Arab Banking Corporation B S CBAHRAIN: ABC

First Quarter Financial Statements

May 11, 2025 at 3:46 PM UTC · Issued by Arab Banking Corporation B S C

Arab Banking Corporation (B.S.C.)

INTERIM CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

31 MARCH 2025 (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 2025, comprising of the interim consolidated statement of financial position as at 31 March 2025, 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 International Accounting Standard 34 Interim Financial Reporting (IAS 34). 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.

11 May 2025

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 2025 (Reviewed)

All figures in US$ Million

		Reviewed 31 March	Audited 31 December
	Notes	2025	2024
ASSETS
Liquid funds		2,032	3,636
Trading securities		1,032	838
Placements with banks and other financial institutions		2,395	2,071
Securities bought under repurchase agreements		1,337	1,288
Non-trading investments	4	16,035	16,117
Loans and advances	5	19,353	18,649
Other assets		3,318	3,442
Premises and equipment		228	224
TOTAL ASSETS		45,730	46,265
LIABILITIES
Deposits from customers		23,365	22,431
Deposits from banks		4,466	4,628
Certificates of deposit		265	244
Securities sold under repurchase agreements		8,620	10,086
Taxation		58	69
Other liabilities		2,711	2,783
Borrowings		1,504	1,381
Total liabilities		40,989	41,622
EQUITY
Share capital		3,110	3,110
Treasury shares		(6)	(6)
Statutory reserve		598	598
Retained earnings		1,439	1,458
Other reserves		(1,265)	(1,343)
EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF
THE PARENT		3,876	3,817
Additional / perpetual tier-1 capital		390	390
Equity attributable to the shareholders of the parent
and perpetual instrument holders		4,266	4,207
Non-controlling interests		475	436
Total equity		4,741	4,643
TOTAL LIABILITIES AND EQUITY		45,730	46,265

These interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 11 May 2025 and signed on their behalf by the Chairman, Deputy Chairman and the Group Chief Executive Officer.

H.E. Naji Issa Belgasem Chairman

Abdulaziz Fahad Alhudaib Deputy Chairman

Sael Al Waary

Group Chief Executive Officer

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Three-month period ended 31 March 2025 (Reviewed)

All figures in US$ Million

Reviewed

Three months ended 31 March

	Notes	2025	2024
OPERATING INCOME
Interest and similar income		741	827
Interest and similar expense		(510)	(594)
Net interest income		231	233
Other operating income	6	101	110
Total operating income		332	343
OPERATING EXPENSES
Staff		124	122
Premises and equipment		14	14
Other		57	62
Total operating expenses		195	198
NET OPERATING PROFIT BEFORE CREDIT LOSS
EXPENSE AND TAXATION		137	145
Credit loss expense	7	(25)	(36)
PROFIT BEFORE TAXATION		112	109
Taxation charge	8	(21)	(18)
PROFIT FOR THE PERIOD		91	91
Profit attributable to non-controlling interests		(15)	(16)
PROFIT ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT		76	75

BASIC AND DILUTED EARNINGS PER SHARE (EXPRESSED IN US$) 0.022 0.021

H.E. Naji Issa Belgasem Chairman

Abdulaziz Fahad Alhudaib Deputy Chairman

Sael Al Waary

Group Chief Executive Officer

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Three-month period ended 31 March 2025 (Reviewed)

All figures in US$ Million

Reviewed
Three months ended
31 March
2025	2024

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 (loss) on exchange translation in

foreign subsidiaries

Debt instruments at FVOCI:

Net change in fair value during the period

82		(155)
28		39
110		(116)

91 91

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 (2)

Other comprehensive income (loss) for the period

TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD

1		(2)
111		(118)
202		(27)

Attributable to:

Shareholders of the parent

Non-controlling interests

154

(28)

202 (27)

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

Three-month period ended 31 March 2025 (Reviewed)

All figures in US$ million

Reviewed
Three months ended
31 March
2025	2024

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

Other non-cash movements

(125)		(319)
(283)		(177)
11		683
(129)		(123)
256		(159)
354		(742)
(298)		372
(1,498)		(1,111)
(204)		22
1		(100)
(1,790)		(1,521)

91 91

(9)

(10)

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

(9,311)

9,463

(11)

(6,750)

6,096

(5)

Net cash from (used in) investing activities 142 (655)

FINANCING ACTIVITIES

Issue of certificates of deposit - net

Proceeds from borrowings

Interest paid on additional / perpetual tier-1 capital

Dividend paid to the Bank's shareholders

Dividend paid to non-controlling interests

21	84
104	100
(9)	(9)
(85)	(70)
(8)	(8)

Net cash from financing activities 23 97

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

(1,625) (2,079)

21 (31)

3,636 4,466

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 2,032 2,356

Arab Banking Corporation (B.S.C.)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Three-month period ended 31 March 2025 (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.)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Three-month period ended 31 March 2025 (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 2023	3,110	(6)	569	1,283	100	(1,126)	13	(33)	3,910	390	504 4,804
Profit for the period	-	-	-	75	-	-	-	-	75	-	16	91
Other comprehensive (loss)
income for the period	-	-	-	-	-	(140)	37	-	(103)	-	(15)	(118)
Total comprehensive income
(loss) for the period -		-	-	75	-	(140)	37	-	(28)	-	1	(27)
Dividend** -		-	-	(70)	-	-	-	-	(70)	-	(8)	(78)
perpetual tier-1 capital -		-	-	(9)	-	-	-	-	(9)	-	-	(9)
in subsidiaries -		-	-	4	-	-	-	-	4	-	13	17
At 31 March 2024 (reviewed) 3,110		(6)	569	1,283	100	(1,266)	50	(33)	3,807	390	510	4,707

Interest paid on additional / Other equity movements

* Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 558 million as at 31 March 2024 (31 December 2023: US$ 555 million).

** A dividend of US$ 0.0225 per share for the year 2023 was approved for payment at the Annual General Meeting held on 24 March 2024 and paid during the period ended 31 March 2024.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (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 2025 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 financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2024. In addition, results for the three-month period ended 31 March 2025 are not necessarily indicative of the results that may be expected for the financial year ending 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 2024. On 1 January 2025, the Group adopted Amendments to IAS 21: The effects of Change in Foreign Exchange Rates. The adoption of the amendments had minimal impact on the Group. 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 2024 except for adoption of new standards and amendments effective from 1 January 2025.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

4	NON-TRADING INVESTMENTS

		Audited
		31 December
		2024
Debt securities
At amortised cost	8,822	9,283
At FVOCI	7,265	6,888
	16,087	16,171
ECL allowance	(75)	(75)
Debt securities - net	16,012	16,096

	23	21

23		21
16,035		16,117

Reviewed

31 March

2025

Equity securities

At FVOCI

Following are the stage wise break-up of debt securities as of 31 March 2025 and 31 December 2024:

31 March 2025 (Reviewed)
Stage 1	Stage 2	Stage 3	Total

Debt securities, gross

ECL allowance

16,023 -

(11) -

16,087

(75)

64 (64) 16,012 - - 16,012

31 December 2024 (Audited)
Stage 1	Stage 2	Stage 3	Total

Debt securities, gross

ECL allowance

16,107 -

(11) -

16,171

(75)

(64)

16,096 - - 16,096

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

5	LOANS AND ADVANCES

Loans and advances, gross

ECL allowances

31 March 2025 (Reviewed)
Stage 1	Stage 2	Stage 3	Total
18,710	623	668	20,001
(139) 18,571	(69) 554	(440) 228	(648) 19,353

Loans and advances, gross

ECL allowances

31 December 2024 (Audited)
Stage 1	Stage 2	Stage 3	Total
17,984	583	699	19,266
(136)	(68)	(413)	(617)
17,848	515	286	18,649

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)

648

Total

As at 1 January 2024

Net transfers between stages

Amounts written-off

Charge for the period - net

Exchange adjustments and other movements

139 74

- (6)

- -

2 6

(1) (2)

648

(11)

(22)

An analysis of movement in the ECL allowance during the period ended 31 March 2025 and 31 March 2024 are as follows:

Reviewed	Stage 1	Stage 2	Stage 3 413	Total
			(8)
			(5)
			30
			10
As at 31 March 2025	139	69	440
Reviewed	Stage 1	Stage 2	Stage 3
			435
			6
			(11)
			27
			(19)
As at 31 March 2024	140	72	438	650

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

OTHER OPERATING INCOME

Reviewed

	31 March 2025	31 March 2024
Fee and commission income*	56	59
Fee and commission expense	(1)	(1)
Fee and commission income - net*	55	58
Bureau processing income	8	11
Net gain from trading book (including foreign currencies transaction)	8	12
Gain on disposal of non-trading debt investments - net	9	10
Merchant acquiring income	5	4
Brokerage income - net	3	3
Others - net	13	12
	101	110

*Included in the fee and commission income is US$ 4 million (31 March 2024: US$ 3 million) of fee income relating to funds under management.

CREDIT LOSS EXPENSE

Reviewed

	31 March 2025	31 March 2024
Non-trading debt investments	1	1
Loans and advances	26	35
Credit commitments and contingent items	(1)	-
Other financial assets	(1)	-
	25	36
8 TAXATION

The tax expense for the period was as follows:

Reviewed

	31 March 2025	31 March 2024
Taxation related to parent	(2)	-
Taxation related to subsidiaries	(19)	(18)
	(21)	(18)

The Group is within the scope of the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework (IF) on Base Erosion and Profit Shifting (BEPS) Pillar 2 model rules, under which multinational entities (MNE Group) whose revenue exceeds EUR 750 million are liable to pay corporate income tax at a minimum effective tax rate of 15% in each jurisdiction they operate. Most of the jurisdiction in which the Group operates have enacted the Pillar 2 legislation, of which Kingdom of Bahrain would be the most impactful for the Group, since there was no tax in the Kingdom of Bahrain.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

8	TAXATION (continued)

The Kingdom of Bahrain issued Decree-Law no (11) of 2024 (the "Law") on 1 September 2024 introducing DMTT effective from the year 2025 on entities which are part of MNE Group with annual revenues of EUR 750 million or more. This was followed by Executive regulations issued on 15 December 2024 under decision no (172) of 2024. The Group has performed an assessment and estimated the top-up tax charge for the period ended 31 March 2025 in line with the regulations and based on OECD guidelines. As the regulatory framework continues to evolve and implementation guidance is further clarified, the Group continues to monitor developments and assess the impact of evolving Pillar 2 tax regulations on its future financial performance and resultant tax obligations.

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

wholesale

banking

Three-month period ended

31 March 2025 (Reviewed)

MENA

subsidiaries

Group

treasury

ABC

Brasil

Net interest income

Other operating income

51 63 8 76 33 231

12 27 18 28 16 101

Others Total

Total operating income 63 90 26 104 49 332

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 2025

Operating liabilities

as at 31 March 2025

(37) (38) (9) (46) (28) (158)

(11)

(17)

174

(25)

(21)

(37)

Profit for the period						91
	4,975	11,101	17,774	10,830	1,050	45,730
	4,325	-	25,892	9,662	1,110	40,989

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

9	OPERATING SEGMENTS (continued)

International

wholesale

banking

Three-month period ended

31 March 2024 (Reviewed)

MENA

subsidiaries

Group

treasury

ABC

Brasil

Net interest income

Other operating income

57	50	11	74	41	233
13	27	19	35	16	110

Others Total

Total operating income 70 77 30 109 57 343

Operating expenses	(34)	(39)	(9)	(52)	(27)	(161)
Profit before taxation,
credit loss and unallocated
operating expenses	36	38	21	57	30	182
Credit loss expense	(8)	(15)	-	(13)	-	(36)
Taxation charge	(18)
Unallocated operating expenses	(37)

Profit for the period 91

Operating assets
as at 31 December 2024 (Audited)	4,896	11,001	19,068	10,652	648	46,265
Operating liabilities
as at 31 December 2024 (Audited)	4,196	-	26,879	9,585	962	41,622

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 2025 (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

626

6,640

493

273

643

1,035

427

133

1,032

7,288

1,035

920

Quantitative disclosure of fair value measurement hierarchy for liabilities as at 31 March 2025 (Reviewed): Financial liabilities measured at fair value:

Level 1 Level 2 Level 3 Total

Derivatives held for trading

Derivatives held as hedges

356

245

601

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

10	FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

Quantitative disclosure of fair value measurement hierarchy for assets as as at 31 December 2024 (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

548

6,265

563

174

640

547

541

121

116

838

6,909

547

1,104

121

Quantitative disclosure of fair value measurement hierarchy for assets as at 31 December 2024 (Audited): Financial liabilities measured at fair value:

Level 1 Level 2 Level 3 Total

Derivatives held for trading

Derivatives held as hedges

467

285

752

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 2025 31 December 2024

Carrying

value

Fair Carrying Fair

value value value

Financial assets

Non-trading debt investments

at amortised cost - gross (level 1 and 2)

8,811

9,283

Financial liabilities

Borrowings - perpetual (level 1)

8,822			9,280
257	283	238	253

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.

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

10	FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

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.

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 (after applying credit conversion factor) and ECL by stage

31 March 2025 (Reviewed)
Stage 1	Stage 2	Stage 3	Total

Credit commitments and contingencies	4,338	99	33	4,470
ECL allowance	9	11	13	33

31 December 2024 (Audited)
Stage 1	Stage 2	Stage 3	Total

Credit commitments and contingencies	4,179	83	38	4,300
ECL allowance	8	11	10	29

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

As at 1 January 2025

ECL movements for the period - net

Stage 1 Stage 2 Stage 3 Total

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

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

11	CREDIT COMMITMENTS AND CONTINGENT ITEMS (continued)

a)	Exposure (after applying credit conversion factor) and ECL by stage (continued)

As at 1 January 2024

ECL movements for the period - net

(1)

Stage 1 Stage 2 Stage 3 Total

As at 31 March 2024 (reviewed) 8 12 11 31

b)	Credit commitments and contingencies

Reviewed

31 March

2025

Audited

31 December

2024

Short-term self-liquidating trade and transaction-related contingent items

Direct credit substitutes, guarantees

Undrawn loans and other commitments

4,205 4,135

3,003 2,861

3,049 3,073

	10,257	10,069
Credit exposure after applying credit conversion factor	4,470	4,300
Risk weighted equivalents	3,689	3,591

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

Reviewed

31 March

2025

Audited

31 December

2024

Interest rate swaps

Currency swaps

Forward foreign exchange contracts

Options

Futures

25,302	21,997
1,682	982
12,679	11,294
14,639	13,537
3,174	3,210

	57,476	51,020
Risk weighted equivalents (credit and market risk)	2,319	1,928

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

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 2025, the Group's LCR and NSFR were at 209% (31 December 2024: 198%) and 126% (31 December 2024: 123%) respectively.

31 March 2025

31 December 2024

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 6 than one Over one maturity months year year

Total weighted

value

Available Stable Funding (ASF):
Capital:
Regulatory Capital	4,192	-	-	-	4,192	4,112	-	-	-	4,112
Other Capital Instruments	487	-	-	337	824	488	-	-	327	815
Retail deposits and deposits from small business customers:
Stable deposits	-	-	-	-	-	-	-	-	-
Less stable deposits	-	2,322	180	306	2,557	-	2,098	277	259	2,397
Wholesale funding:
Operational deposits	-	-	-	-	-	-	-	-	-	-
Other wholesale funding	-	25,135	4,239	6,484	13,776	-	25,060	4,481	7,217	13,524
Other liabilities:
NSFR derivative liabilities	-	-	-	-	-	-	-	-	-	-
All other liabilities not included in the above categories	-	1,278	-	-	-	-	1,117	-	-	-

Total ASF (A) 21,349 20,848

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

12	RISK MANAGEMENT (continued)

31 March 2025

31 December 2024

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 6 than one Over one maturity months year year

Total weighted

value

Required Stable Funding (RSF):

Total NSFR high-quality liquid assets (HQLA)	16,282	395	-	- 1,183		15,736	175	-	- 1,163
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	-	4,012	1,396	853	2,112	-	3,884	919	727	1,730
Performing loans to non- financial corporate clients, loans to retail and small
business customers, and loans to sovereigns,
central banks and PSEs, of which:	-	7,145	2,287	5,851	9,690	-	7,130	2,653	5,484	9,553
With a risk weight of less than or equal to 35% as per the
CBB Capital Adequacy Ratio guidelines	-	-	-	305	198	-	-	-	323	210
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	-	273	472	1,817	1,917	-	173	259	1,531	1,517
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	-	45	-	-	45	-	106	-	-	106
NSFR derivative liabilities before deduction of variation margin posted	-		-	-		-	-	-	-	-
All other assets not included in the above categories	2,247	407	9	979	1,227	3,765	506	6	1,882	2,209
OBS items	-	10,667	-	-	533	-	10,370	-	-	518

Total RSF (B)

NSFR (A/B)

16,905

126%

17,006

123%

Arab Banking Corporation (B.S.C.)

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS

31 March 2025 (Reviewed)

All figures in US$ million

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

2025

(Reviewed)

Deposits from customers

Borrowings

Additional / perpetual tier-1 capital*

Short-term self-liquidating trade and

transaction-related contingent items

Directors

2,794

1,115

390

2,794

1,115

390

Major

share-

holder

931 - - 931

Ultimate

parent

31 December

2024

(Audited)

Deposits from customers

Borrowings

Additional / perpetual tier-1 capital*

Short-term self-liquidating trade and

transaction-related contingent items

Directors

2,795

1,115

390

2,833

1,115

390

1,049 - - 1,049

* During the period, the Group has paid interest on additional / perpetual tier-1 capital amounting to US$ 9 million (31 March 2024: 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
2025	2024
Reviewed

Commission income

Interest expense

First Quarter Financial Statements​​​

First Quarter Financial Statements