April 29, 2026 (MLN):  Standard Chartered Bank (Pakistan) Limited (PSX: SCBPL) reported a 30% decline in its profit after taxation for the first quarter ended March 31, 2026, falling to Rs5.60bn compared to Rs7.99bn in the corresponding period last year.

Reflecting this significant bottom-line contraction, the bank's basic and diluted earnings per share (EPS) dropped to Rs1.45 from Rs2.06 in Q1 2025.

The profit decline was primarily driven by a sharp contraction in both funded and non-funded income streams.

On the funded side, mark-up/return earned fell by a steep 33% year-on-year to Rs17.93bn.

While the bank managed to slash its cost of funds (mark-up expensed) at a faster pace of 50% down to Rs4.92bn, the absolute net mark-up/interest income still contracted by 23%, settling at Rs13.02bn compared to Rs16.98bn in the prior year.

The bank's non-funded operations added heavy pressure to the top line.

Total non-mark-up income plunged by 41% to Rs3.59bn.

This steep drop was triggered by a 32% decline in fee and commission income (Rs1.83bn), a massive 93% collapse in income from derivatives (Rs23.43m), and a significant hit from securities, which posted a net loss of Rs750.87m compared to a gain of Rs672.42m last year.

These losses easily offset a slight 3% increase in foreign exchange income, which stood at Rs2.47bn.

Dragged down by shrinking core margins and plunging non-funded gains, total income contracted by 28% to Rs16.61bn.

On the operational front, SCBPL exhibited strong cost control.

Total non-mark-up expenses actually decreased by 2% to Rs5.62bn, as operating expenses edged down slightly and Workers' Welfare Fund contributions fell.

However, the sheer drop in total income pushed the profit before credit loss allowance down by 37% to Rs10.99bn.

A major bright spot for the bank was a substantial improvement in asset quality.

SCBPL booked a net reversal of credit loss allowance amounting to Rs732.10m a significant turnaround from the Rs309.77m provision charge recorded in the same period last year.

Despite this healthy provision reversal and tight cost control, the profit before taxation registered a 31% decline, settling at Rs11.73bn.

After accounting for a proportionally lower taxation expense of Rs6.13bn (down 32% year-on-year), the bank finalized the quarter with a 30% drop in net profit, closing at Rs5.60bn.