Bank Alfalah earnings surge 55%, dividend declared

April 23, 2026 (MLN): Bank Alfalah Limited (PSX: BAFL) reported a strong consolidated profit after taxation for the first quarter ended March 31, 2026, clocking in at Rs10.99bn, up 55% year-on-year compared to Rs7.07bn in the same period last year.

The bank’s earnings per share (EPS) also witnessed a sharp increase, rising to Rs3.48 from Rs2.24 in Q1 2025.

The bank declared an interim cash dividend of Rs1.5 per share (30%) for the quarter.

The bank’s core markup income remained under pressure during the period. Mark-up/return earned declined by 22% YoY to Rs74.04bn.

However, a significant 36% reduction in mark-up expensed to Rs39.53bn helped cushion the impact, resulting in a 4% increase in net mark-up income to Rs34.51bn.

This modest growth in core income was significantly complemented by a sharp expansion in non-funded income.

Total non-markup income surged by 96% YoY to Rs18.68bn. The increase was largely driven by a substantial jump in gain on securities, which soared to Rs10.81bn from Rs0.62bn last year.

Additionally, foreign exchange income rose by 30% to Rs2.79bn, while fee and commission income grew 12% to Rs4.19bn.

However, dividend income, income from derivatives, and other income recorded notable declines during the period.

The bank also recorded a share of loss from associates amounting to Rs34.36m, compared to a profit of Rs255.14m in the corresponding period last year.

Supported by strong non-core income, total income increased by 25% YoY to Rs53.19bn.

On the cost side, operating expenses rose by 13% to Rs30.70bn, while total non-markup expenses increased by 14% to Rs31.32bn.

Additionally, workers’ welfare fund expense jumped by 53%, showing continued inflationary pressure on the bank’s cost base.

Despite higher expenses, profit before credit loss allowance / provisions surged by 44% YoY to Rs21.86bn.

The provisioning line further supported earnings. The bank recorded a net charge of Rs1.39bn, higher than Rs0.47bn last year, translating into a 197% increase in provisioning expense.

As a result, profit before taxation rose by 49% YoY to Rs23.26bn.

A higher taxation charge of Rs12.27bn, up 44% YoY, slightly diluted the bottom-line impact. Nevertheless, Bank Alfalah managed to post a 55% increase in profit after taxation, closing the quarter at Rs10.99bn.

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