Bank AL Habib has announced its consolidated financial results for 2025, posting a profit-after-tax (PAT) of Rs. 32.46 billion, reflecting a 23% decline compared to last year. The drop in earnings is largely attributed to lower policy rates and increased operating expenses.
Despite the decline, the bank maintained a strong dividend payout for shareholders. Bank Al Habib has reported a 23% year-on-year drop in profit for 2025, mainly due to lower policy rates and higher operating costs.
Full-Year 2025 Financial Performance
For calendar year 2025:
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Net Profit (PAT): Rs. 32.46 billion
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Year-on-Year Change: ↓ 23%
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Dividend Per Share (DPS): Rs. 15.0 (vs Rs. 17.0 in 2024)
The board also announced a final cash dividend of Rs. 4.5 per share for the fourth quarter of 2025.
Fourth Quarter (4Q2025) Snapshot
During the last quarter of 2025:
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Quarterly Profit: Rs. 5.8 billion
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Earnings Per Share (EPS): Rs. 5.20
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YoY Decline: 23%
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QoQ Decline: 16%
Results were reportedly below industry expectations due to rising expenses.
Why Profit Declined in 2025
Lower Net Interest Income
Net Interest Income (NII) dropped due to:
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Decline in asset yields
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Lower policy rates
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Reduced interest earned
In 4Q2025:
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Interest earned fell to Rs. 77 billion
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Interest expense decreased to Rs. 45 billion
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NII stood at Rs. 31.4 billion
Higher Operating Expenses
Non-interest expenses rose significantly:
| Expense Indicator | Change |
|---|---|
| Non-interest expenses | +22% YoY |
| Cost-to-income ratio | 67% (4Q2025) |
Higher marketing costs, especially in remittance campaigns, pushed expenses upward.
Non-Interest Income & Tax Impact
Non-interest income:
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Increased 3% YoY
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Supported by foreign exchange income
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Declined QoQ due to losses on securities
The effective tax rate improved slightly compared to last year but remained elevated at 55% in 4Q2025.
Market Valuation Overview
As per early 2026 estimates:
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2026E PE Ratio: 7.2x
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Price-to-Book Value (PBV): 1.2x
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Dividend Yield: 9.0%
Despite profit decline, the stock continues to offer a relatively attractive dividend yield.
Investor FAQs
Why did Bank Al Habib’s profit decline in 2025?
Due to lower policy rates reducing interest income and higher operating expenses.
What was BAHL’s total profit in 2025?
The bank posted Rs. 32.46 billion in consolidated profit.
How much dividend did BAHL announce for 2025?
Total dividend for 2025 stood at Rs. 15.0 per share.
Did operating expenses increase significantly?
Yes, non-interest expenses rose 22% year-on-year.
Is the bank still profitable?
Yes, despite the decline, the bank remains strongly profitable.
Final Analysis
Bank Al Habib’s 2025 financial results reflect the broader impact of falling interest rates and cost pressures across Pakistan’s banking sector. While profitability declined by 23%, the bank maintained healthy dividends and solid capital metrics. Moving forward, controlling expenses and improving non-interest income streams will be key to restoring earnings growth in 2026.
