Karachi, April 30, 2025 – Allied Bank has reported a significant 24% decline in its markup income for the first quarter of the calendar year 2025, reflecting the impact of falling interest rates and a lower cost of funding.
The Bank’s markup income stood at Rs. 71,647 million for the quarter ended March 31, 2025, down from Rs. 94,312 million during the same period last year.
This decline in markup income was accompanied by a notable reduction in markup expenses, which dropped by 29% to Rs. 46,283 million from Rs. 65,165 million in 1QCY24. The Bank attributed the decrease in markup expenses to a fall in deposit costs and borrowing rates, largely supported by the State Bank of Pakistan’s (SBP) monetary easing cycle. As a result, net markup income for Allied Bank came in at Rs. 25,364 million, a 13% decrease from Rs. 29,147 million in the same quarter last year.
Despite the drop in markup earnings, Allied Bank saw positive trends in non-markup income. Fee income increased by 5% year-on-year to Rs. 3,723 million, driven by higher earnings from card services and branch banking. The Bank also recorded a 146% surge in capital gains, reaching Rs. 745 million due to gains on Eurobonds and government securities.
Foreign exchange income rose sharply by 36% to Rs. 1,728 million, benefiting from a favorable swap curve. However, dividend income declined by 13% to Rs. 850 million, down from Rs. 976 million in 1QCY24. Overall, non-markup income for the quarter reached Rs. 7,148 million, up 13% from Rs. 6,335 million last year.
On the expense side, Allied Bank’s administrative costs rose by 15% to Rs. 15,333 million, primarily due to higher spending on advertising, technology, and card-related operations.
The Bank reported a profit before tax of Rs. 17,315 million, down 22% from Rs. 22,266 million. Profit after tax stood at Rs. 8,190 million, reflecting a 28% decline. Earnings per share dropped to Rs. 7.15 from Rs. 9.92 a year earlier, marking a subdued start to the year for Allied Bank amid shifting interest rate dynamics and evolving market conditions.