Falling market share, higher taxes hit profits at Bank AL Habib

Bank AL Habib’s 2025 numbers read like a reminder of what Pakistani banking looks like when the interest-rate escalator starts moving down instead of up. The bank closed the calendar year with consolidated profit after tax of Rs32.5 billion, down from Rs41.9 billion a year earlier, as total income slid and operating costs rose. Earnings per share fell to Rs29.19 from Rs37.70.

In isolation, a Rs32 billion profit is not a crisis. It is still a large figure, and the bank remains meaningfully profitable. But in a sector where investors have become accustomed to bumper results – fuelled by high policy rates and the banking system’s heavy tilt towards government securities – any step-down in profitability immediately invites a more granular question: was the decline “macro” (the rate cycle), “micro” (execution), or “policy” (tax)? In Bank AL Habib’s case, it is a bit of all three.