KARACHI, April 16, 2025 – Soneri Bank Limited has reported a notable decline in its profit-after-tax for the first quarter of 2025, attributing the drop to an increased tax burden introduced by recent amendments to Pakistan’s income tax laws. According to a statement issued following the bank’s 210th board meeting, Soneri Bank’s net earnings fell by 16.47% year-on-year, declining to Rs. 1.470 billion for the quarter ending March 31, compared to Rs. 1.760 billion in the same period last year.
The bank’s earnings per share (EPS) also reflected this downward trend, slipping from Rs. 1.59 in Q1 2024 to Rs. 1.04 in Q1 2025. This decline has been directly linked to the increase in the effective tax rate, which rose sharply to 65.62% during the quarter, up from 50.48% in the corresponding quarter last year. The elevated tax liability stems from the Income Tax (Amendment) Ordinance 2024, which introduced higher tax rates specifically targeting the banking sector.
While the bank has not disclosed detailed performance metrics such as revenue breakdowns or cost-income ratios in the public release, the impact of fiscal policy changes on the bank’s bottom line is evident. With the higher tax incidence eating into profitability, the bank’s ability to deliver shareholder value in the short term has been affected despite stable operational performance.
The financial results were approved in the board’s 210th meeting, which reviewed and finalized the interim financial statements for the quarter ended March 31. The bank has not announced any dividend payouts for the quarter, suggesting a conservative approach to capital retention in light of the challenging tax environment and the need to preserve earnings.
Soneri Bank’s first-quarter performance serves as a broader reflection of the pressure that Pakistan’s banking sector is currently experiencing due to regulatory changes. With the government seeking to raise additional revenue through higher corporate taxes—particularly on profitable sectors like banking—financial institutions are finding it increasingly difficult to maintain historical levels of profitability.
Industry analysts suggest that unless there is relief in the form of tax policy revisions or exemptions, banks across the country may report similar declines in earnings. Several market watchers have also emphasized the importance of cost-efficiency measures and diversification of income streams, especially non-interest income, to weather the current macroeconomic headwinds.
Despite the dip in profits, Soneri Bank remains operationally sound, with a footprint across major urban and semi-urban centers in Pakistan. The bank has continued to invest in digital banking infrastructure and customer service enhancements, positioning itself as a competitive player in an increasingly tech-driven financial services landscape.
The bank’s full-year outlook remains uncertain and may be shaped significantly by upcoming monetary and fiscal policy decisions, including the possibility of further amendments to corporate tax regulations.
As Soneri Bank navigates this more taxing fiscal landscape, stakeholders will be closely watching its strategic moves to mitigate profit erosion and strengthen resilience in the face of policy-driven financial pressure.