Bank Al Habib sets Rs4.5 dividend amid 22.5% profit fall

February 11, 2026 (MLN): Bank Al Habib Limited (PSX:BAHL) reported a net profit of Rs32.47bn for the year ended December 31, 2025, a 22.5% decline from the Rs41.92bn profit recorded in the previous year.

The bank's earnings per share decreased to Rs29.19 from Rs37.7 in the corresponding period, while the company declared a dividend of Rs4.5 per share.

The bank's mark-up or return or interest earned declined 29.4% year-on-year to Rs337.43bn from Rs478.12bn, which reflects the impact of the lower interest rate environment and reduced yields on earning assets.

Mark-up or return or interest expensed decreased 35.8% to Rs206.46bn from Rs321.65bn, resulting in a net mark-up or interest income of Rs130.97bn, down 16.3% from Rs156.47bn in the prior year.

The compression in net interest income demonstrates the significant challenges faced by the banking sector due to falling interest rates.

Total non-mark-up or interest income rose 10.7% to Rs31.96bn from Rs28.87bn, providing partial offset to the decline in interest income.

Fee and commission income remained relatively stable, increasing marginally by 0.4% to Rs22.04bn from Rs21.94bn.

Dividend income grew 7.6% to Rs391m from Rs363.5m, while foreign exchange income surged 90.1% to Rs7.44bn from Rs3.91bn, marking a significant contributor to non-funded income growth.

The bank recorded a net loss on securities of Rs252.1m compared to a gain of Rs142.1m in the prior year.

Total income stood at Rs162.93bn, down 12.1% from Rs185.34bn in FY2024.

Total non-mark-up or interest expenses increased 16.1% to Rs97.12bn from Rs83.67bn, driven by a 17.2% rise in operating expenses to Rs95.63bn from Rs81.60bn.

Workers' welfare fund decreased 21.4% to Rs1.38bn from Rs1.76bn, while other charges declined sharply by 67.9% to Rs99.5m from Rs310.1m.

Profit before credit loss allowance reached Rs65.81bn, down 35.3% from Rs101.67bn in the prior year.

Notably, the bank recorded a net reversal of credit loss allowance and write-offs of Rs2.39bn compared to a charge of Rs14.89bn in FY2024, indicating significantly improved asset quality and lower provisioning requirements. This substantial reversal helped cushion the impact of lower operating income on profitability.

Profit before taxation stood at Rs68.20bn, representing a 21.4% decline from Rs86.78bn.

The bank recorded a taxation expense of Rs35.74bn, down 20.3% from Rs44.86bn in the corresponding period last year. The lower tax burden partially mitigated the impact of reduced profitability.

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