Soneri Bank Profit Rises 17% in Q1 2026

Soneri Bank Limited reported a stronger bottom line for the first quarter of 2026, with profit after tax rising by nearly 17 percent despite pressure on its core interest income. The bank’s quarterly performance, released on Monday, showed that earnings reached Rs1.34 billion for the period ended March 31, 2026, compared with Rs1.15 billion in the same quarter last year.

The latest results are significant because they show how Pakistani banks are adjusting to a changing interest-rate environment. Soneri Bank’s mark-up and interest income declined during the quarter, reflecting asset repricing and lower returns in parts of the funded portfolio. However, the bank managed to protect its final profit through stronger non-funded income and a lower tax charge.

According to the reported accounts, mark-up and interest earned fell to Rs19.64 billion from Rs22.28 billion a year earlier. Mark-up and interest expense also declined, reaching Rs13.66 billion against Rs14.99 billion in the previous year’s corresponding quarter. As a result, net mark-up income dropped sharply to Rs5.98 billion, showing pressure on the bank’s lending margins.

The stronger side of the result came from non-mark-up income, which rose substantially during the quarter. Soneri Bank recorded total non-funded income of Rs2.82 billion, compared with Rs1.56 billion in Q1 2025, supported by gains on securities, foreign exchange income and higher fee and commission earnings.

The bank’s gain on securities marked a major turnaround, moving from a small loss in the previous year to a sizeable gain in the latest quarter. Foreign exchange income also more than doubled, while fee and commission income posted steady growth, helping the bank offset weakness in its traditional funded income stream.

However, the results also showed pressure from rising costs. Operating expenses increased to Rs6.64 billion, up from Rs5.14 billion a year earlier, while total non-mark-up expenses also climbed sharply. This cost growth reduced the benefit of higher non-funded income and pushed profit before credit loss allowance lower than last year.

The credit provisioning picture also weighed on the bank’s pre-tax performance. Soneri Bank booked a net credit loss allowance and write-off charge of Rs689.29 million in the quarter, compared with a reversal in the same period last year. This shift added pressure to pre-tax earnings, which declined to Rs2.79 billion from Rs3.34 billion.

The final improvement in net profit was supported by a lower taxation charge, which fell significantly year-on-year. Basic and diluted earnings per share rose to Rs1.2146 from Rs1.0406, giving shareholders a stronger quarterly result despite the mixed movement in income lines.

For Pakistan’s banking sector, the result highlights a wider transition as lenders respond to changing rates, market movements and higher operating costs. Soneri Bank’s next quarters will be closely watched to see whether non-funded income remains strong, whether credit costs stabilise and whether core margins recover as market conditions evolve.