Askari Bank Limited (AKBL) reported a profit after tax of Rs. 6.6 billion (EPS: Rs. 4.54) for 1QCY26, down 8 percent year-on-year (YoY) but up 37 percent quarter-on-quarter (QoQ).
Alongside the results, the bank announced a dividend of Rs. 2 per share, bringing the payout ratio to 44 percent for the quarter.
According to Arif Habib Limited, earnings improvement was primarily driven by stronger non-markup income (NFI), stable net interest income (NII), and provisioning reversals.
Net interest income remained largely stable at Rs. 22 billion, increasing 1 percent YoY but declining 2 percent QoQ. Interest earned fell 2 percent YoY to Rs. 75 billion, while interest expenses declined 3 percent YoY to Rs. 53 billion.
Non-markup income showed strong growth, led by fee income of Rs. 2.2 billion, up 25 percent YoY, capital gains of Rs. 1.9 billion, up 135 percent YoY, and foreign exchange income of Rs. 837 million, up 18 percent YoY. This pushed total NFI to Rs. 5.4 billion, reflecting a 45 percent YoY increase.
The bank recorded a provisioning reversal of Rs. 82 million in 1QCY26 compared to a provisioning expense of Rs. 256 million in the same period last year. Operating expenses rose 37 percent YoY to Rs. 13.9 billion, resulting in a cost-to-income ratio of 50 percent compared with 39 percent in 1QCY25.
The effective tax rate remained broadly stable at 52 percent for the quarter.
On the balance sheet side, deposits increased to Rs. 1.7 trillion, up 22 percent YoY. Advances rose 9 percent YoY to Rs. 601 million, while investments grew 34 percent YoY to Rs. 2.2 trillion. This resulted in an ADR of 35.6 percent and an IDR of 130.5 percent.
The stock is currently trading at a price-to-book ratio of 0.9x, with a dividend yield of 6.2 percent for CY26e based on the last day’s closing price.
