Karachi – Bank Al Habib Limited (PSX: BAHL) has announced its consolidated financial results for the year ended December 31, 2025, reporting a profit-after-tax (PAT) of Rs. 32.46 billion, reflecting a 23 percent decline year-on-year (YoY). The drop in earnings was primarily attributed to a lower policy rate environment and higher operating expenses.
Alongside the results, the bank declared a final cash dividend of Rs. 4.5 per share for the fourth quarter of 2025, bringing the total dividend per share (DPS) for the year to Rs. 15.0, compared to Rs. 17.0 in 2024.
For the fourth quarter (4Q2025), BAHL posted consolidated earnings of Rs. 5.8 billion (EPS: Rs. 5.20), down 23 percent YoY and 16 percent quarter-on-quarter (QoQ). According to Topline Securities, the quarterly results fell below industry expectations, mainly due to higher-than-anticipated operating expenses.
Non-interest expenses increased by 22 percent YoY and 4 percent QoQ in 4Q2025, largely driven by elevated marketing spending on remittance-related initiatives. As a result, the bank’s cost-to-income ratio rose to 67 percent during the quarter.
Net Interest Income (NII) for 4Q2025 stood at Rs. 31.4 billion, marking a 21 percent YoY and 5 percent QoQ decline, primarily due to reduced asset yields in a lower interest rate environment. Interest earned dropped by 32 percent YoY and 7 percent QoQ to Rs. 77 billion, while interest expense declined by 38 percent YoY and 8 percent QoQ to Rs. 45 billion.
Meanwhile, non-interest income grew by 3 percent YoY to Rs. 7.4 billion in 4Q2025, supported by higher foreign exchange income. However, on a quarterly basis, non-interest income fell 8 percent due to losses on securities during the period.
The bank’s effective tax rate stood at 55 percent in 4Q2025, compared to 63 percent in 4Q2024 and 55 percent in 3Q2025.
At current market levels, BAHL is trading at a 2026 estimated price-to-earnings (P/E) ratio of 7.2x, a price-to-book value (PBV) ratio of 1.2x, and offers a dividend yield of approximately 9.0 percent.
