SBP Profits Fall 20% While Executive Pay Nearly Doubles

SBP Profits Fall 20% While Executive Pay Nearly Doubles

ByAftab Ahmed

The State Bank of Pakistan (SBP) has reported a significant decline in its profits for the fiscal year 2025-26, accompanied by a striking surge in top management salaries. Despite net earnings dipping by 20%, remuneration for the Governor and Deputy Governors rose sharply, highlighting a marked disconnect between financial performance and executive compensation.

Declining Profits Amid Rising Executive Pay

In its latest annual financial report, the SBP disclosed that total profits fell from Rs. 2,499 billion in FY25 to Rs. 1,992 billion in FY26, reflecting a reduction of Rs. 507 billion. This considerable contraction underscores challenges faced by the central bank during the period. However, while the institution’s overall financial health showed signs of strain, the combined salaries and benefits for the Governor and three Deputy Governors nearly doubled, soaring by 94% to total Rs. 182.53 million.

Board Members and Staff Compensation Trends

Non-executive directors also benefited from sharp pay increases, with their combined remuneration jumping 126% from Rs. 11.15 million to Rs. 25.16 million. Additionally, the external member of the Monetary Policy Committee (MPC) saw a more modest rise of approximately 10.6%, bringing earnings to Rs. 8.43 million. In contrast, the regular staff of the SBP experienced a comparatively restrained salary boost of 8.4%, raising total staff expenses by Rs. 91.18 million to about Rs. 1.16 billion.

Implications for Pakistan’s Economic Governance

This trend of escalating executive pay amidst declining bank profits arrives as SBP navigates efforts to stabilize the exchange rate and promote digital financial transactions under challenging economic circumstances. The stark contrast between leadership remuneration and financial results raises important questions about governance and accountability within Pakistan’s central bank.

Commenting on the developments, an SBP spokesperson noted the importance of competitive compensation to attract high-caliber talent essential for managing complex economic policies, but acknowledged the optics of the raises could be concerning to the public.

For Pakistan’s broader economic landscape, these revelations spotlight the need for transparent and balanced fiscal management at key institutions, particularly as the country pursues ambitious digital transformation in its banking sector.

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