Bank Makramah Reports Rs4.66bn Half-Year Loss Amid Higher Expenses and Weak Income

KARACHI: Bank Makramah Limited has reported a significant loss for the first half of 2026, with its consolidated loss after taxation reaching Rs4.68 billion, compared with a profit of Rs704.47 million in the same period last year.

According to the bank’s financial results for the half year ended June 30, 2026, the loss translated into a loss per share of Rs4.62, compared with earnings per share of Rs0.70 in the corresponding period of 2025.

The bank’s unconsolidated results showed a similar deterioration. Its standalone loss after taxation stood at Rs4.66 billion, against a profit of Rs696.62 million a year earlier. Basic and diluted loss per share were reported at Rs4.60, compared with earnings of Rs0.70 per share in the same period last year.

Income comes under pressure

The financial statements show that Bank Makramah’s net mark-up/interest expense remained a major drag on profitability. On a consolidated basis, net mark-up/interest expense for the six-month period stood at Rs2.33 billion, compared with Rs358.79 million in the restated period of 2025.

Meanwhile, non-mark-up/interest income declined to approximately Rs1.02 billion, compared with Rs2.32 billion in the corresponding period last year. Gains on securities also fell sharply, while fee and commission income declined to Rs512.92 million from Rs561.65 million.

The pressure was further reflected in operating costs. Consolidated operating expenses increased to around Rs4.59 billion during the first half of 2026, compared with Rs4.18 billion a year earlier.

Balance sheet remains sizeable

Despite the reported loss, the bank maintained a substantial balance sheet. Consolidated total assets stood at approximately Rs237.22 billion as of June 30, 2026, compared with Rs213.68 billion at the end of December 2025.

Deposits and other accounts increased to around Rs190.63 billion, from Rs168.86 billion at the end of 2025. Investments also rose to approximately Rs102.72 billion, compared with Rs86.31 billion six months earlier.

However, consolidated accumulated losses reached approximately Rs1.97 billion, compared with an accumulated unappropriated profit of Rs2.64 billion at the end of 2025, highlighting the impact of the first-half loss on shareholders’ equity.

Operating cash flow turns positive

The consolidated cash flow statement showed net cash generated from operating activities of Rs17.53 billion during the six months ended June 30, 2026, compared with a net cash outflow of Rs42.30 billion in the restated period last year.

At the same time, investing activities consumed approximately Rs16.85 billion, largely reflecting net investments in securities. Cash and cash equivalents stood at around Rs15.74 billion at the end of the reporting period.

No dividend announced

At its Board of Directors meeting held on August 28, 2026, Bank Makramah recommended no cash dividend, bonus shares or right shares for the period. The bank said its half-year report for the period ended June 30, 2026 would be transmitted through PUCARS.

The results underline a challenging first half for Bank Makramah, as higher financing costs, weaker non-mark-up income and elevated operating expenses weighed heavily on profitability. While the bank continued to expand its deposits and investment base, restoring earnings remains a key challenge as it moves into the second half of 2026.