Lahore: The Board of Directors of Punjab Modaraba Services (Private) Limited, overseeing the operations of First Punjab Modaraba, recently disclosed the interim financial statements for the half-year ending June 30, 2026. This report, released on August 31, 2026, highlights a period of strategic cost management against a backdrop of economic recovery in Pakistan.

The Modaraba's total assets decreased by 1.4% to Rs. 1.715 billion from Rs. 1.739 billion, while liabilities saw a reduction of 4.0%, settling at Rs. 196.269 million from Rs. 204.480 million. Despite the overall stability in the balance sheet, gross income experienced a significant decline of 18.1%, dropping to Rs. 107.265 million from Rs. 130.910 million. This decrease was counterbalanced by a 31.8% reduction in total expenses, which fell to Rs. 153.992 million from Rs. 225.720 million, attributed to effective cost-control measures and reduced financial charges.

According to information available from the Pakistan Stock Exchange (PSX), the management concentrated efforts on Diminishing Musharakah financing while selectively discouraging Ijarah and Murabaha financings. This focus aligns with the Modaraba's strategy of prudent fund deployment towards creditworthy clients, backed by enhanced credit assessments and rigorous financing proposal scrutiny.

The Modaraba reported a net loss of Rs. 16.41 million for the period, a notable improvement from the Rs. 103.98 million loss recorded during the same period last year. This improved financial position is partly due to the reversal of provisions amounting to Rs. 31.83 million and a continued emphasis on recovery mechanisms.

During the first half of 2026, Pakistan's economy saw gradual recovery, supported by macroeconomic stability and governmental reforms. The State Bank of Pakistan maintained a policy rate of 11.5%, contributing to a stable external sector. Despite these positive indicators, the Modaraba remains cautious due to ongoing challenges such as inflationary pressures and global geopolitical developments.

The Board reaffirmed its commitment to risk management, focusing on the growth of its financing portfolio through Diminishing Musharakah and strengthening recovery mechanisms. The Board also expressed gratitude towards its stakeholders for their continued support and confidence.