BAHL-Transmission of Annual Report for the Year Ended December 31, 2025

TO BE OUR CUSTOMERS' MOST CONVENIENT AND TRUSTED BANK

TO MAKE BANKING SAFE, SIMPLE, AND PLEASANT

Board of Abbas D. Habib Chairman

Directors Aamir Amin* Anwar Haji Karim

Farhana Mowjee Khan Humayun Bashir

Mohammad Rafiquddin Mehkari Qasim Habib

Qumail R. Habib Executive Director

Shoaib Javed Hussain Syed Mohammed Hussain

Mansoor Ali Khan Chief Executive

Audit Committee Mohammad Rafiquddin Mehkari Chairman

Anwar Haji Karim Member

Farhana Mowjee Khan Member

Syed Mohammed Hussain Member

Human Resource & Humayun Bashir Chairman

Remuneration Abbas D. Habib Member Committee Farhana Mowjee Khan Member Shoaib Javed Hussain Member

Syed Mohammed Hussain Member

Credit Risk Farhana Mowjee Khan Chairman Management Mohammad Rafiquddin Mehkari Member Committee Qasim Habib Member

Qumail R. Habib Member

Risk Management Mohammad Rafiquddin Mehkari Chairman

Committee Anwar Haji Karim Member Qasim Habib Member

Qumail R. Habib Member

Shoaib Javed Hussain Member

IT Committee Abbas D. Habib Chairman

Humayun Bashir Member

Qasim Habib Member

Qumail R. Habib Member

Syed Mohammed Hussain Member

Mansoor Ali Khan Member

Islamic Banking Mohammad Rafiquddin Mehkari Chairman

Conversion Committee Farhana Mowjee Khan Member

Humayun Bashir Member

Shoaib Javed Hussain Member

Company

Secretary Mohammad Taqi Lakhani

* Subject to fit and proper test clearance, which is awaited from the State Bank of Pakistan.

Chief Financial

Officer Ashar Husain

Statutory KPMG Taseer Hadi & Co.

Auditors Chartered Accountants

Legal Liaquat Merchant Associates

Advisor Barristers, Advocates & Corporate Legal Consultants

Registered 126-C, Old Bahawalpur Road,

Office Multan

Principal 2nd Floor, Mackinnons Building,

Office I.I. Chundrigar Road, Karachi

Share CDC Share Registrar Services Limited

Registrar CDC House 99-B, Block-B, S.M.C.H.S. Main Shahrah-e-Faisal, Karachi-74400.

Website https://www.bankalhabib.com

History 1

Review Report by the Chairman 6

Directors' Report 7

Corporate Governance 16

Statement of Compliance with Listed Companies (Code of Corporate Governance)

Regulations, 2019 30

Independent Auditor's Review Report on the Statement of Compliance contained in

Listed Companies (Code of Corporate Governance) Regulations, 2019 34

Statement on Internal Controls 35

Independent Auditor's Report to the Members 36

Unconsolidated Statement of Financial Position 41

Unconsolidated Statement of Profit and Loss Account 42

Unconsolidated Statement of Comprehensive Income 43

Unconsolidated Statement of Changes in Equity 44

Unconsolidated Cash Flow Statement 46

Notes to the Unconsolidated Financial Statements 47

Other Information 148

Report of Shariah Board 153

Notice of Annual General Meeting 154

Pattern of Shareholding 162

Consolidated Financial Statements 165

282

283

294

Branch Network 295

E - Dividend Bank Mandate Form

Form of Proxy

2025

3.30

2.60 trillion

65.52 billion, and a

1,323 545

Rs

Total Assets

PKR 3.30 Tr

T otal Ne twork

1323

Branches

Total Cities Served

543

in Pakistan

Domestic ATM Network

Over 1500+

Tot al Foreign Branches

and Representative Offices

5

Countries Across the Globe

Deposits

2600

2500

2400

2300

2200

2100

2000

1900

1800

1700

1600

2,599.1

2,279.0

1,934.0

1,568.1

1500

1400

1300

1200

1,309.8

1,099.7

1100

1000

900

800

700

600

500

400

903.7

796.9

692.6

300

200

100

249.8

189.3

46.2

34.2

24.7

1.7

1992

2001

2002

2003 2004

2005 2006

2007 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020 2021 2022 2023 2024 2025

Profit Before Tax

90

83.8

80

71.1

65.5

70

60

50

40

28.6

30.3

32.9

30

19.0

20

13.2

13.9

14.3

8.9

9.9

12.3

10

5.7

7.2

7.5

0.05

0.6

0.6

1.5

1.0

2.0

2.7

3.1

3.6

4.5

1992 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2021 2022

2023

2024 2025

Shareholders' Equity excluding surplus on revaluation of assets

150

141.8

140

130.4

130

120

111.9

110

100

90

80

70

60

50

40

30

20

10

8.0

6.2

4.7

3.3

2.7

1.8

1.5

0.3

1992 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2023

2024

2025

Branches

1323

1400

1300 1221

1200

1113

1079

1100

956

1000

850

900

755

800

721

650

700

605

528

600

459

500

390

416

351

400

302

300

225

255

152

175

200

74

100

100

41

57

70

6

1992 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2020

2021 2022

2023

2024 2025

Alhamdolillah, I am pleased to present a report on the overall performance of the Board and effectiveness of

the role played by the Board in achieving the Bank's objectives.

The Board has approved a formal performance evaluation process of the Board & its Committees, Individual Directors, Chairman & Chief Executive. The Bank has adopted In-House Approach and Quantitative Technique with scored questionnaires for Board evaluation. Additionally, as per regulatory requirement, performance evaluation of the Board has also been conducted by an external independent evaluator at least every three years.

Accordingly, performance evaluation of the Board was conducted for the year 2025 as per mechanism approved by the Board. The Board has discussed the performance of its each member, and thereafter it was concluded that the overall performance, including effectiveness of the role played by the Board & its Committees in achieving the Bank's objective, was found to be generally satisfactory.

Overall objective of performance evaluation of the Board is to ensure sustainable growth and development of

the Bank, with focus on the following areas:

1. Board Composition and Functioning

2. Corporate Strategy and Business plan

3. Monitoring of Bank Performance

4. Internal Audit and Internal Control

5. Risk Management and Compliance

6. Disclosure of Material Information

7. Ideas for Improvement

Abbas D. Habib

Chairman

Board of Directors

Karachi: February 11, 2026

Alhamdolillah, the Directors of Bank AL Habib Limited are pleased to present the Thirty Fifth Annual Report

together with the audited financial statements of the Bank for the year ended December 31, 2025.

The operating results and appropriations, as recommended by the Board, are given below:

(Rupees in '000)

The Board of Directors propose a final cash dividend of 45%, i.e., Rs. 4.50 per share, in addition to Rs. 10.50 per share i.e., 105% Interim Cash Dividends already paid to the shareholders of the Bank, thus, total 150%

i.e. Rs. 15.00 per share for the year ended December 31, 2025.

Performance Review

Alhamdolillah, deposits rose to Rs. 2.60 trillion against Rs. 2.28 trillion a year earlier, while advances decreased to Rs. 792.1 billion from Rs. 910.9 billion. Foreign Trade Business handled by the Bank during the year was Rs. 3.5 trillion. Profit before tax for the year was Rs. 65.5 billion as compared to Rs. 83.8 billion last year, while profit after tax was Rs. 30.6 billion against Rs. 39.9 billion last year.

Profit of the Bank was declined mainly due to significant decrease in the interest rate during the last two

years and slow growth in the current deposits of the Bank.

During the year, the Bank opened 102 new branches, bringing our network to 1,326, which comprises 1,323 branches (including 392 Islamic Banking Branches and 2 Overseas Branches, one each in Bahrain and Malaysia), and 3 Representative Offices, one each in Dubai, Istanbul, and Beijing. The Bank will Insha'Allah continue to expand its network.

AWARDS AND RECOGNITIONS

By the Grace of Allah, the Bank received the following awards during the year:

1. "4th Largest Bank in Pakistan Remittance Market" award from the State Bank of Pakistan under the Pakistan Remittance Initiative (PRI) at the Pakistan Remittance Summit - 2025. By the Grace of Allah, this is the second time that the Bank had received this award.

2. "2025 Elite Quality Recognition Award" from J.P. Morgan Bank in recognition for outstanding achievement of Best-in-Class MT202 USD Clearing STP (Straight Through Processing) Rate.

3. "Financial Literacy Champion Bank Award" in Large Bank Category for Financial Year 2023 & 2024 from State Bank of Pakistan at Pakistan Financial Literacy Week 2025 for continued focus on spreading financial awareness and building stronger, more informed communities.

4. "National Financial Literacy Program-II" award by State Bank of Pakistan for achieving 2nd highest number

   of female participations under National Financial Literacy Program for the financial year 2024 - 2025.

5. "ESG Excellence Award" in Green Banking Category for the Outstanding Commitment to ESG Principles

   at the ESG Summit 2025.

6. "Environmental Excellence Award 2025" in recognition of our continued commitment to sustainability

   and responsible banking by the National Forum for Environment & Health.

7. "2nd Highest Export Bank Award" in recognition for the Bank's contribution in supporting Pakistan's export sector and facilitating trade-led growth by the Ministry of Commerce, Government of Pakistan and Trade Development Authority of Pakistan.

   CHANGES IN THE BOARD OF DIRECTORS

   • In the last Annual General Meeting held on February 27, 2025, Mr. Murtaza H. Habib, Syed Mazhar Abbas and Mr. Arshad Nasar retired from the Board and did not offer themselves for election as Directors.

   • In the last Annual General Meeting held on February 27, 2025, Mr. Qasim Habib, Mr. Tariq Iqbal Khan and Mr. Shahid Iqbal Baloch were elected as the new members on our Board.

   • In September 2025, Mr. Tariq Iqbal Khan resigned from the Board, due to his health condition.

   • In December 2025, Mr. Shahid Iqbal Baloch, Nominee Director, State Life Insurance Corporation of Pakistan (SLIC) and Mr. Adnan Afridi, Nominee Director, National Investment Trust Limited (NITL) resigned from the Board.

   • In January 2026, Syed Mohammed Hussain - Independent Director, and Mr. Shoaib Javed Hussain, Nominee Director, State Life Insurance Corporation of Pakistan (SLIC) were co-opted as the new members on our Board.

   • Additionally, Mr. Aamir Amin, Nominee Director, National Investment Trust Limited (NITL) has also been appointed on our Board whose SBP clearance is awaited.

     The Board members placed their highest appreciation and gratitude for the invaluable services rendered by Mr. Murtaza H. Habib, Syed Mazhar Abbas, Mr. Arshad Nasar, Mr. Tariq Iqbal Khan, Mr. Shahid Iqbal Baloch, and Mr. Adnan Afridi as their participation played an important role in the development and success of the Bank.

     COMPOSITION OF BOARD OF DIRECTORS

     Total number of Directors are as follows:

   • Male 09

   • Female 01

10

The composition of the Board is as follows:

* Subject to Fit & Proper Test clearance which is awaited from the State Bank of Pakistan.

Mr. Mansoor Ali Khan is the Chief Executive of the Bank. Being CEO of the Bank, he is deemed to be a Director.

Board Meetings

During the year, five meetings of the Board were held and the attendance of each Director was as follows:

Committees Meetings

The Listed Companies (Code of Corporate Governance) Regulations, 2019, and State Bank of Pakistan (SBP) Regulations, require the Bank to disclose the composition of all Committees of the Board, viz. Audit Committee, Human Resource & Remuneration Committee, Credit Risk Management Committee, Risk Management Committee, IT Committee, and Islamic Banking Conversion Committee.

During the year, eight meetings of the Audit Committee, five meetings of Human Resource & Remuneration Committee, four meetings of Credit Risk Management Committee, Risk Management Committee, IT Committee, Islamic Banking Conversion Committee and one meeting of IFRS 9 Committee were held, and the attendance of members were as follows:

Directors Training Programme

All the Directors have either attended the required training or have been exempted, except for one Director who

has already been registered for the aforesaid training.

Directors' Remuneration Policy

The shareholders of the Bank have approved a 'Policy & Procedure for Fixing Remuneration of Directors', which

states that:

• The remuneration of Non-Executive Directors for attending Board and Committee meetings shall be decided

  by the Board within the maximum limit as specified by the State Bank of Pakistan from time to time.

• The Chairman of the Board is also entitled to have 20% additional remuneration fee of the remuneration set for him for attending Board and its Committee meeting considering the Chairman's vast knowledge, experience, insight, sense of judgement and market contacts. The Chairman of the Board shall also monitor the performance of the Bank's management and implementation of the Business Plan of the Bank on behalf of the Board.

• A full time Director shall receive such remuneration as the members (shareholders) may fix.

• The Chairman of the Board (in case of individual Directors) and Independent Directors with the help of other Directors (in case of Chairman of the Board) shall decide regarding reconsideration in remuneration of underperforming Director/Chairman if the overall performance of the Director/Chairman consistently remains in "Needs Improvement" category for the two consecutive years as per Annual Performance Evaluation of the Board members.

  The details of the Directors' and CEO's remuneration are disclosed in Notes 40.1 and 40.2 to the audited financial statements.

  Credit Rating

  Alhamdolillah, Pakistan Credit Rating Agency Limited (PACRA) has maintained the Bank's long term entity and short term entity ratings at AAA (Triple A) and A1+ (A One plus), respectively. This long term credit rating AAA (Triple A) denotes the highest credit quality with the lowest expectation of credit risk and indicates exceptionally strong capacity for timely payment of financial commitments.

  The ratings of our unsecured, subordinated Term Finance Certificates (TFCs) are AAA (Triple A) for TFC 2021 and TFC-2022, and AA+ (Double A plus) for TFC-2017 (perpetual) and TFC-2022 (perpetual). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. Further, the TFC-2022 & the TFC-2022 (perpetual) issued in 2022, were listed on Pakistan Stock Exchange (PSX) pursuant to Chapter 5C of PSX Rule Book.

  Future Outlook

  In FY 2025, Pakistan's macroeconomic stability continued to improve with GDP growth of 3.1%, compared with 2.6% in FY2024. The growth was led by the industrial sector which recorded a growth of 5.3%, compared with a contraction of (0.9%) in the previous year. The services sector posted growth of 3.1%, compared with 2.3% in the year before. However, growth in the agricultural sector was low at 1.5%, compared with 6.4% earlier; the decline was primarily due to slow-down in production of major crops. Fiscal position improved significantly with decline in fiscal deficit from 6.9% of GDP to a nine-year low of 5.4%. During the fiscal year, current account balance posted the first surplus in fourteen years at USD 1.9 billion, mainly due to rise in workers' remittances and ICT exports, which helped offset the rise in trade deficit; foreign exchange reserves of SBP rose over 50% to reach USD 14.5 billion; and the Rupee remained largely stable against USD. Inflation came down from 12.6% in June 2024 to 3.2% in June 2025. SBP reduced its Policy Rate from 20.50% in June 2024 to 11.00% by June 2025. KSE-100 Index continued its upward movement and rose about 50% during CY 2025, and PSX continued to be one of the high-performing stock markets of the world.

  Recent data on quarterly GDP indicate that the economy has continued its growth momentum with an overall growth of 3.7% in the first quarter of FY 2026, compared with 1.6% in the same period last year. Accordingly, SBP has revised its GDP growth projection for the fiscal year to 3.75-4.75% from the earlier estimate of 3.25-4.25%. Reduction of the Policy Rate to 10.50% in December 2025, lowering of Cash Reserve Requirement for banks from 6.0% to 5.0% in January 2026, and continued stability of the Rupee are expected to provide further support to economic and business activities. Nevertheless, challenges remain, as indicated by deficit in current account and rise in inflation in the first half of FY 2026, and the prevailing geopolitical environment and global trade uncertainties. At the same time, net interest margins and profits of banks may continue to be under pressure because of significant reduction in the Policy Rate during the last 18 months.

  On overall basis, however, we view the future with optimism and look forward to sustainable growth and progress for the Bank in the year ahead, Insha'Allah, while continuing to be guided by our time-tested principles of prudence and vigilance.

  Auditors

  The present auditors KPMG Taseer Hadi & Co., Chartered Accountants, retire and offer themselves for reappointment. As suggested by the Audit Committee, the Board of Directors has recommended their reappointment as auditors of the Bank for the year ending December 31, 2026, at a fee to be mutually agreed.

  Risk Management Framework

  The Bank's Risk Management Framework is commensurate with the size of the Bank and the nature of its business. This framework has developed over the years and continues to be refined and improved. A key guiding principle of the Bank is to treat the depositors' money as a trust which must be protected. Therefore, the Bank aims to take business risks in a prudent manner, guided by a conservative outlook. Salient features of the Bank's risk management framework are summarized below:

• Credit risk is managed through the credit policies approved by the Board, a well-defined credit approval mechanism; use of internal risk ratings; prescribed documentation requirements; post-disbursement credit administration processes; review, and monitoring of credit facilities; and continuous assessment of credit worthiness of counterparties. The Bank has also established a mechanism for independent, post-disbursement review of large credit risk exposures. As part of the credit appraisal process, environmental and social risks are also assessed to mitigate potential impacts. Decisions regarding the credit portfolio are taken mainly by the Central Credit Committee. The Credit Risk Management Committee of the Board provides overall guidance in managing the Bank's credit risk.

• Market risk is managed through the Market Risk Policy and Treasury & Investment Policy approved by the Board; approval of counterparty limits and dealer limits; and regular review and monitoring of the investment portfolio by the Bank's Asset Liability Management Committee (ALCO). In addition, the Liquidity Risk Policy provides guidance in managing the liquidity position of the Bank, which is monitored on daily basis by the Treasury and the Middle Office. Decisions regarding the investment portfolio are taken mainly by ALCO. Risk Management Committee of the Board provides overall guidance in managing the Bank's market and liquidity risks, capital adequacy, and integrated risk management (also known as Enterprise Risk Management). Assessment of enterprise-wide integrated risk profile of the Bank is carried out, using the Basel Framework, Key Risk Indicators, Internal Capital Adequacy Assessment Process, Stress Testing, and Recovery Plan which are reviewed on an annual basis. The Bank continued to be selected as "Sample D-SIB" - (Domestic Systemically Important Bank) by SBP in year 2025, as in the previous years.

• Operational risk is managed through the Audit Policy, the Operational Risk Policy, the Compliance Policy & Programme, IT and IT Security policies, Human Resource Policy, Consumer Protection Framework, and Outsourcing Policy approved by the Board, along with the Fraud Prevention Policy; Consumer Grievance Handling Policy; operational manuals and procedures issued from time to time; a system of internal controls and dual authorization for important transactions and safe-keeping; a Business Continuity Plan, including a Disaster Recovery Plan for I.T.; and regular audit of the branches and divisions. Key tools such as Key Risk Indicators, risk evaluation of products and processes and operational loss data management are used to monitor and manage operational risk. Audit Committee of the Board provides overall guidance in managing the Bank's operational risk.

• The Bank has taken various steps in adopting green banking measures for improving environmental

  impact, social risk management, and optimizing resource utilization.

  In addition, Risk Management Policy, Risk Tolerance Statement, and Country Risk Management Policy provide further guidance on managing the potential risk exposures of the Bank.

  Environment, Social and Governance

  During the year, Bank AL Habib Limited continued to strengthen compliance with regulatory expectations on sustainable and responsible banking by systematically embedding environmental, social and governance (ESG) considerations across its operations, risk management and credit processes. In line with the State Bank of Pakistan's Green Banking and Environmental and Social Risk Management requirements, the Bank has incorporated environmental and social risk screening within its credit evaluation framework. The Bank further enhanced governance, disclosures and implementation effectiveness through structured capacity building, digitized resource monitoring, expanded renewable energy adoption and independent sustainability advisory support. Active engagement in national ESG forums and recognition through industry awards reflect progress in implementation maturity and regulatory alignment. Collectively, these initiatives reinforce the Bank's compliance requirements, risk resilience and contribution to national sustainability objectives, while supporting prudent growth and long-term financial stability.

  Diversity, Equity and Inclusion (DE&I)

  Diversity, Equity, and Inclusion (DEI) are anchored in the belief that our staff are members of one family, connected through respect, trust, and shared values. The Bank fosters an inclusive and caring workplace where fairness, dignity, and equal opportunity are upheld, and individual differences are recognized as a source of strength. This people-centric culture, supported by transparent and merit-based Human Resource practices and inclusive leadership, has translated into strong employee engagement and a consistently low attrition rate. The Bank's commitment to nurturing belonging and long-term relationships with its people reinforces organizational stability, sustainable growth, and our identity as a values-driven Bank.

  Corporate Social Responsibility (CSR)

  Your Bank is fully committed to the concept of Corporate Social Responsibility and fulfills this responsibility by engaging in a wide range of activities which include:

• corporate philanthropy amounting to Rs. 756.16 million by way of donations & charities during the year for social and educational development and welfare of people;

• energy conservation, environmental protection, and occupational safety and health by restricting unnecessary lighting, implementing tobacco control law and "No Smoking Zone", and providing a safe and healthy work environment;

• business ethics and anti-corruption measures, requiring all staff members to comply with the Bank's "Code of Conduct" and "Anti-Bribery and Corruption Policy".

• consumer protection measures, requiring disclosure of the schedule of charges and terms and conditions

  that apply to the Bank's products and services;

• amicable staff relations, recognition of merit and performance, and on-going opportunities for learning

  and growth of staff, both on-the-job and through formal training programmes;

• equal opportunity employment through a transparent procedure, without discrimination on the basis of

  religion, caste, language, etc., including employment of special persons;

• expansion of the Bank's branch network to rural areas, which helps in rural development;

• contribution to the national exchequer by the Bank by way of direct taxes of about Rs. 54.44 billion paid to the Government of Pakistan during the year; furthermore, an additional amount of over Rs. 72.15 billion was deducted/collected by the Bank on account of withholding taxes, federal excise duties and sales tax on services, and paid to the Government of Pakistan/Provincial Governments.

Statement on Corporate and Financial Reporting

1. The financial statements, prepared by the Bank, present fairly its state of affairs, the result of its operations, cash flows and changes in equity.

2. Proper books of account have been maintained by the Bank.

3. Appropriate accounting policies have been consistently applied in preparation of the financial statements; changes, if any, have been adequately disclosed and accounting estimates are based on reasonable and prudent judgment.

4. International Financial Reporting Standards and Islamic Financial Accounting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and departure therefrom, if any, has been adequately disclosed.

5. The system of internal controls is sound in design and has been effectively implemented and monitored. The Board's endorsement of the management's evaluation related to Internal Control over Financial Reporting, along with endorsement of overall Internal Controls is given on page 35.

6. Going concern assumption is appropriate. There is no identifiable material uncertainty that raises doubt about the ability of the Bank to continue as a going concern.

7. Key operating and financial data for last six years are summarized below: (Rupees in million)

   	2025	2024	2023	2022	2021	2020
   Total customer deposits	2,599,087	2,278,957	1,934,037	1,568,138	1,309,823	1,099,686
   Total advances	792,050	910,850	869,459	813,535	733,799	510,252
   Profit before tax	65,520	83,841	71,128	32,884	30,273	28,581
   Profit after tax	30,637	39,862	35,319	16,570	18,702	17,812
   Shareholders' Equity (Excluding revaluation)	141,754	130,384	111,895	94,344	83,569	69,570
   Earnings per share (Rs.)	27.57	35.87	31.78	14.91	16.83	16.03
   Cash Dividend (%)	150	170	140	70	70	45

8. Value of investments of Provident Fund and Gratuity Fund Schemes based on latest audited financial

   statements as at December 31, 2024, was as follows:

   (Rupees in '000)

   Provident Fund 18,347,665

   Gratuity Fund 7,896,494

9. The pattern of shareholding and additional information regarding pattern of shareholding is given on pages 162, 163 & 164.

10. The Board has approved a formal process for its performance evaluation. The Bank has adopted In-House Approach and Quantitative Technique with scored questionnaires for Board evaluation. Scope of Board evaluation covers evaluation of the full Board, Individual Directors, Board Committees, the Chairman, and the Chief Executive. Consolidated results/findings will be discussed with the relevant parties. Any areas of improvement identified during the evaluation will be noted for appropriate action. Evaluation process for each calendar year will be completed latest by March 31 of the next year. Additionally, performance evaluation of the Board will be conducted by an external independent evaluator at least every three years. We have appointed Pakistan Institute of Corporate Governance (PICG) for external independent evaluation of the Board.

    There is no conflict of interest between the experts hired by the Bank and any Board member or Key

    Executive.

11. No trade in the shares of the Bank was carried out by the Directors, CEO, CFO, Head of Internal Audit, Company Secretary, and Executives and their spouses and minor children, during the year, except the following:

    • 9,500 shares purchased by a Director.

    • 6,985 shares purchased by three Executives.

    • 32,744 shares sold by four Executive.

For the purpose of this disclosure, the definition of "Executive" includes Assistant General Managers and above, in addition to officials already mentioned in the Rule Book of the Pakistan Stock Exchange regulations.

General

We wish to thank our customers, for their continued trust and support, local and foreign correspondents for their confidence and cooperation, and the State Bank of Pakistan for their guidance. We also thank all our staff members for their sincerity, dedication and hard work.

MANSOOR ALI KHAN ABBAS D. HABIB

Chief Executive Chairman

Board of Directors

Karachi: February 11, 2026

Corporate Governance Culture

Habib Family has been engaged in the business of banking for over 80 years and is well known for commitment to its traditional values of integrity, prudence, and trust. We are committed to continue all our business activities as per highest ethical and professional standards and practices. We ensure good corporate governance culture by remaining true to our values and by following the Corporate Governance Regulatory Framework (CGRF) issued by the State Bank of Pakistan and the Code of Corporate Governance Regulations issued by the Securities & Exchange Commission of Pakistan. Board of Directors of the Bank comprises reputable businessmen, bankers, professional managers, and chartered accountants, representing a range of industries. They carry out their fiduciary duties to protect the interests of shareholders, depositors, and creditors, and exercise their independent judgement in the best interests of the Bank. We have clearly defined the responsibilities of the Board, Chief Executive, and Senior Management.

Nomination and Selection of Board Members

There is a defined procedure for election of Directors in Companies Act, 2017 and the Bank's Articles of Association which has been strictly followed by the Bank. Accordingly, the Bank announces the schedule of election of Directors in the year when the election is due. Any person desirous to become a Director can submit his/her nomination papers as per the requirements of the Companies Act, 2017 and regulations of the State Bank of Pakistan (SBP). The person elected by the shareholders shall hold the office of Director, subject to Fit and Proper Criteria and approval of the State Bank of Pakistan. Any casual vacancy on the Board is filled up by the Directors, subject to applicable regulations.

Profile of Board Members

1. Mr. Abbas D. Habib - Chairman

   Mr. Abbas D. Habib, Founder Member & Chairman of the Board, has over 50 years' commercial, industrial and banking experience in the domestic and international markets. He is a Fellow Member of the Institute of Bankers, Pakistan. He has held senior management positions with various organizations of the Habib Group and gained international banking experience. He has also served on the Board of Habib Insurance Company Limited. Upon the inception of Bank AL Habib Limited in 1991, he became its Director and Joint Managing Director. He assumed responsibilities as Managing Director and Chief Executive of the Bank on May 8, 1994, and served in that position till October 31, 2016. He became Chairman of Bank AL Habib Limited on November 1, 2016. He is also the Chairman of the Board of AL Habib Asset Management Limited, a wholly owned subsidiary of the Bank since August 11, 2020.

2. Mr. Anwar Haji Karim

   Mr. Anwar Haji Karim holds a Bachelor's degree in commerce and has over 40 years' experience in business and industry. He belongs to the AL Karam Group, a reputable business group of Pakistan, with interests in textiles and synthetics. He is the Chairman of AL Karam Textile Mills (Private) Limited and Iqbal Textile Mills (Private) Limited. He is a Founder Member of the Board of Directors of the Bank since its inception in 1991.

3. Ms. Farhana Mowjee Khan

   Ms. Farhana Mowjee Khan, Director of Razaque Steels (Private) Limited, has over 35 years' experience in the local and international environment. She has also served as Managing Director of Razaque Steels (Private) Limited from 1994 to 2006. She graduated from University College London, UK and is a qualified Chartered Accountant from Institute of Chartered Accountants in England and Wales, UK. Ms. Farhana Mowjee Khan is also a director of Shabbir Tiles and Ceramics Limited. She joined the Board of Bank AL Habib Limited in April 2019.

   
   
   

4. Mr. Humayun Bashir

   Mr. Humayun Bashir holds an Electronics Engineering degree from University of Karachi (Dawood College of Engineering & Technology), along with finance and management courses from IBM centers in La Hulpe, Belgium, and Armonk, USA, and training in leadership and innovation from Boston University and INSEAD, France. Mr. Bashir has served 40 years at IBM, in Pakistan and the Middle East headquarters in Dubai, and was CEO of IBM Pakistan twice for 16 years till June 2016, which included Afghanistan and Iran as his operational territory for 2-3 years. He is currently serving as Chairman & advisor of Eocean, Country Advisor of Dun & Bradstreet, and Independent Director on the Board of Rafhan Maize Products Co. Limited, Nominee Director on Khushali Microfinance Bank Limited and Director of Blockverse. In the recent years, he also served as an Independent Director on the Boards of State Life Insurance Corporation of Pakistan, independent director & chairman of NCCPL, and also on the Boards of NBP mutual funds, SILKBANK, Linde/POL, Karachi Port-KPT, Export Processing Zone Authority, Foree Fintech, MIT-EP, and ICCBS Incubator, Chairman PSX IT Steering Committee; and advisor to NBP boards IT digital committee. He was elected president of the American Business Council (ABC) in 2011, president of the Overseas Investors Chamber of Commerce & Industry (OICCI) in 2012, and a member of the executive committee of the Management Association of Pakistan. He joined the Board of Bank AL Habib Limited in June 2024.

5. Mr. Mohammad Rafiquddin Mehkari

   Mr. Mohammad Rafiquddin Mehkari holds a Bachelor degree and has over 43 years' experience in international and domestic banking. Mr. Mehkari has served as President & Chief Executive of Askari Bank Limited from June 2008 to May 2013. He also served as Director, Exchange Policy Department, State Bank of Pakistan. He carries a varied and versatile banking experience in all banking dimensions including operations, credit, treasury, foreign exchange, fund management and investment banking. He also served as Director on the board of: Askari Investment Management Limited, Khushhali Microfinance Bank Limited, 1- Link Limited, and Export Processing Zone. Mr. Mehkari is currently serving as member of governing board of Imdad foundation, Infaq Foundation and Centre for Development of Social Services. He joined the Board of Bank AL Habib Limited in June 2022.

6. Mr. Qasim Habib

   Mr. Qasim Habib is a banking professional with a Bachelor's (Honours) degree in Global Finance Management from England. With over six years of experience in the banking sector, he has demonstrated exceptional leadership in Marketing, Digital Banking, and Contactless Payments segment.

   Mr. Qasim Habib has served as the General Manager and Head of Marketing, Digital Innovation and Cards & Payments at Bank AL Habib Limited, where he was essential in driving strategic growth and enhancing the Bank's digital offerings, ultimately shaping the Bank`s digital banking strategy.

   His expertise extends beyond day-to-day operations, having also served on the Board of AL Habib Capital Markets (Pvt) Limited from February 12, 2019, to February 12, 2025. In April 2025, Mr. Qasim Habib joined the Board of Directors for Bank AL Habib Limited.

7. Mr. Qumail R. Habib - Executive Director

   Mr. Qumail R. Habib is a graduate of the University of California in Business Economics and has over 35 years' commercial, industrial, and banking experience. He is a Founder Member of the Board and Executive Director of the Bank since its inception in 1991. Prior to that, he was Resident Director of AL Ghazi Tractors Limited. He has been actively involved with the operations of the Bank since its inception. He is responsible for enhanced oversight on Enterprise Risk and Corporate Strategy, and for monitoring Fraud Investigation Unit. He has been on the Board of Habib Insurance Company Limited since October 03, 2017. Mr. Qumail also serves as a member of the Board of Directors of Habib University Foundation and as a trustee to various charitable trusts of Habib Family.

   
   
   

8. Mr. Shoaib Javed Hussain

   Mr. Shoaib Javed Hussain, CEO, State Life Insurance Corporation is also the Chairman of the Insurance Association of Pakistan. He has over 25 years of management experience at leading Global Insurance Groups & Consultancies in the United Kingdom and Asia. Through his global engagements across Europe, North America and Asia, Mr. Hussain brings on board his deep understanding and knowledge of finance, audit, risk and strategy matters with a proven track record of:

   • Proactive, dynamic, driven leadership with effective delivery from the conceptual stage through to

     successful implementation.

   • Expert analysis and decision-making skills; utilizing technical acumen and strategic depth.

   • Leading and delivering strategic projects including M&A, due diligence and capital and liquidity management.

   • In-depth experience of leading financial audits and risk management programs.

   • Initiating policy and control improvements and driving programs that enhance transparency, governance

     and control.

   • Strong experience of industry and regulatory engagement on global supervisory developments and

     lobbying with international regulators and supervisory authorities.

     Before joining State Life, Mr. Hussain has held senior leadership and management positions with AIA Group Ltd, Milliman, Prudential plc, EY and HSBC. He began his career at an Actuarial consultancy in Pakistan, holds an MSc in Actuarial Management from Cass Business School, City University, London and is a Fellow of the Institute of Actuaries (UK). He joined the Board of Bank AL Habib Limited in January 2026.

     Besides Bank AL Habib Limited, he holds the Directorship on the Boards of the following companies:

     1. Fauji Fertilizer Company Ltd.

     2. Pakistan Cables Ltd.

9. Syed Mohammed Hussain

Syed Mohammed Hussain holds Bachelor's and Master's degrees in Philosophy, Politics and Economics from University of Oxford and is a qualified Barrister (called from Lincoln's Inn), a solicitor, and an Advocate of the Punjab High Court. He was a partner at Richards Butler (now Reed Smith) and practiced before the High Court of England & Wales.

Mr. Hussain spent 24 years at Shell plc in senior management, including serving as Senior Advisor to the Executive Committee and Board and representing Shell at international organizations like Chatham House and The International Institute of Strategic Studies and The Royal Society of Asian Affairs.

He has served on the boards of commercial and trade bodies such as the Netherlands Japan Society, Malaysia Business Council, Pakistan Britain Trade and Investment Forum, and Singapore British Business Council. Currently, he is a Director at IGI General Insurance Limited and joined Bank AL Habib Limited's Board in January 2026.

Details of Membership on the Bank's & other Boards

* Board discontinued "IFRS 9 Committee" on January 30, 2025

Appointment of the Shariah Board (SB) Members

Shariah scholars who meet the Fit and Proper Criteria as laid down by State Bank of Pakistan are appointed as SB members for a term of three years by the Board of Directors and are eligible for re-appointment. Their appointment and re-appointment is subject to prior written clearance of SBP. The three years' term of SB commenced from the date of SBP's clearance for appointment / re-appointment. Any SB member (including Chairperson) may be re-appointed as a member of SB for another term by the Board of Directors, at least two months prior to expiry of the term, subject to a fresh prior written clearance of SBP and pursuant to Fit and Proper Criteria of SBP.

Casual vacancy

Board of Directors of the Bank fills the casual vacancy on the SB that may occur as a result of resignation, removal, termination, or death of a member, within three months from the date on which such vacancy arises. However, the SB member appointed on casual vacancy shall hold the office till the expiry of the existing term of the SB.

Profile of each of the Shariah Board member Mufti Ismatullah Hamdullah

Mufti Ismatullah holds the degrees of "Shahadat-ul-Aalamiyah" and "Takhassus Fil Fiqh" from Jamia Dar-ul-Uloom, Karachi. He is a PhD in Islamic Economics from University of Karachi. He has been associated with Islamic Banking Division of Bank AL Habib Limited since 2006 as Shariah Advisor prior to his appointment as the Chairman of Shariah Board.

He has been teaching Quran, Hadith, Fiqh, Philosophy and Arabic Grammar in Dar-ul-Uloom since 1993. He has a vast experience in issuing Shariah rulings (Fatwa) and is currently serving Dar-ul-Ifta' of Dar-ul-Uloom. So far, he has issued about 28,000 Fatwas regarding various topics and Shariah issues.

His thesis - Zar (Money) in light of Shariah - is considered as one of the most useful research on Islamic Economics and has already been published. He is a renowned research scholar; his research papers have been published in Monthly "Al Balaagh". He wrote a book "Guide to Takaful or Islamic Insurance" that has also been published.

Mufti Sahab is Shariah Advisor of AL Habib Asset Management, IGI window Takaful and Pak Qatar Family Takaful Ltd, he is also a Shariah Board member of Pak Qatar Takaful Group.

Mufti Mohib ul Haq

Mufti Mohib ul Haq is a prominent and a well-recognized Shariah scholar of international repute. His credentials include a specialized degree in Shahadat-ul-Aalamiyah (Masters in Arabic and Islamic Studies) and Al-Takhassus fial-Iftaa' (Specialization in Islamic Jurisprudence and Fatwa) from the esteemed Jamia Darul Uloom, Karachi.

Mufti Mohib ul Haq has a diversified experience of more than 20 years in Islamic Finance Industry. He has been associated with Faysal Islamic Banking since 2011, as the Shariah Advisor, prior to his appointment as the Chairman Shariah Board. He is also a Shariah Board Member of Bank Alfalah Limited and Bank AL Habib Limited.

Previously, he has served as the Shariah Advisor / Shariah Board Member at various Financial Institutions which

include:

• Takaful Pakistan Limited

• Royal Bank of Scotland Berhad, Malaysia

• JS Islamic Mutual Fund

  Mufti Mohib ul Haq has significant research experience related to Islamic Finance and other Shariah related subjects. Further, he is also a member of the State Bank of Pakistan's Committee for Shariah review, standardization of Islamic products and processes, and formalization of Accounting & Auditing Organization for Islamic Financial Institutions ("AAOIFI") Shariah standards for the Pakistan banking industry. He is also an experienced lecturer and trainer in the field of Islamic Finance, Fiqh and Islamic Financial Laws at various institutions which include:

• Jamia Darul Uloom, Karachi

• Centre for Islamic Economics ("CIE")

• National Institute of Banking and Finance ("NIBAF") - SBP

• Institute of Cost and Management Accountants of Pakistan ("ICMA")

• Institution of Business Administration - Centre for Excellence in Islamic Finance ("CEIF")

Mufti Sher Ali

Mufti Sher Ali is a qualified Shariah Scholar Specialized in financial Fiqh and Halal economics, with nearly 7 years of experience in Shariah compliance, advisory and Fatwa issuance as a member of Darul Ifta, Jamiah Tur Rasheed. He holds Ifta (Mufti) and Dars-e-Nizami credentials. He is a Certified Shariah Advisor and Auditor (CSAA - AAOIFI, Bahrain) and is currently pursuing Ph.D. in Islamic studies and Finance, following his M.Phil. thesis on Shariah-compliant framework for Charitable Organizations.

He has served as Resident Shariah Board Member at Bank AL Habib Limited, member of the Shariah Advisory forum at the State Bank of Pakistan. In addition to advisory work, he has contributed as a lecturer at the University of Karachi (SZIC), curriculum committee head at AL- Burhan International, teacher at Al-Ihsan and trainer in Islamic Finance programs, combining Scholarly depth with practical expertise in Islamic finance and Shariah matters.

Mufti Muhammad Hamza

Mufti Muhammad Hamza is serving Bank AL Habib Limited - Islamic Banking as Shariah Board Member since October 2021. He has a diverse professional experience in IBIs and Audit Firms. Prior to his joining, he has served as Shariah Scholar (Assistant Manager Shariah Support) in Product Management and Development Department at Faysal Bank Limited-Islamic. He also served as Shariah Consultant in EY Ford Rhodes.

Mufti Muhammad Hamza possesses both contemporary as well as religious academic qualifications. He holds Shahadat-ul-Aalamiyah (Masters in Islamic and Arabic Studies) along with Takhassus Fiqh-ul-Muamlaat (Islamic Commercial Law and Management Science) from Jamia tur Rasheed, Karachi.

He is also an MBA (Finance) from University of Karachi. Furthermore, he holds "Post Graduate Diploma in Islamic Banking and Takaful" from Centre for Islamic Economics Jamia Darul Uloom Karachi.

He is presently associated with Jamia-tur-Rasheed, Karachi as a Member of Darul Iftaa and he has issued numerous verdicts (Fatawas) on various issues. He is a lecturer in department of Dars-e-Nizami also. Mufti Muhammad Hamza has significant experience of teaching Quran, Hadith, Philosophy, Arabic Grammar, Islamic Jurisprudence (Fiqh) and other related subjects in renowned institutions as Permanent and Visiting Faculty Member such as Jamia tur Rasheed and Al-Burhan international Karachi.

Details of Membership on the Bank's and other Shariah Boards

Composition of Board Committees and their Terms of References (TORs)

The Listed Companies (Code of Corporate Governance) Regulations, 2019 requires the Bank to disclose the composition of all Committees of the Board, viz. Audit Committee, Human Resource & Remuneration Committee, Credit Risk Management Committee, Risk Management Committee, IT Committee, and Islamic Banking Conversion Committee.

During the year, eight meetings of the Audit Committee, five meetings of Human Resource & Remuneration Committee, four meetings of Credit Risk Management Committee, Risk Management Committee, IT Committee, Islamic Banking Conversion Committee and one meeting of IFRS 9 Committee were held, and the attendance of members were as follows:

TORs of Audit Committee of the Board

The key functions in the TORs include the following:

• Recommend to the Board the appointment / re-appointment of external auditors, their removal, audit fees and provision by external auditors of any services to the Bank in addition to audit of its financial statements for Pakistan Operations and Overseas jurisdictions.

• Discuss with external auditors the major observations arising from interim and final audits and review management letter issued by them and management's response thereto;

• Review quarterly, half-yearly and annual financial statements of the Bank with recommendation (s), if

  any, and present to the Board for their approval before their publication.

• Review of quarterly, half-yearly and annual financial statements of the Bank, focusing on:

  • Major judgmental areas;

  • Significant adjustments resulting from the audit;

  • the going-concern assumption;

  • any changes in accounting policies and practices;

  • compliance with applicable accounting standards;

  • compliance with listing regulations and other statutory and regulatory requirements.

  • review of preliminary announcement of results prior to publication.

  • review of significant related party transactions.

• Appropriate measures to safeguard the Bank's assets.

• Review of implementation of Customer Risk Profile (CRP), Know Your Customers (eKYC), Anti Money Laundering (AML)/Combating Financing Terrorism (CFT), Terrorist Financing (TF), Proliferation Financing (PF), Trade Based Money Laundering (TBML), and sanctioned screening related measures.

• Approve yearly audit planning schedule and the estimated timeframe for completion of various audits. Review of implementation status of Audit Plan on quarterly basis.

• Ensure that policies and procedures of the Bank are in accordance with prevailing banking laws and

  regulations of the State Bank of Pakistan and other relevant statutory requirement;

• Institute special projects, value for money studies or other investigations on any matter specified by the Board, in consultation with the CEO and to consider remittance of any matter to the external auditors or to any other external body.

• Recommend the development/ amendments in the Bank's Internal Control Systems and Internal Audit Policy, Audit Manual, and Internal Audit Strategy to the Board of Directors for approval.

• Review and approve Internal Audit Charter, Internal Audit Risk Assessment Policy, Risk Based Audit

Methodology/Risk Based Audit Plan and Annual Risk Assessment of Audit Division.

• Approval of Testing Plan for Internal Control over Financial Reporting (ICFR). Review of progress on Internal Control over Financial Reporting (ICFR) project and periodical reporting made by the Audit Division on significant findings pointed out during the testing of existing key controls relating to Internal Control over Financial Reporting (ICFR).

• Review the significant audit findings presented by Audit Division in Internal Audit Reports of domestic & overseas operations (Branch/ Islamic Banking Branches Audits, Centralized Credit Audits, Centralized Trade Audits, Management Audits, Information System Audits and Shariah Audits).

• Review of findings/deviations noted by internal audit during assessment of implementation of the bank's

  NPLs strategy and form an independent view of the efficacy of the NPLs Strategy.

• Review the significant findings of Inspection Reports of State Bank of Pakistan, regulators of overseas

  branches and the status of compliance submitted by the Bank's Management.

• Ensure compliance of the corrective actions as required by Shariah Board on the reports of 'Internal Shariah Audit' and 'External Shariah Audit' and review of status of unresolved issues of Internal Shariah Audit reports as per Shariah Governance Framework for Islamic Banking Institutions.

• Review of quarterly Report of all Shariah Non-Compliance events/transactions.

• Review the reports on internal control system presented by Audit Division on quarterly basis as required

  under internal control guidelines issued by the State Bank of Pakistan.

• Review of six monthly compliance report on Bank's compliance status, in each jurisdiction, to host country's regulatory requirements and inspection reports etc.

• Review of Pending audit findings of Audit Report of Bahrain Branch.

• Review and approve the increments of internal auditors and recommend the performance appraisal and

  increment / promotion of Head of Internal Audit.

• Approve annual budget of Audit Division for expenditures and staff requirements. Periodical review of utilization of assigned expenditure budget.

• Review of trainings imparted to staff of Audit Division.

• Evaluation of performance of CIA against set KPIs on annual basis by BAC.

• Review of control breaches of critical nature occurring in at least last two audit periods.

• Coordination between the internal and external auditors of the Bank and review their findings to ensure

  that necessary steps for implementing their recommendations have been taken.

• Adequacy and effectiveness of internal control systems including financial and operational controls,

  accounting systems and reporting structure;

• Compliance with the best practices of Corporate Governance;

• Consideration of major findings of internal investigation of activities characterized by fraud, forgeries and misuse of powers and management responses.

• Review of matters relating to operational risk and operational loss event reports including implementation

  of Operational Risk Framework.

• Review of observations pointed out by the Audit Division during the review of BASEL design and

  implementation.

• Annual review of internal complaint Handling mechanism.

• Review of Zero Tolerance cases decided by the Disciplinary Action Committee.

• Review of summary of cases investigated by Fraud Risk Management Division under Bank's Policy on Employees' Duty to Report.

• Review of summary of cases received and investigated by Fraud Risk Management Division under Bank's Anti-Bribery & Corruption Policy.

• Review of the significant audit findings on the Bank's outsourced/insourced arrangements.

• Review of annual report of containing incidents of robbery and dacoity.

• Review of summary of outstanding issues / exceptions and the suggested future course of action.

• Review of major control gaps relating to parallel banking identified by Audit Division.

• Consider any other issue or matter as may be assigned by the Board of Directors or required by regulatory

authorities.

TORs of Human Resource & Remuneration Committee of the Board

The key functions in the TORs include the following:

• Review and recommend to the Board for approval of Human Resource Policy & Service Rules of the Bank.

• Recommend to the Board the selection, evaluation, compensation (including retirement benefits), and

  succession planning of the CEO.

• Recommend to the Board the selection, evaluation, compensation (including retirement benefits) of COO

  (if any), CFO, Company Secretary, and Head of Internal Audit.

• Consider and approve recommendations of CEO on above matters for key management positions who

  report directly to CEO or COO (if any).

• Review the manpower budget of the Bank, taking into consideration the expansion programme proposed

  by the Management.

• Review training activities and management development programmes for employees of the Bank.

• Review total staff strength with cadre and location-wise break up of employees.

• Review on quarterly basis name-wise details of employees of Senior Chief Manager level and above who have joined on left service of the Bank during the period, along with reasons for their separation.

• Recommend the Remuneration Policy to the Board for approval, ensuring that the Remuneration Policy is

  fair and competitive, and encourages performance and motivation.

• Recommend to the Board the "structure" of compensation package of Executive Directors, Chief Executive,

  Key Executives, and other employees, as may be required by the Board.

  TORs of Credit Risk Management Committee of the Board

  The key functions in the TORs include the following:

• Review from time to time that the Management has put in place effective policies and information systems to identify and mitigate credit risk.

• Review that the Management follows appropriate procedures to recognize adverse trends in the credit portfolio of the Bank, identifies weaknesses in the loan portfolio, takes corrective/remedial actions, and maintains an adequate level of provisions for potential loan losses in the light of the requirements of the Prudential Regulations.

• Review and recommend to the Board any changes in the Bank's policies related to credit.

• Review the quality of the Bank's credit portfolio on a quarterly basis through various comparisons / benchmarking, including but not limited to:

  • Industry Benchmarks / Positioning.

  • Diversification of advances by industry, business segment, etc.

  • Concentration of advances in private and public sectors.

  • Movement / changes in advances by region / industry / business segments.

  • Details of large limits approved / enhanced during the quarter, as per the threshold prescribed by the

    Committee.

  • Maturity profile of the loan portfolio.

  • Review of Non-Performing Loans (NPLs).

  • Review of Watch-List & NPL accounts, as per the threshold prescribed by the Committee.

  • Review / approval of any policy exceptions.

  • Review restructured / rescheduled accounts and written-off advances, as per the threshold prescribed

    by the Committee.

  • Review any adverse findings of Credit Risk Review Department (CRRD).

• Consider Write Off/Waiver of NPLs up to Rs. 50 million.

• Recommend cases for Write Off/Waiver, exceeding Rs. 50 million, to the Board of Directors for consideration and approval.

  TORs of Risk Management Committee of the Board

  The key functions in the TORs include the following:

• Review from time to time that the management has put in place effective policies and information systems to identify and mitigate the following risks:

  
  
  

  • Market Risk, which includes Interest Rate Risk, Foreign Exchange Risk, and Equity Price Risk;

  • Liquidity Risk.

• Review summary of risk reports relating to the following risks:

  • Credit Risk,

  • Operational Risk,

    Which are reviewed in detail by the Credit Risk Management Committee and the Audit Committee of the Board, respectively.

• Review and provide guidance regarding integrated risk management (also known as enterprise risk

  management), covering various significant risk exposures of the Bank.

• Review the Bank's capital adequacy ratio and establish a process for internal capital adequacy assessment process (ICAAP) using integrated risk management.

• Review and recommend to the Board any changes in the Bank's Treasury and Investment Policy, Market Risk Policy, Liquidity Risk Policy, Risk Management Policy, and ICAAP.

• Review the credit rating report of the Bank, issued by the credit rating agency.

• Review any changes in laws and regulations relating to Market Risk, Liquidity Risk and Capital Adequacy.

• Review changes in prevailing economic and market conditions.

• Review the financial data of other comparable banks.

• Review and provide guidance on sustainability-related initiatives which cover environmental, social, and

  governance risks.

  TORs of IT Committee of the Board

  The key functions in the TORs include the following:

• Review and recommend the Bank's IT and Digital strategies, relevant policies, frameworks, and changes

  thereof, for the Board's approval.

• Provide strategic direction for digital banking by adopting emerging technologies, offering new products

  and services with enhanced customer experience.

• Review the role of IT as an enabler to provide competitive advantage and efficient services to customers.

• Review the level of expertise of IT personnel and assess their adequacy in number and skillset as well as

  continuous professional development.

• Review major IT related risks and ensure that IT Risk Management strategies are designed and implemented to address IT related risks including cyber-attacks and attacks on multiple critical infrastructure sectors in order to achieve resilience.

• Receive periodic updates from IT Steering Committee to monitor all IT related projects, particularly those which are approved by the Board.

• Ensure that IT related procurements are in line with the strategic directions provided by the Board.

• Review and recommend any IT related material outsourcing arrangement including obtaining IT experts'

  opinion.

• Constitute/reconstitute IT Steering Committee and approve its TORs and any revisions thereof.

• Review the MIS on incidents, logs, breaches, and significant incidents on a regular basis.

  TORs of Islamic Banking Conversion Committee of the Board

  The key functions in the TORs include the following:

• Constitution and provide guidance to the Management Committee to administer the project.

• Review and recommend Bank AL Habib's conversion plan to the board for approval.

• Review of the progress made against implementation of conversion plan.

• Ensure compliance of regulatory and Shariah guidelines for conversion of conventional Banking into Islamic.

• Ensure smooth transformation of conventional banking into Islamic.

Board's Oversight over Shariah Compliance Functions and Shariah Board (SB)

The Shariah Board members meet the Board of Directors on half yearly basis and give detailed briefings on the Shariah compliance environment, the issues/weaknesses (if any), and recommendations to improve Shariah compliance environment and to ensure timely and effective enforcement of the SB's decisions, Fatwas, observations and recommendations.

Further, every year, Shariah Board Report is also presented by the Shariah Board in the meeting of the Board

of Directors of the Bank.