SBL reports 16% profit growth in 1QCY26

April 23, 2026 (MLN): Samba Bank Limited (PSX: SBL) reported a solid 16% increase in its profit after taxation for the first quarter ended March 31, 2026, recording Rs193.33m compared to Rs166.85m in the corresponding period last year.

Reflecting this bottom-line growth, the bank's basic and diluted earnings per share (EPS) improved to Rs0.19 from Rs0.17 in Q1 2025.

The bank's core lending operations faced notable margin compression during the quarter. Mark-up/return earned slipped by 4% year-on-year to Rs5.30bn, while the cost of funds (mark-up expensed) edged up by 2% to Rs4.04bn.

 As a result, net mark-up/interest income experienced a sharp 19% contraction, falling to Rs1.26bn from Rs1.56bn in the prior year.

On the non-funded side, total non-mark-up income remained relatively flat, inching up by just 1% to Rs386.16m.

The bank saw strong growth in several areas, including an 86% jump in gains on securities (Rs89.08m), an 81% increase in dividend income (Rs34.42m), and a 19% rise in fee and commission income (Rs100.42m).

However, these gains were largely offset by a 33% drop in foreign exchange income, which fell to Rs156.15m.

Dragged down by the shrinking core lending margins, total income contracted by 15% to Rs1.64bn.

Operating overheads were kept tightly in check, with total non-mark-up expenses edging up by a mere 1% to Rs1.36bn. Nonetheless, the top-line pressures caused the profit before credit loss allowances to plummet by 53% to Rs280.95m.

The critical catalyst that rescued Samba Bank's bottom line was a significant reversal in asset quality provisioning. The bank booked a net reversal of credit loss allowances amounting to Rs122.49m, a stark turnaround from the net provision charge of Rs238.33m recorded in Q1 2025.

This massive positive swing in provisioning completely absorbed the operational shortfall, pushing the profit before taxation up by 14% to Rs403.44m. After accounting for a 12% higher taxation expense of Rs210.11m, the bank successfully secured its 16% final net profit growth for the quarter.

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