Soneri Bank Limited (PSX: SNBL) reported a 10.97% year-on-year decline in profit after taxation to Rs2.94 billion for the nine months ended September 30, 2026, compared with Rs3.30 billion recorded during the corresponding period last year. The bank’s financial results, released on October 26, showed pressure on its earnings from lower net interest income and higher operating expenses. Basic and diluted earnings per share also declined by 10.97% to Rs2.67, against Rs3.00 in the same period of 2025. Although stronger non-interest income, a reversal of credit loss allowances and lower taxation provided some support, these factors were insufficient to prevent a decline in the bank’s overall profitability.
The bank’s core interest income remained under pressure during the reporting period. Mark-up, return and interest earned decreased by 3.02% to Rs62.44 billion from Rs64.38 billion in the corresponding nine months of the previous year. At the same time, interest expenses increased by 3.49% to Rs44.91 billion from Rs43.39 billion, adding further pressure to the bank’s earnings. Consequently, net mark-up and interest income fell by 16.46% to Rs17.53 billion, compared with Rs20.99 billion recorded in the same period last year. The reduction in this key income stream was one of the principal factors behind the decline in Soneri Bank’s financial performance.
Despite the weakness in net interest income, Soneri Bank recorded growth across several non-interest income categories. Foreign exchange income increased by 71.61% to Rs1.95 billion from Rs1.13 billion, while fee and commission income rose by 3.96% to Rs3.75 billion against Rs3.60 billion a year earlier. Gains on securities also improved by 4.50% to Rs1.62 billion from Rs1.55 billion. Dividend income increased by 14.26% to Rs160.93 million, compared with Rs140.85 million, while other income climbed by 37.69% to Rs118.01 million from Rs85.71 million. These increases lifted total non-mark-up income by 16.53% to Rs7.60 billion from Rs6.52 billion, helping offset some of the pressure arising from the decline in interest-based earnings.
However, the improvement in non-interest income could not fully compensate for the rise in expenses and the reduction in net interest income. Soneri Bank’s total income declined by 8.64% to Rs25.13 billion during the nine-month period, compared with Rs27.51 billion in the corresponding period of 2025. Operating expenses increased by 18.53% to Rs20.49 billion from Rs17.28 billion, reflecting a significant rise in the bank’s operating cost base. The Workers’ Welfare Fund expense moved in the opposite direction, declining by 37.26% to Rs120.54 million from Rs192.12 million. Other charges also dropped sharply by 96.88% to Rs10.90 million from Rs349.78 million. Nevertheless, total non-mark-up expenses rose by 15.67% to Rs20.62 billion from Rs17.82 billion, further limiting the bank’s earnings capacity.
The combined effect of lower income and higher expenses resulted in a substantial decline in profit before credit loss allowances. This figure fell by 53.39% to Rs4.51 billion from Rs9.68 billion in the same period last year. However, the bank benefited from a net reversal of credit loss allowances and write-offs amounting to Rs1.51 billion, compared with a net charge of Rs77.97 million recorded in the corresponding period of 2025. This reversal provided a notable improvement to the pre-tax earnings position and helped limit the overall decline in profitability. As a result, profit before taxation stood at Rs6.03 billion, down 37.25% from Rs9.60 billion reported in the previous year’s corresponding period.
Taxation also played an important role in limiting the reduction in Soneri Bank’s final earnings. The bank’s tax expense declined by 51.03% to Rs3.09 billion for the nine months ended September 30, 2026, compared with Rs6.30 billion a year earlier. The lower tax charge partially offset the impact of weaker pre-tax earnings, leaving profit after taxation at Rs2.94 billion. Although the decline in net profit was considerably smaller than the reduction in profit before taxation, the results indicate that pressure on core interest earnings and rising operating costs remained significant challenges during the reporting period.
Overall, Soneri Bank’s nine-month results reflect a mixed financial performance, with growth in foreign exchange earnings, commissions and other non-interest income providing some support against weaker interest margins. The reversal of credit loss allowances and reduced taxation also helped cushion the decline in net profit. However, the contraction in net interest income and continued growth in operating expenses weighed on the bank’s earnings, contributing to lower profit after taxation and earnings per share compared with the same period last year.
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