KARACHI: The Board of Directors of Soneri Bank Limited, in their 217th meeting held in Karachi on Wednesday, approved the Bank’s financial statements of the half year ended 30 June 2026.
The Bank’s stable performance across all functional areas underscores its operational robustness and resilience that was achieved despite a challenging macroeconomic landscape driven by surging international energy prices, global supply chain disruptions, and domestic energy tariff adjustments. Against this backdrop and a shifting interest rate environment, the Bank successfully sustained its performance while executing planned capital expenditure to expand its branch footprint.
The Bank posted a Profit Before Tax (PBT) of Rs 4.795 billion and a Profit After Tax (PAT) of Rs 2.396 billion for the period ended June 30, 2026, compared to Rs 6.685 billion and Rs 2.497 billion, respectively, in the prior period. Earnings Per Share (EPS) was recorded at Rs 2.1732 per share, as compared to Rs 2.2648 per share for the previous period. The stable bottom line demonstrates the Bank’s ability to maintain steady shareholder returns despite economic stress and geopolitical challenges.
Despite a challenging interest rate environment, the Bank maintained a robust gross revenue base. While Net Interest Income (NII) declined by 19.80 percent period-on-period by Rs 2.823 billion due to margin compression, this was effectively cushioned by an exceptional 50.96 percent surge in non-interest income, which reached Rs. 5.368 billion up from Rs. 3.556 billion last year. This strong performance in non-funded streams was driven by increase in foreign exchange income of Rs 0.722 billion, capital gains of Rs 1.017 billion, and fee and commission income of Rs 0.064 billion, underscoring the Bank’s successful revenue diversification strategy.
The Bank’s investment portfolio increased to Rs 509.110 billion by period-end, reflecting a 6.23 percent growth over the previous year’s position of Rs 479.247 billion. Average volume of investments for the period also showed an upward trend, rising to Rs 501.123 billion compared to prior period of Rs 462.446 billion.
Investment income, however declined to Rs 27.843 billion compared to prior period of Rs 31.185 billion. This contraction was primarily driven by a compression in net investment yields, which averaged 11.20 percent for the current period compared to 13.60% in the prior year.
In line with the State Bank of Pakistan’s downward policy rate revisions from last year, the Bank’s loan book underwent gradual repricing. This led to a contraction in net yields on advances to 10.89%, compared to 11.86% in the prior period.
Despite this yield compression, the Bank successfully expanded its lending activity, with average net advances growing to Rs 221.092 billion from Rs 199.055 billion last year. This volume growth effectively mitigated the margin drop, allowing total income from advances to rise marginally by 1.9 percent to Rs 11.936 billion, up from Rs 11.708 billion in the corresponding period.
The Bank’s deposit base stood at Rs 784.226 billion at period-end, reflecting a robust year-on-year growth of 13.8 percent as against the year-end 2025 position of Rs 689.106 billion. The portfolio demonstrated strong momentum in average volumes, which grew by Rs 84.934 billion as compared to the prior period.
Notable improvements were achieved in the deposit mix, with the CASA ratio strengthening to 87.17 percent (December 2025: 81.86%) and the Current Account composition rising to 34.51 percent. This favourable shift, supported by a 13.35% growth in average current account volumes, successfully drove the cost of deposits down from 7.43 percent for the half year ended 30 June 2025 to 6.65 percent in the current period.
The Bank remains committed to optimizing its funding mix and rationalizing costs while maintaining premium service standards.
The Bank’s borrowings were reported at Rs 12.095 billion as at June 30, 2026 versus Rs 61.644 billion as of year-end 2025, while overall costs during the current half-year decreased to 10.51 percent as against 10.70 percent for the comparative half-year. The Bank’s period-end net IDR slightly decreased to 64.92 percent as against 69.55 percent as at year-end 2025.
The Bank’s cost of funds decreased to 6.68 percent for the period ended June 30, 2026, down from 7.44 percent in the prior period. This reduction directly aligns with the downward policy rate revisions by the State Bank of Pakistan.
Non-Markup expenses were reported at Rs 13.195 billion for the period ended June 30, 2026 as against Rs 11.280 billion in the comparative period of 2025, indicating an increase of 16.98 percent, which coincides with elevated inflation levels during the period.
However, this was in line with our expectations considering the Bank’s branch expansion plan, under which we achieved the milestone of opening 110 branches since June 30, 2025 and as of June 30, 2026, the total number of our branches stands at 682 branches.
The Board has given firm directions, and the management remains committed on practicing rigorous cost control measures to keep costs within strict budgets, and with the inflation now expected to be contained in the medium term, we expect good progress in this area as well.
The Bank achieved a significant improvement in asset quality during the period ended June 30, 2026. Effective recovery initiatives resulted in the Non-Performing Loan (NPL) ratio declining to 2.48 percent, compared to 3.41 percent as of December 31, 2025. This favourable trend enabled a net reversal of Rs 1.186 billion in credit loss allowances, a significant increase from the Rs 0.151 billion net reversal recorded in the prior period.
Despite this reversal, the Bank continued its prudent provisioning policy, strengthening the loan loss coverage ratio to 102.35 percent, compared to 96.77 percent as of December 31, 2025. Management remains vigilant in monitoring the portfolio to mitigate potential credit infection and maintain optimal coverage levels.
The Bank’s Capital Adequacy Ratio as at June 30, 2026 stands at 14.10 percent, while the Leverage Ratio is at 3.18 percent. The Bank’s Liquidity Coverage Ratio and Net Stable Funding Ratios have been reported at 198.73 percent and 175.81 percent respectively, which are also comfortably above the regulatory requirements.
Alhamdulillah, during the period under review, the Pakistan Credit Rating Agency (PACRA) has upgraded the Bank’s long-term entity rating to ‘AA’ (Double A). This upgrade represents a significant milestone, moving up from the previous long-term rating of ‘AA-’ (Double A minus). PACRA has also reaffirmed the short-term rating at the highest level of ‘A1+’ (A One Plus), with a Stable Outlook.
Furthermore, PACRA has upgraded the credit ratings of the Bank’s unsecured, subordinated, and listed Term Finance Certificates (TFC–3) issue of Rs 4 billion at ‘AA’ (Double A) [2025: ‘A+’ (Single A plus)], and the unsecured, subordinated, rated, listed, perpetual and non-cumulative TFC issue of Rs 4 billion at ‘A+’ (Single A plus) [2025: ‘A’ (Single A)], both with a Stable Outlook.
Copyright Business Recorder, 2026