BankIslami 1HCY26 profit slumps 54% to Rs2bn

MG News August 19, 2026 (MLN): BankIslami Pakistan Limited (PSX: BIPL) recorded a 54% decline in its consolidated net profit for the half year ended June 30, 2026, with profit after taxation falling to Rs2.03bn from Rs4.41bn in the corresponding period last year. Showing this softer bottom-line, the bank's basic and diluted earnings per share (EPS) contracted to Rs1.83 from Rs3.98 in 1HFY25. The Board of Directors has declared an interim cash dividend of Rs1.50 per share (15%) for the half year ended June 30, 2026. Total income declined 12% year-on-year to Rs20.54bn from Rs23.42bn in the prior period. On the core financing spread, profit/return earned declined 12% to Rs34.37bn, while profit/return expensed fell at a faster pace of 18% to Rs16.69bn, causing net profit/return to ease 5% to Rs17.68bn from Rs18.52bn. The more pronounced pressure came from total other income, which fell 42% to Rs2.86bn from Rs4.90bn. Fee and commission income declined 4% to Rs1.70bn, while foreign exchange income surged to Rs1.08bn from Rs246.61m more than fourfold. Dividend income rose 20% to Rs133.90m, and other income grew 15% to Rs92.08m. However, these gains were more than offset by a swing to a net loss on securities of Rs139.71m against a gain of Rs2.39bn last year, and a swing to a loss of Rs8.95m on Shariah-compliant alternative of forward foreign exchange contracts against an income of Rs287.60m in the prior period. On the expenditure side, operating expenses rose 14% to Rs17.14bn. Workers' Welfare Fund declined 52% to Rs87.98m, and other charges collapsed 92% to Rs14.29m. Total other expenses rose 12% to Rs17.24bn from Rs15.38bn. Profit before credit loss allowance fell 59% to Rs3.30bn from Rs8.04bn. The reversal of provisions/credit loss allowance and write-offs net swung to a charge of Rs1.03bn from a charge of Rs919.05m last year, a 12% increase, adding further pressure and pulling profit before taxation down 52% to Rs4.33bn from Rs8.96bn. Taxation declined 49% to Rs2.30bn from Rs4.55bn, providing partial relief. However, the proportional tax saving was insufficient to fully absorb the pre-tax decline, resulting in the 54% fall in profit after taxation for the half year. CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE HALF YEAR ENDED JUNE 30, 2026 (Rs.000) Description 2026 2025 Change (%) Profit / return earned 34,370,984 38,897,762 -11.64% Profit / return expensed 16,693,737 20,374,571 -18.07% Net profit / return 17,677,247 18,523,191 -4.57% Fee and commission income 1,704,646 1,782,824 -4.39% Dividend income 133,902 111,152 20.47% Foreign exchange income 1,076,542 246,609 336.54% (Loss) / income from shariah compliant alternative of forward foreign exchange contracts (8,951) 287,595 (Loss) / gain on securities - net (139,713) 2,388,038 Other income 92,075 79,905 15.23% Total other income 2,858,501 4,896,123 -41.62% Total Income 20,535,748 23,419,314 -12.31% Operating expenses 17,138,442 15,012,616 14.16% Workers' welfare fund 87,982 182,779 -51.86% Other charges 14,292 186,786 -92.35% Total other expenses 17,240,716 15,382,181 12.08% Profit before credit loss allowance 3,295,032 8,037,133 -59.00% Reversal of provisions / credit loss allowance and write offs - net (1,031,389) (919,045) 12.22% PROFIT BEFORE TAXATION 4,326,421 8,956,178 -51.69% Taxation 2,296,946 4,547,171 -49.49% PROFIT AFTER TAXATION 2,029,475 4,409,007 -53.97% Equity Shareholders of the Holding Company 2,029,475 4,409,007 -53.97% (Total Attributable) 2,029,475 4,409,007 -53.97% Basic and Diluted earnings per share (Rupees) 1.83 3.98 -54.02% Copyright Mettis Link News