Bank Alfalah declares Rs2.5/share dividend

July31, 2025 (MLN): Bank Alfalah Limited (PSX: BAFL) has released its financial results for the half-year ended June 30, 2025. The company declared a cash dividend of Rs2.50 per share (25%).

Profit After Tax (PAT) declined by 25.8% year-over-year (YoY) to Rs15.27 billion, compared to Rs20.60bn in the same period last year.

Consequently, Earnings per Share (EPS) fell to Rs9.68, down from Rs13.06, reflecting a 25.9% decrease YoY.

Despite the decline in profitability, Net Mark-up / Interest Income (NII) increased by 8.0% YoY to Rs67.58 billion, as the reduction in interest expenses (-38.3%) outpaced the decline in interest earned (-27.1%).

Non-Mark-up / Interest Income (NMI) also showed strong growth, rising 18.4% to Rs24.05bn. This improvement was led by a 160.7% surge in gains on securities, which reached Rs8.39bn, and a 25.5% increase in dividend income to Rs1.46bn.

Foreign exchange income remained stable at Rs5.29bn (up 0.9%), but fee and commission income dropped significantly by 23.7% to Rs7.65bn.

 The bank also reported a loss of Rs388.6m from derivatives, reversing a gain of Rs1.37bn in the previous year. Other income jumped 360.8% YoY to Rs874m.

As a result, total income for H1 2025 stood at Rs91.64bn, up 10.6% from Rs82.86bn in H1 2024.

However, profitability was constrained by a sharp increase in expenses. Non-Mark-up / Interest Expenses surged by 39.4% YoY to Rs56.81bn, largely driven by a 41.3% rise in operating expenses, which reached Rs55.98bn.

The Workers’ Welfare Fund contribution declined slightly to Rs822m, and other charges plummeted by 95.4% to just Rs9.56m.

Provisions for credit losses (net) decreased by 31.4% to Rs896.6m, providing some relief. Taxation was also down 7.6% YoY to Rs18.66bn.

Profit Before Tax (PBT) amounted to Rs33.93bn, a 16.8% decline from Rs40.80bn in the same period last year. While Bank Alfalah delivered growth in total income and market-related gains, rising costs and a fall in core fee-based income significantly eroded the bottom line.

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