Faysal Bank Limited (PSX: FABL) posted a stable financial performance during the first six months of 2026, with the Faysal Bank profit standing at Rs10.35 billion despite a decline in core earnings and a reduction in credit loss reversals.
According to the bank’s financial results for the half-year ended June 30, 2026, consolidated profit after taxation fell marginally by 0.7% from Rs10.42 billion in the corresponding period of last year.
Alongside the earnings announcement, the bank declared an interim cash dividend of Rs1.50 per share, reflecting management’s confidence in the institution’s financial position.
Basic and diluted earnings per share (EPS) came in at Rs6.82 compared with Rs6.87 recorded during the same period a year earlier.
Despite pressure on net profit earned from financing activities, the bank benefited from strong growth in non-markup income, which helped offset the decline in its core business operations.
Non-Markup Income Supports Overall Earnings
The latest Faysal Bank profit figures show that non-markup income increased significantly during the reporting period.
Total other income climbed by 41% to Rs17.22 billion, compared with Rs12.20 billion recorded in the corresponding period of 2025.
The increase was largely driven by substantial gains from investments and higher income generated through foreign exchange transactions.
The bank’s gain on securities increased sharply to Rs3.37 billion from Rs210.08 million a year earlier, representing an increase of more than 1,500%.
Foreign exchange income also recorded impressive growth, rising by 21% to Rs4.52 billion.
Dividend income increased by nearly 89% to Rs385.54 million, while fee and commission income grew by 10% to reach Rs8.92 billion.
Overall, total income increased by almost 8% to Rs50.31 billion, compared with Rs46.65 billion in the corresponding period last year.
Core Banking Income Declines
Despite the growth in other sources of revenue, the bank’s net profit earned from financing activities declined during the first half of the year.
Profit earned fell to Rs81.04 billion from Rs84 billion recorded a year earlier.
At the same time, profit expenses declined to Rs47.95 billion from Rs49.55 billion.
As a result, net profit earned fell by almost 4% to Rs33.09 billion.
Financial analysts attribute the decline to changing market conditions and adjustments in profit rates across the banking industry.
However, strong diversification of revenue streams helped the bank maintain overall profitability.
Operating Expenses Continue To Rise
The bank also reported higher operating costs as its business activities expanded.
Total operating expenses increased by 8.6% to Rs29.64 billion, while total other expenses rose by 8.5% to Rs30.09 billion.
Contributions to the Workers Welfare Fund reached Rs448.52 million during the reporting period.
At the same time, the bank’s share of profits from associated companies increased by 29% to Rs161.25 million.
Consequently, profit before credit loss allowances rose by more than 7% to Rs20.38 billion.
Lower Credit Loss Reversals Affect Earnings
The bank recorded a net reversal of credit loss allowances amounting to Rs697.55 million.
Although this amount strengthened earnings, it was considerably lower than the Rs3.51 billion reversal reported during the same period last year.
As a result, profit before taxation declined by 6.5% to Rs21.07 billion.
Meanwhile, taxation expenses fell by almost 12% to Rs10.72 billion, helping the bank maintain its overall profitability.
The lower tax burden played an important role in keeping the Faysal Bank profit largely unchanged despite pressure on pre-tax earnings.
Key Financial Highlights
| Description | 1HCY26 | 1HCY25 | Change |
|---|---|---|---|
| Profit after taxation | Rs10.35bn | Rs10.42bn | -0.7% |
| Earnings per share | Rs6.82 | Rs6.87 | -0.7% |
| Total income | Rs50.31bn | Rs46.65bn | +7.8% |
| Non-markup income | Rs17.22bn | Rs12.20bn | +41.1% |
| Foreign exchange income | Rs4.52bn | Rs3.73bn | +21.3% |
| Operating expenses | Rs29.64bn | Rs27.29bn | +8.6% |
Market analysts believe the bank’s diversified revenue base, expanding digital operations, and strong balance sheet position will continue to support future growth despite ongoing economic challenges.
Investors will now closely monitor the bank’s performance during the second half of the year as changing economic conditions continue to influence Pakistan’s banking sector.