Karachi: In its Director’s Report for the year ending December 31, 2024, Samba Bank Limited has outlined a year of mixed financial performance, reflecting both the challenges and opportunities presented by Pakistan’s evolving economic landscape. The report highlights that Pakistan’s economy has shown signs of stabilization and modest growth, driven by structural reforms, international financial assistance, and a steady exchange rate. The Large-Scale Manufacturing (LSM) sector, despite ongoing challenges, reported a noticeable improvement compared to the previous year’s significant contraction of 5.79%.
According to the report, 12 out of 22 LSM sectors recorded positive performance, with growth in key industries such as the auto, cement, and food sectors. The State Bank of Pakistan reduced the policy rate by 900 basis points to 13% during the year, impacting the bank’s interest income.
The bank’s financial results reveal a decrease in net interest income by 9.6% over the comparative period, largely due to the downward trend in the policy rate. However, non-interest income increased by 39.6%, closing at Rs. 1,687 million. This increase was primarily attributed to capital gains on investments amounting to Rs. 212 million, contrasting with a capital loss of Rs. 399 million in the previous year. Additionally, the bank realized a gross gain of Rs. 815 million on its equity investment portfolio, directly recognized in the Statement of Changes in Equity.
Operating costs rose by 11% over the last year but remained below the average inflation rate of 13.12%. This cost increase was attributed to initiatives such as branch network expansion and technology upgrades. The bank strategically increased its balance sheet size by Rs. 3,789 million, primarily through an increase in investments by Rs. 29,863 million, partially offset by a reduction in loans and advances by Rs. 17,366 million.
On the external economic front, the current account posted a surplus of USD 1,210 million during the first half of the fiscal year 2025, compared to a deficit of USD 1,397 million in the same period the previous year. This improvement was due to increased workers’ remittances by USD 4,410 million and exports by USD 1,342 million, partially offset by a USD 2,855 million increase in imports.
The bank’s credit ratings, assigned by the Pakistan Credit Rating Agency Limited (PACRA), remain at ‘AA/A-1’ (Double A/A-One) with a ‘Stable’ outlook. These ratings indicate high credit quality and strong capability for timely financial commitments, supported by robust liquidity positions.
The bank’s report also details a significant development regarding its majority shareholder, Saudi National Bank (SNB). After receiving a non-binding offer from Bank Alfalah Limited for SNB’s 100% stake in Samba Bank Limited, SNB decided to terminate the sale process following due diligence and exploration of the sale.
According to information available from the Pakistan Stock Exchange (PSX), Samba Bank Limited’s financial figures for the year ended December 31, 2024, indicate a profit before taxation of Rs. 1,550 million, down from Rs. 2,193 million the previous year. After accounting for taxation of Rs. 850 million, the bank recorded a profit after taxation of Rs. 699 million, compared to Rs. 1,235 million in 2023. Earnings per share decreased to PKR 0.69 from PKR 1.22.
The bank also reported a 6.6% decrease in deposits and an 11,492 million increase in interbank borrowings. Its branch network expanded with the addition of 10 new branches, bringing the total to 57, enhancing customer accessibility and supporting retail banking growth.