Transmission of Half Yearly Report for the period ended June 30, 2025

Samba Bank Limited Half Yearly Report June 30, 2025

samba bank @ L;oLu«

CONTENTS

1. Branch Network

2. Company Information

3. Directors' Report

10 Independent Auditor's Review Report

12

Condensed Interim Statement of Financial Position

13

Condensed Interim Profit and Loss Account (Un-Audited)

14

Condensed Interim Statement of Comprehensive Income (Un-Audited)

15

Condensed Interim Cash Flow Statement (Un-Audited)

16

Condensed Interim Statement of Changes in Equity (Un-Audited)

17

Notes to and Forming Part of the

Condensed Interim Financial Statements (Un-Audited)

OUR BRANCH NETWORK

Currently, SBL has a network of 60 branches located in 19 major cities across the country.

Karachi

I.I. Chundrigar Road Clifton, Park Towers Rashid Minhas Road Hyderi

S.M.C.H.S.

Bahria Complex I DHA Phase VIII Shahrah-e-Faisal Gulshan-e-Iqbal Bahadurabad Khayaban-e-Ittehad Saba Avenue Tauheed Commercial

Shaheed-e-Millat Road DHA Shahbaz Branch Malir Cantt.

Lahore

Gulberg Shadman Town

Allama Iqbal Town Johar Town

DHA Phase VI DHA Phase V DHA Z Block

New Garden Town Tufail Sarwar Road Cavalry Ground Faisal Town

Model Town Bahria Town Pine Avenue Etihad Town

Model Town - Block K

Islamabad

Jinnah Avenue F-11

F-7

DHA Phase II New Blue Area Park View City

Rawalpindi

Murree Road Bahria Town Wah Cantt. Satellite Town

Quetta

M.A. Jinnah Road

AJK - Bagh

Bagh

Jhelum

Jhelum Cantt.

Faisalabad

Liaquat Road Susan Road

Daska

Daska

Peshawar

Deans Trade Center

Gujranwala

G.T. Road

D.C. Colony

Nowshera

Rashakai

Sialkot

Paris Road

Gujrat

Gujrat

Lala Musa

Lala Musa

Sahiwal

Sahiwal

Multan

Nusrat Road

Mouza Gith Barabar (DHA)

Gwadar

Airport Road

Burewala

Burewala

02

COMPANY INFORMATION

Board of Directors President & Chief Executive Officer**

Mr. Mustafa Ilyas Chairman/Non-Executive Director

Mr. Fahad A. AlHunaiti Non-Executive Director

Mr. Mazen Ali AlDhabi Non-Executive Director Ms. Kholood Khalid Al-Khelaiwi Non-Executive Director Hafiz Mohammad Yousaf Independent Director Mr. Javed Kureishi Independent Director

Ms. Zeeba Ansar Independent Director

Mr. Shafqaat Ahmed Independent Director

Mr. Rashid Jahangir Acting President & CEO/ Executive Director

Board Audit Committee*

Hafiz Mohammad Yousaf Chairman

Mr. Mazen Ali AlDhabi Member

Mr. Javed Kureishi Member

Board Risk Committee*

Mr. Shafqaat Ahmed Chairman

Mr. Fahad A. AlHunaiti Member

Ms. Zeeba Ansar Member

Mr. Rashid Jahangir Member

Board Nomination & Remuneration Committee*

Mr. Javed Kureishi Chairman

Mr. Mustafa Ilyas Member Mr. Kholood Khalid Al-Khelaiwi Member

Board IT Committee*

Ms. Zeeba Ansar Chairperson

Mr. Mazen Ali AlDhabi Member

Mr. Fahad A. AlHunaiti Member

Mr. Shafqaat Ahmed Member

Board Level-Governance Committee*

Hafiz Mohammad Yousaf Chairman

Mr. Shafqaat Ahmed Member

Mr. Rashid Jahangir Member

Ms. Samina H. Khan Member Syed Zia-ul-Husnain Shamsi Member

Mr. Rashid Jahangir (Acting)

Company Secretary

Syed Zia-ul-Husnain Shamsi

Chief Financial Officer

Mr. Basit Hamanyun

Auditors

A. F. Ferguson & Co. Chartered Accountants

Legal Advisors

Mohsin Tayebaly & Co. Advocates & Legal Consultants

Head Office***

5th Floor, Sidco Avenue Centre,

Maulana Deen Muhammad Wafai Road, Karachi.

Registered Office

1st Floor, 19-Saleem Plaza, Blue Area, Jinnah Avenue, Islamabad - Pakistan.

Share Registrar

Famco Share Registration Services (Pvt.) Limited 8-F Near Hotel Faran, Nursery, Block-6 P.E.C.H.S., Shahrah-e-Faisal, Karachi

Website

https://www.samba.com.pk

Helpline

11 11 SAMBA (72622)

0800 - SAMBA (72622)

Credit Rating

Medium to Long Term AA (Double A)

Short Term A-1 (A-One)

* Re-constituted w.e.f. July 15, 2025

** Appointed w.e.f. May 22, 2025

*** Change of Address w.e.f. May 31, 2025

03

DIRECTORS' REPORT

Economic Highlights

In the first half of 2025, Pakistan's economy has shown a real GDP growth rate reaching approximately 2.68%, while inflation has eased steadily. KSE-100 index rose to as high as 125,627 points as at June 30, 2025. Large-Scale Manufacturing (LSM) registered a year-on-year growth of 2.3% (YoY) despite ongoing challenges, with 12 out of 22 sectors showing positive trends. Key contributors include textile, wearing apparel, petroleum products, beverages, pharmaceuticals, automobiles and cement etc. The State Bank of Pakistan lowered the policy rate by 100bps to 11% during the half year ended June 30, 2025, in line with easing inflation.

On the external front, current account posted a surplus of USD 2,106 million during fiscal year FY25 as against a deficit of USD 2,072 million during the similar period last year. The primary reasons for the reduction in current account deficit are increased workers' remittances by USD 8,049 million and higher exports by USD 2,018 million, partially offset by the increase in imports by USD 6,132 million.

Bank's Operating Results and Financial Review

The bank has posted following financial results for the half year ended June 30, 2025, summary of which is as under:

During the period under review, Net interest income decreased by 26% over the comparative period, which is attributable to decrease in policy rate from 20.50% in June'24 to 11.00% in June'25. Non-interest income stood at Rs. 885 million primarily driven by capital gains of Rs. 290 million on investments and foreign exchange income of 348million. In addition, the Bank realized a gross capital gain of Rs. 346 million in its FVOCI investment portfolio, which has been directly recognized in the Statement of Changes in Equity (SOCE) in accordance with IFRS-9 requirements. Operating costs during the half year ended June'25 decreased by 2.4% over the comparative period despite certain strategic initiatives, including the addition of 13 new branches during the period and the implementation of key technology upgrades.

The bank is continuously right sizing its earning assets mix vis-à-vis credit risk. The bank has increased its balance sheet size by Rs. 11,312 million which primarily represents an increase of Rs. 5,998 million in investments and Rs. 5,999 million in lending's to financial

04

institutions which is partially offset by decrease of Rs. 395 million in Loans and Advances over Dec-2024 position. On the liabilities side, interbank borrowings increased by Rs. 11,025.6 million, while deposits grew by Rs. 1,172.9 million, reflecting a 1.1% rise over Dec-2024 position. The Bank's deposit profile strengthened during the period, with the Current Accounts (CA) mix improved from 21.4% as of December 31, 2024, to 31.8% as of June 30, 2025. The Bank's Current and Savings Accounts (CASA) mix improved from 44.0% as of December 31, 2024, to 58.5% as of June 30, 2025.

Credit Rating

The Pakistan Credit Rating Agency Limited (PACRA), premier credit rating agency of the country, have assigned the entity ratings at 'AA/A-1' (Double A/A-One) to the Bank with 'Stable' outlook. These long-term and short-term ratings of the Bank denote high credit quality with adequate protection factor and strong capability for timely payments to all financial commitments owing to strong liquidity positions.

Outlook

Going ahead, State Bank of Pakistan and the Ministry of Finance anticipate that real GDP growth will range between 3.25% and 4.25% in FY2026. This outlook reflects a measured improvement in macroeconomic conditions, underpinned by ongoing fiscal and monetary reforms.

A key structural shift is also underway in the financial system, as SBP accelerates industry transition towards a full Islamic banking model by 2027, following the Federal Shariah Court's ruling. The State Bank of Pakistan has introduced strategic guidelines and updated conversion frameworks. In this regard, the Bank has initiated conversion process towards Islamic Banking, the road map for this transition was approved by the Board of Directors of the Bank in first quarter 2025.

The Bank plans to further expand its network with the addition of 17 new branches during FY 2025, which will be in addition to the three (3) branches already made operational. In parallel, the Bank remains focused on strategically strengthening its digital footprint to enhance accessibility and deliver an improved customer experience.

Acknowledgement

We wish to express sincere gratitude to our customers, business partners and shareholders for their patronage and trust. The Board of Directors and the management would like to thank the State Bank of Pakistan, Securities & Exchange Commission of Pakistan, Federal Board of Revenue and other regulatory bodies for their guidance and support. We also sincerely appreciate the dedication, commitment and teamwork of all employees of the Bank who worked very hard to transform the Bank into a successful franchise.

On behalf of the Board of Directors,

Mr. Rashid Jahangir

President and Chief Executive Officer (Acting)

05

August 27, 2025 Karachi

Hafiz Mohammad Yousaf

Director

06

2025 27

07

2027



2025 PACRA





4.25% 3.25% 2026 GDP

/ (A-1/AA)



3 2025 17





290 885 9 20.50 2024 26 11 2025 348 (FVOCI) (Statement of Changes in Equity)

13 346 2025





2.4

1,172.9 2024 11,025.6 2024 1.1 31 395 5,998 5,999 11,312

31.8 2025 30 21.4 2024

08

44.0 58.5 2025 30

2024 31







2.68 2025

125,627 100- 2025 30 22 2.3

12



2025 30



11 100

2,072



2,106 2025

2,018 8,049

09

6,132

Independent Auditor's Review Report

To the members of Samba Bank Limited

Report on review of Interim Financial Statements Introduction

We have reviewed the accompanying condensed interim statement of financial position of Samba Bank Limited ("the Bank") as at June 30, 2025 and the related condensed interim statement of profit and loss account, the condensed interim statement of comprehensive income, condensed interim statement of changes in equity, and condensed interim cash flow statement, and notes to the condensed interim financial statements for the half year then ended (here-in-after referred to as the "interim financial statements"). Management is responsible for the preparation and presentation of these 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 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 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 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 Matters

10

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 condensed interim statement of profit and loss account and condensed interim statement of comprehensive income for the quarters ended June 30, 2025 and June 30, 2024 have not been reviewed by us.

The financial statements of the Bank for the year ended December 31, 2024 and half year ended June 30, 2024 were audited and reviewed by another firm of Chartered Accountants who had expressed an unmodified opinion / conclusion on those statements vide their reports dated March 17, 2025 and August 28, 2024 respectively.

The engagement partner on the audit resulting in this independent auditor's report is Shahbaz Akbar.

Karachi A.F. Ferguson & Co.

Date: August 29, 2025 Chartered Accountants

11

UDIN: RR2025100686MpHZ1N2C

Condensed Interim Statement of Financial Position

AS AT JUNE 30, 2025

Note

ASSETS

Cash and balances with treasury banks 7

Balances with other banks 8

Lendings to financial institutions 9

Investments 10

Advances 11

Property and equipment 12

Right-of-use assets 13

Intangible assets 14

Deferred tax assets 15

Other assets 16

Total Assets

LIABILITIES

Bills payable 17

Borrowings 18

Deposits and other accounts 19

Lease liabilities 20

Subordinated debt 21

Deferred tax liabilities

Other liabilities 22

Total Liabilities NET ASSETS

REPRESENTED BY:

Share capital Reserves

Surplus / (deficit) on revaluation of investment 23

Unappropriated profit

CONTINGENCIES AND COMMITMENTS 24

12

The annexed notes 1 to 43 form an integral part of these condensed interim financial statements.

Chief Financial Officer President & Chief Executive Officer Director

Director

Chairman

Condensed Interim Profit and Loss Account (Un-Audited)

FOR THE QUARTER AND HALF YEAR ENDED JUNE 30, 2025

(Rupees in '000)

Half Year ended

June 30, June 30,

2025 2024

(Restated)

Quarter ended

June 30, June 30,

2025 2024

(Restated)

Note

7,544,484

5,435,717

2,108,767

15,124,054

11,159,356

3,964,698

569,517

889,824

2,678,284

4,854,522

1,262,839

27,000

280

1,290,119

2,586,143

45,000

280

2,631,423

1,388,165

786,825

2,223,099

919,910

601,340

1,303,189

297,095

640,261

304,245

662,928

(Rupees)

0.30

0.66

0.18

0.02

10,789,363

7,845,883

2,943,480

884,790

3,828,270

2,524,429

14,782

330

2,539,541

1,288,729

883,525

405,204

219,678

185,526

5,260,140

3,873,783

1,386,357

501,690

1,888,047

1,186,760

5,782

330

1,192,872

695,175

645,193

49,982

31,305

18,677

Mark-up / return / interest earned 25

Mark-up / return / interest expensed 26

Net Mark-up / Return / Interest Income

Non Mark-up / Interest Income

Fee and commission income 27

Dividend income

Foreign exchange income

Income / (expense) from derivatives

Gain / (loss) on securities 28

Other income 29

Total non-markup / interest Income

Total Income

Non Mark-Up / Interest Expenses

Operating expenses 30

Workers welfare fund 31

Other charges 32

Total non-markup / interest expenses

Profit before credit loss allowance / provisions

Credit loss allowance / provisions and write offs - net 33

Profit Before Taxation

Taxation 34

Profit After Taxation

Earnings per share - basic and diluted 35

13

The annexed notes 1 to 43 form an integral part of these condensed interim financial statements.

Chief Financial Officer President & Chief Executive Officer Director

Director

Chairman

Condensed Interim Statement of Comprehensive Income (Un-Audited)

FOR THE QUARTER AND HALF YEAR ENDED JUNE 30, 2025

(Rupees in '000)

June 30,

2025

Quarter ended

June 30,

2024

(Restated)

June 30,

2025

Half Year ended

June 30,

2024

(Restated)

Profit after taxation for the period Other comprehensive income

Items that may be reclassified to the statement

of profit and loss account in subsequent periods:

Movement in surplus on revaluation of investment in debt securities classified as FVOCI - net of tax

Items that will not be reclassified to statement

of profit and loss account in subsequent periods:

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

Total comprehensive income

14

The annexed notes 1 to 43 form an integral part of these condensed interim financial statements.

Chief Financial Officer President & Chief Executive Officer Director

Director

Chairman

Condensed Interim Cash Flow Statement (Un-Audited)

FOR THE HALF YEAR ENDED JUNE 30, 2025

Note

405,204

1,303,189

(31,231) (25,720) 373,973 1,277,469

(1,631,115) (2,640,015)

(1,257,142) (1,362,546)

(4,660,830)

11,858,654

10,843,615

11,942,429

(4,855,033)

15,326,644

(8,204,947) (11,071,661)

(422,696) (259,841) 8,240,429 9,636,217

(7,531,360)

(9,686,811)

(845,682)

(866,582)

(136,613)

(917,176)

10,577,814 10,504,332

10,441,201 9,587,156

CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation Less: Dividend income

Adjustments:

Net mark-up / interest income

Depreciation 30

Depreciation on right-of-use assets 30

Amortization 30

Credit loss allowance and write offs 33

Gain on sale / disposal of property and equipment - net 29

Gain on re-measurement of lease liability 29

Interest expense on lease liability against right-of-use assets 26

Unrealized (gain) / loss on revaluation of investments classified as FVTPL 28 Staff loans - notional cost

Workers' welfare fund

Decrease / (increase) in operating assets Lendings to financial institutions Securities classified as FVPL

Advances

Others assets (excluding advance taxation)

(Decrease) / increase in operating liabilities

Bills payable

Borrowings from financial institutions Deposits

Other liabilities (excluding current taxation)

Mark-up / Interest received Mark-up / Interest paid Income tax paid

Net cash flow from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Net Investments in securities classified as FVOCI

Net divestments in securities carried at amortised cost Dividends received

Investments in fixed assets and intangible assets Proceeds from sale of disposal of property and equipment Net cash flow used in investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Principal repayment of Debt Securities Markup payment on Debt Securities Dividend paid

Payments of lease obligations against right-of-use assets Net cash flow used in financing activities

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of the period

ts. ..

15

Cash and cash equivalents at end of the period 36

The annexed notes 1 to 43 form an integral part of these condensed interim financial statemen

Chief Financial Officer President & Chief Executive Officer Director

Director

Chairman

Condensed Interim Statement of Changes in Equity (Un-Audited)

FOR THE HALF YEAR ENDED JUNE 30, 2025

Opening Balance as at January 1, 2024 (audited)

Effect of reclassification on adoption of IFRS 9 -Equity impairment (net of tax)

Effect of reclassification on adoption of IFRS 9 -Classifications due to business model and SPPI assessment

Effect of adoption of IFRS 9 "transaction of IFRS 9 Financial Instruments" - ECL charge (net of tax)

Restated balance as at January 1, 2024 after adoption of IFRS 9 Changes in equity for the half year ended June 30, 2024 Profit after taxation - (restated)

Other comprehensive income / (loss) - net of tax Movement in surplus on revaluation of investments in debt instruments classified

as FVOCI - net of tax

Movement in surplus on revaluation of investments in equity instruments classified

as FVOCI - net of tax

Gain on disposal of equity investment at FVOCI transferred to unappropriated profit - net of tax

Total other comprehensive loss - net of tax

Transfer to statutory reserve Closing balance as at June 30, 2024 (un-audited) - restated Changes in equity for half year ended December 31, 2024 Profit after taxation

Other comprehensive income - net of tax

Movement in surplus on revaluation of investments in debt instruments classified

as FVOCI - net of tax

Movement in surplus on revaluation of investments in equity instruments classified

as FVOCI - net of tax

Gain on disposal of equity investment at FVOCI transferred to unappropriated profit - net of tax

Total other comprehensive income - net of tax

Transfer to statutory reserve

Balance as at December 31, 2024 after adoption of IFRS 9 (audited)

Changes in equity for the half year ended June 30, 2025

Profit after taxation

Other comprehensive income - net of tax

Movement in surplus on revaluation of investments in debt instruments classified

as FVOCI - net of tax

Movement in surplus on revaluation of investments in equity instruments classified

as FVOCI - net of tax

Gain on disposal of equity investment at FVOCI transferred to unappropriated profit - net of tax Total other comprehensive income - net of tax

Transfer to statutory reserve

Closing balance as at June 30, 2025

1. This represents amount received by the Bank amounting to USD 10 million from its parent company - Samba Financial Group (now Saudi National Bank) in 'Q1 2021 for rebranding / marketing and to setup the digital banking roadmap, to launch digital product / services such as credit cards etc. The amount is non refundable and therefore has been classified as transactions with owners in equity.

2. This represents the reserve created under section 21 (i) (a) of the Banking Companies Ordinance, 1962.

The annexed notes 1 to 43 form an integral part of these condensed interim financial statements.

16

Chief Financial Officer

President & Chief Executive Officer

Director Director

Chairman

Notes to and Forming Part of the Condensed Interim Financial Statements (Un-audited)

FOR THE HALF YEAR ENDED JUNE 30, 2025

1. STATUS AND NATURE OF BUSINESS

   1. Samba Bank Limited (the Bank) is a banking company incorporated in Pakistan and is engaged in commercial banking and related services. The Bank is listed on the Pakistan Stock Exchange Limited. Its principal office is located at 5th floor Sidco Avenue Centre, Maulana Deen Muhammad Wafai Road, Karachi, whereas, the registered office of the Bank is located at 1st Floor, 19 - Saleem Plaza, Blue Area, Jinnah Avenue, Islamabad. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962. The Bank is operating through 60 branches (December 31, 2024: 57 branches) inside Pakistan.

      The Bank is a subsidiary of Saudi National Bank (formerly Samba Financial Group) of Kingdom of Saudi Arabia, the Parent entity, which holds 84.51% shares of the Bank as at June 30, 2025 (December 31, 2024: 84.51%).

   2. The Pakistan Credit Rating Agency Limited has reaffirmed the Bank's long-term rating as 'AA' and short-term rating as 'A1' with stable outlook on June 26, 2025.

2. BASIS OF PRESENTATION

   1. STATEMENT OF COMPLIANCE

      These 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" and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as are 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 and directives 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).

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

      The SBP has deferred the applicability of International Accounting Standard (IAS) 40, 'Investment Property' for banking companies through BSD Circular Letter No. 10 dated August 26, 2002 till further instructions. Further, the SECP has deferred the applicability of International Financial Reporting Standard (IFRS) 7, 'Financial Instruments: Disclosures' on banks through its notification S.R.O 411(I)/2008 dated April 28, 2008. Accordingly, the requirements of these standards have not been considered in the preparation of these condensed interim financial statements.

      1. The disclosures made in these condensed interim financial statements have been limited based on the format prescribed by the SBP through BPRD Circular Letter No. 02 dated February 09, 2023 and the requirements of International Accounting Standard 34, "Interim Financial Reporting". These do not include all the information and disclosures required for annual financial statements, and therefore should be read in conjunction with the annual audited financial statements of the Bank for the year ended December 31, 2024.

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

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

      17

      
      
      

      There are certain new and amended standards, issued by International Accounting Standards Board (IASB), interpretations and amendments that are mandatory for the Bank's accounting periods beginning on or after January 01, 2025 but are considered not relevant or do not have any material effect on the Bank's operations

      and are therefore not detailed in these condensed interim financial statements. Further, the comparative period has been restated to incorporate the impact of adoption of IFRS 9 as disclosed in note 4.1.1 of these condensed interim financial statements.

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

      There are certain new and amended standards, issued by International Accounting Standards Board (IASB), interpretations and amendments that are mandatory for the Bank's accounting periods beginning on or after January 01, 2026 but are considered not to be relevant or will not have any material effect on the Bank's financial statements except for:

      • the new standard - IFRS 18 'Presentation and Disclosure in Financial Statements' (published in April 2024) with applicability date of January 01, 2027 by IASB. IFRS 18 is yet to be adopted in Pakistan. IFRS 18 when adopted and applicable shall impact the presentation of 'Statement of Profit and Loss Account' with certain additional disclosures in the condensed interim financial statements.

      • amendments to IFRS 9 'Financial Instruments' which clarify the date of recognition and derecognition of a financial asset or financial liability including settlement of liabilities through banking instruments and channels including electronic transfers. The amendment when applied may impact the timing of recognition and derecognition of financial liabilities.

      • amendment to IAS 21 'The Effects of Changes in Foreign Exchange Rates' which will require Banks to apply a consistent approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the disclosures to provide.

3. BASIS OF MEASUREMENT

   1. Accounting convention

      These condensed interim financial statements have been prepared under the historical cost convention except for investments classified at fair value through profit and loss and fair value through other comprehensive income: foreign exchange contracts are measured at fair value; right of use of asset and related lease liability is measured at present value on initial recognition; and staff loans is measured at fair value on initial recognition.

   2. Functional and presentation currency

      These condensed interim financial statements are presented in Pakistani Rupees, which is the Bank's functional and presentation currency. The amounts are rounded off to the nearest thousand rupees except as stated otherwise.

4. MATERIAL ACCOUNTING POLICY INFORMATION

   The material accounting policies applied in the preparation of these 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, 2024. Impacts of adoption of IFRS for the comparative period is disclosed in note 4.1.

   1. IFRS 9 - Financial Instruments'

      1. The Bank had adopted IFRS 9 effective from January 01, 2024 with modified retrospective approach for restatement permitted under IFRS 9. The cumulative impact of initial application amounting to Rs. 503.1 million was recorded as an adjustment to equity at the beginning of the previous accounting period.

         18

         
         
         

         The Bank, in compliance with extended timelines prescribed in SBP's BPRD Circular Letter No. 16 dated July 29, 2024 and BPRD Circular Letter No. 01 dated January 22, 2025 had incorporated certain IFRS 9 related impacts in the last quarter of 2024. Therefore the condensed interim statement of profit and loss account (un-audited) for the half year ended June 30, 2024 have been restated to incorporate these impacts. The details are tabulated below:

         Head			Rupees in '000'		Description
         Mark-up / return / interest earned	Increase		139,031		Fair value impact of subsidiesd advances and
         Mark-up / return/interest earned	Increase		52,796		Fair value impact of staff loans
         Mark-up / return / interest expensed	Increase		139,031		Fair value impact of subsidiesd borrowings
         Operating expenses	Increase		52,796		Fair value impact of staff loans

      2. The SBP in a separate instruction SBPHOK-BPRD-RPD-SMB-820177 dated January 22, 2025 has allowed extension for application of Effective Interest Rate upto December 31, 2025.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

   The preparation of these condensed interim financial statements in conformity with the accounting and reporting standards as applicable in Pakistan requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses as well as in the disclosure of contingent liabilities. It also requires management to exercise judgment in application of its accounting policies. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised, if the revision affects only that period, or in the period of revision and in future periods if the revision affects both current and future periods.

   The significant judgments made by the management in applying the Bank's accounting policies and the key sources of estimation were the same as those applied in the preparation of annual audited financial statements for the year ended December 31,2024 except for matters related to IFRS 9 which have been disclosed in note

   4.1 to these condensed interim financial statements.

6. FINANCIAL RISK MANAGEMENT

   (Rupees in '000)
   June 30, 2025	December 31, 2024
   (Un-audited)	(Audited)
   1,315,481	903,932
   417,241	481,535
   1,732,722	1,385,467
   3,331,833	4,970,885
   1,048,510	851,249
   321,576	303,200
   2,096,736	1,699,434
   6,798,655	7,824,768
   15,491	-
   -	68
   (19,270)	-
   8,527,598	9,210,303

   The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the audited annual financial statements for the year ended December 31, 2024.

7. CASH AND BALANCES WITH TREASURY BANKS

In hand

Local currency Foreign currencies

With State Bank of Pakistan in

Local currency current account

Foreign currency current account (cash reserve account) Foreign currency deposit account (settlement account) Foreign currency deposit account (special cash reserve account)

With National Bank of Pakistan in

Local currency current accounts

Prize Bonds

Less: Credit loss allowance held against cash and balances with treasury bank

19

Cash and balances with treasury banks - net of credit loss allowance