Karachi: The Trust Modaraba, managed by Al-Zamin Modaraba Management (Private) Limited, has released its annual report for the fiscal year ending June 30, 2026, highlighting a steady financial performance despite the geopolitical and economic challenges that marked the period. The report, dated October 1, 2026, offers insights into the entity's economic strategies and financial outcomes during a turbulent year.
The fiscal year 2025-26 was characterized by significant global economic shifts, initially buoyed by stabilizing inflation and reduced interest rates before being impacted by the geopolitical conflict stemming from the Iran-US war. This conflict led to disruptions in energy transit routes and a subsequent rise in fuel prices. Domestically, despite these external pressures, Pakistan's economy showed resilience, supported by disciplined macroeconomic policies, a stable exchange rate, and controlled inflation. The government's reform agenda focused on SME development, energy transformation, digitization, and export expansion, though ongoing global tensions and oil price fluctuations remain a concern for near-term economic stability.
Trust Modaraba reported a total income of Rs. 68.21 million for the financial year 2025-26, a decrease from the previous year's Rs. 72.58 million. This decline is mainly attributed to reduced lending rates and a conservative credit strategy amidst geopolitical uncertainties. The income stream was predominantly driven by the diminishing musharakah mode of financing, which contributed 68% to gross revenue. Despite challenges, the Modaraba's cautious approach to lending, especially amid the Iran-US conflict, helped maintain profitability.
According to information available from the Pakistan Stock Exchange (PSX), the Modaraba's stock market operations generated an income of Rs. 6.28 million through dividends and capital gains. However, the investment portfolio recorded an unrealized loss of Rs. 3.09 million compared to an unrealized profit of Rs. 1.91 million in the previous year, indicative of the market's volatility due to regional instability. The management remains vigilant, focusing on high-yield, fundamentally strong securities to mitigate short-term market fluctuations.
The balance sheet for the year revealed assets totaling Rs. 405.52 million, with an equity base rising to Rs. 360.13 million. The entity's return on equity (ROE) stood at 3.16%, reflecting a big move compared to the previous year's 5.27%. Operating expenses were stable despite upward cost pressures, with resource optimization playing a key role in maintaining operational quality.
The Trust Modaraba did not declare any dividends for the year, opting instead to strengthen its financial position amid future business considerations. Its credit rating was reaffirmed by VIS Credit Rating Company at BBB+ for long-term and A2 for short-term, with a stable outlook. These ratings underscore the Modaraba's established presence in the sector and its focus on shariah-compliant financing.
Looking ahead, the ongoing Iran-US conflict poses multifaceted risks, especially in terms of energy prices and supply chain disruptions. These factors could elevate business costs, pressure portfolio quality, and affect credit demand if interest rates rise. The Modaraba's management is proactively adjusting its business priorities to navigate the evolving economic landscape, emphasizing client due diligence and sector reallocation.