Bank Al-Habib’s April–June 2025 Results: A Mixed Quarter

Bank Al-Habib Limited (BAHL) announced its results for April–June 2025 (2QCY25), showing weaker profits compared to last year and the previous quarter. Let’s break down the key numbers in simple terms.

Key highlights

• Net Profit (PAT): PKR 9.1 billion
• Earnings per Share (EPS): PKR 8.2
• This is 18% lower than last year and 11% lower than last quarter.

The bank also announced a cash dividend of PKR 3.5 per share, taking the total payout for the first half of the year to PKR 7.0 per share.

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What hurt the profits?

1. Lower Interest Income (NII):
   • Net Interest Income (NII) fell 13% YoY to PKR 32.8 billion, mainly because lending rates (yields) declined.
   • The bank’s net interest margin (NIM) dropped to 4.3% (from 4.6% last quarter).
2. Higher Costs:
   • Operating expenses rose to PKR 23.4 billion (+5% YoY, +7% QoQ).
   • Cost-to-income ratio climbed to 57.9%, showing expenses are rising faster than income.

The positives

• Non-Interest Income:
  BAHL earned PKR 7.6 billion from non-interest sources, 16% higher YoY, thanks to stronger foreign exchange (FX) and dividend income.
• Provisioning Reversal:
  Instead of setting aside money for bad loans, BAHL actually recorded a reversal of PKR 1.5 billion, which supported profits.

Taxes

The effective tax rate came in at 50.7%, slightly higher than last year’s 48%. This further squeezed net profit.

In summary

Bank Al-Habib had a challenging quarter:

• Profits fell because of lower interest income and rising costs.
• Non-interest income and provisioning reversals provided some relief.
• The bank rewarded shareholders with a steady dividend.

Looking ahead, BAHL’s performance will likely depend on how interest rates, costs, and income from FX/dividends evolve in the coming quarters.

Source: AKD Securities

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⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →