JS Bank Half-Year Profit Slumps 45% Amid Margin Pressure and Rising Costs

JS Bank Limited (PSX: JSBL) reported a sharp decline in earnings for 1HFY25, with consolidated profit after tax falling 45.1% YoY to Rs5.32 bn. Earnings per share dropped to Rs1.99 from Rs3.86 a year earlier, according to the bank’s filing with the PSX.

Key Drivers:

Margin compression: Net mark-up income fell 8.3% to Rs32.45 bn, reflecting lower asset yields despite reduced funding costs.

Non-mark-up income gains: Jumped 40.8% to Rs12.51 bn, mainly due to Rs4.63 bn in securities gains (+281% YoY).

Foreign-exchange income decline: FX revenue fell 61%, reducing a historically important buffer.

Rising costs: Operating expenses surged 26.7% to Rs30.18 bn, pushing the cost-to-income ratio to ~68%.

Higher credit charges: Credit loss allowance jumped 79.8% to Rs2.28 bn, further pressuring profitability.

Pre-tax profit: Declined 36.4% to Rs11.93 bn.

The results highlight underlying pressure on core banking income, with trading gains cushioning the decline. Investors remain cautious, given the reliance on volatile income sources amid rising costs.

JS Bank 1HFY25 Consolidated Figures (vs 1HFY24)

Metric	1HFY25	1HFY24	Change
PAT	Rs5.32 bn	Rs9.70 bn	-45.1%
EPS	Rs1.99	Rs3.86	-48.4%
Net Mark-up Income	Rs32.45 bn	Rs35.38 bn	-8.3%
Non-Mark-up Income	Rs12.51 bn	Rs8.88 bn	+40.8%
Gains on Securities	Rs4.63 bn	Rs1.22 bn	+281%
Operating Expenses	Rs30.18 bn	Rs23.82 bn	+26.7%
Credit Loss Allowance	Rs2.28 bn	Rs1.27 bn	+79.8%
Pre-tax Profit	Rs11.93 bn	Rs18.75 bn	-36.4%

JS Bank’s half-year performance underscores margin pressure, rising costs, and higher credit charges. Future profitability will depend on restoring core income growth and managing expenses without over-reliance on trading gains.