Higher investment gains offset weaker core income, while rising operating expenses weigh on first-half earnings
KARACHI: Faysal Bank Limited (FABL) reported a marginal decline in profit for the first half of the calendar year 2026 despite recording a sharp increase in gains on securities, according to its consolidated financial results submitted to the Pakistan Stock Exchange (PSX) on Thursday.
The Islamic bank posted a profit after tax of Rs10.35 billion for the half year ended June 30, 2026, compared with Rs10.42 billion in the corresponding period last year, representing a decline of 0.7%.
Earnings per share (EPS) stood at Rs6.82, slightly lower than Rs6.87 recorded during the same period in 2025.
The Board of Directors, at its meeting held on August 6, 2026, approved an interim cash dividend of Rs1.50 per share (15%) for the second quarter ended June 30, 2026. This is in addition to the 15% interim cash dividend already distributed for the first quarter ended March 31, 2026.
Investment Gains Surge
Faysal Bank’s earnings received a significant boost from investment-related income, with gains on securities soaring to Rs3.37 billion during the first half of 2026, compared with just Rs210 million in the corresponding period last year.
The substantial increase helped cushion the impact of weaker core banking income amid a challenging operating environment.
Core Revenue Under Pressure
Despite the rise in investment gains, the bank’s net revenue declined to Rs33.09 billion from Rs34.45 billion a year earlier, reflecting pressure on its primary income streams.
However, fee and commission income improved to Rs8.92 billion, up from Rs8.10 billion in the first half of 2025, contributing to stronger non-funded income.
As a result, total income increased to Rs50.31 billion, compared with Rs46.65 billion in the corresponding period last year.
Higher Costs Offset Income Growth
Operating expenses rose to Rs29.64 billion during the six-month period, compared with Rs27.29 billion a year earlier, reflecting higher administrative and business operating costs.
Meanwhile, the bank’s income tax expense declined sharply to Rs10.72 billion, compared with Rs22.55 billion in the same period of 2025.
Second Quarter Performance
For the quarter ended June 30, 2026, Faysal Bank posted a profit after tax of Rs5.25 billion, slightly higher than Rs5.02 billion reported in the corresponding quarter last year.
The quarterly performance indicates that the bank maintained stable earnings despite ongoing pressure on core revenue generation.
Outlook
The first-half results suggest that robust investment gains and stronger fee income helped support Faysal Bank’s profitability during the period. However, lower core revenue and higher operating expenses constrained overall earnings growth, resulting in a modest decline in first-half profit despite improved total income. The continued dividend payout also reflects management’s confidence in the bank’s financial position while navigating a challenging banking environment.