percent to Rs883.53 million, but the bank’s profit before tax still plunged 68.9 percent to Rs405.20 million compared to Rs1.30 billion last year. After accounting for taxation expenses of Rs219.68 million, which were themselves 65.7 percent lower year-on-year, net profit closed at Rs185.53 million.
The steep decline in profitability underscores the challenges banks face in navigating a volatile interest rate environment, foreign exchange pressures, and subdued market conditions. Despite marginal growth in fee income and significant gains on securities, these factors were not enough to offset the weakness in core banking revenue streams.
Analysts believe that the results highlight the importance of diversifying income sources and strengthening digital financial channels to withstand fluctuations in traditional interest-driven revenues. For Samba Bank, the improvement in securities gains and cost control measures provides a base to build resilience, but the sharp erosion in net earnings reflects the need for a more robust strategy going forward.
As the banking ecosystem in Pakistan continues to undergo transformation with an increased push towards digital banking, enhanced customer experience, and regulatory compliance, Samba Bank’s latest financial performance illustrates the pressure mid-tier banks face in adapting to these evolving conditions. The coming quarters will test how effectively the bank can balance profitability, customer engagement, and investment in new financial technologies to remain competitive in the modern banking landscape.