Arab Banking B S C : Third Quarter Financial Statements​​​

About this update from Arab Banking Corporation B S C

Arab Banking Corporation (B.S.C.) INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 SEPTEMBER 2025 (REVIEWED) Ernst & Young - Middle East P.O. Box 140 East Tower, 10 th Floor Bahrain World Trade Center Manama, Kingdom of Bahrain Tel: +973 1753 5455 Fax: +973 1753 5405 [email protected] 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 30 September 2025, comprising of the interim consolidated statement of financial position as at 30 September 2025, and the related interim consolidated statements of profit or loss and comprehensive income for the three-month period and nine-month period then ended, and interim consolidated statements of cash flows and changes in equity for the nine-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 November 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 30 September 2025 (Reviewed) All figures in US$ Million Reviewed 30 September Audited 31 December Notes 2025 2024 ASSETS Liquid funds 2,521 3,636 Trading securities 1,204 838 Placements with banks and other financial institutions 2,411 2,071 Securities bought under repurchase agreements 919 1,288 Non-trading investments 4 16,039 16,117 Loans and advances 5 21,064 18,649 Other assets 4,146 3,442 Premises and equipment 235 224 TOTAL ASSETS 48,539 46,265 LIABILITIES Deposits from customers 25,321 22,431 Deposits from banks 4,310 4,628 Certificates of deposit 320 244 Securities sold under repurchase agreements 8,470 10,086 Taxation 81 69 Other liabilities 3,550 2,783 Borrowings 1,468 1,381 Total liabilities 43,520 41,622 EQUITY Share capital 3,110 3,110 Treasury shares (6) (6) Statutory reserve 598 598 Retained earnings 1,562 1,458 Other reserves (1,162) (1,343) EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT 4,102 3,817 Additional / perpetual tier-1 capital 390 390 Equity attributable to the shareholders of the parent and perpetual instrument holders 4,492 4,207 Non-controlling interests 527 436 Total equity 5,019 4,643 TOTAL LIABILITIES AND EQUITY 48,539 46,265 These interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 11 November 2025 and signed on their behalf by the Chairman, Deputy Chairman and the Group Chief Executive Officer. H.E. Naji 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 Nine-month period ended 30 September 2025 (Reviewed) All figures in US$ Million Reviewed Three months ended 30 September Reviewed Nine months ended 30 September Notes 2025 2024 2025 2024 OPERATING INCOME Interest and similar income 769 787 2,249 2,411 Interest and similar expense (520) (561) (1,530) (1,719) Net interest income 249 226 719 692 Other operating income 6 112 102 314 310 Total operating income 361 328 1,033 1,002 OPERATING EXPENSES Staff 121 118 362 355 Premises and equipment 16 15 44 43 Other 71 57 189 170 Total operating expenses 208 190 595 568 NET OPERATING PROFIT BEFORE CREDIT LOSS EXPENSE AND TAXATION 153 138 438 434 Credit loss expense 7 (53) (31) (103) (105) PROFIT BEFORE TAXATION 100 107 335 329 Taxation charge 8 (30) (25) (81) (62) PROFIT FOR THE PERIOD 70 82 254 267 Profit attributable to non-controlling interests (18) (17) (50) (52) PROFIT ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT 52 65 204 215 BASIC AND DILUTED EARNINGS PER SHARE (EXPRESSED IN US$) 0.014 0.018 0.060 0.064 H.E. Naji Belgasem Chairman Abdulaziz Fahad Alhudaib Deputy Chairman Sael Al Waary Group Chief Executive Officer Arab Banking Corporation (B.S.C.) INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Nine-month period ended 30 September 2025 (Reviewed) All figures in US$ Million Reviewed Reviewed Three months end ed Nine months ended 30 September 30 September 2025 2024 2025 2024 70 82 254 267 44 34 196 (248) 51 (2) 51 12 95 32 247 (236) (4) - (4) - - 5 3 4 (4) 5 (1) 4 Other comprehensive income (loss) for the period 91 37 246 (232) 161 119 500 35 385 115 161 119 500 35 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 Other comprehensive income (loss) that will not be reclassified (or recycled) to profit or loss in subsequent periods: Net change in pension fund reserve Net change in fair value of FVOCI equity securities during the period TOTAL COMPREHENSIVE INCOME FOR THE PERIOD Attributable to: Shareholders of the parent Non-controlling interests 132 92 29 27 36 (1) Arab Banking Corporation (B.S.C.) INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS Nine-month period ended 30 September 2025 (Reviewed) All figures in US$ million Reviewed Nine months ended 30 September 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 (218) (186) (219) (515) 468 761 (1,148) (1,618) (411) (588) 1,546 742 (611) 541 (1,678) 1,824 510 587 (66) (453) (1,438) 1,493 254 267 103 55 (23) 105 49 (23) Net cash (used in) from 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 (25,269) 25,629 (31) 7 2 (21,625) 17,570 (12) 6 (2) Net cash from (used in) investing activities 338 (4,063) FINANCING ACTIVITIES Issue of certificates of deposit - net Issue / (Proceeds) from borrowings - net Interest paid on additional / perpetual tier-1 capital Dividend paid to the Bank's shareholders Dividend paid to non-controlling interests 73 97 (22) 112 (19) (19) (85) (70) (29) (21) Net cash (used in) from financing activities (82) 99 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 (1,182) (2,471) 67 (3) 3,636 4,466 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 2,521 1,992 Arab Banking Corporation (B.S.C.) INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Nine-month period ended 30 September 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 - - - 204 - - - - 204 - 50 254 Other comprehensive income (loss) for the period - - - - - 131 54 (4) 181 - 65 246 Total comprehensive income (loss) for the period - - - 204 - 131 54 (4) 385 - 115 500 Dividend** - - - (85) - - - - (85) - (29) (114) Interest paid on additional / perpetual tier-1 capital - - - (19) - - - - (19) - - (19) Other equity movements in subsidiaries - - - 4 - - - - 4 - 5 9 At 30 September 2025 (reviewed) 3,110 (6) 598 1,562 100 (1,306) 82 (38) 4,102 390 527 5,019 * Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 565 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 Nine-month period ended 30 September 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 - - - 215 - - - - 215 - 52 267 Other comprehensive (loss) income for the period - - - - - (195) 16 - (179) - (53) (232) Total comprehensive income (loss) for the period - - - 215 - (195) 16 - 36 - (1) 35 Dividend** - - - (70) - - - - (70) - (21) (91) perpetual tier-1 capital - - - (19) - - - - (19) - - (19) in subsidiaries - - - 3 - - - - 3 - 7 10 At 30 September 2024 (reviewed) 3,110 (6) 569 1,412 100 (1,321) 29 (33) 3,860 390 489 4,739 Interest paid on additional / Other equity movements * Retained earnings include non-distributable reserves arising from consolidation of subsidiaries amounting to US$ 560 million as at 30 June 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 30 September 2024. Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 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 nine-month period ended 30 September 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 consolidated 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 nine-month period ended 30 September 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. 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 30 September 2025, 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 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 30 September 2025 (Reviewed) All figures in US$ million 4 NON-TRADING INVESTMENTS Audited 31 December 2024 Debt securities At amortised cost 8,467 9,283 At FVOCI 7,621 6,888 16,088 16,171 ECL allowance (75) (75) Debt securities - net 16,013 16,096 26 21 26 21 16,039 16,117 Reviewed 30 September 2025 Equity securities At FVOCI Following are the stage wise break-up of debt securities as of 30 September 2025 and 31 December 2024: 30 September 2025 (Reviewed) Stage 1 Stage 2 Stage 3 Total Debt securities, gross ECL allowance 16,024 - (11) - 16,088 (75) 64 (64) 16,013 - - 16,013 31 December 2024 (Audited) Stage 1 Stage 2 Stage 3 Total Debt securities, gross ECL allowance 16,107 - (11) - 16,171 (75) 64 (64) 16,096 - - 16,096 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 5 LOANS AND ADVANCES 30 September 2025 (Reviewed) Stage 1 Stage 2 Stage 3 Total Loans and advances, gross ECL allowances 20,329 633 (95) (80) 21,785 (721) 823 (546) 20,234 553 277 21,064 31 December 2024 (Audited) Stage 1 Stage 2 Stage 3 Total Loans and advances, gross ECL allowances 17,984 583 (136) (68) 19,266 (617) 699 (413) 17,848 515 286 18,649 As at 1 January 2025 Net transfers between stages Amounts written-off (Reversal) / charge for the period - net Exchange adjustments and other movements 136 68 1 7 - - (47) 4 5 1 617 - (30) 106 28 721 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 1 (11) - - 4 6 (1) (2) 648 - (95) 101 (33) An analysis of movement in the ECL allowance during the period ended 30 September 2025 and 30 September 2024 are as follows: Reviewed Stage 1 Stage 2 Stage 3 413 Total (8) (30) 149 22 As at 30 September 2025 95 80 546 Reviewed Stage 1 Stage 2 Stage 3 435 10 (95) 91 (30) As at 30 September 2024 143 67 411 621 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 6 OTHER OPERATING INCOME Reviewed 30 September 30 September 2025 2024 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 159 166 (4) (4) 155 162 26 32 26 34 23 32 18 12 20 18 46 20 314 310 *Included in the fee and commission income is US$ 9 million (30 September 2024: US$ 11 million) of fee income relating to funds under management. 7 CREDIT LOSS EXPENSE Reviewed 30 September 30 September 2025 2024 Loans and advances Credit commitments and contingent items Other financial assets 106 101 (3) 3 - 1 103 105 8 TAXATION The tax expense for the period was as follows: Reviewed 30 September 30 September 2025 2024 Taxation related to parent Taxation related to subsidiaries 7 - 74 62 81 62 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 jurisdictions 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 previously enacted in the Kingdom of Bahrain. Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 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 Domestic Minimum Top-up Tax ("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 30 September 2025 in line with the respective 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 - 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. Nine-month period ended '30 September 2025 (Reviewed) International wholesale banking MENA subsidiaries Group treasury ABC Brasil Others Total Net interest income Other operating income 159 156 30 263 111 719 41 75 55 88 55 314 Profit for the period 254 5,385 12,096 18,632 11,535 893 48,541 4,633 - 27,563 10,226 1,098 43,520 Total operating income 200 231 85 351 166 1,033 Operating expenses (107) (111) (28) (146) (88) (480) Profit before taxation, credit loss and unallocated operating expenses 93 120 57 205 78 553 Credit loss expense (8) (42) - (53) - (103) Taxation charge (30) (16) (5) (32) 2 (81) Unallocated operating expenses (115) Operating assets as at 30 September 2025 Operating liabilities as at 30 September 2025 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 9 OPERATING SEGMENTS (continued) Nine-month period ended '30 September 2024 (Reviewed) International wholesale banking MENA subsidiaries Group treasury ABC Brasil Others Total Net interest income Other operating income 158 154 20 236 124 692 35 77 41 112 45 310 Total operating income 193 231 61 348 169 1,002 Operating expenses (96) (116) (18) (152) (82) (464) Profit before taxation, credit loss and unallocated operating expenses 97 115 43 196 87 538 Credit loss expense (12) (49) - (43) (1) (105) Taxation charge (28) (16) - (18) - (62) Unallocated operating expenses (104) Operating assets as at 31 December 2024 (Audited) Operating liabilities as at 31 December 2024 (Audited) Profit for the period 267 4,896 11,001 19,068 10,652 648 46,265 10 FAIR VALUE OF FINANCIAL INSTRUMENTS 4,196 - 26,879 9,585 962 41,622 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 30 September 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 540 7,037 - 734 - 488 609 1,163 413 37 176 - - - - 1,204 7,646 1,163 1,147 37 Quantitative disclosure of fair value measurement hierarchy for liabilities as at 30 September 2025 Financial liabilities measured at fair value: Level 1 Level 2 Level 3 Total Derivatives held for trading Derivatives held as hedges 537 - 274 84 - - 811 84 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 10 FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Quantitative disclosure of fair value measurement hierarchy for assets 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 4 - - - 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 34 - - 752 34 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 30 September 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) 8,464 9,283 Financial liabilities Borrowings - perpetual (level 1) 8,468 9,280 221 248 238 253 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. 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. Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 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 (after applying credit conversion factor) and ECL by stage 30 September 2025 (Reviewed) Stage 1 Stage 2 Stage 3 Total Credit commitments and contingencies 4,353 73 36 4,462 ECL allowance 8 8 15 31 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: Stage 1 Stage 2 Stage 3 Total As at 1 January 2025 ECL movements for the period - net 8 - 11 (3) 10 5 29 2 As at 30 September 2025 (reviewed) 8 8 15 31 Stage 1 Stage 2 Stage 3 Total As at 1 January 2024 ECL movements for the period - net 8 - 13 (1) 11 1 32 - As at 30 September 2024 (reviewed) 8 12 12 32 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 11 CREDIT COMMITMENTS AND CONTINGENT ITEMS (continued) b) Credit commitments and contingencies 30 September 2025 (Reviewed) Stage 1 Stage 2 Stage 3 Total 4,142 2,970 3,332 67 47 34 54 2 1 4,263 3,019 3,367 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 10,444 148 57 10,649 Credit exposure after applying credit conversion factor 4,353 73 36 4,462 Risk weighted equivalents 3,776 31 December 2024 (Audited) Stage 1 Stage 2 Stage 3 Total 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 3,996 2,814 3,047 85 39 17 54 8 9 4,135 2,861 3,073 Credit exposure after applying credit conversion factor 9,857 141 71 10,069 4,179 83 38 4,300 3,591 Risk weighted equivalents c) Derivatives The outstanding notional amounts at the reporting date were as follows: Reviewed 30 September 2025 Audited 31 December 2024 Interest rate swaps Currency swaps Forward foreign exchange contracts Options Futures 28,937 21,997 1,905 982 16,076 11,294 21,293 13,537 2,544 3,210 70,755 51,020 2,453 1,928 Risk weighted equivalents (credit and market risk) Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 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 30 September 2025, the Group's LCR and NSFR were at 297% (31 December 2024: 198%) and 119% (31 December 2024: 123%) respectively. 30 September 2025 31 December 2024 Unweighted Values (i.e. before applying relevant factors) 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 4,405 - - - 4,405 4,112 - - - 4,112 Other Capital Instruments 527 - - 306 832 488 - - 327 815 Retail deposits and deposits from small business customers: Stable deposits - - - - - - - - - - Less stable deposits - 2,396 311 359 2,795 - 2,098 277 259 2,397 Wholesale funding: Operational deposits - - - - - - - - - - Other wholesale funding - 27,180 4,321 6,110 13,936 - 25,060 4,481 7,217 13,524 Other liabilities: NSFR derivative liabilities - 28 - - - - - - - - All other liabilities not included in the above categories - 1,056 - - - - 1,117 - - - Total ASF (A) 21,968 20,848 Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 2025 (Reviewed) All figures in US$ million 12 RISK MANAGEMENT (continued) 30 September 2025 31 December 2024 Unweighted Values (i.e. before applying relevant factors) 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): 16,060 - 264 - - - - - 1,142 - 15,736 - 175 - - - - - 1,163 - - - - - - - - - - - - 3,910 1,507 1,072 2,394 - 3,884 919 727 1,730 - 7,540 2,452 6,535 10,550 - 7,130 2,653 5,484 9,553 - - - 316 205 - - - 323 210 - - - - - - - - - - - 479 168 2,288 2,268 - 173 259 1,531 1,517 - - - - - - - - - - - - - - - - - - - - - - - - - - 106 - - 106 - 6 - - 6 - - - - - 2,730 479 20 982 1,310 3,765 506 6 1,882 2,209 - 10,925 - - 546 - 10,370 - - 518 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) 18,421 119% 17,006 123% Arab Banking Corporation (B.S.C.) NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 30 September 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 30 September 2025 (Reviewed) 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 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 - - - 1 - - 2,796 1,115 390 Major share- holder 31 December 2024 (Audited) 865 - - 865 Ultimate parent 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 - - - 38 - - 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$ 19 million (30 September 2024: US$ 19 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: 30 September 30 September 2025 2024 Reviewed Commission income Interest expense 15 162 17 183 14 SUBSEQUENT EVENTS On 9 October 2025, the Group has issued Basel 3 compliant additional / perpetual Tier 1 Capital securities amounting to US$ 200 million to its ultimate parent. These securities are perpetual, subordinated and unsecured and carry an interest of 8% per annum payable semi-annually. The holders of these securities do not have a right to claim the interest and such an event of non-payment will not be considered an event of default. 19

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