Soneri Bank profit jumps 17% in Q1 2026

April 27, 2026 (MLN): Soneri Bank Limited (PSX: SNBL) reported a 16.72% surge in its profit after taxation for the first quarter ended March 31, 2026, climbing to Rs1.34bn from Rs1.15bn recorded in the same period last year.

On the funded side, mark-up/return/interest earned declined by 11.84% year-on-year to Rs19.64bn from Rs22.28bn in Q1 2025, showing the broad repricing of assets in a declining interest rate environment.

The cost of funds mark-up/return/interest expensed also declined, but at a slower pace of 8.87%, settling at Rs13.66bn against Rs14.99bn a year earlier.

As a result, net mark-up/interest income contracted sharply by 17.96% to Rs5.98bn from Rs7.29bn in the prior-year period, highlighting the squeeze on the bank's core lending margin.

In sharp contrast to the funded side, non-funded income emerged as the standout performer for the quarter.

Total non-mark-up/interest income surged 80.17% to Rs2.82bn from Rs1.56bn in Q1 2025, more than compensating for the weakness in the funded book.

The primary driver behind this exceptional performance was a dramatic turnaround in gain on securities, which swung from a loss of Rs10.97m in Q1 2025 to a robust gain of Rs711.39m in the current quarter, showing the bank's active repositioning within the fixed-income market amid a shifting rate cycle.

Foreign exchange income delivered an equally impressive showing, more than doubling by 130.17% to Rs764.05m from Rs331.95m a year earlier.

Fee and commission income posted a solid 8.18% increase to Rs1.30bn.

Dividend income of Rs2.12m was recorded in the quarter, against nil in the corresponding period.

However, other income contracted marginally by 4.02% to Rs38.03m, partially offsetting the broader non-funded income momentum.

Buoyed by the surge in non-funded income, total income edged down only marginally by 0.63% to Rs8.80bn from Rs8.85bn in Q1 2025 demonstrating the bank's ability to largely absorb the funded income squeeze through strong non-funded income channels.

However, the gains were significantly eroded by a steep rise in operational overheads.

Operating expenses surged 29.09% to Rs6.64bn, while total non-mark-up/interest expenses climbed 28.30% to Rs6.69bn a pace of cost growth that considerably outstripped revenue expansion and materially compressed margins.

Workers' Welfare Fund obligations declined 25.40% to Rs55.34m, while other charges fell 90.58% to Rs0.047m.

Squeezed between near-flat income and dramatic cost escalation, profit before credit loss allowance declined sharply by 42.11% to Rs2.11bn from Rs3.64bn in the prior-year period.

A notable headwind came from the credit provisioning front, where the bank recorded a net credit loss allowance and write-offs charge of Rs689.29m in Q1 2026, compared to a reversal of Rs300.64m in Q1 2025 a sharp deterioration that added further pressure to pre-tax earnings.

Profit before taxation registered a 16.24% decline, settling at Rs2.79bn against Rs3.34bn a year earlier.

After accounting for a taxation charge of Rs1.46bn down a significant 33.50% year-on-year the bank closed the quarter with a net profit after taxation of Rs1.34bn, representing a 16.72% year-on-year increase.

Basic and diluted earnings per share rose to Rs1.2146 from Rs1.0406 in the prior-year period, reflecting a year-on-year improvement of 16.72%.

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