Arab Banking Corporation B S CBAHRAIN: ABC

First Quarter Financial Statements

May 12, 2026 at 4:28 PM UTC · MarketScreener

Arab Banking Corporation (B.S.C.)

INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

31 MARCH 2026 (REVIEWED)

Ernst & Young - Middle East

P.O. Box 140

East Tower, 10th Floor

Bahrain World Trade Center Manama, Kingdom of Bahrain

Tel: +973 1753 5455

Fax: +973 1753 5405

manama@bh.ey.com https://www.ey.com

C.R. No. 29977-1

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF ARAB BANKING CORPORATION (B.S.C.)

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Arab Banking Corporation (B.S.C.) [the "Bank"] and its subsidiaries [together the "Group"] as at 31 March 2026, comprising of the interim consolidated statement of financial position as at 31 March 2026, and the related interim consolidated statements of profit or loss, comprehensive income, cash flows and changes in equity for the three-month period then ended, and explanatory notes. The Bank's Board of Directors is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

12 May 2026

Manama, Kingdom of Bahrain

A member firm of Ernst & Young Global Limited

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 March 2026 (Reviewed)

All figures in US$ Million

		Reviewed 31 March	Audited 31 December
	Notes	2026	2025
ASSETS
Liquid funds		3,205	3,127
Trading securities		1,711	1,205
Placements with banks and other financial institutions		2,346	2,240
Securities bought under repurchase agreements		1,077	1,310
Non-trading investments	4	13,694	17,445
Loans and advances	5	21,157	20,661
Other assets		3,738	3,687
Premises and equipment		237	237
TOTAL ASSETS		47,165	49,912
LIABILITIES
Deposits from customers		26,142	26,491
Deposits from banks		4,466	4,065
Certificates of deposit		497	383
Securities sold under repurchase agreements		6,579	9,074
Other liabilities		2,931	3,239
Borrowings		1,434	1,426
Total liabilities		42,049	44,678
EQUITY
Share capital		3,110	3,110
Treasury shares		(6)	(6)
Statutory reserve		624	624
Retained earnings		1,538	1,585
Other reserves		(1,310)	(1,185)
EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF
THE PARENT		3,956	4,128
Additional / perpetual tier-1 capital		590	590
Equity attributable to the shareholders of the parent
and perpetual instrument holders		4,546	4,718
Non-controlling interests		570	516
Total equity		5,116	5,234
TOTAL LIABILITIES AND EQUITY		47,165	49,912

These interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 12 May 2026 and signed on their behalf by the Chairman, Deputy Chairman and the Acting Group Chief Executive Officer.

H.E. Naji Belgasem

Abdulaziz Fahad Alhudaib

Brendon Hopkins

Chairman

Deputy Chairman Acting Group Chief Executive Officer

The attached notes 1 to 14 form part of these interim condensed consolidated financial statements.

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Three-month period ended 31 March 2026 (Reviewed)

All figures in US$ Million

Reviewed

Three months ended 31 March

	Notes	2026	2025
OPERATING INCOME
Interest and similar income		795	741
Interest and similar expense		(554)	(510)
Net interest income		241	231
Other operating income	6	103	97
Total operating income		344	328
OPERATING EXPENSES
Staff		130	124
Premises and equipment		16	14
Other		66	57
Total operating expenses		212	195
NET OPERATING PROFIT BEFORE CREDIT LOSS EXPENSE AND TAXATION		132	133
Credit loss expense	7	(46)	(21)
PROFIT BEFORE TAXATION		86	112
Taxation charge	8	(17)	(21)
PROFIT FOR THE PERIOD		69	91
Attributable to:
Shareholders of the parent		52	76
Non-controlling interests		17	15
		69	91
BASIC AND DILUTED EARNINGS PER
(EXPRESSED IN US$)		0.014	0.022

H.E. Naji Belgasem Chairman

Abdulaziz Fahad Alhudaib Deputy Chairman

Brendon Hopkins

Acting Group Chief Executive Officer

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three-month period ended 31 March 2026 (Reviewed)

All figures in US$ Million

Reviewed
Three months ended
31 March
2026	2025

PROFIT FOR THE PERIOD

Other comprehensive income (loss):

Other comprehensive income (loss) that will be reclassified (or

recycled) to profit or loss in subsequent periods:

Foreign currency translation:

Unrealised gain on exchange translation in

foreign subsidiaries

17		82
(119)		28
(102)		110

69 91

Debt instruments at FVOCI:

Net change in fair value during the period

Other comprehensive income (loss) that will not be reclassified

(or recycled) to profit or loss in subsequent periods:

Net change in fair value of FVOCI equity securities

during the period

- 1

Other comprehensive (loss) income for the period

TOTAL COMPREHENSIVE (LOSS) INCOME FOR THE PERIOD

-		1
(102)		111
(33)		202

Attributable to:

Shareholders of the parent

Non-controlling interests

(73)

154

(33) 202

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

Three-month period ended 31 March 2026 (Reviewed)

All figures in US$ million

Reviewed
Three months ended
31 March
2026	2025

OPERATING ACTIVITIES

Profit for the period

Adjustments for:

Credit loss expense

Depreciation and amortisation

Gain on disposal of non-trading debt investments - net

Changes in operating assets and liabilities:

Trading securities

Placements with banks and other financial institutions

Securities bought under repurchase agreements

Loans and advances

Other assets

Deposits from customers

Deposits from banks

Securities sold under repurchase agreements

Other liabilities

Exchange rate and other non-cash movements

(437)		(125)
(167)		(283)
275		11
(370)		(129)
42		256
(446)		354
345		(298)
(2,512)		(1,498)
(470)		(204)
112		5
(3,501)		(1,790)

69 91

(8)

(9)

Net cash used in operating activities

INVESTING ACTIVITIES

Purchase of non-trading investments

Sale and redemption of non-trading investments

Purchase of premises and equipment

Sale of premises and equipment

Investment in subsidiaries - net

(6,254)

9,803

(56)

(9,311)

9,463

(11)

Net cash from investing activities 3,498 142

FINANCING ACTIVITIES

Issue of certificates of deposit

Repayment of certificates of deposit

Issue of borrowings

Interest paid on additional / perpetual tier-1 capital

Dividend paid to the Bank's shareholders

Dividend paid to non-controlling interests

349	95
(234)	(74)
-	104
(9)	(9)
-	(85)
(10)	(8)

Net cash from financing activities 96 23

Net change in cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at beginning of the period

93 (1,625)

(15) 21

3,127 3,636

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 3,205 2,032

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Three-month period ended 31 March 2026 (Reviewed)

All figures in US$ Million

Equity attributable to the shareholders of the parent

Other reserves

Additional

/ perpetual

tier-1 capital

Non-controlling

interests Total equity

						Foreign exchange	Cumulative	Pension
	Share	Treasury	Statutory	Retained	General	translation	changes in	fund
	capital	shares	reserve	earnings*	reserve	adjustments	fair value	reserve	Total
At 31 December 2025	3,110	(6)	624	1,585	100	(1,326)	79	(38)	4,128 590 516 5,234
Profit for the period	-	-	-	52	-	-	-	-	52	-	17	69
Other comprehensive
(loss) income for the period	-	-	-	-	-	(6)	(119)	-	(125)	-	23	(102)
Total comprehensive
income (loss) for the period -		-	-	52	-	(6)	(119)	-	(73)	-	40	(33)
Dividend** -		-	-	(85)	-	-	-	-	(85)	- (10)		(95)
Interest paid on additional /
perpetual tier-1 capital -		-	-	(9)	-	-	-	-	(9)	- -		(9)
Other equity movements
in subsidiaries -		-	-	(5)	-	-	-	-	(5)	- 24		19

At 31 March 2026 (reviewed) 3,110 (6) 624 1,538 100 (1,332) (40) (38) 3,956 590 570 5,116

* Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 570 million (31 December 2025: US$ 565 million).

** A dividend of US$ 0.0275 per share (2024: US$ 0.0275 per share) for the year 2025 was approved for payment at the Annual General Meeting held on 26 March 2026 and paid on 6 April 2026.

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Three-month period ended 31 March 2026 (Reviewed)

All figures in US$ Million

Equity attributable to the shareholders of the parent

Other reserves

Additional

/ perpetual

tier-1 capital

Non-controlling

interests Total equity

						Foreign exchange	Cumulative	Pension
	Share	Treasury	Statutory	Retained	General	translation	changes in	fund
	capital	shares	reserve	earnings*	reserve	adjustments	fair value	reserve	Total
At 31 December 2024	3,110	(6)	598	1,458	100	(1,437)	28	(34)	3,817 390 436 4,643
Profit for the period	-	-	-	76	-	-	-	-	76	-	15	91
Other comprehensive
income for the period	-	-	-	-	-	49	29	-	78	-	33	111
Total comprehensive income
for the period	-	-	-	76	-	49	29	-	154	-	48	202
Dividend	-	-	-	(85)	-	-	-	-	(85)	-	(8)	(93)
Interest paid on additional /
perpetual tier-1 capital	-	-	-	(9)	-	-	-	-	(9)	-	-	(9)
Other equity movements
in subsidiaries	-	-	-	(1)	-	-	-	-	(1)	-	(1)	(2)
At 31 March 2025 (reviewed)	3,110	(6)	598	1,439	100	(1,388)	57	(34)	3,876	390	475	4,741

* Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 564 million (31 December 2024: US$ 560 million).

** A dividend of US$ 0.0275 per share (2023: US$ 0.0225 per share) for the year 2024 was approved for payment at the Annual General Meeting held on 16 March 2025 and paid during the period.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2026 (Reviewed)

All figures in US$ million

1	INCORPORATION AND ACTIVITIES

Arab Banking Corporation (B.S.C.) [the "Bank"] is incorporated in the Kingdom of Bahrain by an Amiri decree and operates under a wholesale banking licence issued by the Central Bank of Bahrain (the "CBB"). The Bank is a Bahraini Shareholding Company with limited liability and is listed on the Bahrain Bourse. The Central Bank of Libya is the ultimate parent of the Bank and its subsidiaries (together the "Group").

The Bank's registered office is at ABC Tower, Diplomatic Area, P.O. Box 5698, Manama, Kingdom of Bahrain. The Bank is registered under commercial registration number 10299 issued by the Ministry of Industry and Commerce, Kingdom of Bahrain.

The Group is a leading provider of Trade Finance, Treasury, Project & Structured Finance, Syndications, Corporate & Institutional Banking, Islamic Banking services and the digital, mobile-only banking space named "ila Bank" within retail consumer banking services. Retail banking services are only provided in the MENA region.

2	BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES

2.1

Basis of preparation

The interim condensed consolidated financial statements for the three-month period ended 31 March 2026 have

been prepared in accordance with IAS 34 Interim Financial Reporting (IAS 34).

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2025.

2.2

New and amended standards and interpretations adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2025, except for the adoption of new standards or amendments to existing standards that

have become applicable effective from 1 January 2026.

2.3

New standards, interpretations and amendments issued but not yet effective

There are certain new standards, interpretations and amendments that are issued as of 31 March 2026, which were applicable to the Group and not yet effective up to the date of issuance of the Group's interim condensed consolidated financial statements. The management will assess the impact of implementation of these standards prior to their adoption on effective dates. The Group has not early adopted any new and amended standard or

interpretation that has been issued but is not yet effective.

3	SUMMARY OF MATERIAL ACCOUNTING POLICIES

The accounting policies, estimates and assumptions used in the preparation of these interim condensed consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2025 except for adoption of new standards and amendments effective from 1 January 2026.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2026 (Reviewed)

All figures in US$ million

4	NON-TRADING INVESTMENTS

		Audited
		31 December
		2025
Debt securities
At amortised cost	6,084	9,648
At FVOCI	7,661	7,844
	13,745	17,492
ECL allowance	(75)	(75)
Debt securities - net	13,670	17,417

	24	28

24		28
13,694		17,445

Reviewed

31 March

2026

Equity securities

At FVOCI

Following are the stage wise break-up of debt securities as of 31 March 2026 and 31 December 2025:

31 March 2026 (Reviewed)
Stage 1	Stage 2	Stage 3	Total

Debt securities, gross

ECL allowance

13,681 -

(11) -

13,745

(75)

64 (64) 13,670 - - 13,670

31 December 2025 (Audited)
Stage 1	Stage 2	Stage 3	Total

Debt securities, gross

ECL allowance

17,428 -

(11) -

17,492

(75)

(64)

17,417 - - 17,417

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2026 (Reviewed)

All figures in US$ million

5	LOANS AND ADVANCES

31 March 2026 (Reviewed)
Stage 1	Stage 2	Stage 3	Total

Loans and advances, gross

ECL allowances

20,445 617

(96) (60)

21,778

(621)

716 (465) 20,349 557 251 21,157

31 December 2025 (Audited)
Stage 1	Stage 2	Stage 3 Total

Loans and advances, gross

ECL allowances

20,029 568

(89) (81)

21,379

(718)

782

(548)

19,940 487 234 20,661

As at 1 January 2026

Net transfers between stages

Amounts written-off

Charge for the period - net

Exchange adjustments and other movements

89 81

(1) (26)

- -

7 4

1 1

718

(143)

621

Total

As at 1 January 2025

Net transfers between stages

Amounts written-off

Charge for the period - net

Exchange adjustments and other movements

136 68

1 7

- -

2 (6)

- -

617

(5)

An analysis of movement in the ECL allowance during the period ended 31 March 2026 and 31 March 2025 are as follows:

Reviewed	Stage 1	Stage 2	Stage 3 548	Total
			27
			(143)
			32
			1
As at 31 March 2026	96	60	465
Reviewed	Stage 1	Stage 2	Stage 3
			413
			(8)
			(5)
			26
			14
As at 31 March 2025	139	69	440	648

6	OTHER OPERATING INCOME

Reviewed
31 March	31 March
2026	2025

Fee and commission income*

Fee and commission expense

Fee and commission income - net

Bureau processing income

Net gain from trading book (including foreign currencies transaction)

Gain on disposal of non-trading debt investments - net

Merchant acquiring income

Brokerage income - net

Others - net

59	56
(2)	(1)
57	55
9	8
12	8
8	9
10	5
6	5
1	7

103 97

*Included in the fee and commission income is US$ 2 million (31 March 2025: US$ 4 million) of fee income relating to funds under management.

7	CREDIT LOSS EXPENSE

Reviewed
31 March	31 March
2026	2025

Non-trading debt investments

Loans and advances

Credit commitments and contingent items

Other financial assets

Recoveries from written-off loans and advances

1	1
44	26
2	(1)
-	(1)
(1)	(4)

46 21

TAXATION

The tax expense for the period is as follows:

Reviewed
31 March	31 March
2026	2025

Current tax

- Pillar Two taxes in Kingdom of Bahrain

- on foreign operations (excluding Pillar Two tax charge)

(1)

Deferred tax

- on Kingdom of Bahrain operations

- on foreign operations

- -

3 2

17 21

9	OPERATING SEGMENTS

For management purposes, the Group is organised into five operating segments which are based on business units and their activities. The Group has accordingly been structured to place its activities under the distinct divisions which are as follows:

-	MENA subsidiaries cover retail, corporate and treasury activities of subsidiaries in North Africa and Levant;
-	International wholesale banking encompasses corporate and structured finance, trade finance, Islamic banking services and syndications;
-	Group treasury comprises treasury business of Bahrain Head Office, New York and London;
-	ABC Brasil primarily reflects the commercial banking and treasury activities of the Brazilian subsidiary Banco ABC Brasil S.A., focusing on the corporate and middle market segments in Brazil and its related holding company; and

-	Others includes activities of the Head Office, Arab Financial Services Company B.S.C. (c) and ila Bank.

International
MENA	wholesale
subsidiaries	banking

Three-month period ended

31 March 2026 (Reviewed)

Group

treasury

ABC

Brasil

Net interest income

Other operating income

54 44 8 100 35 241

13 23 18 25 24 103

Others Total

Total operating income 67 67 26 125 59 344

Operating expenses

Profit before taxation,

credit loss and unallocated

operating expenses

Credit loss expense

Taxation charge

Unallocated operating expenses

Operating assets

as at 31 March 2026

Operating liabilities

as at 31 March 2026

(38) (38) (10) (57) (32) (175)

(9)

(16)

(20)

(1)

169

(46)

(17)

(37)

Profit for the period						69
	5,492	11,354	16,445	12,877	997	47,165
	4,693	-	24,695	11,428	1,233	42,049

9	OPERATING SEGMENTS (continued)

International
MENA	wholesale
subsidiaries	banking

Three-month period ended

31 March 2025 (Reviewed)

Group

treasury

ABC

Brasil

Net interest income

Other operating income

51	63	8	76	33	231
12	27	18	24	16	97

Others Total

Total operating income 63 90 26 100 49 328

Operating expenses	(37)	(38)	(9)	(46)	(28)	(158)
Profit before taxation,
credit loss and unallocated
operating expenses	26	52	17	54	21	170
Credit loss expense	3	(11)	-	(13)	-	(21)
Taxation charge	(21)
Unallocated operating expenses	(37)

Profit for the period 91

Operating assets
as at 31 December 2025 (Audited)	5,592	11,651	19,857	11,738	1,074	49,912
Operating liabilities
as at 31 December 2025 (Audited)	4,796	-	28,247	10,442	1,193	44,678

10	FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables provide the fair value measurement hierarchy of the Group's financial assets and financial liabilities measured at fair value in these financial statements.

Quantitative disclosure of fair value measurement hierarchy for assets as at 31 March 2026 (Reviewed): Financial assets measured at fair value:

Level 1 Level 2 Level 3 Total

Trading securities

Non-trading investments

Loans and advances

Derivatives held for trading

Derivatives held as hedges

870

7,012

852

651

673

1,765

492

190

1,711

7,685

1,765

1,344

Quantitative disclosure of fair value measurement hierarchy for liabilities as at 31 March 2026 (Reviewed): Financial liabilities measured at fair value:

Level 1 Level 2 Level 3 Total

Derivatives held for trading

Derivatives held as hedges

642

329

971

10	FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Quantitative disclosure of fair value measurement hierarchy for assets as at 31 December 2025 (Audited):

Financial assets measured at fair value:

Level 1 Level 2 Level 3 Total

Trading securities

Non-trading investments

Loans and advances

Derivatives held for trading

Derivatives held as hedges

781

7,211

638

240

661

867

387

184

1,205

7,872

867

1,025

Quantitative disclosure of fair value measurement hierarchy for assets as at 31 December 2025 (Audited): Financial liabilities measured at fair value:

Level 1 Level 2 Level 3 Total

Derivatives held for trading

Derivatives held as hedges

461

249

710

Fair values of financial instruments not carried at fair value

Except for the following, the fair value of financial instruments which are not carried at fair value are not

materially different from their carrying value.

Reviewed Audited

31 March 2026 31 December 2025

Carrying

value

Fair Carrying Fair

value value value

Financial assets

Non-trading debt investments

at amortised cost - gross (level 1 and 2)

6,066

9,648

Financial liabilities

Borrowings - perpetual (level 1)

6,084			9,645
192	215	182	196

For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the end of each reporting period.

Financial instruments in level 1

The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by

the Group is the current bid price. These instruments are included in Level 1.

Financial instruments in level 2

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all

significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

10	FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Financial instruments in level 3

The fair value of financial instruments that are neither traded in an active market nor have observable inputs is determined by valuation techniques. These valuation techniques include an internal model which uses observable market yield curves and expected loss methodology for securities. Quotes provided by fund administrators are used

for funds valuation.

Transfers between level 1, level 2 and level 3

There were no transfers between level 1, level 2 and level 3 during the current and prior period.

11	CREDIT COMMITMENTS AND CONTINGENT ITEMS

a)	Exposure and ECL by Stage

31 March 2026 (Reviewed)
Stage 1	Stage 2	Stage 3	Total

4,163

3,082

3,716

4,255

3,132

3,748

Short-term self-liquidating trade and

transaction-related contingent items

Direct credit substitutes, guarantees

Undrawn loans and other commitments

Credit exposure before applying credit

conversion factor

10,961 117 57 11,135

Credit exposure after applying credit

conversion factor

4,602 89 27 4,718

Risk weighted equivalents 3,781

Short-term self-liquidating trade and

transaction-related contingent items

Direct credit substitutes, guarantees

Undrawn loans and other commitments

Credit exposure before applying credit

conversion factor

ECL allowance 8 9 12 29

31 December 2025 (Audited)
Stage 1	Stage 2	Stage 3	Total

4,474

2,816

3,261

4,566

2,901

3,310

10,551 166 60 10,777

Credit exposure after applying credit

conversion factor

4,366 103 32 4,501

Risk weighted equivalents 3,860

ECL allowance 8 7 12 27

11	CREDIT COMMITMENTS AND CONTINGENT ITEMS (continued)

a)	Exposure and ECL by Stage (continued)

An analysis of movement in the ECL allowance during the period are as follows:

Stage 1 Stage 2 Stage 3 Total

As at 1 January 2026

ECL movements for the period - net

As at 31 March 2026 (reviewed)	8	9	12	29
	Stage 1	Stage 2	Stage 3	Total

As at 1 January 2025

ECL movements for the period - net

As at 31 March 2025 (reviewed) 9 11 13 33

b)	Derivatives
The outstanding notional amounts at the reporting date were as follows:

Reviewed

31 March

2026

Audited

31 December

2025

Interest rate swaps

Currency swaps

Forward foreign exchange contracts

Options

Futures

28,577	28,924
2,344	2,136
19,499	17,655
18,695	16,119
4,110	4,060

73,225 68,894

Risk weighted equivalents (credit and market risk) 2,302 2,434

12	RISK MANAGEMENT

Liquidity risk

The Group is required to comply with the liquidity requirements as stipulated by its regulator, the CBB. These requirements relate to maintaining a minimum of 100% for liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). LCR is calculated as a ratio of its stock of high quality liquid assets (HQLA) and net outflows over the next 30 calendar days. NSFR is calculated as a ratio of 'available stable funding' to 'required stable

funding'. As at 31 March 2026, the Group's LCR and NSFR were at 311.% (31 December 2025: 237%) and 127% (31 December 2025: 127%) respectively.

31 March 2026

31 December 2025

Unweighted Values (i.e. before applying relevant factors)

No specified maturity

Less than 6 months

Over 6 months and less than one

year

Over one

year

Total weighted

value

Over 6 months

No and less

specified Less than than one Over one maturity 6 months year year

Total weighted

value

Available Stable Funding (ASF):
Capital:
Regulatory Capital	4,265	-	-	-	4,265	4,427	-	-	-	4,427
Other Capital Instruments	727	-	-	289	1,016	710	-	-	293	1,003
Retail deposits and deposits from small business customers:
Stable deposits	-	-	-	-	-	-	-	-	-	-
Less stable deposits	-	2,351	597	374	3,027	-	2,178	679	357	2,928
Wholesale funding:
Operational deposits	-	-	-	-	-	-	-	-	-	-
Other wholesale funding	-	22,490	7,400	6,889	14,868	-	27,603	5,270	6,435	14,196
Other liabilities:
NSFR derivative liabilities	-	21	-	-	-	-	29	-	-	-
All other liabilities not included in the above categories	-	739	-	-	-	-	815	-	-	-

Total ASF (A) 23,176 22,554

12	RISK MANAGEMENT (continued)

31 March 2026

31 December 2025

Unweighted Values (i.e. before applying relevant factors)

No specified maturity

Less than 6 months

Over 6 months and less than one

year

Over one

year

Total weighted

value

Over 6 months

No and less

specified Less than than one Over one maturity 6 months year year

Total weighted

value

Required Stable Funding (RSF):

13,914 -	131 -	- -	- -	907 -	17,610 -	152 -	- -	- -	1,174 -
-	-	-	-	-	-	-	-	-	-
-	4,864	1,399	876	2,276	-	4,626	1,311	829	2,140
-	7,238	2,666	6,657	10,611	-	7,117	2,507	6,384	10,238
-	-	-	150	97	-	-	-	289	188
-	-	-	-	-	-	-	-	-	-
-	226	717	2,129	2,281	-	246	396	2,412	2,370
-	-	-	-	-	-	-	-	-	-
-	-	-	-	-	-	-	-	-	-
-	-	-	-	-	-	-	-	-	-
-	4	-	-	4	-	6	-	-	6
3,213	497	40	1,220	1,537	3,461	460	6	784	1,076
-	11,920	-	-	596	-	11,614	-	-	581

Total NSFR high-quality liquid assets (HQLA)

Deposits held at other financial institutions for operational purposes Performing loans and securities:

Performing loans to financial institutions secured by Level 1 HQLA Performing loans to financial institutions secured by non-level 1 HQLA

and unsecured performing loans to financial institutions Performing loans to non- financial corporate clients, loans to retail

and small business customers, and loans to sovereigns, central banks and PSEs, of which:

With a risk weight of less than or equal to 35% as per the CBB Capital Adequacy Ratio guidelines

Performing residential mortgages, of which:

With a risk weight of less than or equal to 35% under the CBB Capital Adequacy Ratio Guidelines

Securities that are not in default and do not qualify as HQLA, including exchange-traded equities

Other assets:

Physical traded commodities, including gold

Assets posted as initial margin for derivative contracts and contributions to default funds of CCPs

NSFR derivative assets

NSFR derivative liabilities before deduction of variation margin posted All other assets not included in the above categories

OBS items

Total RSF (B)

NSFR (A/B)

18,309

127%

17,773

127%

13	TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Related parties represent the ultimate parent, major shareholders, associates, directors and key management personnel of the Group and entities controlled, jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group's management.

Major

share-

holder

The period-end and year-end balances in respect of related parties included in the interim consolidated statement of financial position are as follows:

Ultimate

parent

31 March

2026

(Reviewed)

Deposits from customers

Borrowings

Additional / perpetual tier-1 capital*

Short-term self-liquidating trade and

transaction-related contingent items

Directors

2,874

1,115

590

2,875

1,115

590

Major

share-

holder

585 - - 585

Ultimate

parent

31 December

2025

(Audited)

Deposits from customers

Borrowings

Additional / perpetual tier-1 capital*

Short-term self-liquidating trade and

transaction-related contingent items

Directors

2,809

1,115

590

2,810

1,115

590

862 - - 862

* During the period, the Group has paid interest on additional / perpetual tier-1 capital amounting to US$ 9 million (31 March 2025: US$ 9 million) which has been charged to the interim consolidated statement of changes in equity.

The income and expenses in respect of transactions with related parties included in the interim consolidated statement of profit or loss are as follows:

31 March	31 March
2026	2025
Reviewed

Commission income

Interest expense

14	ESTIMATES AND JUDGEMENTS

Geopolitical developments in the Middle East

The geopolitical situation in the Middle East has intensified since 28 February 2026, with ongoing developments creating secondary impacts across multiple countries in the region, including the Kingdom of Bahrain. These circumstances have contributed to heightened uncertainty in the economic environment and have resulted in

disruption to certain business and economic activities across the region where the Group operates.

14	ESTIMATES AND JUDGEMENTS (continued)

Geopolitical developments in the Middle East (continued)

The Group is closely monitoring the situation and has activated its business continuity planning and other risk management practices to manage the potential impact of the business disruption on its performance and enhanced its risk management and monitoring practices to address potential operational, credit, and liquidity risks arising from these developments. Management continues to closely monitor the situation and its potential implications for

the Group's operations, financial position, and performance.

Reasonableness of forward looking information and related impact on expected credit losses (ECL)

The Group uses a range of macro-economic factors in ECL assessment relevant to multiple jurisdictions of operations considering its global footprint under three scenarios, upward, base and downward case. The Group reviews and updates selected economic series on regular basis and applies its judgement in determining what constitutes reasonable and forward-looking estimates. In light of the prevailing economic uncertainty, management has reassessed the macro-economic scenarios and probability weightings used in estimating ECL as at 31 March 2026, in accordance with IFRS 9 - Financial instruments (IFRS 9). The revised weightings reflect management's updated view of the increased likelihood of adverse economic outcomes in the current environment. The

probability weightings assigned to each macro-economic scenario are summarised below:

Scenarios

Base case

Upward case

Downward case

31 March

2026

50%

31 March

2025

40%

30%

31 December

2025

40%

30%

The Group will continue to assess the effects of the geopolitical situation on its portfolio and any impacts as and when known will be incorporated into the determination of the Group's estimates relating to significant increase in credit risk (SICR), inputs, macro-economic variables and weightages applied to scenarios in the ECL model and fair valuation of financial assets in the interim condensed consolidated financial statements for the periods ending

30 June 2026 and 30 September 2026 as well as the annual consolidated financial statements for the year ending

31 December 2026.

Management remains focused on maintaining prudent risk management, capital adequacy, and liquidity buffers to

support the Group's resilience in the current environment.

Earlier from Arab Banking Corporation B S C

All Arab Banking Corporation B S C news releases