Bank Al Habib (PSX: BAHL) announced its financial results today, wherein it posted a consolidated profit-after-tax (PAT) of Rs. 32.46 billion, down by 23 percent year-on-year (YoY) due to a decline in the policy rate and higher operating expenses.
Alongside the results, the bank announced a final cash dividend of Rs. 4.5 per share for 4Q2025. This brings 2025 DPS to Rs. 15.0, compared to Rs. 17.0 in 2024.
For 4Q2025, BAHL posted consolidated earnings of Rs. 5.8 billion (EPS of Rs. 5.20), down 23 percent YoY and 16 percent QoQ. According to Topline Securities, the 4Q2025 results came in below industry expectations due to higher-than-expected operating expenses.
Non-interest expenses increased by 22 percent YoY and 4 percent QoQ, primarily due to higher marketing spending on remittances. This took the bank’s cost-to-income ratio to 67 percent in 4Q2025.
Net Interest Income (NII) for 4Q2025 stood at Rs. 31.4 billion, down 21 percent YoY and 5 percent QoQ due to a decline in asset yields. BAHL’s interest earned declined by 32 percent YoY and 7 percent QoQ to Rs. 77 billion, while interest expense decreased by 38 percent YoY and 8 percent QoQ to Rs. 45 billion in 4Q2025.
The bank’s non-interest income grew by 3 percent YoY to Rs. 7.4 billion in 4Q2025, primarily driven by an increase in foreign exchange income. However, it declined by 8 percent QoQ due to losses on securities in 4Q2025.
The bank’s effective tax rate stood at 55 percent in 4Q2025, compared to 63 percent in 4Q2024 and 55 percent in 3Q2025.
BAHL currently trading at a 2026E PE ratio of 7.2x, a PBV ratio of 1.2x, and a dividend yield of 9.0 percent.
Known for not extending credit, bank has obviously been relying on high investment income to maintain / boost its EPS.
Expext further decline in profitability as policy rate eases further …..wake up call , pls start doing what you are licensed to do!