HMB Q1CY26 profit down 18%, pays Rs2.5/share dividend

April 24, 2026 (MLN): Habib Metropolitan Bank Limited (PSX: HMB) reported an 18% decline in its consolidated profit after taxation for the first quarter ended March 31, 2026, recording Rs5.14bn compared to Rs6.24bn in the corresponding period last year.

Reflecting this bottom-line contraction, the bank's basic and diluted earnings per share (EPS) dropped to Rs4.69 from Rs5.80 in Q1 2025.

The company also declared dividend of Rs2.5 per share.

The bank faced notable pressure on its core lending margins during the quarter. Mark-up/return earned fell by 6% year-on-year to Rs40.12bn, while the cost of funds (mark-up expensed) saw only a marginal 1% decline to Rs24.37bn.

As a result, net mark-up/interest income contracted by 13%, falling to Rs15.76bn from Rs18.08bn in the prior year.

Conversely, the non-funded side showed positive momentum. Total non-mark-up income grew by 9% to Rs5.95bn.

This growth was supported by an 87% surge in net gains on securities (Rs468.93m), a 58% increase in dividend income (Rs425.66m), and a 10% rise in foreign exchange income (Rs2.21bn).

Fee and commission income remained relatively flat at Rs2.83bn.

Despite the non-core gains, the contraction in core interest income pulled total income down by 8% to Rs21.71bn.

Operating overheads compounded the top-line pressures. Operating expenses surged by 20% to Rs11.16bn, driving total non-mark-up expenses up 19% to Rs11.37bn.

This combination of shrinking revenues and rising costs caused the profit before credit loss allowance to plummet by 26% to Rs10.34bn.

The bank did receive significant relief from asset quality provisioning. HMB booked a net reversal of credit loss allowances amounting to Rs304.10m, a stark turnaround from the net provision charge of Rs678.33m recorded in Q1 2025.

While this positive swing in provisioning helped cushion the operational shortfall, profit before taxation still registered a 20% decline, settling at Rs10.64bn.

After accounting for a 22% lower taxation expense of Rs5.50bn, the bank closed the quarter with its final net profit of Rs5.14bn.

Copyright Mettis Link News