Allied Bank CY2025 Profit Falls 18% to Rs35 Billion as Rates Come Off Their Peak

Allied Bank, one of Pakistan's larger banks, posted a weaker 2025. Profit fell 18 percent as interest rates came down from the highs of the prior two years, reducing the income banks earn on loans and government paper. It is a reminder that the same rate cycle that powered record bank profits in 2024 can work in reverse as it turns.

What the Allied Bank results showed

Allied Bank reported profit after tax of Rs35.18 billion for the year ended 31 December 2025, down from Rs43.12 billion in 2024. Profit before tax fell to Rs74.2 billion from Rs87.9 billion, and earnings per share dropped to Rs30.72 from Rs37.65. On a consolidated basis profit was Rs36.33 billion against Rs44.39 billion. The board kept the payout steady, recommending a final cash dividend of Rs4 per share on top of Rs12 already paid, for a total of Rs16 per share for the year.

Why falling rates matter for bank earnings

Banks make most of their money from net interest income, the spread between what they earn on loans and securities and what they pay depositors. When the policy rate is high, that spread and the yield on their large holdings of government paper are fat. As rates fall, the income side reprices lower, and unless deposit costs fall just as fast, margins and profit compress. Allied Bank's decline reflects that turn in the cycle. It is the flip side of the record profits banks booked when rates were at their peak.

Which stocks, and why

This is a direct, company specific result for Allied Bank, and the read is negative. An 18 percent profit fall is a clear step down, even though the bank remains highly profitable and maintained its dividend. The result also stands in contrast to the record years posted by some larger peers in 2025, which shows that banks with different deposit mixes and balance sheets felt the rate decline differently.

What to watch

The signals to track are the policy rate, where the April 2026 hike could help margins again after this dip, the bank's deposit mix and cost of funds, and loan growth as the economy recovers. Watch net interest income and the cost of deposits in the next results, since those will show whether earnings stabilise as the rate environment shifts.