FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

CONTENTS

CORPORATE INFORMATION 1

DIRECTORS’ REVIEW 3

INDEPENDENT AUDITOR’S REVIEW REPORT 5

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION 6

CONDENSED INTERIM STATEMENT OF PROFIT AND LOSS ACCOUNT 7

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME 8

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY 9

CONDENSED INTERIM CASH FLOW STATEMENT 10

NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 11

 CORPORATE INFORMATION
As of June 30, 2025

Board of Directors

Ikramullah Khan Chairman / Non-Executive Director

Amer Sultan Tareen Non-Executive Director
Abid Saar Independent Director
Syed Asad Ali Shah Independent Director
Tahir Jawaid Independent Director
Osman Asghar Khan Independent Director
Muhammed Shahid Sadiq Independent Director
Natasha Jehangir Khan Independent Director

Managing Director / CEO

Hassan Raza

Shariah Board

Mufti Muhammad Zahid Chairman Shariah Board

Mufti Muhammad Arif Khan Member Shariah Board
Mufti Abdul Wahab Member Shariah Board
Qazi Abdul Samad Resident Shariah
Board Member (RSBM)

Board Audit Commiee

Syed Asad Ali Shah Chairman

Amer Sultan Tareen Member
Abid Saar Member
Muhammed Shahid Sadiq Member
Osman Asghar Khan Member

Board Human Resource & Remuneration Commiee

Abid Saar Chairperson

Tahir Jawaid Member
Osman Asghar Khan Member
Natasha Jehangir Khan Member

Board Risk Management Commiee

Abid Saar Chairman

Amer Sultan Tareen Member
Muhammed Shahid Sadiq Member
Managing Director Member

1
Board I.T Steering Commiee

Osman Asghar Khan Chairman

Tahir Jawaid Member
Syed Asad Ali Shah Member
Natasha Jehangir Khan Member
Managing Director Member

Board Compliance Committee

Muhammed Shahid Sadiq Chairman

Secretary Finance Member
Natasha Jehangir Khan Member
Managing Director Member

Chief Financial Oicer

Irfan Saleem Awan

Company Secretary

Raza Mohsin Qizilbash

Registered Office / Head Oice

The Bank of Khyber

24 – The Mall, Peshawar Can.

UAN# 00-92-91-111 95 95 95
URL: www.bok.com.pk

Auditors

M/s Pwc A.F. Ferguson & Co.

Chartered Accountants

Legal Advisors

M/s. Mohsin Tayebaly & Co., Karachi

Registrar and Share Registration Oice

THK Associates (Pvt) Ltd.

Plot # 32 – C, Jami Commercial Street 2
D.H.A, Phase-VII,
Karachi-75500.

2
 Directors’ Review
On behalf of the Board of Directors of Bank of Khyber (The Bank or BoK), I am pleased to present the condensed
interim financial information of the Bank for the six month period ended June 30, 2025.

Financial Highlights
The financial highlights of the Bank for the period under review are as follows:

Rs. In Million
As at
June 30, 2025 December 31, 2024
Total Assets 537,205 477,564
Deposits 382,010 277,642
Advances (Gross) 127,765 159,624
Investments (Net) 351,703 282,767
For the six month period ended
June 30, 2025 June 30, 2024
Profit before provisions 6,576 3,589
(Reversal) / charge of provision (credit loss allowance) (618) 108
Profit before taxation 7, 194 3,481
Profit after taxation 3,365 1,551
Rupees
Basic and diluted earnings per share 2.91 1.34

Interim Dividend Announcement

The Board of Directors in its meeting held on August 26, 2025, has announced an interim cash dividend of Rs. 1.50
per share for the six month period ended June 30, 2025 (For the six month period ended June 30, 2024: Nil)

Performance Review
The Bank achieved a remarkable performance during the six month period whereby profit after tax surged by 117%
year-on-year (YoY) to Rs. 3,365 million as compared to Rs. 1,551 million during the same period last year.
Net Markup/Interest Income for the period increased by 28% YoY to Rs. 9,845 million as a result of robust balance
sheet management and successful reduction in funding costs achieved during the period. Non -markup/interest
income also recorded significant growth, rising sharply by 171% YoY to Rs. 2, 420 million (6M period ended June 30,
2024: Rs. 893 million). The main contributors in non -markup income were gain on securities, fee and commission
income and foreign exchange income.
To improve the non -mark income stream, special focus is being given to trade finance, investment banking and
home remiances businesses. The Bank has launched its home remiance product with the brand name of BoK
Kor Pay which has received a very healthy response from our overseas KPK diaspora.
Non mark-up expenses rose by 14% YoY to Rs. 5,690 million, reflecting increase in employee and other
administrative costs due to the impact of inflation and overall increase in activities of the Bank.
As a result of the strenuous recovery eorts and prudent len ding strategy followed by the management, t he Bank
achieved net reversal in provisions amounting to Rs. 618 million during the six month period under review,
compared to the net provision charge of Rs. 108 million during the same period last year.
The Bank’s deposit base as on June 30, 2025 stood at Rs. 382,010 million as against Rs. 277,642 million as of
December 31, 2024. G ross Advances of the Bank at the half year end amounted to Rs.127,765 million while net
investments stood at Rs. 351,703 million. Total assets of the Bank as of June 30, 2025 increased to Rs. 537,205
million as against Rs. 477,564 million on December 31, 2024.

3
Status of Conversion into Islamic Bank
During the half year ended June 30, 2025, the Bank announced initiation of the process for its conversion to a full-
fledged Islamic Bank. The Bank is taking all the necessary steps for achievement of this landmark initiative as per
the plan. In pursuit of this goal, 36 branches have been converted from conventional to Islamic banking during the
review period. Accordingly, Islamic banking branch network of the Bank has increased to 167 branches (out of the
total of 246 branches) at the period end while there are 77 Islamic Banking Windows to support the conversion of
conventional banking branches. It is important to highlight that number of converted branches has further
increased subsequent to the period-end.

Credit Rating
In June-2025, VIS Credit Rating Company Limited (VIS) upgraded the Medium to Long Term entity rating of the Bank
to AA- (Double A minus) from A+ (Single A plus) which indicates high credit quality. Moreover, Short Term rating of
the Bank was reairmed at A1 (A one).
The Pakistan Credit Rating Agency Limited (PACRA) in June 2025 reairmed the Medium to Long term and the
Short Term entity ratings of the Bank at A+ (Single A plus) and A1 (A one) respectively.
These ratings have been assigned a stable outlook by both the ra ting companies.

Future Outlook
Going forward, the Bank will continue its emphasis on sustainable profitability, asset quality improvement and
diversification of portfolio through proactive management strategies. Special focus will be kept on enhancing
asset quality while maintaining growth momentum. Moreover, improvement of service quality standards and
providing state-of-the-art banking services by leveraging technology and skilled human resources remain key
priorities of the management.
Furthermore, the Bank plans to grow advances acr oss all economic segments, i.e. Corporate, SMEs, Agriculture
and Consumer financing. Simultaneously, target will be to further diversify and improve the deposits composition
for reduction in the funding cost of the Bank.

Acknowledgments
The Board would like to thank the Provincial Government, State Bank of Pakistan, Shareholders, regulatory
authorities and all other stakeholders for their continued trust and support. We are also grateful to our valued
customers for their patronage and continued confiden ce in the Bank.

For and on behalf of the Board of Directors

__________________
Hassan Raza
Managing Director & CEO

August 26, 2025

Peshawar

4
5
 CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT JUNE 30, 2025

(Un-audited) (Audited)
June 30, December 31,
2025 2024
Note Rupees in '000
ASSETS
Cash and balances with treasury banks 5 29,054,738 23,993,095
Balances with other banks 6 15,746,518 3,252,274
Lendings to financial institutions 7 3,911,947 133,574
Investments 8 351,702,574 282,766,597
Advances 9 115,629,121 146,881,971
Property and equipment 10 4,183,474 4,293,173
Right-of-use assets 11 1,850,168 2,059,970
Intangible assets 12 350,333 361,363
Deferred tax assets 13 825,076 1,193,562
Other assets 14 13,951,080 12,628,288
Total Assets 537,205,029 477,563,867

LIABILITIES
Bills payable 15 2,273,340 21,951,353
Borrowings 16 108,272,134 133,531,771
Deposits and other accounts 17 382,010,434 277,641,989
Lease liabilities 18 2,007,759 2,147,700
Subordinated debt - -
Deferred tax liabilities - -
Other liabilities 19 19,377,252 20,391,835
Total Liabilities 513,940,919 455,664,648

NET ASSETS 23,264,110 21,899,219

REPRESENTED BY
Share capital 20 11,579,360 11,579,360
Reserves 5,739,098 5,066,025
Surplus on revaluation of assets 21 1,638,406 1,676,698
Unappropriated profit 4,307,246 3,577,136
23,264,110 21,899,219

CONTINGENCIES AND COMMITMENTS 22

The annexed notes 1 to 41 form an integral part of these condensed interim financial statements.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER

6
 CONDENSED INTERIM STATEMENT OF PROFIT AND LOSS ACCOUNT (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

Quarter ended Period ended

April 1 to April 1 to January 1 to January 1 to

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Note - Rupees in '000 -

(Restated) (Restated)

Mark-up / return / interest earned 23 14,088,548 16,862,906 27,588,830 33,879,063

Mark-up / return / interest expensed 24 9,348,813 12,757,143 17,743,484 26,195,998
Net mark-up / interest income 4,739,735 4,105,763 9,845,346 7,683,065

NON MARK-UP / INTEREST INCOME

Fee and commission income 25 322,713 202,048 550,814 483,292
Dividend income - 213 - 213
Foreign exchange income 209,795 110,060 282,162 337,328
Income /(loss) from derivatives - - - -
Gain /(loss) on securities 26 975,858 (768) 1,496,573 (768)
Net (loss)/gain on derecognition of financial assets
measured at amortised cost 27 (41,361) (1,528) 9,610 (2,194)
Share of profit of associate 5,498 4,447 8,466 9,143
Other income 28 47,730 30,380 72,513 65,712
Total non-mark-up / interest income 1,520,233 344,852 2,420,138 892,726

Total income 6,259,968 4,450,615 12,265,484 8,575,791

NON MARK-UP / INTEREST EXPENSES

Operating expenses 29 2,968,884 2,590,036 5,689,358 4,986,220
Workers Welfare Fund - - - -
Other charges 30 30 206 160 306
Total non-mark-up / interest expenses 2,968,914 2,590,242 5,689,518 4,986,526

PROFIT BEFORE CREDIT LOSS ALLOWANCE 3,291,054 1,860,373 6,575,966 3,589,265

(Reversal of) / credit loss allowance and write os - net 31 (500,483) (82,025) (618,472) 108,051

PROFIT BEFORE TAXATION 3,791,537 1,942,398 7,194,438 3,481,214

Taxation 32 2,028,703 1,176,447 3,829,072 1,930,515

PROFIT AFTER TAXATION 1,762,834 765,951 3,365,366 1,550,699

Rupees -

(Restated) (Restated)
Basic and diluted earnings per share 33 1.52 0.66 2.91 1.34

The annexed notes 1 to 41 form an integral part of these condensed interim financial statements.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER

7
 CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
Quarter ended Period ended

April 1 to April 1 to January 1 to January 1 to

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

- Rupees in '000 -
(Restated) (Restated)

Profit after taxation for the period 1,762,834 765,951 3,365,366 1,550,699

Other comprehensive income/ (loss)

Items that may be reclassified to statement of profit and loss account

in subsequent periods:
Movement in surplus/ (deficit) on revaluation of debt investments through FVOCI - net of tax 1,459,585 92,711 598,551 (258,273)

8
Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax (473,624) - (718,355) -
985,961 92,711 (119,804) (258,273)

Items that will not be reclassified to statement of profit and loss account
in subsequent periods:
Movement in (deficit)/ surplus on revaluation of equity investments - net of tax (58,921) (1,571) 19,479 593
Share of surplus on revaluation of investment of associate - net of tax - 634 1,339 1,145
Share of remeasurement loss on defined benefit obligations of associate - net of tax - - - (916)
(58,921) (937) 20,818 822

Total comprehensive income 2,689,874 857,725 3,266,380 1,293,248

The annexed notes 1 to 41 form an integral part of these condensed interim financial statements.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER
 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
Surplus / (deficit) on revaluation of
Share Statutory Unappropriated
Property and Non-banking Total
capital reserve Investments profit
equipment assets

- Rupees in '000 -

Balance as at December 31, 2023 (audited) 11,027,905 4,343,001 (823,221) 900,120 47,723 4,805,756 20,301,284

Impact of adoption of IFRS 9 - net of tax (note 4.1) - - 729,764 - - (1,949,528) (1,219,764)

Balance as at January 1, 2024 after adoption of IFRS 9 11,027,905 4,343,001 (93,457) 900,120 47,723 2,856,228 19,081,520

Profit after taxation for the six month period ended June 30, 2024 - restated - - - - - 1,550,699 1,550,699
Other comprehensive (loss) / income - net of tax
Movement in deficit on revaluation of investments in debt instruments through FVOCI- net of tax - - (258,273) - - - (258,273)
Share of surplus on revaluation of investment of associate - net of tax - - 1,145 - - - 1,145
Share of remeasurement loss on defined benefit obligation of associate - net of tax - - - - (916) (916)
Movement in surplus on revaluation of equity investments - net of tax - - 593 - - - 593
Total other comprehensive loss - net of tax - - (256,535) - - (916) (257,451)
Transfer to statutory reserve - 310,140 - - - (310,140) -
Transfer from surplus on revaluation of non-banking asset to unappropriated profit - net of tax - - - (4,034) 4,034 -
Transactions with owners, recorded directly in equity -

Final cash dividend for the year ended December 31, 2023 (Rs.1.50 per share) - - - - - (1,654,364) (1,654,364)
Bonus shares issued for the year ended December 31, 2023 (Rs. 0.50 per share) 551,455 - - - - (551,455) -

Balance as at June 30, 2024 (un-audited) - restated 11,579,360 4,653,141 (349,992) 900,120 43,689 1,894,086 18,720,404
Profit after taxation for the six month period ended December 31, 2024 - - - - - 2,064,422 2,064,422
Other comprehensive income / (loss) - net of tax -
Movement in surplus on revaluation of investments in debt instruments through FVOCI- net of tax - 1,131,035 - - - 1,131,035
Share of surplus on revaluation of investments of associate - net of tax - - 269 - - - 269
Remeasurement gain on defined benefit obligations - net of tax - - - - - 21,944 21,944
Share of remeasurement gain on defined benefit obligation of associate - net of tax - - - - - 53 53
Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax - - (58,742) - - - (58,742)
Movement in surplus on revaluation of equity investments - net of tax - - 33,354 - - - 33,354

9
Movement in deficit on revaluation of non-banking assets - net of tax - - - - (13,520) - (13,520)
Total other comprehensive income - net of tax - - 1,105,916 - (13,520) 21,997 1,114,393

Transfer to statutory reserve - 412,884 - - - (412,884) -

Transfer from surplus on revaluation of non-banking asset to unappropriated profit - net of tax - - - - (3,557) 3,557 -

Gain on disposal of equity investments at FVOCI transferred to unappropriated profit - net of tax - - (5,958) - - 5,958 -

Balance as at December 31, 2024 (audited) 11,579,360 5,066,025 749,966 900,120 26,612 3,577,136 21,899,219

Impact of adoption of IFRS 9 - net of tax (note 4.1.1) - - 67,193 - - - 67,193

Balance as at January 1, 2025 after adoption of IFRS 9 11,579,360 5,066,025 817,159 900,120 26,612 3,577,136 21,966,412

Profit after taxation for the six month period ended June 30, 2025 - - - - - 3,365,366 3,365,366
Other comprehensive income / (loss) - net of tax
Movement in surplus on revaluation of investments in debt instruments through FVOCI - net of tax - - 598,551 - - - 598,551
Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax - - (718,355) - - - (718,355)
Share of surplus on revaluation of investment of associate - net of tax - - 1,339 - - - 1,339
Movement in surplus on revaluation of equity investments - net of tax - - 19,479 - - - 19,479
Total other comprehensive loss - net of tax - - (98,986) - - - (98,986)

Transfer to statutory reserve - 673,073 - - - (673,073) -

Transfer from surplus on revaluation of non-banking asset to unappropriated profit - net of tax - - - - (2,708) 2,708 -

Gain on disposal of equity investments at FVOCI of associate transferred to unappropriated profit - net of tax - - (3,791) - - 3,791 -

Transactions with owners, recorded directly in equity

Final cash dividend for the year ended December 31, 2024 (Rs.1.70 per share) - - - - - (1,968,682) (1,968,682)

Balance as at June 30, 2025 (un-audited) 11,579,360 5,739,098 714,382 900,120 23,904 4,307,246 23,264,110

The annexed notes 1 to 41 form an integral part of these condensed interim financial statements.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER
 CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
January 1 to January 1 to
June 30, 2025 June 30, 2024
Note - Rupees in '000 -
(Restated)
CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 7,194,438 3,481,214
Less: Dividend income - 213
7,194,438 3,481,001
Adjustments:
Net mark-up / return / interest income (10,046,097) (7,895,351)
Depreciation - Property and equipment 29 413,728 373,414
Depreciation - Non-banking assets acquired in satisfaction of claims 29 22,356 20,742
Depreciation - Right-of-use assets 29 377,190 354,497
Amortization 29 42,888 39,937
(Reversal of) / credit loss allowance and write os - net 31 (618,472) 108,051
Unrealised loss on investments measured at FVPL 26 - 768
Gain on disposal of property and equipment - net 28 (5,330) (8,101)
(Gain)/loss on early culmination of lease 28 (3,904) 3,492
Finance charges on leased assets 24 200,751 212,286
Net loss/(gain) on derecognition of financial assets 27 (9,610) 2,194
Unwinding of deferred cost on staff loans 74,270 72,637
Exchange loss/(gain) on cash and cash equivalents (100,831) 26,382
Share of profit of associate (8,466) (9,143)
(9,661,527) (6,698,195)
(2,467,089) (3,217,194)
(Increase) / decrease in operating assets
Lendings to financial institutions (3,767,461) (15,282,040)
Securities classified as FVPL 5,402 150,041
Advances 31,936,269 9,852,338
Other assets (excluding mark-up receivable) (395,895) 5,113,498
27,778,315 (166,163)
(Decrease) / increase in operating liabilities
Bills payable (19,678,013) (2,382,510)
Borrowings from financial institutions (25,259,637) (23,227,172)
Deposits 104,368,445 29,118,676
Other liabilities (excluding current taxation and mark-up payable) (81,018) 946,598
59,349,777 4,455,592
Mark-up / interest received 26,497,613 34,783,966
Mark-up / interest paid (19,641,987) (21,406,401)
Income tax paid (2,285,498) (962,853)
Net cash flow from operating activities 89,231,131 13,486,947

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in amortised cost (2,441,879) (355,523)
Net investments in securities classified as FVOCI (66,548,984) (3,187,043)
Dividends received - 213
Investments in property and equipment (304,794) (307,909)
Investments in intangible assets (31,858) (20,117)
Disposal of property and equipment 6,095 12,182
Net cash flow used in investing activities (69,321,420) (3,858,197)

CASH FLOW FROM FINANCING ACTIVITIES

Payments of lease obligations against right-of-use assets (504,176) (470,548)
Dividend paid (1,950,361) (1,639,363)
Net cash flow used in financing activities (2,454,537) (2,109,911)

Eects of credit loss allowance changes on cash and cash equivalents (118) (518)
Eects of exchange rate changes on cash and cash equivalents 100,831 (26,382)
Increase in cash and cash equivalents 17,555,887 7,491,939
Cash and cash equivalents at beginning of the period 27,245,369 27,855,805
Cash and cash equivalents at end of the period 44,801,256 35,347,744

The annexed notes 1 to 41 form an integral part of these condensed interim financial statements.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER

10
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
1 STATUS AND NATURE OF BUSINESS

The Bank of Khyber (the Bank) was established in Pakistan under The Bank of Khyber Act, 1991 and is principally engaged
in the business of commercial banking and related services. The Bank acquired the status of a scheduled bank in 1994
and is listed on the Pakistan Stock Exchange Limited. The registered office of the Bank is situated at 24-The Mall,
Peshawar Can, Peshawar. The Bank operates 246 branches including 167 Islamic banking branches (December 31,
2024: 246 branches including 131 Islamic banking branches). Pursuant to the State Bank of Pakistan's (SBP) approval
dated December 31, 2024, the Bank has converted 36 of its conventional banking branches into Islamic banking branches
during the period. The long term credit rating of the Bank assigned by VIS Credit Rating Company Limited and Pakistan
Credit Rating Agency Limited (PACRA) are 'A A-' and 'A+' respectively and the short-term credit ratings assigned are 'A-1'
(A-One) and 'A1' (A-One) respectively. The majority shares (i.e. 70.20%) of the Bank are held by Government of Khyber
Pakhtunkhwa (GoKP).

The Provincial Assembly of Khyber Pakhtunkhwa has passed the Bank of Khyber (Amendment) Act, 2022. As part of the
amendments, the name of Bank has been changed from “The Bank of Khyber” to “Bank of Khyber”. The Bank is in the
process of seeking necessary regulatory approval for the same.

2 BASIS OF PREPARATION

2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic
modes, the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-
related modes of financing include purchase of goods by the banks from their customers and immediate resale to them
at appropriate profit in price on deferred payment basis. The purchases and sales arising under the respective
arrangements (except for Murabaha financings accounted for under Islamic Financial Accounting Standard - 1
"Murabaha”)are not reflected in these condensed interim financial statements as such, but are restricted to the amount
of facility actually utilized and the appropriate portion of profit thereon.

2.2 The Islamic banking branches of the Bank have complied with the requirements as set out in the Islamic Financial
Accounting Standards (IFAS), issued by the Institute of Chartered Accountants of Pakistan (lCAP) as are notified under
the provisions of Companies Act, 2017.

2.3 The financial results of the Islamic Banking Branches have been included in these condensed interim financial
statements for reporting purposes, after eliminating the effects of inter-branch transactions and balances. Key financial
figures of the Islamic Banking Branches are disclosed in note 38 to these condensed interim financial statements.

2.4 These condensed interim financial statements have been prepared under the historical cost convention except that
certain class of property and equipment and non-banking assets acquired in satisfaction of claims are stated at revalued
amounts; certain investments classified at fair value through profit or loss and fair value through other comprehensive
income are stated at fair value; sta loans are measured at fair value at initial recognition; and the recognition of certain
employees benefits, lease liabilities and corresponding right of use assets at present value, as disclosed in their
respective notes.

2.5 The Bank believes that there is no significant doubt on the Bank's ability to continue as a going concern. Therefore,
these condensed interim financial statements have been prepared on a going concern basis.

2.6 These condensed interim financial statements have been presented in Pakistani Rupee, which is the Bank's functional
and presentation currency. The figures have been rounded o to the nearest thousand rupees, unless otherwise stated.

11
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
3

3.1 These condensed interim financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable
in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (IAS) 34, 'Interim Financial Reporting', and International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) as are notified under the Companies
Act, 2017;

- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as
are notified under the Companies Act, 2017;

- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and

- Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).

Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives
issued by the SBP and the SECP differ with the requirements of IAS 34 or IFAS, the requirements of the Banking
Companies Ordinance, 1962, the Companies Act, 2017 and the said directives, shall prevail.

3.2 The disclosures made in these condensed interim financial statements have been limited based on the format
prescribed by the SBP vide BPRD Circular Leer No. 2 dated February 9, 2023 and IAS 34. These condensed interim
financial statements do not include all the information and disclosures required in the audited annual financial
statements, and should be read in conjunction with the audited annual financial statements for the year ended
December 31, 2024.

3.3 SBP vide BSD Circular Leer No. 10, dated August 26, 2002, has deferred the applicability of International Accounting
Standard (IAS) 40, Investment Property for banking companies till further instructions. Moreover, SBP vide BPRD Circular
No. 4, dated February 25, 2015, has deferred the applicability of Islamic Financial Accounting Standards (IFAS) 3, Profit
and Loss Sharing on Deposits. Further, according to the notification of the SECP issued vide SRO 411(I)/2008 dated April
28, 2008, International Financial Reporting Standard (IFRS) 7, 'Financial Instruments: Disclosures' has not been made
applicable for banks. Accordingly, the requirements of these standards have not been considered in the preparation of
these condensed interim financial statements.

3.4 Standards, interpretations of and amendments to published accounting and reporting standards that are effective
in the current period

There are certain new and amended standards, issued by International Accounting Standards Board (IASB),
interpretations and amendments that are mandatory for the Bank's accounting periods beginning on or after January 1,
2025 but are considered not to be relevant or do not have any material effect on the Bank's financial statements and
therefore are not detailed in these condensed interim financial statements. The impact of IFRS 9 for the current period is
disclosed in note 4.1.1 to these condensed interim financial statements. Further, the comparative period has been
restated to incorporate the impact of adoption of IFRS 9 as disclosed in note 4.1 to these condensed interim financial
statements.

12
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

3.5 Standards, interpretations of and amendments to published accounting and reporting standards that are not yet
effective

There are certain new and amended standards, issued by International Accounting Standards Board (IASB),
interpretations and amendments that are mandatory for the Bank's accounting periods beginning on or after January 1,
2026 but are considered not to be relevant or will not have any material effect on the Bank's financial statements except
for:

- IFRS 18 'Presentation and Disclosure in Financial Statements' (published in April 2024) with applicability date of
January 1, 2027 by IASB. IFRS 18 is yet to be adopted in Pakistan. IFRS 18 when adopted and applicable shall impact
the presentation of 'Statement of Profit and Loss Account' with certain additional disclosures in the condensed
interim financial statements.

- amendments to IFRS 9 'Financial Instruments' which clarify the date of recognition and derecognition of a financial
asset or financial liability including selement of liabilities through banking instruments and channels including
electronic transfers. The amendment when applied may impact the timing of recognition and derecognition of
financial liabilities.

- amendment to IAS 21 'The Effects of Changes in Foreign Exchange Rates' which will require Banks to apply a
consistent approach in assessing whether a currency can be exchanged into another currency and, when it
cannot, in determining the exchange rate to use and the disclosures to provide.

4 MATERIAL ACCOUNTING POLICY INFORMATION

The material accounting policies applied in the preparation of these condensed interim financial statements are
consistent with those applied in the preparation of the annual audited financial statements of the Bank for the year
ended December 31, 2024. Impacts of adoption of IFRS 9 for comparative and current period are disclosed in note 4.1
below.

4.1 IFRS 9 - 'Financial Instruments'

The Bank had adopted IFRS 9 eective from January 1, 2024 with modified retrospective approach for restatement
permied under IFRS 9. The cumulative impact of initial application amounting to Rs. 1,219.76 million net of tax was
recorded as an adjustment to equity at the beginning of the previous accounting period.

The Bank, in compliance with extended timelines prescribed in SBP's BPRD Circular Leer No. 16 dated July 29, 2024 and
BPRD Circular Leer No. 1 dated January 22, 2025 had incorporated IFRS 9 related impacts of fair valuation of subsidised
sta loans in the last quarter of 2024. Therefore, the condensed interim statement of profit and loss account (un-
audited) for the half year ended June 30, 2024 have been restated to incorporate these impacts. Had the restatement
not been incorporated the profit after tax and total comprehensive income for the half year ended June 30, 2024 would
have been lower by Rs. 18.34 million. The details are tabulated below:

Financial statement line items Rupees in '000 Description

Mark-up/ return/ interest earned 110,791

Operating expenses (72,637) Impact of fair valuation of subsidised sta loans
Net loss on derecognition of financial
assets measured at amortised cost (2,194)
35,960
Taxation (17,620) Tax impact of restatement
Net impact on profit after tax 18,340

Rupee
Net impact on Earnings Per Share (EPS) 0.016 EPS impact of restatement

13
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

4.1.1 During the current period, in accordance with BPRD Circular No. 03 of 2022 dated July 5, 2022 and BPRD Circular Leer No. 16
dated July 29, 2024, the Bank has applied IFRS 9 'Financial Instruments' and measured unquoted equity securities at their fair
value. The cumulative impact of application in current period amounting to Rs. 67.19 million net of tax has been recorded as an
adjustment to equity at the beginning of the current period.

4.1.2 The SBP has directed the Banks through its BPRD Circular Leer No. 1 dated January 22, 2025 to continue the existing revenue
recognition methodology for Islamic Operations, including the requirements of IFAS 1 and IFAS 2 until further instructions. Had
IFRS 9 been adopted in its entirety for revenue recognition from Islamic operations, the profit after tax of the Bank would have
been higher by Rs. 34.65 million.

4.1.3 The SBP in a separate instruction SBPHOK-BPRD-RPD-BOK-827068 dated January 22, 2025 has allowed extension for
application of Eective Interest Rate method upto December 31, 2025.

4.2 Critical accounting estimates and judgements

The basis for accounting estimates adopted in the preparation of these condensed interim financial statements are the same
as that applied in the preparation of the financial statements for the year ended December 31, 2024, except for maers related
to IFRS 9 which have been disclosed in note 4.1 to these condensed interim financial statements.

4.3 Financial risk management

The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the annual
audited financial statements for the year ended December 31, 2024.

(Un-audited) (Audited)
June 30, December 31,
2025 2024
5 CASH AND BALANCES WITH TREASURY BANKS Rupees in '000

In hand
Local currency 8,057,008 5,968,029
Foreign currencies 154,560 186,814
8,211,568 6,154,843
With State Bank of Pakistan in
Local currency current accounts 16,043,196 15,258,838
Foreign currency current accounts 112,371 25,943
Foreign currency deposit accounts 278,991 257,275
16,434,558 15,542,056
With National Bank of Pakistan in
Local currency current accounts 4,338,744 1,294,874
Local currency deposit accounts 67,779 995,058
Foreign currency current accounts 1,244 4,436
4,407,767 2,294,368

Prize bonds 857 1,854

Less: Credit loss allowance held against cash and

balances with treasury banks (12) (26)

Cash and balances with treasury banks - net of credit loss allowance 29,054,738 23,993,095

14
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

(Un-audited) (Audited)
June 30, December 31,
Note 2025 2024
6 BALANCES WITH OTHER BANKS Rupees in '000

In Pakistan
In current accounts 5,411,177 900,776
In deposit accounts 305,165 551,919
5,716,342 1,452,695
Outside Pakistan
In current accounts 773,148 705,614
In deposit accounts 9,267,487 1,104,292
10,040,635 1,809,906

with other banks (10,459) (10,327)

Balances with other banks - net of credit loss allowance 15,746,518 3,252,274

7 LENDINGS TO FINANCIAL INSTITUTIONS

Placements with financial institutions 4,006,405 238,944

Less: Credit loss allowance held against lendings to
financial institutions 7.1 (94,458) (105,370)

Lendings to financial institutions - net of credit loss allowance 3,911,947 133,574

(Un-audited) (Audited)
June 30, 2025 December 31, 2024
7.1
Credit loss Credit
of credit loss allowance
Lending allowance Lending loss allowance
Note
held held

Rupees in '000
Domestic
Performing Stage 1 3,775,000 122 - -
Under performing Stage 2 - - - -
Non-performing Stage 3
Substandard - - - -
Doubtful - - - -
Loss 7.2 231,405 94,336 238,944 105,370
231,405 94,336 238,944 105,370
Total 4,006,405 94,458 238,944 105,370

Overseas - - - -
Total - - - -

7.2 As of June 30, 2025, the Bank has availed forced sales value benefit amounting to Rs. 137.07 million (December 31, 2024: Rs.
133.57 million), that is equivalent to the market value of the Pakistan Investment Bonds received by the Bank as part of the
selement agreement against a non performing lending of the Bank. The resulting increase in the unappropriated profit (net of
tax) amounting to Rs. 64.43 million (December 31, 2024: Rs. 61.44 million) is not available for the distribution of cash or stock
dividend to shareholders or bonus to employees.

15
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited)
8 INVESTMENTS June 30, 2025
Cost /
Credit loss Surplus / Carrying
8.1 Investments by type: amortised
allowance (deficit) value
cost
Rupees in '000

Fair value through profit or loss (FVPL)

Non-Government Debt Securities 1,064,720 - (13,809) 1,050,911

Fair value through other comprehensive

income (FVOCI)
Federal Government Securities 322,142,045 - 324,571,421
Shares 677,081 - (282,574) 394,507
Non-Government Debt Securities 5,174,514 (149,900) (111,937) 4,912,677
327,993,640 (149,900) 2,034,865 329,878,605
Amortised cost (AC)
Federal Government Securities 20,659,452 - - 20,659,452

Associate 113,606 - - 113,606

Total investments 349,831,418 (149,900) 2,021,056 351,702,574

(Audited)
December 31, 2024
Cost /
Credit loss Surplus / Carrying
amortised
allowance (deficit) value
cost
-Rupees in '000 -

Fair value through profit or loss (FVPL)

Federal Government Securities 5,367 - (5) 5,362
Non-Government Debt Securities 1,064,760 - (13,809) 1,050,951
1,070,127 - (13,814) 1,056,313

Fair value through other comprehensive

income (FVOCI)
Federal Government Securities 255,339,267 - 2,659,286 257,998,553
Shares 677,081 - (463,139) 213,942
Non-Government Debt Securities 5,428,308 (158,189) (92,254) 5,177,865
261,444,656 (158,189) 2,103,893 263,390,360
Amortised cost (AC)
Federal Government Securities 18,217,573 - - 18,217,573

Associate 102,351 - - 102,351

Total investments 280,834,707 (158,189) 2,090,079 282,766,597

(Un-audited) (Audited)
June 30, December 31,
2025 2024
8.2 Investments given as collateral Note - Rupees in '000

Market Treasury Bills 4,728,155 3,692,167

Pakistan Investment Bonds 90,915,480 109,498,432
Ijara Sukuks - 4,057,905
8.2.1 95,643,635 117,248,504

8.2.1 The market value of securities given as collateral is Rs 95,652.02 million (December 31, 2024: Rs 117,262.46 million)

16
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

(Un-audited) (Audited)
June 30, December 31,
2025 2024
8.3 Credit loss allowance for diminution in value of investments Rupees in '000

Opening balance 158,189 799,132

Impact of adoption of IFRS 9 - (633,983)
Balance after adoption of IFRS 9 158,189 165,149

Charge / (reversals)
Charge for the period / year - -
Reversal for the period / year (26) (6,960)
Reversal on disposals / repayment during the period / year (8,263) -
(8,289) (6,960)

Closing balance 149,900 158,189

8.4 Particulars of credit loss allowance against debt securities

(Un-audited) (Audited)
Category of classification December 31, 2024
Credit loss Credit loss
Outstanding Outstanding
allowance allowance
amount amount
held held
Domestic - - Rupees in '000 - -
Performing Stage 1 4,762,786 9 5,019,711 35
Underperforming Stage 2 - - - -
Non-performing Stage 3
Substandard - - - -
Doubtful - - - -
Loss 149,891 149,891 158,154 158,154
149,891 149,891 158,154 158,154
Total 4,912,677 149,900 5,177,865 158,189

Overseas - - - -
Total - - - -

17
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

8.5 Summarised financial information of associate

Number of Percentage of Country of Cost

8.5.1 Investment in associate - unlisted Period / year ended
shares holding incorporation Rupees in '000

Taurus Securities Limited June 30, 2025 (Un-audited) 4,050,374 30% Pakistan 40,504
Taurus Securities Limited December 31, 2024 (Audited) 4,050,374 30% Pakistan 40,504

Total
Profit after

18
Assets Liabilities Equity Revenue comprehensive
taxation
income

8.5.2 Summary of financial information of associate - Rupees in '000 -

Based on financial statements:

- October 1, 2024 to June 30, 2025 1,184,158 805,473 378,685 230,859 28,219 37,516

- October 1, 2023 to September 30, 2024 1,109,700 768,533 341,170 230,721 37,273 40,470

8.5.3 Reporting date of associate (i.e. Taurus Securities Limited) is December 31. Further, results of its operations including share of profit and other comprehensive income for the three
months period October 1, 2024 to December 31, 2024 has been extracted by subtracting nine months period January 1, 2024 to September 30, 2024 figures from the annual audited
financial statements for the year ended December 31, 2024 and then adding that to six months period figures from January 1, 2025 to June 30, 2025 based on its un-audited interim
financial statements.

8.6 The market value of securities classified as amortised cost as at June 30, 2025 amounted to Rs. 20,726.16 million (December 31, 2024: Rs. 18,157.60 million).
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

9 ADVANCES Performing Non performing Total

(Un-audited) (Audited) (Un-audited) (Audited) (Un-audited) (Audited)
Note June 30, December 31, June 30, December 31, June 30, December 31,
2025 2024 2025 2024 2025 2024
Rupees in '000

Loans, cash credits, running finances, etc. 85,602,556 128,245,818 8,861,496 9,756,779 94,464,052 138,002,597
Islamic financing and related assets 31,501,613 19,920,768 2,079,834 2,002,824 33,581,447 21,923,592
Bills discounted and purchased 99,595 155,174 1,541,365 1,541,365 1,640,960 1,696,539
117,203,764 148,321,760 12,482,695 13,300,968 129,686,459 161,622,728
Impact of fair valuation and modification of advances (1,921,484) (1,999,125) - - (1,921,484) (1,999,125)
Advances - gross 115,282,280 146,322,635 12,482,695 13,300,968 127,764,975 159,623,603

Credit loss allowance against advances 9.3

- Stage 1 720,702 731,140 - - 720,702 731,140

19
- Stage 2 540,318 584,619 - - 540,318 584,619
- Stage 3 - - 10,874,834 11,425,873 10,874,834 11,425,873
1,261,020 1,315,759 10,874,834 11,425,873 12,135,854 12,741,632
Advances - net of credit loss allowance 114,021,260 145,006,876 1,607,861 1,875,095 115,629,121 146,881,971

(Un-audited) (Audited)
June 30, December 31,
2025 2024
9.1 Particulars of advances (gross) Rupees in '000 - -

In local currency 127,764,975 159,623,603

In foreign currencies - -
127,764,975 159,623,603
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

9.2 Advances include Rs. 12,482.69 million (December 31, 2024: Rs. 13,300.97 million) which have been placed under non-performing / stage 3 status as detailed below:

(Un-audited) (Audited)
June 30, 2025 December 31, 2024
Category of classification Non Non
Credit loss Credit loss
performing performing
allowance allowance
loans loans
- Rupees in '000 -
Domestic
Other assets especially mentioned (OAEM) 231,691 139,825 57,738 30,741
Substandard 445,400 308,751 510,351 330,039
Doubtful 332,771 222,931 566,182 372,070
Loss 11,472,833 10,203,327 12,166,697 10,693,023

20
12,482,695 10,874,834 13,300,968 11,425,873

Overseas
Other assets especially mentioned (OAEM) - - - -
Substandard - - - -
Doubtful - - - -
Loss - - - -
- - - -

Total 12,482,695 10,874,834 13,300,968 11,425,873

 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
9.3 Particulars of credit loss allowance against advances

(Un-audited) (Audited)
June 30, 2025 December 31, 2024
Credit loss allowance held

Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total

-- Rupees in '000 - -

Opening balance 731,140 584,619 11,425,873 12,741,632 - 96,130 8,019,353 8,115,483

Impact of adoption of IFRS 9 - - - - 851,989 806,101 3,220,756 4,878,846
Balance after adoption of IFRS 9 731,140 584,619 11,425,873 12,741,632 851,989 902,231 11,240,109 12,994,329

Charge for the period / year 300,914 359,152 221,215 881,281 435,777 250,337 722,758 1,408,872
Reversals for the period / year (311,352) (403,453) (772,254) (1,487,059) (556,626) (567,949) (536,994) (1,661,569)
(10,438) (44,301) (531,039) (605,778) (120,849) (317,612) 185,764 (252,697)
Amounts wrien o - - - - - - - -
Closing balance 720,702 540,318 10,874,834 12,135,854 731,140 584,619 11,425,873 12,741,632

21
(Un-audited) (Audited)
June 30, 2025 December 31, 2024
Credit loss allowance held
9.4 Advances - particulars of credit
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
loss allowance
Rupees in '000 - -

Opening balance 731,140 584,619 11,425,873 12,741,632 - 96,130 8,019,353 8,115,483

Impact of adoption of IFRS 9 - - - - 851,989 806,101 3,220,756 4,878,846

Balance after adoption of IFRS 9 731,140 584,619 11,425,873 12,741,632 851,989 902,231 11,240,109 12,994,329

New advances 256,415 76,283 175,553 508,251 334,097 104,833 144,547 583,477
Advances derecognised or repaid (105,231) (47,542) (493,003) (645,776) (156,308) (106,921) (457,379) (720,608)
Transfer to stage 1 44,499 (39,440) (5,059) - 101,680 (96,239) (5,441) -
Transfer to stage 2 (54,515) 282,869 (228,354) - (71,330) 145,504 (74,174) -
Transfer to stage 3 (5,111) (40,551) 45,662 - (24,057) (154,469) 178,526 -
136,057 231,619 (505,201) (137,525) 184,082 (107,292) (213,921) (137,131)

Changes in risk parameters (146,495) (275,920) (45,838) (468,253) (304,931) (210,320) 399,685 (115,566)
Closing balance 720,702 540,318 10,874,834 12,135,854 731,140 584,619 11,425,873 12,741,632
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
June 30,2025 December 31, 2024

Outstanding Credit loss Outstanding Credit loss

9.4.2 Advances - Category of classification
amount allowance held amount allowance held

- Rupees in '000 -
Domestic
Performing Stage 1 104,150,544 720,702 117,398,894 731,140
Underperforming Stage 2 11,137,736 540,318 28,923,741 584,619
Non-performing Stage 3
Other assets especially mentioned (OAEM) 231,691 139,825 57,738 30,741
Substandard 445,400 308,751 510,351 330,039
Doubtful 332,771 222,931 566,182 372,070
Loss 11,472,833 10,203,327 12,166,697 10,693,023
12,482,695 10,874,834 13,300,968 11,425,873
Total 127,764,975 12,135,854 159,623,603 12,741,632

Overseas - - - -
Total - - - -

9.4.3 State Bank of Pakistan (SBP) through BSD Circular No.1 dated October 21, 2011 has allowed benefit of the forced sales value (FSV) of plant
& machinery under charge, pledged stocks & mortgaged residential, commercial and industrial properties (land and building only), held as
collateral against Non-Performing Loans (NPLs) for a maximum of five years from the date of classification.

The Bank has adopted IFRS 9 with eect from January 1, 2024. In accordance with the SBP's IFRS 9 Application Instructions (together with
BPRD Circular Leer No.16 of 2024 dated July 29, 2024), credit loss allowance / provision against NPLs has been taken at higher of the i)
provision as required under SBP's Prudential Regulations; or ii) credit loss allowance computed in accordance with the requirements of the
Application Instructions. As at June 30, 2025, the Bank has availed cumulative benefit of forced sales value of Rs. 914.99 million (December
31, 2024: Rs. 1,235.09 million). Increase in unappropriated profit amounting to Rs. 430.04 million (December 31, 2024: Rs. 586.14 million) is
not available for the distribution of cash or stock dividend to shareholders or bonus to employees.

(Un-audited) (Audited)
June 30, December 31,
2025 2024
10 PROPERTY AND EQUIPMENT Note Rupees in '000 - -

Capital work-in-progress 10.1 125,344 81,214

Property and equipment 4,058,130 4,211,959
4,183,474 4,293,173

10.1 Capital work-in-progress

Civil works 73,187 2,264

Equipment 40,611 42,711
Furniture and fixtures 11,546 10,132
Advances to suppliers - 26,107
125,344 81,214

22
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

10.2 Additions to property and equipment (Un-audited)

For the six months ended
The following additions have been made to property and equipment June 30, June 30,
during the period: 2025 2024
Rupees in '000 - -

Capital work-in-progress - net additions / (transfers) 44,130 16,388

Property and equipment

Furniture and fixtures 31,441 28,132
Electrical, oice and computer equipment 118,151 92,663
Vehicles 26,701 -
Leasehold improvements 84,371 170,726
260,664 291,521
Total 304,794 307,909

10.3 Disposal of property and equipment

The net book value of property and equipment disposed o

during the period is as follows:

Furniture and fixtures 289 2,473

Electrical, oice and computer equipment 476 545
Leasehold improvements - 1,063
Total 765 4,081

(Un-audited) (Audited)
June 30, December 31,
2025 2024
11 RIGHT-OF-USE ASSETS Rupees in '000 - -

Buildings

At January 1
Cost 4,965,179 4,663,099
Accumulated depreciation (2,905,209) (2,113,858)
Net carrying amount at January 1 2,059,970 2,549,241

Additions during the period / year 179,085 351,947

Terminations during the period / year - at cost (29,243) (49,867)

Accumulated depreciation on termination 17,546 755
(11,697) (49,112)

Depreciation charge for the period / year (377,190) (792,106)

Net carrying amount at the period / year end 1,850,168 2,059,970

12 INTANGIBLE ASSETS

Capital work in progress 46,806 36,884

Licenses and computer softwares 303,527 324,479
350,333 361,363

23
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
For the six months ended
(Un-audited)
June 30, June 30,
Additions to intangible assets 2025 2024
12.1
- - Rupees in '000 - -
The following additions have been made to intangible
assets during the period:

Directly purchased - intangible assets - -

Capital work in progress - net 9,922 4,840
Total 9,922 4,840

12.2 Disposals of intangible assets

No intangible assets were disposed o during the periods ended June 30, 2025 and June 30, 2024.

(Un-audited) (Audited)
June 30, December 31,
13 DEFERRED TAX ASSETS 2025 2024
Rupees in '000 - -
Deductible temporary dierences on
Accelerated accounting depreciation 427,713 340,581
19,308 23,617
Unrealised loss on FVPL investments 7,183 7,183
Credit loss allowance against advances and
o balance sheet obligations 1,705,916 2,038,063
Credit loss allowance against cash and
balances with treasury banks 6 14
Credit loss allowance against balances with other banks 5,439 5,370
Credit loss allowance against lendings to financial institutions 63 -
Credit loss allowance against other assets 23,653 23,884
Islamic pool management reserves 49,864 159,665
2,239,145 2,598,377
Taxable temporary dierences on
Share of profit of associate (38,013) (32,160)
Surplus on revaluation of FVOCI investments - net (1,317,889) (1,353,785)
Surplus on revaluation of non-banking asset (25,894) (28,828)
Deferred cost on staff loans (86,951) (35,663)
Modification of advances (20,907) -
Others 75,585 45,621
(1,414,069) (1,404,815)
Deferred tax assets - net 825,076 1,193,562

24
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

(Un-audited) (Audited)
June 30, December 31,
2025 2024
Note - - Rupees in '000
14 OTHER ASSETS

Income / mark-up accrued in local currency 9,969,530 9,081,809

Advances, deposits, advance rent and other prepayments 341,061 327,764
Non-banking assets acquired in satisfaction of claims 243,181 259,895
Mark to market gain on forward foreign exchange contracts 8,790 6,771
Acceptances 136,579 18,892
Pre-IPO investment 100,000 100,000
Stationary and stamps on hand 189,763 213,914
Employees benefits 113,591 166,498
Clearing and selement accounts 319,809 -
Branch adjustment account 15,436 -
Receivable from the State Bank of Pakistan 364,616 343,085
Deferred cost on sta loans 2,128,903 2,067,708
Others 160,043 176,869
14,091,302 12,763,205
Less: Credit loss allowance held against other assets 14.1 (190,020) (190,357)
Other assets - net of credit loss allowance 13,901,282 12,572,848
Surplus on revaluation of non-banking assets acquired
in satisfaction of claims 21 49,798 55,440
Other assets - total 13,951,080 12,628,288

14.1 Credit loss allowance held against other assets

Income / mark-up accrued in local currency 2,524 2,861

Advance for Pre-IPO investment 100,000 100,000
Others 87,496 87,496
190,020 190,357

14.1.1 Movement in credit loss allowance held against other assets

Opening balance 190,357 222,656

Impact of adoption of IFRS 9 - 3,251
Balance after adoption of IFRS 9 190,357 225,907

Charge for the period / year 1,215 -

Reversal for the period / year (1,552) (35,550)
(337) (35,550)

Closing balance 190,020 190,357

15 BILLS PAYABLE

In Pakistan 2,273,340 21,951,353

Outside Pakistan - -
2,273,340 21,951,353

25
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
16 BORROWINGS June 30, December 31,
2025 2024
Secured Rupees in '000 - -
Borrowings from State Bank of Pakistan (SBP) under:
- Export refinance scheme 2,989,234 3,552,700
- Long term financing facility 2,724,965 3,038,577
- Refinance and credit guarantee scheme for women entrepreneurs 54,122 54,981
- Financing facility for renewable energy 235,263 265,478
- Refinance facility for modernization of Small and Medium Enterprises (SMEs) 93,686 53,976
- Refinance facility for combating COVID-19 305,686 428,627
- SME Asaan Scheme (SAAF) 447,081 799,615
- Financing facility for storage of agriculture produce 78,462 89,384
- Repurchase agreement borrowings 90,915,480 91,064,600
- Acceptance mudarbah - 4,057,905
97,843,979 103,405,843

Repurchase agreement borrowings 4,728,155 22,125,999

Total secured 102,572,134 125,531,842

Unsecured
Call borrowings 5,700,000 6,000,000
Bai Muajjal borrowings - 1,999,929
Total 108,272,134 133,531,771

17 DEPOSITS AND OTHER ACCOUNTS

(Un-audited) (Audited)
June 30, 2025 December 31, 2024
In local In foreign In local In foreign
Total Total
currency currencies currency currencies
-- Rupees in '000
Customers
Current deposits 69,330,995 782,037 70,113,032 53,734,250 595,131 54,329,381
Saving deposits 183,858,098 243,015 184,101,113 134,403,110 326,537 134,729,647
Term deposits 106,151,488 707,593 106,859,081 68,749,355 729,110 69,478,465
Others 18,885,844 - 18,885,844 17,183,317 - 17,183,317
378,226,425 1,732,645 379,959,070 274,070,032 1,650,778 275,720,810
Financial Institutions
Current deposits 757,800 31,322 789,122 539,360 31,230 570,590
Saving deposits 1,262,242 - 1,262,242 1,350,589 - 1,350,589
2,020,042 31,322 2,051,364 1,889,949 31,230 1,921,179
380,246,467 1,763,967 382,010,434 275,959,981 1,682,008 277,641,989

(Un-audited) (Audited)
June 30, December 31,
2025 2024
18 LEASE LIABILITIES Rupees in '000 - -

Outstanding amount at the start of the period / year 2,147,700 2,407,066

Additions during the period / year 179,085 351,947

Lease payments including interest during the period / year (504,176) (1,012,610)
Interest expense 200,751 446,916
Terminations / modifications during the period / year (15,601) (45,619)
(139,941) (259,366)
Outstanding amount at the end of the period / year 2,007,759 2,147,700

26
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

(Un-audited) (Audited)
June 30, December 31,
2025 2024
Rupees in '000 - -
18.1 Liabilities outstanding

Not later than one year 706,440 666,438

Later than one year and up to five years 1,301,319 1,481,262

Total at the period / year end 2,007,759 2,147,700

18.2 The Bank mainly has lease contracts for real estate that are used in its operations including branches and other oices. Leases generally
have lease terms between 1.5 years to 5 years. The Bank's obligations correspond to the lessor's title to the leased assets. Generally, the
Bank is restricted from assigning and subleasing the lease assets. As a practical expedient, management does not separate lease and
non-lease components, wherever applicable. The additions to lease obligations during the period have been discounted at rates ranging
between 11.09% to 12.24% (December 31, 2024: 13.47% to 22.09%) per annum; being the relevant incremental borrowing rate of the
Bank.

(Un-audited) (Audited)
June 30, December 31,
Note 2025 2024
Rupees in '000 - -
19 OTHER LIABILITIES

Mark-up / return / interest payable in local currency 13,917,349 16,002,810

Mark-up / return / interest payable in foreign currencies 9,260 23,053
Unearned commission and income on bills discounted 160,533 154,067
Accrued expenses and supplier payables 1,338,736 1,339,154
Current taxation (provisions less payments) 2,591,309 1,450,667
Acceptances 136,579 18,892
Unclaimed dividends 94,623 76,302
Mark to market loss on forward foreign exchange contracts 750 9,786
Deferred income on government schemes 1,329 1,487
Deferred income on Islamic financing 331,434 239,724
Islamic pool management reserves 95,892 307,049
Share subscription money refund 1,091 1,091
Retention money 26,595 22,889
Bills payment system over the counter (BPS-OTC) 650 14,107
Charity fund balance 47,474 40,298
Branch adjustment account - 4,114
Security deposits against ijarah 40,446 45,483
Clearing and selement accounts - 106,470
Levies and other taxes payable 35,195 34,219
Credit loss allowance against o-balance sheet obligations 19.1 50,824 44,098
Others 497,183 456,075
19,377,252 20,391,835

19.1 Credit loss allowance against o-balance sheet obligations

Opening balance 44,098 -

Impact of adoption of IFRS 9 - 40,892
Balance after adoption of IFRS 9 44,098 40,892

Charge for the period / year 20,428

Reversal for the period / year (17,222)
3,206
Closing balance 50,824 44,098

27
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

20 SHARE CAPITAL

20.1 Authorized capital

(Un-audited) (Audited) (Un-audited) (Audited)

June 30, December 31, June 30, December 31,
2025 2024 2025 2024
Number of shares - Rupees in '000 -

1,500,000,000 1,500,000,000 Ordinary shares of Rs. 10 each 15,000,000 15,000,000

20.2 Issued, subscribed and paid up

(Un-audited) (Audited) (Un-audited) (Audited)

June 30, December 31, June 30, December 31,
2025 2024 2025 2024
Number of shares - Rupees in '000 -
Ordinary shares of Rs. 10 each
722,698,448 722,698,448 7,226,984 7,226,984

Issued as fully paid bonus shares:

435,237,541 380,092,081 Opening balance 4,352,376 3,800,921
- 55,145,460 Issued during the period / year (Note 20.3) - 551,455
435,237,541 435,237,541 Closing balance 4,352,376 4,352,376
1,157,935,989 1,157,935,989 11,579,360 11,579,360

20.3 In the year 2024, 55,145,460 shares were issued as fully paid bonus shares in respect of the year ended December 31, 2023.

20.4 The Bank has only one class of shares and at reporting date, the Government of Khyber Pakhtunkhwa and Ismail Industries Limited
held 812,893,803 (December 31, 2024: 812,893,803) and 282,852,969 (December 31, 2024: 282,852,969) ordinary shares
respectively. Moreover, the Bank has no reserved shares under options.

(Un-audited) (Audited)
June 30, December 31,
21 SURPLUS ON REVALUATION OF ASSETS 2025 2024
Rupees in '000 - -
Surplus / (deficit) on revaluation of:
- Securities measured at FVOCI - Debt 2,317,439 2,567,032
- Securities measured at FVOCI - Equity (282,574) (463,139)
- Property and equipment 900,120 900,120
- Non-banking assets acquired in satisfaction of claims 49,798 55,440
- Investment of associate (5,404) (295)
2,979,379 3,059,158

Deferred tax on (deficit)/ surplus on revaluation of:

- Securities measured at FVOCI - Debt (1,205,068) (1,334,857)
- Securities measured at FVOCI - Equity (112,821) (18,928)
- Non-banking assets acquired in satisfaction of claims (25,894) (28,828)
- Investment of associate 2,810 153
(1,340,973) (1,382,460)

1,638,406 1,676,698

28
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
June 30, December 31,
2025 2024
Note Rupees in '000 - -
22 CONTINGENCIES AND COMMITMENTS

Guarantees 22.1 43,488,857 39,768,236

Commitments 22.2 31,823,660 13,262,517
75,312,517 53,030,753

22.1 Guarantees:

Financial guarantees 300,000 300,000

Performance guarantees 43,182,775 39,462,154
Other guarantees 6,082 6,082
43,488,857 39,768,236

22.2 Commitments:

Documentary credits and short-term trade-related transactions

- Leers of credit 13,999,998 9,990,326

Commitments in respect of:

- Forward foreign exchange contracts 22.2.1 17,641,485 2,869,232

Commitments for acquisition of:

- Property and equipment 93,795 326,857
- Intangible assets 88,382 76,102

Other commitments - -
31,823,660 13,262,517

22.2.1 Commitments in respect of forward foreign exchange contracts

Purchase 4,575,940 1,102,151

Sale 13,065,445 1,767,081
17,641,485 2,869,232

Commitments for outstanding forward foreign exchange contracts are disclosed in these condensed interim financial statements at
contracted rates.

22.3 Other contingent liabilities

22.3.1 There are certain claims which have not been acknowledged as debts. These mainly represent counter claims by the borrowers,
claims filed by the former employees of the Bank and certain other claims. Based on legal advice and/or internal assessments
management is optimistic that the maers will be decided in the Bank's favour and the possibility of any adverse outcome is remote.
Accordingly, no provision has been made in these condensed interim financial statements for the same.

22.3.2 The Bank is contesting a case filed by an employee in the Peshawar High Court regarding changes in post retirement benefit plans
made by the Bank w.e.f. January 1, 2019. The management based on a legal opinion is of the view that such changes were lawfully
made as per Bank's policy and is optimistic about the favourable outcome of the case. Hence, no provision in this respect is
recognised in these condensed interim financial statements. Considering the complexity and uncertainty in nature, the financial
impact cannot be reasonably ascertained.

29
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

22.3.3 The maers arising from income tax assessments of the Bank up to Tax Year 2024 are detailed below:

i) In respect of Tax Year 2014, the Commissioner Inland Revenue, Appeals (CIRA), issued an order dated November 24, 2021 under
section 129 of the Income Tax Ordinance, 2001 in which he remanded back certain maers to Commissioner Inland Revenue (CIR) for
reassessment and also upheld few maers. Being aggrieved, the Bank filed an appeal with Appellate Tribunal Inland Revenue (ATIR)
on February 23, 2022, which is currently pending.

The remand back proceedings were also completed by CIR, and order was issued, creating a total demand of Rs. 231 million
(December 31, 2024: Rs. 231 million) in respect of remand back proceedings and for maer upheld by CIRA and mainly included
disallowances on account of provision for doubtful debt, depreciation and workers welfare fund. The Bank filed correction application
with CIR as well as appeal with CIRA, on May 18, 2022 which is currently pending.

ii) In respect of Tax Year 2015, Deputy Commissioner Inland Revenue issued an order dated February 23, 2023 creating an additional tax
demand along with default surcharge of Rs. 645 million (December 31, 2024: Rs. 645 million) under section 161 of Income Tax
Ordinance, 2001, mainly on account of non-deduction of withholding taxes on profit on debt, salaries and wages, advertisement and
professional charges etc. Being aggrieved, the Bank filed an appeal before CIRA on March 22, 2023 which is currently pending.

iii) In respect of Tax Year 2016, Additional Commissioner Inland Revenue issued an order dated June 21, 2022 creating a demand of Rs.
188 million (December 31, 2024: Rs. 188 million) on account of provision for non-performing loans and advances. Being aggrieved the
Bank filed an appeal with CIRA on July 22, 2022 which is currently pending.

iv) In respect of Tax Year 2017, Additional Commissioner Inland Revenue issued an order dated May 29, 2023 creating a demand of Rs.
130 million (December 31, 2024: Rs. 130 million) on account of provision for non-performing loans and advances. Being aggrieved the
Bank filed an appeal with CIRA on July 4, 2023 which is currently pending.

v) In respect of Tax Year 2019, Assistant Commissioner Inland Revenue issued an order dated November 30, 2023 creating a demand of
Rs. 962 million (December 31, 2024: Rs. 962 million) along with default surcharge amounting to Rs 567 million (December 31, 2024: Rs
567 million) under section 161 of Income Tax Ordinance, 2001, mainly on account of non-deduction of withholding taxes. Being
aggrieved, the Bank filed an appeal against the order on January 1, 2024. During the period, Appellate Tribunal Inland Revenue (ATIR)
issued an order dated March 7, 2025, remanding the maer back to the assessing oicer for a fresh decision after the examination of
records.

Pursuant to Tax Law (Amendment) Act, 2024, appeal cases pending before Commissioner (Appeals) have now been transferred to
Appellate Tribunal Inland Revenue, as per the pecuniary limits prescribed under section 126(A) of the Income Tax Ordinance, 2001.

22.3.4 The Bank's share of contingencies of it's associated company i.e. Taurus Securities Limited amounts to Rs. 8.62 million (December 31,
2024: Rs. 8.62 million)

Management is confident of a favourable outcome of the above maers. Hence, no provision has been recognised for the same in
these condensed interim financial statements.

30
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
23 MARK-UP / RETURN / INTEREST EARNED Note - Rupees in '000 -

(Restated)

Loans and advances 7,089,255 9,642,671

Investments (other than Sukuks bonds) 13,305,414 17,960,449
Lendings to financial institutions 327,820 493,131
Balances with banks 108,122 102,997
Sukuk bonds 6,758,219 5,679,815
27,588,830 33,879,063

23.1 Interest income recognized on:

Financial assets measured at amortized cost 8,601,506 12,056,579

Financial assets measured at FVOCI 18,837,307 21,588,789
Financial assets measured at FVPL 150,017 233,695
27,588,830 33,879,063

24 MARK-UP / RETURN / INTEREST EXPENSED (Not restated)

Deposits 12,620,495 23,408,279

Borrowings 4,922,238 2,575,433
Lease liability 200,751 212,286
17,743,484 26,195,998

25 FEE AND COMMISSION INCOME

Branch banking customer fees 14,278 14,451

Consumer finance related fees 475 258
Card related fees (Debit cards) 262,654 215,682
Commission on trade 82,573 69,670
Commission on guarantees 118,068 112,144
Commission on remiances including home remiances 34,683 38,370
Rebate from financial institutions 30,644 21,793
Others 7,439 10,924
550,814 483,292

26 GAIN ON SECURITIES

Realised gain 26.1 1,496,573 -

Unrealised (loss) - measured at FVPL - (768)
1,496,573 (768)

26.1 Realised gain on:

Federal government securities 1,496,573 -

27 NET GAIN/ (LOSS) ON DERECOGNITION OF FINANCIAL ASSETS

MEASURED AT AMORTISED COST (Restated)
Gain on derecognition of financial assets measured at amortised cost 29,736 -
Loss on derecognition of financial assets measured at amortised cost (20,126) (2,194)
9,610 (2,194)

28 OTHER INCOME (Not restated)

Rent on property 1,676 2,225
Gain on sale of property and equipment - net 5,330 8,101
Postal, swift and other services 61,283 58,636
Gain/ (loss) on early culmination of lease 3,904 (3,492)
Service income on Government schemes 320 242
72,513 65,712

31
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
29 OPERATING EXPENSES Rupees in '000

(Restated)

Total compensation expense 2,584,182 2,284,445

Property expense

Rent and taxes 7,340 6,525

Utilities cost 245,277 215,456
Security (including guards) 187,578 170,228
Repair and maintenance (including janitorial charges) 14,034 11,049
Depreciation - Right of use assets 377,190 354,497
Depreciation - Non banking assets acquired in satisfaction of claims 22,356 20,742
Depreciation - Property and equipment 198,741 179,248
1,052,516 957,745
Information technology expenses

Software maintenance 327,724 237,685

Hardware maintenance 52,712 56,275
Depreciation - Property and equipment 166,339 147,550
Amortization 42,888 39,937
Network charges 8,833 7,598
Connectivity charges 158,774 126,901
ATM charges 135,101 138,324
892,371 754,270
Other operating expenses

Directors' fees and allowances 24,602 35,337

Fees and allowances to Shariah Board 7,652 6,695
Legal and professional charges 27,805 27,814
Outsourced service cost 209,264 174,330
Travelling and conveyance 50,096 44,919
NIFT clearing charges 16,243 13,435
Depreciation - Property and equipment 48,648 46,616
Training and development 8,691 13,449
Postage and courier charges 40,681 2,506
Communication 118,847 148,690
Stationery and printing 73,262 70,023
Marketing, advertisement and publicity 125,106 76,271
Auditors' remuneration 12,300 8,346
Entertainment 34,698 29,330
Newspapers and periodicals 1,346 1,221
Brokerage and commission 19,863 16,102
Rent and taxes 1,270 977
Cash carriage charges 71,700 58,888
Repair and maintenance 68,140 54,546
Utilities cost 5,692 40,458
Insurance 48,039 32,948
Fees and subscriptions 4,595 5,607
Deposit protection premium 79,934 64,692
Others 61,815 16,560
1,160,289 989,760
5,689,358 4,986,220

30 OTHER CHARGES (Not restated)

Penalties imposed by State Bank of Pakistan 160 306

32
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
31 (REVERSAL OF)/ CREDIT LOSS ALLOWANCE Note - Rupees in '000 -
AND WRITE OFFS - NET

Credit loss allowance held against cash and

and balances with treasury banks and balances with other banks 5&6 118 14
(Reversal of)/credit loss allowance against lendings
to financial institutions 7 (10,912) 678
Reversal of credit loss allowance for diminution in
value of investments 8.3 (8,289) (67)
(Reversal of)/credit loss allowance against advances 9.3 (605,778) 129,200
Reversal of credit loss allowance against other assets 14.1.1 (337) (269)
Credit loss allowance/ (reversal) against
o balance sheet obligations 19.1 6,726 (21,505)

(618,472) 108,051

32 TAXATION (Restated)

Current 3,426,140 1,949,079

Deferred 402,932 (18,564)
3,829,072 1,930,515

33 BASIC AND DILUTED EARNINGS PER SHARE

Profit for the period 3,365,366 1,550,699

(Number of shares)

Weighted average number of ordinary shares 1,157,935,989 1,157,935,989

- (Rupees)

(Restated)
Basic and diluted earnings per share 2.91 1.34

33.1 There were no dilutive potential ordinary shares outstanding as at June 30, 2025 and June 30, 2024.

34 FAIR VALUE MEASUREMENTS

The fair value of quoted securities other than those classified under amortised cost, is based on quoted market price. Quoted securities
classified under amortised cost are carried at cost. The fair value of unquoted equity securities, other than investments in associates, is
determined on the basis of valuation methodologies. The fair value of unquoted debt securities, fixed term loans, other assets, other
liabilities, fixed term deposits and borrowings cannot be calculated with sufficient reliability due to the absence of current and active market
for these assets and liabilities and reliable data regarding market rates for similar instruments.

In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly dierent from their
carrying values since assets and liabilities are either short-term in nature or in the case of customer loans and deposits, are frequently re-
priced.

34.1 Fair value of financial assets

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
measurements:

Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Fair value measurements using inputs that are not based on observable market data (i.e. unobservable inputs).

33
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy in to which the fair value
measurement is categorized:
(Un-audited)
June 30, 2025
Carrying Fair value
value Level 1 Level 2 Level 3 Total
On balance sheet financial instruments - Rupees in '000 -

Financial assets - measured at fair value

Investments
Federal Government Securities 324,571,421 87,160,481 237,410,940 - 324,571,421
Shares 394,507 165,220 229,287 - 394,507
Non-Government Debt Securities 5,963,588 - 5,963,588 - 5,963,588

Financial assets - disclosed but not measured at fair value

Investments
Federal Government Securities 20,659,452 - 20,726,167 - 20,726,167

O-balance sheet financial instruments - measured at fair value

Forward exchange contracts purchase 4,575,940 - 750 - 750
Forward exchange contracts sale 13,065,545 - 8,790 - 8,790

(Audited)
December 31, 2024
Carrying Fair value
value Level 1 Level 2 Level 3 Total
On balance sheet financial instruments - Rupees in '000 -

Financial assets measured at fair value

Investments
Federal Government Securities 258,003,915 42,986,600 215,017,315 - 258,003,915
Shares 213,942 124,640 89,302 - 213,942
Non-Government Debt Securities 6,228,816 - 6,228,816 - 6,228,816

Financial assets - disclosed but not measured at fair value

Investments
Federal Government Securities 18,217,573 - 18,157,598 - 18,157,598

O-balance sheet financial instruments - measured at fair value

Forward exchange contracts purchase 1,102,151 - 9,786 - 9,786
Forward exchange contracts sale 1,767,081 - 6,771 - 6,771

34.2 The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Bank's
policy is to recognize transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer
occurred. There were no transfers between level 1 and 2 during the period.

Leasehold land is carried at revalued amount as determined by professional valuers, based on their assessment of market value, and has been classified under level-
3, as the eect of changes in the unobservable inputs used in the valuation cannot be determined with certainty.

34.2.1 Fair value of financial assets

(a) Financial instruments in level 1

Financial instruments included in level 1 comprise of investments in listed ordinary shares, listed GoP Sukuks and listed non-government debt securities.

(b) Financial instruments in level 2

Financial instruments included in level 2 comprise of unquoted equity securities, Sukuks bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance
Certificates and forward exchange contracts.

c) Financial instruments in level 3

Currently, no financial instruments are classified in level 3.

34
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

34.2.2 Fair value of non - financial assets

Certain categories of property and equipment (leasehold land) of Rs. 1,016.28 million (December 31, 2024: Rs. 1,016.28 million) and non banking assets acquired in
satisfaction of claims of Rs. 292.98 million (December 31, 2024: Rs. 315.33 million) are carried at revalued amounts (level 3 measurements) determined by
professional valuers based on their assessment of the market values. The valuations are conducted by the valuation experts appointed by Bank which are also on
panel of State Bank of Pakistan.

34.2.3 Valuation techniques and inputs used in determination of fair values within level 1

Fully paid-up listed ordinary shares, listed GOP ijarah, Fair values of investments in listed equity securities and listed GOP Ijarah Sukuks are valued on
and listed non-government debt securities the basis of closing quoted market prices available at the Pakistan Stock Exchange.

34.2.4 Valuation techniques and inputs used in determination of fair values within level 2

Pakistan Investment Bonds / Market Treasury Bills Fair values of Pakistan Investment Bonds and Treasury Bills are derived using the PKRV rates
for fixed rate securities and PKFRV rates for floating rate PIB's (Reuters page).

Un-listed GOP ijarah Sukuks Fair values of unlisted GoP Ijarah Sukuks are derived using the PKISRV rates announced by the
Financial Market Association (FMA) through Reuters. These rates denote an average of quotes
received from eight different pre-defined / approved dealers / brokers.

Term Finance, Bonds and Sukuk certificates Investments in debt securities (comprising term finance certificates, bonds, Sukuk
certificates and any other security issued by a company or a body corporate for the purpose of
raising funds in the form of redeemable capital) are valued on the basis of the rates
announced by the Mutual Funds Association of Pakistan (MUFAP) in accordance with the
methodology prescribed by the Securities and Exchange Commission of Pakistan. In the
determination of the rates, the MUFAP takes into account the holding paern of these
securities and categorizes these as traded, thinly traded and non-traded securities. However,
fair values of investments in unquoted debt securities are valued on the basis of present value
technique based on market interest rates.

Unquoted equity securities Fair value of investments in unquoted equity securities are valued on the basis of income and
market approach.

Valuation techniques and inputs used in determination of fair values within level 3

Property & equipment (Leasehold land) and non-banking These assets are revalued on regular basis using professional valuers on the panel of Pakistan
assets acquired in satisfaction of claims Banker's Association. The valuation is based on their assessment of market value of the
properties. The valuation experts used a market based approach to arrive at the fair value of
the Bank's properties. The market approach used prices and other relevant information
generated by market transactions involving identical, comparable or similar properties. These
values are adjusted to reflect the current condition of the properties. The effect of changes in
the unobservable inputs used in the valuations cannot be determined with certainty
accordingly a qualitative disclosure of sensitivity has not been presented in these financial
statements.

35
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

35 SEGMENT INFORMATION

35.1 Segment details with respect to business activities

For the six months ended June 30, 2025 (Un-audited)

Corporate Trading and Retail Commercial
Total
Finance Sales Banking Banking
Rupees in 000

Profit and loss

Net mark-up / return / profit (3,230,520) 15,268,962 (2,166,746) (26,350) 9,845,346

Inter segment revenue - net 4,785,654 (8,585,557) 2,780,731 1,019,172 -
Non mark-up / return / interest income 31,380 1,933,601 291,522 163,635 2,420,138
Total income 1,586,514 8,617,006 905,507 1,156,457 12,265,484
Segment direct expenses (3,094,285) (109,307) (1,524,964) (960,962) (5,689,518)
Inter segment expense allocation 2,358,380 (3,887,699) 1,104,944 424,375 -
Total expenses (735,905) (3,997,006) (420,020) (536,587) (5,689,518)
Reversal of credit loss allowance - 17,434 76,518 524,520 618,472
Profit before tax 850,609 4,637,434 562,005 1,144,390 7,194,438

As at June 30, 2025 (Un-audited)

Corporate Trading and Commercial
Retail Banking Total
Finance Sales Banking
Rupees in 000

Balance sheet

Cash and bank balances 6,182,754 25,255,298 1,660,135 11,703,069 44,801,256

Investments 20,659,452 330,929,516 - 113,606 351,702,574
Net inter segment lending 141,058,794 (253,955,545) 83,465,225 29,431,526 -
Lendings to financial institutions - 3,911,947 - - 3,911,947
Advances - performing 61,313,150 - 21,741,851 30,966,259 114,021,260
Advances - non performing - - 257,467 1,350,394 1,607,861
Others 4,237,311 9,642,951 3,306,892 3,972,977 21,160,131
Total assets 233,451,461 115,784,167 110,431,570 77,537,831 537,205,029

Borrowings 6,928,499 95,643,635 - 5,700,000 108,272,134

Deposits and other accounts 211,834,891 - 104,399,073 65,776,470 382,010,434
Net inter segment borrowing (141,058,794) 253,955,545 (83,465,225) (29,431,526) -
Others 10,686,932 4,128,644 4,864,697 3,978,078 23,658,351
Total liabilities 88,391,528 353,727,824 25,798,545 46,023,022 513,940,919
Equity 145,059,933 (237,943,657) 84,633,025 31,514,809 23,264,110
Total equity and liabilities 233,451,461 115,784,167 110,431,570 77,537,831 537,205,029

Contingencies and commitments 13,504,001 17,770,931 15,908,940 28,128,645 75,312,517

36
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

For the six months ended June 30, 2024 (Un-audited) - restated
Corporate Trading and Retail Commercial
Total
Finance Sales Banking Banking
Rupees in 000
Profit and loss

Net mark-up / return / profit (6,869,815) 19,510,754 (4,167,507) (790,367) 7,683,065

Inter segment revenue - net 8,157,366 (15,644,719) 4,690,476 2,796,877 -
Non mark-up / return / interest income 5,414 433,012 214,975 239,325 892,726
Total Income 1,292,965 4,299,047 737,944 2,245,835 8,575,791
Segment direct expenses and allocation (2,552,720) (98,529) (1,052,573) (1,282,704) (4,986,526)
Inter segment expense allocation 1,800,953 (2,401,065) 623,509 (23,397) -
Total expenses (751,767) (2,499,594) (429,064) (1,306,101) (4,986,526)
Credit loss allowance - (610) (44,122) (63,319) (108,051)
Profit / (loss) before tax 541,198 1,798,843 264,758 876,415 3,481,214

As at December 31, 2024 (Audited)

Corporate Trading and Retail Commercial
Total
Finance Sales Banking Banking
Rupees in 000

Balance sheet

Cash and bank balances 2,200,814 16,168,609 519,373 8,356,573 27,245,369

Investments 18,217,573 264,446,673 - 102,351 282,766,597
Net inter segment lending 142,908,088 (156,635,911) 76,975,885 (63,248,062) -
Lendings to financial institutions - 133,574 - - 133,574
Advances - performing 17,796,165 - 8,469,009 118,741,702 145,006,876
Advances - non performing - - 204,541 1,670,554 1,875,095
Others 2,180,730 7,727,299 2,672,354 7,955,973 20,536,356
Total assets 183,303,370 131,840,244 88,841,162 73,579,091 477,563,867

Borrowings 12,341,243 113,190,599 - 7,999,929 133,531,771

Deposits and other accounts 148,960,714 - 78,144,607 50,536,668 277,641,989
Net inter segment borrowing (142,908,088) 156,635,911 (76,975,885) 63,248,062 -
Others 20,149,043 5,421,253 10,152,461 8,768,131 44,490,888
Total liabilities 38,542,912 275,247,763 11,321,183 130,552,790 455,664,648
Equity 144,760,458 (143,407,519) 77,519,979 (56,973,699) 21,899,219
Total equity and liabilities 183,303,370 131,840,244 88,841,162 73,579,091 477,563,867

35.2 Contingencies and commitments 13,565,317 3,118,387 13,703,012 22,644,037 53,030,753

Geographical segment

Segment details with respect to geographical locations are not presented in these condensed interim financial statements as geographically
the Bank conducts all its operations in Pakistan only.

37
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

36 RELATED PARTY TRANSACTIONS

The Bank has related party relationship with its majority shareholders (Government of Khyber Pakhtunkhwa and Ismail Industries Limited), associate, directors, key
management personnel, sta retirement benefit plan and other related parties.

The Bank enters into transactions with related parties in the ordinary course of business and on substantially the same terms as for comparable transactions with person
of similar standing. Contributions to and accruals in respect of staff retirement benefits and other benefit plans are made in accordance with the actuarial valuations /
terms of the contribution plan. Remuneration to the executives are determined in accordance with terms of their appointments. Further, the Bank acts as a custodian for
securities held in Investor Portfolio Securities (IPS) account maintained on behalf of Government of Khyber Pakhtunkhwa having face value of Rs. 105,149.63 million
(December 31, 2024: Rs. 108,659.20 million).

Details of transactions with related parties during the period, other than those which have been disclosed elsewhere in these condensed interim financial statements are
as follows:
(Un-audited) (Audited)
As at June 30, 2025 As at December 31, 2024
Key Key
Employee Employee
Directors management Associate Directors management Associate
funds funds
personnel personnel
- Rupees in '000 -
Advances
Opening balance - 181,425 - - - 179,490 - -
Addition during the period / year - 38,131 - - - 49,690 - -
Repaid during the period / year - 20,672 - - - 26,209 - -
Transfer (out) / in - net - (36,143) - - - (21,546) - -
Closing balance - 162,741 - - - 181,425 - -

Credit loss allowance - 44 - - - 50 - -

Deposits and other accounts

Opening balance 148 8,423 95,829 3,016,225 13,956 6,467 44,580 3,301,627
Received during the period / year 12,195 80,232 225,756 2,206,603 18,408 161,951 249,512 4,830,897
Withdrawn during the period / year 9,211 82,024 287,392 1,797,875 16,723 159,755 198,263 5,116,299
Transfer (out) / in - net - (248) - - (15,493) (240) - -
Closing balance 3,132 6,383 34,193 3,424,953 148 8,423 95,829 3,016,225

Other liabilities
Interest / mark-up payable 17 29 849 59,153 28 1,024 6,747 256,848

(Un-audited) (Un-audited)
For the six months ended June 30, 2025 For the six months ended June 30, 2024
Key Key
Employee Employee
Directors management Associate Directors management Associate
funds funds
personnel personnel
- Rupees in '000 -
Income
Mark-up / return / interest earned - 2,017 - - - 1,888 - -
Expense
Mark-up / return / interest expensed 73 1,188 9,320 289,343 162 743 7,232 357,159

Operating expenses - Compensation 53,496 147,641 - - 37,589 110,909 - -

36.1 As of June 30, 2025, the Bank has an equity investment having cost of Rs. 112.50 million (December 31, 2024: Rs. 112.50 million) and carrying value of Rs. 229.28 million
(December 31, 2024: Rs. 89.29 million) in Dawood Family Takaful Limited, a related party.

36.2 Government of Khyber Pakhtunkhwa (GoKP) holds 70.20% shareholding in the Bank and therefore, entities which are owned and / or controlled by the GoKP, or where the
GoKP may exercise significant influence, are also related parties of the Bank. The Bank in the ordinary course of its business enters into transaction with various
departments of the GoKP and its related entities. Such transactions include advances to, deposits from and provision for other banking services to Government related
entities.

Transactions and balances with Government and its related entities, other than those disclosed in the respective notes to these condensed interim financial statements,
as at period end includes loans and advances and deposits amounting to Rs. 61,313.15 million (December 31, 2024: Rs. 17,796.16 million) and Rs. 211,834.89 million
(December 31, 2024: Rs. 148,960.71 million), respectively. During the period, the Bank has paid cash dividend amounting to Rs. 1,381.92 million (December 31, 2024: Rs.
1,161.28 million) to GoKP.

Detailed related party disclosure for being government entity is disclosed as required under IAS-24 "Related Party Disclosures". Relevant details are referred in the
following notes:

Particulars Note

Investments 8.1
Shareholding 20.4

36.3 During the period, the Bank has paid cash dividend amounting to Rs. 480.85 million (December 31, 2024: Rs. 404.08 million) to Ismail Industries Limited, a related party.

38
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
June 30, December 31,
2025 2024
37 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS -- Rupees in '000

Minimum Capital Requirement (MCR):

Paid-up capital (net of losses) 11,579,360 11,579,360

Capital Adequacy Ratio (CAR):

Eligible common equity tier 1 (CET 1) capital 21,277,595 19,861,157
Eligible additional tier 1 (ADT 1) capital - -
Total eligible tier 1 capital 21,277,595 19,861,157
Eligible tier 2 capital 2,442,729 2,714,195
Total eligible capital (Tier 1 + Tier 2) 23,720,324 22,575,352

Risk weighted assets (RWAs):

Credit risk 67,086,441 85,128,759
Market risk 18,071,982 14,947,185
Operational risk 26,704,795 26,704,795
Total 111,863,218 126,780,739

Common equity tier 1 capital adequacy ratio 19.02% 15.67%

Tier 1 capital adequacy ratio 19.02% 15.67%
Total capital adequacy ratio 21.20% 17.81%

National minimum capital requirements prescribed by SBP

CET1 minimum ratio 6.00% 6.00%
ADT-1 minimum ratio 1.50% 1.50%
Tier 1 minimum ratio 7.50% 7.50%
Total capital minimum ratio 10.00% 10.00%
Capital conservation buer (CCB- consisting of CET1 only) 1.50% 1.50%
Total capital plus CCB 11.50% 11.50%

Leverage Ratio (LR):

Eligible tier 1 capital 21,277,595 19,861,157
Total exposures 583,752,487 553,214,970
Leverage ratio 3.64% 3.59%

Liquidity Coverage Ratio (LCR):

Total high quality liquid assets 253,844,630 210,120,866
Total net cash outflow 107,683,550 100,596,138
Liquidity coverage ratio 235.73% 208.88%

Net Stable Funding Ratio (NSFR):

Total available stable funding 269,029,998 204,889,233
Total required stable funding 136,930,285 138,223,557
Net stable funding ratio 196.47% 148.23%

37.1 The SBP in its application instructions for IFRS 9 has permied the banks to adopt a transitional approach to phase in the
initial impact of ECL for stage 1 and 2 financial assets over a period of five years. However, the Bank has opted to disclose the
figures of “fully loaded” CAR.

39
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

ISLAMIC BANKING BUSINESS

38 The Bank is operating 167 (December 31, 2024: 131) Islamic banking branches and 77 (December 31, 2024: Nil) Islamic
banking windows as at June 30, 2025. As detailed in note 1, the Bank has converted 36 of its conventional banking
branches into Islamic banking branches during the period.

(Un-audited) (Audited)
June 30, December 31,
2025 2024
STATEMENT OF FINANCIAL POSITION Note Rupees in '000

ASSETS
Cash and balances with treasury banks 16,663,248 9,578,634
Balances with other banks 10,533,318 469,552
Due from financial institutions 38.1 3,774,878 -
Investments 38.2 131,932,173 87,035,748
Islamic financing and related assets - net 38.3 30,688,736 19,381,209
Property and equipment 934,261 729,247
Right-of-use assets 891,868 679,308
Intangible assets - -
Due from head oice 2,898,151 -
Other assets 4,727,961 3,458,220
Total Assets 203,044,594 121,331,918

LIABILITIES
Bills payable 1,254,962 3,493,761
Due to financial institutions 1,145,627 10,022,769
Deposits and other accounts 38.4 182,412,656 90,129,385
Due to head oice - 339,861
Lease liabilities 973,451 647,456
Sub-ordinated debt - -
Other liabilities 9,021,469 6,578,534
Total Liabilities 194,808,165 111,211,766

NET ASSETS 8,236,429 10,120,152

REPRESENTED BY
Islamic banking fund 1,000,000 1,000,000
Reserves 5,791 113,438
Surplus on revaluation of assets 1,089,704 1,770,518
Unappropriated profit 38.8 6,140,934 7,236,196
8,236,429 10,120,152

CONTINGENCIES AND COMMITMENTS 38.5

40
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

The profit and loss account of the Bank's Islamic banking branches including windows for the six months ended June
30, 2025 is as follows:

(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
PROFIT AND LOSS ACCOUNT Note Rupees in '000

(Restated)

Profit / return earned 38.6 8,256,964 9,254,994

Profit / return expensed 38.7 3,298,805 4,316,822
Net profit / return 4,958,159 4,938,172
Other income
Fee and commission income 216,083 185,156
Dividend income - 213
Foreign exchange income 107,955 122,268
Income / (loss) from derivatives - -
Gain on securities 75,528 -
Net loss on derecognition of financial assets
measured at amortized cost (5,160) (352)
Other income 36,425 29,954
Total other income 430,831 337,239

Total income 5,388,990 5,275,411

Other expenses
Operating expenses 2,807,414 2,306,978
Workers Welfare Fund - -
Other charges 40 100
Total other expenses 2,807,454 2,307,078
Profit before credit loss allowance 2,581,536 2,968,333
Credit loss allowance / (reversal) and write os - net 258,583 (60,973)
Profit before taxation 2,322,953 3,029,306
Taxation 1,231,165 1,537,230
Profit after taxation 1,091,788 1,492,076

41
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
June 30, 2025 December 31, 2024
In local In foreign In local In foreign
Total Total
currency currencies currency currencies
38.1 Due from financial institutions Rupees in '000

Unsecured
Placement with other banks 3,775,000 - 3,775,000 - - -

Less: credit loss allowance

Stage 1 (122) - (122) - - -
Stage 2 - - - - - -
Stage 3 - - - - - -

Due from financial institutions - net of

credit loss allowance 3,774,878 - 3,774,878 - - -

(Un-audited)
June 30, 2025

Cost /
Credit loss Surplus / Carrying
38.2 Investments by segments Amortised
allowance (Deficit) value
cost
- Rupees in '000 -
Debt Instruments

Classified / measured at amortised cost

Federal Government securities
- GoP ijarah sukuks 8,244,922 - - 8,244,922

Classified / measured at fair value through

other comprehensive income (FVOCI)
Federal Government securities
- GoP ijarah sukuks 119,952,580 - 1,083,754 121,036,334
Non - government debt securities 2,645,000 (33) 5,950 2,650,917
122,597,580 (33) 1,089,704 123,687,251

Classified / measured at fair value through

profit or loss (FVPL) - - - -

Total investments 130,842,502 (33) 1,089,704 131,932,173

(Audited)
December 31, 2024

Cost /
Credit loss Surplus / Carrying
Amortised
allowance (Deficit) value
cost

- Rupees in '000 -
Debt Instruments

Classified / measured at amortised cost

Federal Government securities
- GoP ijarah sukuks 5,024,765 - - 5,024,765

Classified / measured at fair value through

other comprehensive income (FVOCI)
Federal Government securities
- GoP ijarah sukuks 77,335,498 - 1,737,901 79,073,399
Non - government debt securities 2,905,000 (33) 32,617 2,937,584
80,240,498 (33) 1,770,518 82,010,983

Classified / measured at fair value through

profit or loss (FVPL) - - - -

Total investments 85,265,263 (33) 1,770,518 87,035,748

42
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited) (Audited)
June 30, December 31,
2025 2024
Rupees in '000
38.3 Islamic financing and related assets

Ijarah 102,460 118,959

Murabaha 2,713,558 2,154,176
Diminishing musharaka 8,068,466 7,781,849
Running musharaka 15,641,918 6,100,000
Istisna 6,843,970 5,768,519
Tijarah 200,000 -
Qarz e Hasna 11,075 89

Gross Islamic financing and related assets 33,581,447 21,923,592

Impact of fair valuation of Islamic financing and related assets (594,198) (495,531)
32,987,249 21,428,061

Less: Credit loss allowance against Islamic financing

- Stage 1 315,538 168,696
- Stage 2 167,043 184,050
- Stage 3 1,815,932 1,694,106
2,298,513 2,046,852
Islamic financing and related assets - net of credit loss allowance 30,688,736 19,381,209

38.4 Deposits

Customers
Current deposits 43,637,581 24,186,803
Savings deposits 119,796,062 55,440,319
Term deposits 7,248,738 7,032,252
Others 9,810,257 3,307,949
180,492,638 89,967,323
Financial Institutions
Current Deposits 748,389 12,335
Savings deposits 1,171,629 149,727
1,920,018 162,062
182,412,656 90,129,385

38.5 Contingencies and commitments

Guarantees 11,608,081 9,248,623

Commitments 14,439,091 2,669,203
26,047,172 11,917,826

(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
38.6 Profit / return earned on financing, investments and placements - Rupees in '000 -

(Restated)
Profit earned on:
Financing 1,417,249 3,419,212
Investments 6,731,897 5,619,975
Placements 91,892 210,070
Balances with banks 15,926 5,737
8,256,964 9,254,994

43
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
(Un-audited)
For the six months ended
June 30, June 30,
2025 2024
38.7 Profit on deposits and other dues expensed - Rupees in '000 -

Deposits and other accounts 3,073,787 4,093,363

Due to financial institutions 142,372 154,076
Finance charge on lease liability 82,646 69,383
3,298,805 4,316,822

(Un-audited) (Audited)
June 30, December 31,
2025 2024
38.8 Islamic banking business unappropriated profit - Rupees in '000 -

Opening balance 7,236,196 7,457,308

Impact of adoption of IFRS 9 - (610,932)
Balance after adoption of IFRS 9 7,236,196 6,846,376

Add: Islamic banking profit before taxation for the period / year 2,322,953 5,472,279
Less: Taxation (1,231,165) (2,955,032)
Less: Transferred to head office (2,187,050) (2,127,427)
Closing balance 6,140,934 7,236,196

38.9 Pool management

Islamic Banking Group of the Bank is operating following pools / sub-pools:

General pool

Special pools

i. Riba Free Special Deposit Pool - 1 xv. RFSD - Daily Product - 4 Pool
ii. Riba Free Special Deposit Pool - 2 xvi. RFSD - Daily Product - 5 Pool
iii. Riba Free Special Deposit Pool - Corporate - 1 xvii. RFSD - Daily Product - 6 Pool
iv. Riba Free Special Deposit Pool - Corporate - 2 xviii. Khyber Islamic Investment Certificates - 1
v. Riba Free Special Deposit Pool - Corporate - 3 xix. Khyber Islamic Investment Certificates - 2
vi. Riba Free Special Deposit Pool - Corporate - 4 xx. Raast Financial Institutions Pool - 1
vii. Riba Free Special Deposit Pool - Corporate - 5 xxi. Raast Financial Institutions Pool - 2
viii. Riba Free Special Deposit Pool - Corporate - 6 xxii. RFSD - Itminan Mahana Certificate - pool
ix. Riba Free Special Deposit Pool - Corporate - 7 xxiii. Riba free special deposit pool - IERS
x. Riba Free Special Deposit Pool - Mutual fund xxiv. Riba free special deposit pool - PER
xi. Riba Free Special Deposit Pool 2 - Mutual fund / FI xxv. Riba free special deposit pool - IRR
xii. RFSD - Daily Product - 1 Pool xxvi. General Pool (FCY)
xiii. RFSD - Daily Product - 2 Pool xxvii. RFSD Special Pool (USD)
xiv. RFSD - Daily Product - 3 Pool

Features of general pool

In this pool all types of deposits are accepted on Mudarabah basis. The Bank converted its pool management and profit and loss distribution
mechanism from Musharakah to Mudarabah with effect from December 1, 2024 and is accepting deposits against all types of assets and income
earned from these assets. Certificates can also be issued for a fixed period.

Deposits received in this Pool are invested in Islamic assets like Murabaha, Ijarah, Diminishing Musharakah, Running Musharakah, Istisna, Islamic
Sukuks and any other Shariah Compliant Investment which are duly approved by the Shariah Advisor. Deposits are accepted through all Islamic
branches of the Bank.

44
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

Features of special pools

In special pools, deposits are accepted on Mudarabah basis by providing extended avenues to the depositors for placement of their funds
aracting high rate of return. Certificates are issued for a fixed period against specific assets allocated to each special pool based on expected
rate of return.
Deposits received in this pool are invested in Islamic assets like Ijarah, Diminishing Musharakah, Running Musharakah, Islamic Sukuks and any
other Shariah Compliant investment which are duly approved by the Shariah Advisor. Deposits are accepted through all Islamic branches of the
Bank.

Deposits in these special pools are accepted with prior approval from the management and are utilized for liquidity management along with some
opportunity of investment.

Key features

- Minimum investment is prescribed by the Bank for each special pool.

- Profit payment on monthly basis.
- Profit calculated on daily average balance for the month.
- Investment as deposit and certificate for 1 month, 3 months and 6 months etc.
- Pre-mature termination is allowed without any adjustment for next two months, if sharing ratios and / or weightages are changed during
disclosure.

Risks of the special pools

All special pools are created as seperate entities which have respective assets and liabilities and income and expense position. In each pool,
depositors bear the risk of all direct losses and expenses of the pool. All indirect expenses of the pools are borne by the Bank as Mudarib. Same
rate of return is paid to all the depositors in same category.

Profit sharing and weightages for distribution of profit

Assignment of weightage for profit distribution to dierent types of profit bearing sources of funds is as follows:
While considering weightages emphasis shall be given to the quantum, type and the period of risk assessed by following factors:

i. Period of investment (number of months, years)

ii. Profit payment option (monthly, quarterly, yearly maturity)
iii. Purpose of deposit (Hajj, Umrah etc.)
iv. Type of customer (pensioners, widows, corporate, individual)

Weightages are declared at least three days before start of each month.
As per policy of the Bank, no gift (Hiba) is given in favour of any particular customer, however, as per SBP guidelines (Circular No. 9 of Nov, 2024),
hiba can be given to saving account depositors or category of customers / investors. However, the Bank has reduced its own share as Mudarabah
Fee. Out of distributable income, an amount of Rs. 2,277.93 million (42.91%) has been charged as Mudarabah fee. The total Hiba amount of Rs.
232.24 million (9.33%) has been distributed during the period.
Brief highlights of profit earned and distributed to depositors and retained by IBG are as under:

(Un-audited) (Un-audited)
June 30, June 30,
2025 2024
Rupees in '000 --

Gross profit earned 6,670,941 9,377,582

Direct expenses (29,504) (43,613)
Distributable share 4,140,283 5,086,531
Profit paid to IAH/PLS depositors 2,501,154 4,247,428

Charging expenses
Net income is distributed as per SBP instruction, therefore, all pools shall bear their respective identified expenses. A list of lines of direct
expenses are maintained duly veed from Shariah Board of the Bank. Indirect expenses are borne by Mudarib and are not part of distribution.

All credit loss allowance / provisions created against non-performing financing and diminution in the value of investment as under IFRS 9,
prudential regulations and other SBP directives have not been passed on to the PLS deposits as expense. However, income reversals due to
classification of assets and losses due to actual write-o of any facility have been considered expenses of the pool.

45
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025
The profit equalization reserves amounting to Rs. 5.79 million (December 31, 2024: Rs. 113.44 million) has been presented in note 19 to these
condensed interim financial statements.

Classification of assets, revenues, expenses, gain and loss on the basis of sources of finance

All earning assets of Islamic banking group are jointly financed by unrestricted investments/PLS deposits account holders and the Bank. Detail of
jointly financed earning assets is:
(Un-audited) (Audited)
June 30, December 31,
2025 2024
Financings Rupees in '000 --

Agri business 799,935 570,577

Chemical and pharmaceuticals 1,558,043 2,463,762
Cement 1,125,946 3,035,956
Textile 7,938,342 7,234,957
Automobile and transportation equipment 506,282 9,987
Ghee/cooking oil 127,670 -
Petro chemical - 2,984
Housing 1,100,155 1,116,992
Manufacturing of match 140,000 140,000
Miscellaneous manufacturing 3,165,241 2,582,761
Personal 1,276,661 883,969
Financial 239,495 -
Construction 300,038 304,798
Tradings 2,501,075 1,119,694
Government 10,000,000 -
Communication 31,500 35,000
Services 723,448 899,939
Auto loans 539,845 294,871
Metal products 271,499 335,840
Commodity finance 500,000 500,000
CNG station / gas 23,487 31,440
Consumer finance 683,441 351,752
Others 29,344 8,313
Impact of fair valuation of Islamic financing and related assets (594,198) (495,531)
32,987,249 21,428,061
Investments
GOP Ijarah Sukuk 8,244,922 5,024,765
Power / electric / gas 123,687,251 82,010,983
131,932,173 87,035,748
164,919,422 108,463,809

Details regarding pools managed by the Bank

Remunerative Profit rate Profit rate Profit sharing ratios Mudarib Profit rate Percentage of Amount of
depositors and return share return Mudarib share Mudarib share
pools announcem earned distributed to transferred transferred
ent period - average Mudarib Rab-ul - Rupees in remunerative through Hiba through Hiba
share maal share '000 deposits (saving Rupees in '000
and fixed) -
average
General Pool
PKR Pool Monthly 12.27% 50% 50% 3,457,350 3.97% 10.52% 166,520.01
USD Pool Monthly 1.61% 85% 15% 2,121 0.45% 45.65% 85.73
Special Pools
Saving & TDRs Monthly 12.70% 49.67% 50.33% 1,318,170 3.77% 7.10% 63,759.44

Bank SBP
IERS Pool Monthly 10.90% 72.12% 27.88% 79,793 Nil 20.84% 1,873.42

46
 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2025

39 NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on August 26, 2025 has declared an interim cash dividend of Rs 1.5 per share for the half year ended
June 30, 2025 (June 30, 2024: Nil). These condensed interim financial statements do not include the effect of this appropriation which will be
accounted for subsequent to the period end.

40 CORRESPONDING FIGURES

Comparative information has been restated in these condensed interim financial statements, wherever necessary to facilitate comparison.
Further, the eects of restatement due to adoption of IFRS 9 are mentioned in note 4.1 to these condensed interim financial statements.

41 DATE OF AUTHORIZATION FOR ISSUE

These condensed interim financial statements were authorized for issue in the Board of Directors meeting of the Bank held on August 26, 2025.

__________ ______________ ___________ ___________ ___________

MANAGING CHIEF FINANCIAL DIRECTOR DIRECTOR DIRECTOR
DIRECTOR OFFICER

47