Bank Makramah Swings to Rs8.8 Billion CY2025 Profit on Huge Loan-Loss Reversal

Bank Makramah, the troubled lender formerly known as Summit Bank, posted its first profit in years. The bank swung from a loss to a large after-tax profit for the year ended December 2025, but the headline number rests on an accounting reversal rather than a sudden jump in everyday banking income. That distinction matters for how durable the turnaround really is.

What the Bank Makramah results showed

Bank Makramah reported profit before tax of about Rs19.13 billion for the year ended 31 December 2025, against a pre-tax loss of around Rs7.23 billion in 2024. After-tax profit came in near Rs8.83 billion, compared with a loss of about Rs5.21 billion the year before, with earnings per share of roughly Rs8.83. The single biggest reason was a net reversal in credit loss allowance and write-offs of Rs21.03 billion, sharply higher than the Rs1.41 billion reversed in 2024. That one line effectively wiped out the operating loss. Non-markup income also rose strongly, up about 119 percent to Rs7.96 billion on gains in securities and other income, while net interest expense fell as both markup earned and markup paid came down.

Why the source of the profit matters

A provision reversal happens when a bank had set aside money against loans it expected to go bad, then recovers more than expected or writes back those reserves. It is real and it flows through to profit, but it is not the same as earning fresh income from lending. For a bank rebuilding after years of losses and negative equity, a large reversal can repair the balance sheet and restore positive earnings in a single year, which is what happened here. The catch is that reversals of this size do not repeat. Once the bad-loan book has been cleaned up and recoveries are booked, the bank still has to show that its ordinary business, taking deposits and lending at a spread, can stand on its own. That is why a turnaround built mainly on provisions is best read as a starting point rather than proof of a sustainable earning engine.

Which stocks, and why

This is a direct, company specific result for Bank Makramah, and the read is positive. Returning to profit after nearly a decade of losses is a genuine milestone, and the scale of the swing is large, which is why it is marked at a high influence level. The longevity is marked short because the profit is dominated by a one-off provision reversal that will not recur, so the lasting question is whether core income can carry the bank in future years.

What to watch

The signals to track are net interest income and the bank's deposit base, since the recurring business is what must sustain profit once reversals fade, the level of remaining non-performing loans and any further recoveries, and the bank's capital position after years of repair. Watch the next quarterly results to see how much profit remains once the large reversal is out of the comparison.