Standard Chartered Bank (Pakistan) Limited reported a 28.9 percent year-on-year decline in net profit for the half-year ended June 30, 2026, with profit after taxation falling to Rs11.78 billion from Rs16.56 billion recorded during the corresponding period of 2025. The bank’s financial results showed pressure on core income and non-mark-up revenues during the six-month period, although lower operating costs, reduced taxation and a stronger credit loss allowance reversal provided some support to the bottom line. Alongside the results, the bank announced an interim cash dividend of Rs3.00 per share for the period.
The decline in profitability was also reflected in the bank’s earnings per share. Basic and diluted EPS fell to Rs3.04 for the six months ended June 30, 2026, compared with Rs4.28 in the same period last year, representing a decline of 29 percent. The primary pressure on earnings came from lower net mark-up income, which remained the bank’s largest source of income. Mark-up, return and interest earned declined 25.3 percent to Rs36.43 billion from Rs48.79 billion in 1HCY25, while mark-up, return and interest expensed fell by 38 percent to Rs10.12 billion from Rs16.32 billion.
As a result of the movement in income and funding costs, net mark-up income declined 19 percent year-on-year to Rs26.30 billion from Rs32.47 billion in the corresponding period. The bank also recorded weaker non-mark-up income during the six-month period, with total non-mark-up and interest income falling 28.7 percent to Rs8.50 billion from Rs11.93 billion. The decline was largely linked to a reversal in securities performance, as the bank recorded a net loss on securities of Rs574.94 million compared with a gain of Rs2.04 billion in the previous year. Fee and commission income also fell 35.3 percent to Rs3.06 billion from Rs4.73 billion.
Several other income streams provided some offset to the weaker fee and securities performance. Foreign exchange income increased 22.1 percent year-on-year to Rs5.31 billion from Rs4.35 billion, while other income rose sharply by 217.8 percent to Rs292.97 million from Rs92.19 million. Dividend income also increased 12.7 percent to Rs158.80 million. However, income from derivatives declined 55.5 percent to Rs259.32 million from Rs582.43 million. With the combined impact of lower net mark-up income and weaker non-mark-up income, total income declined 21.6 percent to Rs34.81 billion compared with Rs44.40 billion in 1HCY25.
The bank exercised control over its operating costs during the period, helping limit the impact of lower income on profitability. Operating expenses declined 3.5 percent to Rs11.01 billion from Rs11.41 billion, while workers welfare fund expenses fell 21.6 percent to Rs526.28 million from Rs671.58 million. Total non-mark-up and interest expenses consequently declined 4.5 percent to Rs11.53 billion compared with Rs12.08 billion in the previous year. Despite the reduction in expenses, profit before credit loss allowance fell 28 percent to Rs23.27 billion from Rs32.32 billion due to the substantial contraction in total income.
Below the pre-provision line, the bank recorded a stronger credit loss allowance reversal, which helped cushion the decline in earnings. Net credit loss allowance and write-offs amounted to a reversal of Rs1.11 billion during 1HCY26, compared with a reversal of Rs587.22 million in the same period last year, representing an 88.6 percent increase. The higher reversal supported profit before taxation, which declined 25.9 percent to Rs24.38 billion from Rs32.91 billion in 1HCY25. Taxation expense also decreased 22.9 percent to Rs12.60 billion from Rs16.34 billion, providing additional support to the final earnings figure.
After accounting for the lower taxation expense and the stronger credit loss allowance reversal, Standard Chartered Bank (Pakistan) Limited closed the first half of 2026 with profit after taxation of Rs11.78 billion. The results indicate that the bank’s profitability remained under pressure primarily because of reduced net mark-up income and weaker non-mark-up revenues, particularly fee income and securities gains. At the same time, cost controls, lower tax expenses, higher foreign exchange income and the increased credit loss allowance reversal helped cushion the overall decline and supported the bank’s earnings during the six-month period.
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