February 04, 2026 (MLN):  MCB Bank Limited (PSX:MCB) reported a net profit of Rs58.78bn for the year ended December 31, 2025, a 7.4% decline from the Rs63.47bn profit recorded in the previous year.

The bank's earnings per share decreased to Rs49.29 from Rs53.35 in the corresponding period, with dividends coming in at Rs9 per share.

The bank's mark-up or return or interest earned declined 20.8% year-on-year to Rs327.51bn from Rs413.55bn, which reflects the impact of lower interest rates and changing asset mix.

Mark-up or return or interest expense decreased 32.3% to Rs166.30bn from Rs245.60bn, resulting in a net mark-up or interest income of Rs161.20bn, down 4% from Rs167.95bn in the prior year.

The net interest margin compression indicates the challenging interest rate environment faced by the banking sector during the period.

Total non-mark-up or interest income rose marginally by 0.4% to Rs41.40bn from Rs41.24bn, demonstrating resilience in fee-based revenues.

Fee and commission income declined slightly by 1.8% to Rs24.35bn from Rs24.78bn, while dividend income surged 51.9% to Rs4.45bn from Rs2.93bn, providing a significant boost to non-funded income.

Foreign exchange income increased 12.9% to Rs10.86bn from Rs9.61bn, while income from derivatives jumped to Rs4.1m from Rs2m.

The bank recorded a gain on securities of Rs1.19bn, down 65.7% from Rs3.47bn in the prior year. Other income increased 25.7% to Rs557.7m from Rs443.5m.

Total income stood at Rs202.61bn, down 3.1% from Rs209.19bn in FY2024. Total non-mark-up or interest expenses increased 13% to Rs85.38bn from Rs75.57bn, driven by a 13.6% rise in operating expenses to Rs82.41bn from Rs72.53bn.

Workers Welfare Fund declined 4.9% to Rs2.47bn from Rs2.60bn, while other charges increased 10.7% to Rs494.9m from Rs447.2m. The bank's share of profit from associates rose 15.8% to Rs2.83bn from Rs2.44bn.

Profit before credit loss allowance reached Rs120.05bn, down 11.8% from Rs136.06bn in the prior year. Notably, the bank recorded a net reversal of credit loss allowance and write-offs of Rs5.07bn compared to a charge of Rs4.88bn in FY2024, indicating improved asset quality and lower provisioning requirements.

This reversal positively impacted the bottom line and demonstrates the bank's strengthened balance sheet.

Profit before taxation stood at Rs125.12bn, representing a 4.6% decline from Rs131.18bn.

The bank recorded a taxation expense of Rs66.34bn, down 2% from Rs67.71bn in the corresponding period last year. The effective tax management partially mitigated the impact of lower operating income on net profitability.