Karachi: Escorts Investment Bank Limited (EIBL) has reported a pre-tax loss of PKR 9.1 million for the first quarter of FY2025, according to the directors' report released recently. This figure marks a deterioration compared to the PKR 3.8 million loss recorded in the corresponding period last year.

The financial results come amid a global economic landscape that shows mixed signals, with moderating inflation and stable employment helping to sustain growth. According to information available from the Pakistan Stock Exchange (PSX), global real GDP growth is anticipated to be around 2.7-3% for the year, with emerging economies like India and Brazil expected to outperform more developed nations. However, persistent high interest rates and geopolitical tensions are impacting business confidence and consumer spending across major economies.

In Pakistan, the economic indicators have been more positive, with a noticeable drop in inflation to single digits, and improvements seen in large-scale manufacturing and exports. This has contributed to a reduced current account deficit. The country's Monetary Policy Committee cut the policy rate by 200 basis points in September 2024, setting it at 17.50%, with expectations of further reductions. These moves are anticipated to foster private sector growth but may reduce bank profitability.

During the reviewed quarter, EIBL experienced a decline in overall revenues due to a downward trend in policy rates, despite increases in income from financing and fees and commissions. Income from financing rose by 31.73% to PKR 21.1 million, and fee and commission income increased by 59.06%. However, other income streams faltered, notably due to the relocation of branches and diminished returns on investments.

Notably, the company has applied for the renewal of its IFS license with the Securities and Exchange Commission of Pakistan (SECP), reflecting ongoing compliance and operational adjustments.

The Board of Directors expressed gratitude towards customers and sponsors, whose continued support is deemed vital for the company's future profitability and growth. They also highlighted a significant reduction in provisions by more than 59.27%, evidencing the effectiveness of the bank's robust risk policy.