Transmission of Quarterly Financial Statements for the period ended 30.06.2026

Islam Zaib Chairman / Non-Executive Director

Kamran Ahmed Afridi Secretary Finance / Non-Executive Director

Syed Asad Ali Shah Independent Director

Tahir Jawaid Independent Director

Osman Asghar Khan Independent Director

Muhammed Shahid Sadiq Independent Director

Natasha Jehangir Khan Independent Director

Hassan Raza

Mufti Muhammad Zahid Chairman Shariah Board

Mufti Muhammad Arif Khan Member Shariah Board

Mufti Abdul Wahab Member Shariah Board

Qazi Abdul Samad Resident Shariah

Board Member (RSBM)

Syed Asad Ali Shah Chairman

Kamran Ahmed Afridi Member

Muhammed Shahid Sadiq Member

Osman Asghar Khan Member

Islam Zaib Chairman

Natasha Jehangir Khan Member

Tahir Jawaid Member

Osman Asghar Khan Member

Kamran Ahmed Afridi Chairman

Muhammed Shahid Sadiq Member

Hassan Raza Member

Osman Asghar Khan Chairman

Tahir Jawaid Member

Natasha Jehangir Khan Member

Syed Asad Ali Shah Member

Hassan Raza Member

Natasha Jehangir Khan Chairperson

Muhammed Shahid Sadiq Member

Hassan Raza Member

Irfan Saleem Awan

Raza Mohsin Qizilbash

The Bank of Khyber

24 The Mall, Peshawar Can .

UAN# 00-92-91-111 95 95 95

URL: https://www.bok.com.pk

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

M/s. Mohsin Tayebaly & Co., Karachi

THK Associates (Pvt) Ltd.

Plot # 32 C, Jami Commercial Street 2 D.H.A, Phase VII,

Karachi 75500

On behalf of the Board of Directors of the Bank of Khyber ( The Bank ), I am pleased to present the condensed interim financial information of the Bank for the six-month period ended June 30, 2026.

Financial Highlights

The financial results of the Bank (Standalone) for the period under review are as follows:

(Rs. in Million)

As at

(Rs. in Million)

For the six-month period ended

regional geopolitical headwinds. In this scenario, the State Bank of Pakistan maintained a cautious monetary approach to bala nce price stability with growth incentives. The SBP raised the key benchmark rate by 100 basis points to 11.50% with effect from April 28, 2026 and the same rate is maintained to date.

In this backdrop, during the six-month period ended June 30, 2026, the Bank posted a profit before tax of Rs. 3,185 million, while profit after tax stood at Rs. 1,466 million, compared to profit before tax of Rs. 7,194 million and profit after tax of Rs. 3,365 mi llion earned in the corresponding period last year. The market interest rate movements had negative impact on the comparative net yields

portfolio which thereby resulted in reduction in the net interest income as well as gain on securities for the half year. Moreover, Q2-2026 profitability moderated compared to Q1, driven by lower net markup income alongside higher non -markup expenses and credit loss provisions.

Non-markup expenses registered an increase of 13% during the six-month period compared to the corresponding period last year, mainly reflecting impact of increase in business activities and inflationary adjustments.

As a result of continuous recovery efforts and the prudent lending strategy pursued by management, the Bank achieved net reduction in NPLs from Rs. 12,530 million as at December 31, 2025 to Rs. 11,703 million as at June 30, 2026. Similarly, the B ank recorded a net reversal of credit loss allowance of Rs. 292 million during this half year.

Notwithstanding comparative reduction in profitability, the Bank maintained strong balance sheet growth during the period, reflecting continued business expansion and focus on strategy implementation.

June 30, 2026 against Rs. 453,300 million as of December 31, 2025. Net advances increased to Rs. 171,027 million as at June 30, 2026 (December 31, 2025: Rs. 126,706 million) while net investments increased to Rs. 353,233 million as compared to Rs. 274,957 million as at December 31, 2025.

The balance sheet growth during the period was funded by sizeable increase in deposits which amounted to Rs. 486,658 million as at June 30, 2026 as compared to Rs. 378,123 as of December 31, 2025. Similarly, borrowings increased to Rs. 71,720 million as against Rs. 35,698 million as at December 31, 2025. Alongside growth in balance sheet, the Bank continues to maintain strong liquidity and capital profile with LCR and CAR standing 205.10% and 15.46% respectively as at June 30, 2026 well above the regulatory requirements .

The Bank also continued to make progress towards implementation of its Islamic Banking conversion strategy. During the period under view, the Bank converted additional 11 conventional banking branches into Islamic banking Branches (IBBs). At the period end, the Bank is operating with 256 branches across the country out of which 212 are dedicated IBBs. The deposit of Islamic banking operations of the Bank as of June 30, 2026 stood at Rs. 259,275 million thereby reflecting growth of 28% since December 31, 2025.

Update on Subsidiary

On January 19, 2026, the SECP issued certificate of incorporation of the BOK Currency Exchange Company (Pvt.) Limited, a wholly owned subsidiary of the Bank. In this respect, the Bank has injected an amount of Rs. 1 billion as paid-up capital of the BOK exchange company during the six-month period under review. Accordingly, the Bank has also prepared and presented its consolidated financial statements for the six-month ended June 30, 2026. Currently, the subsidiary is in the process of completing the remaining regulatory formalities required for obtaining necessary approvals to commence foreign exchange business operations.

Ratings

In June 2026, The Pakistan Credit Rating Agency Limited (PACRA) upgraded the medium to long- -

-

Moreover, in June 2026, VIS Credit Rating Company Limited (VIS) re- medium to long term entity rating of the Bank at A- Double A Minus) and short-

protection factors. In April 2026,

Islamic Banking Operations of the Bank

to global standards in terms of fulfi

The medium to long- -

-

Future Outlook

The Bank remains vigilant of prevailing economic conditions and will continue to focus on sustaining growth momentum while

f service quality standards and the delivery of state-of-the-art banking services through effective leverage of technology and a well -trained workforce.

Furthermore, the Bank will prioritize prudent increase in advances across all economic segments and also aims to diversify its financing portfolio by targeting high-quality private sector borrowers for fresh loans, with an emphasis on opportunities in ancillary business and trade finance.

Acknowledgments

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

For and on behalf of the Board of Directors

Peshawar: August 27, 2026

Hassan Raza

Managing Director & CEO

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of The Bank of Khyber

Report on review of Unconsolidated Condensed Interim Financial Statements Introduction

We have reviewed the accompanying unconsolidated condensed interim statement of financial

position of The Bank of Khyber (the Bank) as at June 30, 2026 and the related unconsolidated condensed interim statement of profit and loss account, unconsolidated condensed interim statement of comprehensive income, unconsolidated condensed interim statement of changes in equity, and unconsolidated condensed interim cash flow statement, and notes to the unconsolidated condensed interim financial statements for the six month period then ended (here-in-after referred to as the "unconsolidated interim financial statements"). Management is responsible for the preparation and presentation of these unconsolidated interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these unconsolidated interim 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 unconsolidated interim financial statements 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 unconsolidated interim financial statements are not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.

Other Matter

Pursuant to the requirement of Section 237 (1) (b) of the Companies Act, 2017, only cumulative figures for the half year, presented in the second quarter accounts are subject to a limited scope review by the statutory auditors of the Bank. Accordingly, the figures of the unconsolidated condensed interim statement of profit and loss account and unconsolidated condensed interim statement of comprehensive income for the quarter ended June 30, 2026 have not been reviewed by us.

The engagement partner on the audit resulting in this independent auditor's report is M. Imtiaz Aslam.

Chartered Accountants Islamabad

Date: August 28, 2026

UDIN: RR202610050qdspcRM0m

Bank of Khyber

(un-audited) (Audited)

June 30, December 31,

2026 2025

Note -------- Rupees in"000 --------

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

MANAGING DIRECTOR

CHIEF FINANCIAL OFFICER

DIRECTOR DIRECTOR DIRECTOR

Quarter ended Period ended

Basic and diluted earnings per share

----------Rupees ---------

33 0.39 1.52 1.27 2.91

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

MANAGING DIRECTOR

CHIEF FINANCIAL OFFICER

DIRECTOR DIRECTOR DIRECTOR

Quarter ended Period ended

April 1 to

June 30, 2026

April 1 to

June 30, 2025

January 1 to

June 30, 2026

January 1 to

June 30, 2025

--------------------- Rupees in '000 ---------------------

Profit after taxation for the period 453,084 1,762,834 1,465,981 3,365,366

Other comprehensive income / (loss)

Items that may be reclassified to statement of profit and loss account in subsequent periods:

Movement in surplus / (deficit) on revaluation of debt investments through FVOCI - net of tax

Loss / (gain) on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax

9,613 985,961 (1,313,518) (119,804)

Items that will not be reclassified to statement of profit and loss account in subsequent periods:

Movement in (deficit) / surplus on revaluation of equity investments - net of tax

Share of (deficit) / surplus on revaluation of investment in associate - net of tax

(12,216) (58,921) 10,935 20,818

Total comprehensive income 450,481 2,689,874 163,398 3,266,380 The annexed notes 1 to 41 form an integral part of these unconsolidated condensed interim financial statements.

MANAGING DIRECTOR

CHIEF FINANCIAL OFFICER

DIRECTOR DIRECTOR DIRECTOR

Share

Statutory

Surplus / (deficit) on revaluation of

Unappropriated

capital

reserve

Investments

Property and equipment

Non-banking assets

profit Total

--------------------------------------------- Rupee s in '000 ---------------------------------------------

Movement in surplus on revaluation of investments in debt instruments through OCI - net of tax Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax Share of surplus on revaluation of investment of associate - net of tax

Movement in surplus on revaluation of equity investments - net of tax

Movement in surplus on revaluation of investments in debt instruments through FVOCI- net of tax Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax

Share of surplus on revaluation of investments of associate - net of tax Movement in surplus on revaluation of equity investments - net of tax Remeasurement (loss) on defined benefit obligations - net of tax

Deficit transferred to profit and loss on reclassification of debt investment - net of tax Movement in surplus on revaluation of non-banking assets - net of tax

Movement in deficit on revaluation of investments in debt instruments through OCI - net of tax Gain on sale of debt investments carried at FVOCI reclassified to profit and loss - net of tax Share of surplus on revaluation of investment of associate - net of tax

Movement in surplus on revaluation of equity investments - net of tax

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

MANAGING DIRECTOR

CHIEF FINANCIAL OFFICER

DIRECTOR DIRECTOR DIRECTOR

January 1 to

June 30, 2026

January 1 to

June 30, 2025

Note ------- Rupees in '000 -------

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

MANAGING DIRECTOR

CHIEF FINANCIAL OFFICER

DIRECTOR DIRECTOR DIRECTOR

1. STATUS AND NATURE OF BUSINESS

   The Bank of Khyber (the Bank) was established in Pakistan under The Bank of Khyber Act, 1991 and is principally engaged in the business of commercial banking and related services. The Bank acquired the status of a scheduled bank in 1994 and is listed on the Pakistan Stock Exchange Limited. The registered office of the Bank is situated at 24-The Mall, Peshawar Can , Peshawar. The Bank operates 256 branches including 212 Islamic banking branches (December 31, 2025: 254 branches including 199 Islamic banking branches). During the period, the Bank has converted additional 11 of its conventional banking branches into Islamic banking branches. The long term credit rating of the Bank assigned by VIS Credit Rating Company Limited and Pakistan Credit Rating Agency Limited (PACRA) are 'AA-' and 'AA-' (December 31, 2025: 'AA-' and 'A+') respectively and the short-term credit ratings assigned are 'A1' (A-One) and 'A-1' (A-One) (December 31, 2025: 'A1' (A-One) and 'A-1' (A-One)) respectively. The majority shares (i.e. 70.20%) of the Bank are held by Government of Khyber Pakhtunkhwa (GoKP).

   During the period, the Securities and Exchange Commission of Pakistan (SECP) has issued certificate of incorporation of 'BOK Currency Exchange Company (Private) Limited' dated January 19, 2026 (incorporated as a wholly owned subsidiary of the Bank), and the Bank has injected an amount of Rs. 1,000 million as paid up capital in BOK Exchange Company. Currently, the BoK Exchange Company is in the process of completing the regulatory formalities and obtaining the necessary approvals to commence its operations.

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

2. BASIS OF PREPARATION

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

   2. These unconsolidated condensed interim financial statements represent separate financial statements of the Bank in which investment in subsidiary is accounted for on the basis of cost less accumulated impairment losses, if any. Consolidated condensed interim financial statements are prepared seperately.

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

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

      
      
      

      NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

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

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

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

2. STATEMENT OF COMPLIANCE

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

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

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

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

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

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

   2. The disclosures made in these unconsolidated condensed interim financial statements have been limited based on the format prescribed by the SBP vide BPRD Circular Le er No. 2 dated February 9, 2023 and IAS 34. These unconsolidated condensed interim financial statements do not include all the information and disclosures required in the audited annual financial statements, and should be read in conjunction with the audited annual financial statements for the year ended December 31, 2025.

   3. SBP vide BSD Circular Le er No. 10, dated August 26, 2002, has deferred the applicability of International Accounting Standard (IAS) 40, Investment Property for banking companies till further instructions. Moreover, SBP vide BPRD Circular No. 4, dated February 25, 2015, has deferred the applicability of Islamic Financial Accounting Standards (IFAS) 3, Profit and Loss Sharing on Deposits. Accordingly, the requirements of these standards have not been considered in the preparation of these unconsolidated condensed interim financial statements.

      
      
      

      NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

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

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

      • IFRS 7, 'Financial Instruments: Disclosures'; the SECP through S.R.O. 742(1)/2025 dated April 16, 2025 has required disclosures regarding the significance of financial instruments to the Bank's financial position and performance, as well as the nature, extent, and management of risks arising from such instruments. Accordingly, the Bank will adopt IFRS 7 in preparing its annual financial statements for the year ending December 31, 2026. However, the disclosure requirements of IFRS 7 do not apply to these unconsolidated condensed interim financial statements except for those specified in paragraph 16A(j) of IAS 34, 'Interim Financial Reporting'.

      • certain amendments to IFRS 7 'Financial Instruments: Disclosures' and IFRS 9 'Financial Instruments' have become applicable on the Bank which clarify the date of recognition and derecognition of a financial asset or financial liability. These amendments do not have any material impact and therefore, have not been detailed in these unconsolidated condensed interim financial statements.

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

      There are certain new and amended standards, issued by IASB, interpretations and amendments that are mandatory for the Bank's accounting periods beginning on or after January 1, 2027 but are considered not to be relevant or do not have any material effect on the Bank's unconsolidated condensed interim financial statements except for:

      • the new standard - IFRS 18 'Presentation and Disclosure in Financial Statements' (published in April 2024) with applicability date of January 1, 2027. Application of IFRS 18 will impact the presentation of 'Statement of Profit and Loss Account' with certain additional disclosures as and when instructed by SBP.

2. MATERIAL ACCOUNTING POLICY INFORMATION

   The material accounting policies applied in the preparation of these unconsolidated condensed interim financial statements are consistent with those applied in the preparation of the annual audited financial statements of the Bank for the year ended December 31, 2025, except for changes mentioned in note 4.1 below.

   1. IFRS 9 - Financial Instruments

      1. The Bank adopted IFRS 9 effective from January 1, 2024, except for certain relaxations and extensions issued by the SBP from time to time. The impacts of these relaxations and extensions were incorporated in the annual audited financial statements of the Bank for the years ended December 2024 and 2025, with the modified retrospective approach as permi ed under IFRS-9.

         
         
         

         NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

1. 1. 1. In addition, SBP in a separate instruction vide le er BPRD/RPD/822456/25 dated January 22, 2025 allowed an extension for application of Effective Interest Rate (EIR) upto December 31, 2025. During the current period, in accordance with aforementioned instructions, the Bank has applied the EIR on the financial instruments as at January 1, 2026. Accordingly, cumulative impact of application of EIR amounting to Rs. 8,977 thousand, net of tax, has increased the equity at the beginning of the current period with a corresponding impact on the income / mark-up accrued and mark-up / return / interest payable.

   2. The SBP has directed the Banks through its BPRD Circular Le er No. 1 dated January 22, 2025 to continue to apply the existing revenue recognition methodology for Islamic Operations, including the requirements of IFAS 1 and IFAS 2 until further instructions. Had the IFRS-9 been adopted in its entirety for revenue recognition from islamic operations. The profit after tax of the bank would have been higher by Rs. 185,265 thousand.

   3. Critical accounting estimates and judgements

      The basis for accounting estimates adopted in the preparation of these unconsolidated condensed interim financial statements are the same as that applied in the preparation of the annual audited financial statements for the year ended December 31, 2025.

   4. Financial risk management

      The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the annual audited financial statements for the year ended December 31, 2025.

      (Un-audited) (Audited)

      June 30, December 31,

2. CASH AND BALANCES WITH TREASURY BANKS

   In hand

   2026 2025

   -------- Rupees in '000 --------

   Local currency	8,649,359		7,042,878
   Foreign currencies	224,042		142,560
   With State Bank of Pakistan in	8,873,401		7,185,438
   Local currency current accounts	18,794,476		14,897,044
   Foreign currency current accounts	35,444		105,018
   Foreign currency deposit accounts	321,033		266,202
   With National Bank of Pakistan in	19,150,953		15,268,264
   Local currency current accounts	5,837,714		2,321,247
   Local currency deposit accounts	12,202		612,385
   Foreign currency current accounts	8,683		10,442
   	5,858,599		2,944,074
   Prize bonds	354		354
   Less: Credit loss allowance held against cash and
   balances with treasury banks	(16)		(14)

   Cash and balances with treasury banks - net of credit loss allowance 33,883,291 25,398,116

   
   
   

   NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

(Un-audited) (Audited)

June 30, December 31,

1. BALANCES WITH OTHER BANKS

   In Pakistan

   In current accounts In deposit accounts

   Outside Pakistan

   In current accounts In deposit accounts

   Less: Credit loss allowance held against balances

   Note

   2026 2025

   -------- Rupees in '000 --------

   3,880,305	1,010,786
   632,706	344,727

   4,513,011 1,355,513

   957,650	357,530
   9,087,993	1,514,164

   10,045,643 1,871,694

   with other banks (10,506) (10,140)

   Balances with other banks - net of credit loss allowance 14,548,148 3,217,067

2. LENDINGS TO FINANCIAL INSTITUTIONS

   Placements with financial institutions 217,140 224,236 Call / clean money lending 1,500,000 3,300,000

   1,717,140 3,524,236

   Less: Credit loss allowance held against lendings to

   financial institutions 7.1 (83,508) (85,687) Lendings to financial institutions - net of credit loss allowance 1,633,632 3,438,549

   (Un-audited) (Audited)

   June 30, 2026 December 31, 2025

   1. Lendings to financial institutions - particulars of credit loss allowance

      Lending

      Credit loss allowance

      Lending

      Credit loss allowance held

      Note

      held

      ---------- Rupees in '000 ----------

      Domestic Performing Under performing	Stage 1 Stage 2		1,500,000 -	- -	3,300,000 -	- -
      Non-performing	Stage 3
      Substandard			-	-	-	-
      Doubtful			-	-	-	-
      Loss		7.2	217,140	83,508	224,236	85,687
      			217,140	83,508	224,236	85,687
      Total			1,717,140	83,508	3,524,236	85,687
      Overseas			- - - -
      Total			- - - -

   2. As at June 30, 2026, the Bank has availed the forced sales value benefit amounting to Rs. 133.63 million (December 31, 2025: Rs. 138.55 million), that is equivalent to the market value of the Pakistan Investment Bonds received by the Bank as part of the settlement agreement against a non performing lending of the Bank. The resulting increase in the unappropriated profit (net of tax) amounting to Rs. 64.14 million (December 31, 2025: Rs. 65.12 million) is not available for the distribution of cash or stock dividend to shareholders or bonus to employees.

      
      
      

      NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

1. INVESTMENTS

   (Un-audited) June 30, 2026

   1. Investments by type:

      Cost / amortised cost

      Credit loss allowance

      Surplus / (deficit)

      Carrying value

      --------------Rupees in '000--------------

      Fair value through profit or loss (FVPL)

      Non Government Debt Securities 1,364,640 - (15,459) 1,349,181

      Fair value through other comprehensive income (FVOCI)

      Federal Government Securities	340,022,536	-	(1,039,827)	338,982,709
      Shares	677,081	-	(155,675)	521,406
      Non-Government Debt Securities	2,371,795	(137,493)	(125,087)	2,109,215
      	343,071,412	(137,493)	(1,320,589)	341,613,330
      Amortised cost (AC)
      Federal Government Securities	8,636,803	-	-	8,636,803
      Non-Government Debt Securities	507,882	(13)	-	507,869
      	9,144,685	(13)	-	9,144,672
      Associate	125,994	-	-	125,994
      Subsidiary	1,000,000	-	-	1,000,000
      Total investments	354,706,731	(137,506)	(1,336,048)	353,233,177

      (Audited) December 31, 2025

      Cost / amortised cost

      Credit loss allowance

      Surplus / (deficit)

      Carrying value

      -------------Rupees in '000-------------

      Fair value through profit or loss (FVPL)

      Non Government Debt Securities 1,364,680 - (15,459) 1,349,221

      Fair value through other comprehensive income (FVOCI)

      Federal Government Securities	259,127,494	-	1,661,852	260,789,346
      Shares	677,081	-	(178,456)	498,625
      Non-Government Debt Securities	2,617,666	(141,626)	(90,270)	2,385,770
      	262,422,241	(141,626)	1,393,126	263,673,741
      Amortised cost (AC)
      Federal Government Securities	9,308,916	-	-	9,308,916
      Non-Government Debt Securities	507,264	(5)	-	507,259
      	9,816,180	(5)	-	9,816,175
      Associate	117,490	-	-	117,490
      Total investments	273,720,591	(141,631)	1,377,667	274,956,627

      (Un-audited) (Audited)

      June 30,

      2026

      December 31,

      2025

   2. Investments given as collateral Note ------- Rupees in '000 --------

      Market Treasury Bills		-	-
      Pakistan Investment Bonds		43,474,337	13,878,200
      Ijara Sukuks		19,473,726	-
      	8.2.1	62,948,063	13,878,200

      1. The market value of securities given as collateral is Rs. 63,476.18 million (December 31, 2025: Rs. 13,871.20 million).

         THE BANK OF KHYBER

         NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED)

         
         
         

         NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

THE BANK OF KHYBER

NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

(Un-audited) (Audited)

June 30,

2026

December 31,

2025

1. ADVANCES Performing Non performing Total

   Note

   (Un-audited) June 30,

   2026

   (Audited) December 31,

   2025

   (Un-audited) June 30,

   2026

   (Audited) December 31,

   2025

   (Un-audited) June 30,

   2026

   (Audited) December 31,

   2025

   ------------Rupees in '000------------

   Loans, cash credits, running finances, etc.		49,327,485		41,044,761		9,247,116		10,367,438		58,574,601		51,412,199
   Islamic financing and related assets		123,372,041		86,833,272		2,236,254		1,943,405		125,608,295		88,776,677
   Bills discounted and purchased		-		99,608		219,630		219,630		219,630		319,238
   		172,699,526		127,977,641		11,703,000		12,530,473		184,402,526		140,508,114
   Impact of fair valuation and modification of advances		(1,834,483)		(1,903,583)		-		-		(1,834,483)		(1,903,583)
   Advances - gross		170,865,043		126,074,058		11,703,000		12,530,473		182,568,043		138,604,531
   Credit loss allowance against advances	9.3
   - Stage 1		605,888		702,763		-		-		605,888		702,763
   - Stage 2		523,401		395,797		-		-		523,401		395,797
   - Stage 3		-		-		10,411,784		10,800,150		10,411,784		10,800,150
   		1,129,289		1,098,560		10,411,784		10,800,150		11,541,073		11,898,710

   Advances - net of credit loss allowance 169,735,754 124,975,498 1,291,216 1,730,323 171,026,970 126,705,821

   (Un-audited) (Audited)

   June 30, December 31,

   1. Particulars of advances (gross)

      2026 2025

      ------ Rupees in '000 ------

      In local currency	182,568,043		138,604,531
      In foreign currencies	-		-
      	182,568,043		138,604,531

      
      
      

      NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

(Un-audited) (Audited)

June 30, 2026 December 31, 2025

1. 1. Advances - Category of classification

      Outstanding amount

      Credit loss allowance

      Outstanding amount

      Credit loss allowance held

      held

      --------------------- Rupees in '000 ---------------------

      Domestic Performing	Stage 1	118,551,256		605,888		81,305,726		702,763
      Underperforming	Stage 2	52,313,787		523,401		44,768,332		395,797
      Non-performing	Stage 3
      Other assets especially mentioned (OAEM)		59,006		41,888		151,988		81,548
      Substandard		511,023		333,988		774,959		530,827
      Doubtful		794,166		518,057		419,689		283,341
      Loss		10,338,805		9,517,851		11,183,837		9,904,434
      		11,703,000		10,411,784		12,530,473		10,800,150
      Total		182,568,043		11,541,073		138,604,531		11,898,710
      Overseas		-	-		-		-
      Total		-	-		-		-

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

      The Bank has adopted IFRS 9 with effect from January 1, 2024. In accordance with the SBP's IFRS 9 Application Instructions (together with BPRD Circular Le er No.16 of 2024 dated July 29, 2024), credit loss allowance / provision against NPLs has been taken at higher of the i) provision as required under SBP's Prudential Regulations; or ii) credit loss allowance computed in accordance with the requirements of the Application Instructions. This has effectively reduced the cumulative FSV benefit availed by the Bank as on period end. As at June 30, 2026, the Bank has availed cumulative benefit of forced sales value of Rs. 743.53 million (December 31, 2025: Rs. 936.19 million). Increase in unappropriated profit amounting to Rs. 356.90 million (December 31, 2025: Rs. 440.00 million) is not available for the distribution of cash or stock dividend to shareholders or bonus to employees.

      (Un-audited) (Audited)

      June 30, December 31,

2. PROPERTY AND EQUIPMENT Note

   2026 2025

   ------ Rupees in '000 ------

   Capital work-in-progress 10.1 141,570 290,463

   Property and equipment 4,442,976 4,506,076

   4,584,546 4,796,539

   1. Capital work-in-progress

      Civil works 137,333 76,921

      Equipment 4,237 212,400

      Furniture and fixtures - 216

      Advances to suppliers - 926

      141,570 290,463

      
      
      

      NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

(Un-audited)

For the six months ended

June 30,

2026

June 30,

2025

The following additions have been made to property and equipment during the period:

------ Rupees in '000 ------

(Un-audited)

For the six months ended

June 30,

2026

June 30,

2025

No intangible assets were disposed off during the periods ended June 30, 2026 and June 30, 2025.

(Un-audited) (Audited)

June 30, December 31,

13 DEFERRED TAX ASSETS

2026 2025

------ Rupees in '000 ------

Bank of Khyber

(Un-audited) (Audited)

June 30, December 31,

2026 2025

Note ------ Rupees in '000 ------

(Un-audited) (Audited)

1. BORROWINGS

   June 30,

   2026

   December 31,

   2025

   Secured

   Borrowings from State Bank of Pakistan (SBP) under:

   ------ Rupees in '000 ------

   - Export refinance scheme	1,971,000		2,205,700
   - Long term financing facility	2,024,246		2,367,827
   - Refinance and credit guarantee scheme for women entrepreneurs	38,443		46,242
   - Financing facility for renewable energy	175,442		204,448
   - Refinance facility for modernization of Small and Medium Enterprises (SMEs)	115,372		134,449
   - Refinance facility for combating COVID-19	75,359		182,745
   - SME Asaan Scheme (SAAF)	227,278		321,801
   - Financing facility for storage of agriculture produce	95,077		107,538
   - Repurchase agreement borrowings	42,351,908		-
   - Acceptance mudarbah	19,473,726		-
   	66,547,851		5,570,750
   Repurchase agreement borrowings	1,122,429		13,878,200
   Total secured	67,670,280		19,448,950
   Unsecured

   Call borrowings 4,050,000 16,249,028

   Total 71,720,280 35,697,978

2. DEPOSITS AND OTHER ACCOUNTS

   (Un-audited) (Audited)

   June 30, 2026 December 31, 2025

   80,703,550	1,302,549	82,006,099	68,296,014	744,527	69,040,541
   207,083,653	104,145	207,187,798	176,241,734	116,671	176,358,405
   173,982,634	265,589	174,248,223	107,567,941	601,574	108,169,515
   18,731,042	-	18,731,042	21,709,929	-	21,709,929

   In local currency

   In foreign currencies

   Total In local currency

   In foreign currencies

   Total

   Customers Current deposits Saving deposits Term deposits Others

   Financial Institutions Current deposits Saving deposits

   Term deposits

   -------------------------------- Rupees in '000 --------------------------------

   1,042,106	31,071	1,073,177	1,999,589	30,896	2,030,485
   3,207,508	-	3,207,508	814,345	-	814,345
   204,400	-	204,400	-	-	-

   480,500,879 1,672,283 482,173,162 373,815,618 1,462,772

   4,454,014 31,071 4,485,085 2,813,934 30,896

   484,954,893 1,703,354 486,658,247 376,629,552 1,493,668

   375,278,390

   2,844,830

   378,123,220

   (Un-audited) (Audited)

   June 30, December 31,

3. LEASE LIABILITIES

   2026 2025

   ------ Rupees in '000 ------

   Outstanding amount at the start of the period / year	1,757,104		2,147,700
   Additions during the period / year	91,658		379,414
   Lease payments including interest during the period / year	(475,815)		(1,097,755)
   Interest expense	175,869		390,465
   Terminations / modifications during the period / year	(3,828)		(62,720)
   	(212,116)		(390,596)

   Outstanding amount at the end of the period / year 1,544,988 1,757,104

   
   
   

   NOTES TO THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2026

(Un-audited) (Audited)

June 30, December 31,

2026 2025

------ Rupees in '000 ------

June 30,

2026

December 31,

2025

------ Rupees in '000 ------

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

22.2.2 Undrawn loan commitments

These represent commitments that are irrevocable because they cannot be withdrawn at the discretion of the Bank without the risk of incurring significant penalty or expense. In addition, the Bank makes revocable commitments that do not a ract any significant penalty or expense if the facility is unilaterally withdrawn.

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

During the period, the assessing officer completed the remand back proceedings and issued an order dated June 29, 2026 under section 161(1) of the Income Tax Ordinance, 2001, reducing the demand to Rs. 28 million including default surcharge of Rs. 6 million. Being aggrieved, the Bank filed an appeal before CIR(A) on July 28, 2026, which is currently pending.

In respect of Tax Year 2020, Additional Commissioner Inland Revenue issued an order dated May 25, 2026 under section 122(5A) of the Income Tax Ordinance, 2001, creating a demand of Rs. 271 million by disallowing the Bank's claim of refund adjustment. Being aggrieved, the Bank filed an appeal before CIRA on June 18, 2026 which is currently pending.

Further, Assistant Commissioner Inland Revenue issued an order dated June 30, 2026 under section 161(1) of the Income Tax Ordinance, 2001, creating a demand of Rs. 26 million including default surcharge of Rs. 3 million, mainly on account of non-deduction of withholding taxes. Being aggrieved, the Bank filed an appeal before CIRA on July 28, 2026, which is currently pending.

In respect of Tax Year 2021, Additional Commissioner Inland Revenue issued an order dated May 25, 2026 under section 122(5A) of the Income Tax Ordinance, 2001, creating a demand of Rs. 199 million by disallowing the Bank's claim of refund adjustment. Being aggrieved, the Bank filed an appeal before CIRA on June 18, 2026 which is currently pending.

In respect of Tax Year 2022, Deputy Commissioner Inland Revenue issued an order dated December 8, 2025 creating a tax demand along with default surcharge of Rs. 6.620 billion under section 161 of Income Tax Ordinance, 2001, mainly on account of non-deduction of withholding taxes on profit on debt, dividend paid, salaries and wages, advertisement, professional and other charges etc. Being aggrieved, the Bank filed an appeal before CIRA on January 9, 2026. The demand was then reduced to Rs. 25 million (including default surcharge), vide order dated April 8, 2026.The Bank filed an appeal before the ATIR, which is currently pending.

In respect of Tax Year 2023, Additional Commissioner Inland Revenue issued an order dated May 25, 2026 under section 122(5A) of the Income Tax Ordinance, 2001, creating a demand of Rs. 71 million by disallowing the Bank's claim of refund adjustment. Being aggrieved, the Bank filed an appeal before CIRA on June 18, 2026 which is currently pending.

In respect of Tax Year 2024, Additional Commissioner Inland Revenue issued an order dated April 14, 2026 under section 122(5A) of the Income Tax Ordinance, 2001, creating a demand of Rs. 210 million by disallowing the Bank's claim of refund adjustment. Being aggrieved, the Bank filed an appeal before CIRA on May 14, 2026 which is currently pending.

Moreover, a recovery notice under section 138(1) was issued to the Bank, against which the Bank's stay application was rejected by CIRA on May 20, 2026. The Bank thereafter filed an interim appeal along with a stay application before ATIR on May 21, 2026. The Division Bench of the ATIR, Peshawar, vide order dated May 25, 2026 granted a stay against recovery proceedings until the disposal of the main appeal by CIRA. Subsequently, CIRA on July 10, 2026 upheld the department's decision. Being aggrieved, the Bank filed an appeal before ATIR on July 23, 2026 and ATIR granted stay on July 24, 2026.

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

The Bank's share of contingencies of it's associated company i.e. Taurus Securities Limited amounts to Rs. 8.61 million (December 31, 2025: Rs. 9.37 million). No provision has been recognised for the same in these unconsolidated condensed interim financial statements.

(Un-audited)

For the six months ended

June 30,

2026

June 30,

2025

23 MARK-UP / RETURN / INTEREST EARNED Note --------- Rupees in '000 ---------

using effective interest rate method:

24.1.1 As disclosed in note 4.1.2, the Bank has applied the effective interest rate method during the current period under the modified retrospective approach. The impact has been recognised in opening equity, and accordingly, prior information has not been presented.

(Un-audited)

For the six months ended

June 30,

2026

June 30,

2025

25 FEE AND COMMISSION INCOME Note --------- Rupees in '000 ---------

(Un-audited)

(Un-audited)

For the six months ended

June 30,

2026

June 30,

2025

1. (REVERSAL OF) / CREDIT LOSS ALLOWANCE Note --------- Rupees in '000 ---------

   AND WRITE OFFS - NET

   Credit loss allowance held against cash and and balances with treasury banks and balances with other banks	5 & 6	368	118
   (Reversal) of credit loss allowance against lendings
   to financial institutions	7	(2,179)	(10,912)
   (Reversal) of credit loss allowance for diminution in

   value of investments 8.3 (4,125) (8,289)

   (Reversal) of credit loss allowance against advances 9.3 (357,637) (605,778)

   (Reversal) of credit loss allowance against other assets 14.1.1 (641) (337)

   Credit loss allowance against off balance sheet obligations 19.1 72,639 6,726

   (291,575) (618,472)

2. TAXATION

   Current 1,659,511 3,426,140

   Deferred 59,553 402,932

   1,719,064 3,829,072

3. BASIC AND DILUTED EARNINGS PER SHARE

   Profit for the period 1,465,981 3,365,366

   ------ (Number of shares) ------

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

   ----------- (Rupees) ------------

   Basic and diluted earnings per share 1.27 2.91

   1. There were no dilutive potential ordinary shares outstanding as at June 30, 2026 and June 30, 2025.

4. FAIR VALUE MEASUREMENTS

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

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

   1. Fair value of financial assets

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

Level 1:

Level 2:

Level 3:

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

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

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

The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy in to which the fair value measurement is categorized:

Carrying value

(Un-audited) June 30, 2026

Fair value

Level 1 Level 2 Level 3 Total

On balance sheet financial instruments ------------------- Rupees in '000 -------------------

Pakistan Investment Bonds / Market Treasury Bills

Un-listed GOP ijarah Sukuks

Term Finance, Bonds and Sukuk certificates

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

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

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

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

Property & equipment (Leasehold land) and

non-banking assets acquired in satisfaction of claims

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

Unquoted equity securities Fair value of unquoted equity securities is determined on the basis of income approach. The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value measurement of investments:

(Un-audited) (Audited)

June 30, December 31,

The following table shows reconciliation of investments measured at level 3 fair value:

2026 2025

------ Rupees in '000 ------

1. SEGMENT INFORMATION

   1. Segment details with respect to business activities

For the six months ended June 30, 2026 (Un-audited)

Corporate Finance

Trading and Sales

Retail Banking Commercial

Banking

Total

------------------------------ Rupees in 000 ------------------------------

As at June 30, 2026 (Un-audited)

Corporate Finance

Trading and Sales

Retail Banking Commercial

Banking

Total

------------------------------ Rupees in 000 ------------------------------