Karachi: Bank Alfalah Limited has reported a robust 17% year-on-year growth in deposits for the year ending December 2025, highlighting a strategic focus on current accounts, which also saw a similar 17% increase. The bank’s financial results, released on March 30, 2026, reveal a stable yet complex financial landscape, as net advances remained flat over the same period, influenced by the ADR-related lending from the last quarter of 2024.
Investments at Bank Alfalah increased by 9% year-on-year, with a notable preference for floating-rate bonds and Treasury bills, as the interest rate cycle approaches its lower bounds. This strategic shift resulted in a significant 27% reduction in borrowings. Reserves augmented by 8% year-on-year, incorporating the profit earned over the past twelve months and dividends disbursed during the same timeframe. In a sign of positive valuation adjustments, the revaluation surplus surged by 28%, underscoring favorable book positions in both fixed income and equities.
The balance sheet snapshot indicates that total assets grew by 3% year-on-year to 3.83 trillion Pakistani Rupees, with a quarterly increase of 19%. Similarly, total liabilities increased by 3% year-on-year, reaching 3.63 trillion Pakistani Rupees. Paid-up capital remained unchanged, while reserves saw an 8% year-on-year rise. The book value per share improved by 11% year-on-year to Rs. 125.23.
Financial performance for 2025 shows a 7% improvement in net interest income, attributed to the bank’s strategic buildup of a fixed-rate PIB book coupled with current account growth. Non-interest income also registered a 7% increase, driven by higher dividend and foreign exchange income, despite fee income pressures due to market dynamics in remittances.
According to information available from the Pakistan Stock Exchange (PSX), Bank Alfalah’s profit after tax decreased by 26% year-on-year, with earnings per share dropping to Rs. 17.97. Despite a challenging environment, the bank increased its dividends per share by 24%, reflecting a commitment to shareholder returns.
Administrative expenses grew by 38% due to branch expansion and staff compensation, although excluding remittance marketing, the increase was 26%. Provision charges rose significantly, reflecting a top-up related to Afghanistan and specific provisions, while the effective tax rate experienced a slight uptick. Despite these challenges, the bank maintained a profit before provisions of 65.65 billion Pakistani Rupees, albeit a 23% decline from the previous year.
This comprehensive financial overview illustrates Bank Alfalah’s strategic maneuvers in a fluctuating market environment, as it navigates through growth in deposits and investments while managing flat advances and increased operational expenses.