Soneri Bank Limited (PSX: SNBL) has posted its financial results for the half year ending June 30, 2025, recording a profit after taxation of Rs 2.49 billion. This represents a 22.36 percent decline compared to Rs 3.21 billion earned in the same period last year, highlighting the impact of rising expenses and pressure on profitability despite double-digit growth in total income.
The bank’s earnings per share (EPS) dropped to Rs 2.26, lower than Rs 2.92 recorded during the first half of 2024. The decline in bottom-line performance comes at a time when the banking sector is grappling with elevated cost structures and volatility in income streams from non-core operations.
Despite this earnings dip, Soneri Bank managed to grow its total income by 14.64 percent, reaching Rs 17.81 billion against Rs 15.54 billion in the corresponding period last year. The growth was largely attributed to stronger net markup/interest income, which rose by 19.48 percent to Rs 14.26 billion compared to Rs 11.93 billion a year earlier.
However, the non-markup income segment remained almost stagnant, recording a marginal decline of 1.39 percent to Rs 3.55 billion compared to Rs 3.6 billion last year. Within this segment, fee and commission income expanded by 14.28 percent to Rs 2.36 billion, dividend income increased by 24.22 percent to Rs 140.8 million, while gains on securities jumped 29.65 percent to Rs 374.2 million. On the flip side, foreign exchange income witnessed a sharp drop of 43.93 percent, falling to Rs 608.8 million, underscoring the volatility in currency market operations.
Other income supported the balance sheet, growing by 38.12 percent to Rs 67 million. Still, these gains could not offset the mounting expenses that weighed heavily on the bank’s profitability. Operating expenses surged by 20.10 percent to Rs 11.02 billion, while total non-markup/interest expenses increased by 20.74 percent to Rs 11.28 billion. Other charges jumped significantly by 279 percent to Rs 125.3 million, further adding pressure to the cost base.
On the profitability side, Soneri Bank posted a profit before taxation of Rs 6.68 billion, reflecting a modest increase of 2.54 percent from Rs 6.52 billion last year. A reversal in credit loss allowances and write-offs, amounting to Rs 150.7 million compared to Rs 322.4 million in the previous year, provided some relief, showcasing improved credit quality management.
Nevertheless, higher taxation expenses, which rose 26.79 percent to Rs 4.18 billion, significantly eroded net profitability, resulting in the decline in after-tax profit.
The bank’s results mirror broader trends in the industry, where strong growth in core banking operations is being offset by higher expenses, tax adjustments, and volatile non-markup income streams. Despite these challenges, Soneri Bank continues to strengthen its income-generating capacity and maintain profitability in a competitive market environment.
As the sector continues to navigate an evolving economic and regulatory landscape, maintaining cost discipline and diversifying income streams will remain critical for sustaining profitability in the coming quarters.