for the period ended June 30, 2019 - Bank of Khyber · Dr. Shahzad Khan Bangash Chairman Shakeel...

for the period ended June 30, 2019

CONDENSED INTERIM

FINANCIAL STATEMENTS for the Period Ended June 30, 2019

StatementofChangesinEquity

StatementofComprehensiveIncome

CorporateInformation

Directors’Review

StatementofFinancialPosition

ProfitandLossAccount

CashFlowStatement

NotestotheFinancialStatements

1

3

5

6

7

8

9

10

11

IndependentAuditor’sReviewReport

BoardofDirectors

Dr.ShahzadKhanBangash ChairmanShakeelQadirKhanMaqsoodIsmailAhmadAsadMuhammadIqbalJavedAkhtarShaharyarAhmadRashidAliKhan

ManagingDirector/CEO

Saif-ul-Islam

BoardAuditCommittee

AsadMuhammadIqbal ChairmanShakeelQadirKhanJavedAkhtarShaharyarAhmadRashidAliKhan

BoardHumanResource&RemunerationCommittee

ShaharyarAhmad ChairmanMaqsoodIsmailAhmad AsadMuhammadIqbal ManagingDirector

BoardRiskManagementCommittee

MaqsoodIsmailAhmad ChairmanJavedAkhtarShakeelQadirKhanRashidAliKhanManagingDirector

BoardI.TSteeringCommittee

ShakeelQadirKhan ChairmanShaharyarAhmadAsadMuhammadIqbalRashidAliKhanManagingDirector

CORPORATEINFORMATION

1

2

ChiefFinancialOfficerMahmoodAhmedQureshi

CompanySecretaryZahidSahibzada

RegisteredOffice/HeadOfficeTheBankofKhyber24–TheMall,PeshawarCantt.

1stFloor,StateLifeBuilding,24–TheMall,PeshawarCantt.,Pakistan

UAN#00-92-91-111959595URL:www.bok.com.pk

Auditors

EYFordRhodesCharteredAccountants

LegalAdvisors

Mr.NisarAhmedKhanAdvocate,Peshawar

M/s.MohsinTayebaly&Co.,Karachi

RegistrarandShareRegistrationOffice

THKAssociates(Pvt)Ltd.1stFloor,40-C,Block6P.E.C.H.S,Karachi–75530Pakistan.

Directors'Review

3

OnbehalfoftheBoardofDirectorsoftheBankofKhyber,IampleasedtopresentthecondensedinterimfinancialinformationoftheBankalongwithAuditors'ReviewReportforthehalfyearendedJune30,2019.TheresultsareinclusiveofIslamicBankingOperations.

FinancialHighlights

ThefinancialresultsoftheBankofKhyberforthehalfyearendedJune30,2019areasunder:

(Rs.inMillion) June30 December31 2019 2018TotalAssets 235,559 223,095Deposits 195,268 171,168Advances(Gross) 116,144 99,167Investments(Net) 91,049 94,233

(Rs.inMillion) PeriodEndedJune30 2019 2018OperatingProfit 784 1,196(Provision)/Reversalagainstnon-performing (146) 71advances/others Profitbeforetaxation 638 1,267Taxation (140) (491)Profitaftertax 498 776

FinancialOverview

Theeffectofinflationarypressurefromexchangeratedepreciationandthesubsequentriseinpolicyratehasaffectedthebank'sprofitability.TheBankpostedapre-taxprofitofRs.657millionwhereasaftertaxprofitstoodatRs.498millionagainstRs.776millionofthecorrespondingperiodof2018.

Markup/interestearnedincreasedby44%overthecorrespondingperiodof2018duetoincreaseinvolumeof advances.However, re-pricing lagon assets effected theprofitability. Cost of depositsincreased due to increase in policy rate which also had a negative impact. Operating expensesremainedcontrolledwithslightincrease.

Ontheassetssideofthefinancialstatements,anincreaseof6%hasbeenwitnessedinthebalancesheetsizewhichstoodatRs.235,559million fromRs.223,095millionasatDecember31,2018.Depositsregisteredagrowthof14%mainlyinCASAovertheyearend2018andstoodatRs.195,268million.Thisincreasehelpedtoreducerelianceonborrowingstomeetadvancesandinvestments.Advances reachedRs. 116,144million showing an increase of 17%over the year end 2018. Thisincrease camemainly from commodity and blue chip corporate financing.Non-performing loansremainedcontrolled.InvestmentswithaslightdecreasestoodatRs.91,049millionatthecloseofthehalfyear2019.

4

FutureOutlook

Despitetheprevailingeconomicuncertainty,weremainoptimisticabouttheBank'sperformanceastheeconomymovestowardsstability.

TheBank'sthreeyearstrategyshallconcentrateonincreasinglowcostdeposits.EmphasiswillbeongrowthinIslamicBankingmodetobenefitfromlowercostoffunds.TheBankalsoplanstotaptheopportunities available in the newly merged former Federally Administered Tribal Areas (FATA).UpgradationintheI.T.platformoftheBankisessentialforachievingtheBank'sobjectivesandeveryeffortisbeingmadetoimplementthecorebankingsystemattheearliest.

TheBankwithanetworkof169branchesincluding84dedicatedIslamicBankingBranches,3sub-branchesand3booths,providescomprehensivebankingservicesacrossthecountryandisstrivingtomakeaccesstotheseserviceseasier,throughitstechnologyplatform.

CreditRating

TheJCR-VISCreditRatingCompanyLimited(JCR-VIS)hasmaintainedthemediumtolongtermandshorttermentityratingsoftheBankat“A”(SingleA)and“A-1”(AOne)respectively.Outlookontheassignedratingis“Stable”.

ThePakistanCreditRatingAgencyLimited(PACRA)hasalsomaintainedthelongtermandshorttermentityratingsoftheBankat“A”(SingleA)and“A1”(AOne)respectively.Ratingoutlookis“Stable”.These ratings denote low expectation of credit risk emanating from a strong capacity for timelypaymentoffinancialcommitments.

Acknowledgement

TheBoardwouldliketothanktheProvincialGovernment,StateBankofPakistanandotherregulatoryauthoritiesfortheirsupportandcontinuedguidance.Wearegratefultoourvaluedcustomersfortheirtrustandsupportwhereasdedicatedeffortsofthestaffisverymuchappreciated.

ForandonbehalfoftheBoardofDirectors

Islamabad:August22,2019 Saif-ul-Islam ManagingDirector

5

INDEPENDENTAUDITOR'SREVIEWREPORT

TOTHEMEMBERSOFTHEBANKOFKHYBERREPORTONREVIEWOFCONDENSEDINTERIMFINANCIALSTATEMENTS

IntroductionWehavereviewedtheaccompanyingcondensedinterimstatementoffinancialpositionofTheBankOfKhyber(“theBank”)asat30June2019,andtherelatedcondensedinterimprofitandlossaccount,condensedinterimstatementof comprehensive income, condensed interimstatementof changes inequity, andcondensedinterimcashflowstatement,andnotestothecondensedinterimfinancialstatementsforthesix-monthperiodthen ended (here-in-after referred to as the “condensed interim financial statements”).Management isresponsible for the preparation and presentation of these condensed interim financial statements inaccordancewithaccountingandreportingstandardsasapplicableinPakistanforinterimfinancialreporting.Ourresponsibilityistoexpressaconclusiononthesefinancialstatementsbasedonourreview.

ScopeofReviewWeconductedourreviewinaccordancewithInternationalStandardonReviewEngagements2410,“ReviewofInterim Financial Information Performed by the Independent Auditor of the Entity”. A reviewof interimfinancialstatementsconsistsofmakinginquiries,primarilyofpersonsresponsibleforfinancialandaccountingmatters,andapplyinganalyticalandotherreviewprocedures.AreviewissubstantiallylessinscopethananauditconductedinaccordancewithInternationalStandardsonAuditingandconsequentlydoesnotenableustoobtainassurancethatwewouldbecomeawareofallsignificantmattersthatmightbeidentifiedinanaudit.Accordingly,wedonotexpressanauditopinion.

ConclusionBasedonourreview,nothinghascometoourattentionthatcausesustobelievethattheaccompanyingcondensed interim financial statements is not prepared, in allmaterial respects, in accordancewith theaccountingandreportingstandardsasapplicableinPakistanforinterimfinancialreporting.

OthermattersThefinancialstatementsoftheBankfortheyearended31December2018,wereauditedbyanotherauditorwhoexpressedanunmodifiedopinionon those statementson01March2019. Further, thecondensedinterimfinancialstatementsoftheBankforthehalfyearended30June2018werereviewedbythesameauditorwhoexpressedanunmodifiedconclusionon17August2018.

The figures for the condensed interim profit and loss account and condensed interim statement ofcomprehensiveincomeforthethreemonthsperiodended30June2019and2018havenotbeenreviewed,aswearerequiredtoreviewonlythecumulativefiguresforthesix-monthperiodended30June2019.

Theengagementpartnerontheauditresultinginthisindependentauditor'sreportisAhsanShahzad.

CharteredAccountantsPlace:IslamabadDate:27August2019

EY Ford RhodesChartered AccountantsEagle Plaza

75 West, Fazlul Haq RoadBlue Area , P.O. Box 2388Islamabad 44000, Pakistan

Tel: +9251 234 4160Fax: +9251 234 [email protected]/pk

Note2019 2018

------------Rupeesin'000------------

Un-Audited Audited

ASSETS

Cashandbalanceswithtreasurybanks 6

Balanceswithotherbanks 7

Lendingstofinancialinstitutions 8

Investments 9

Advances 10

Fixedassets 11

Intangibleassets 12

Deferredtaxassets 13

Otherassets 14

LIABILITIES

Billspayable 15

Borrowings 16

Depositsandotheraccounts 17

Liabilitiesagainstassetssubjecttofinancelease

Subordinateddebt

Deferredtaxliabilities

Otherliabilities 18

19

CONTINGENCIESANDCOMMITMENTS 20

June30, December31,

NETASSETS

REPRESENTEDBY

Sharecapital

Reserves

Deficitonrevaluationofassets

Unappropriatedprofit

Theannexednotes1to38formanintegralpartofthesecondensedinterimfinancialstatements.

12,351,453

3,705,360

7,695,642

94,233,239

95,011,903

2,216,422

78,850

1,757,451

6,044,663

223,094,983

895,126

34,842,114

171,167,556

-

-

-

4,485,603

211,390,399

11,704,584

10,002,524

2,643,483

(2,104,692)

1,163,269

11,704,584

6

CONDENSEDINTERIMSTATEMENTOFFINANCIALPOSITIONASATJUNE30,2019

11,260,599 3,523,654

3,331,347

91,049,463 111,842,933

3,354,413

59,282

2,042,537

9,094,641

235,558,869

843,841

17,659,784

195,268,486

-

-

-

9,857,874

223,629,985

11,928,884

10,002,524

2,743,116

(2,378,556)

1,561,800

11,928,884

7

CONDENSEDINTERIMPROFITANDLOSSACCOUNT(UN-AUDITED)FORTHESIXMONTHSENDEDJUNE30,2019

Note

June30,2019 June30,2018 June30,2019 June30,2018

------------------------------------Rupeesin'000-------------------------------------

Mark-up/return/interestearned 21 5,408,135

3,508,536

10,272,226 7,134,096

Mark-up/return/interestexpensed 22 4,227,959

2,114,564

7,810,267 4,343,165

Netmark-up/interestincome 1,180,176

1,393,972

2,461,959 2,790,931

NONMARK-UP/INTERESTINCOME

Feeandcommissionincome 23 106,247

130,793

195,388 225,024

Dividendincome 5,435

19,911

5,435 26,542

Foreignexchangeincome 67,014

31,272

89,197 54,629

Income/(loss)fromderivatives -

-

- -

(Loss)/gainonsecurities-net 24 (3,362)

(822)

2,192 11,232

Otherincome 25 25,814

30,147

59,760 53,192

Totalnon-markup/interestincome 201,148

211,301

351,972 370,619

Totalincome 1,381,324

1,605,273

2,813,931 3,161,550

NONMARK-UP/INTERESTEXPENSE

Operatingexpenses 26 993,741

987,516

2,027,492 1,965,370

WorkersWelfareFund -

-

- -

Othercharges 27 2,197

130

2,287 130

Totalnon-markup/interestexpenses 995,938

987,646

2,029,779 1,965,500

PROFITBEFOREPROVISIONS 385,386 617,627 784,152 1,196,050

Provisionsandwriteoffs-net 28 91,517 30,129 145,645 (71,158)

PROFITBEFORETAXATION 293,869 587,498 638,507 1,267,208

Taxation 29 (17,564) 249,631 140,343 490,856

PROFITAFTERTAXATION 311,433 337,867 498,164 776,352

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

Basicanddilutedearningspershare 30 0.31 0.34 0.50 0.78


Threemonths

ended

Sixmonths

ended

Threemonths

ended

Sixmonths

ended

8

CONDENSEDINTERIMSTATEMENTOFCOMPREHENSIVEINCOME(UN-AUDITED)FORTHESIXMONTHSENDEDJUNE30,2019

June30,2019 June30,2018 June30,2019 June30,2018

-------------------------------------Rupeesin'000------------------------------------

Profitaftertaxationfortheperiod 311,433

337,867

498,164

776,352

Othercomprehensiveincome

Itemsthatmaybereclassifiedtoprofitand

lossaccountinsubsequentperiods:

Movementindeficitonrevaluationof

investments-net(787,178)

(446,638)

(421,329)

(851,645)

Relateddeferredtax 275,512 156,323 147,465 298,076

(511,666) (290,314) (273,864) (553,569)

Totalcomprehensiveincome (200,233) 47,553 224,300 222,783


Threemonths Threemonths

ended

Sixmonths

ended

Sixmonths

endedended

9

CONDEN

SEDIN

TERIM

STATEMEN

TOFCHANGESIN

EQUITY(UN-AUDITED

)FO

RTHESIXM

ONTH

SEN

DED

JUNE30,2019

Share

capital

Statutory

reserve

Unap

propriate

dprofit

Total

Investments

Fixedassets

----------------------------------------------------------------------Rupeesin'000-----------------------------------------------------------------------

Balan

ceasatJan

uary1,2018

10,002,524

2,550,263

(319,315)

774,183

2,390,464

15,398,119

TotalC

omprehensiveIn

come

Profitaftertaxationforthesixmonthsen

ded

June30,2018

--

--

776,352

776,352

Othercomprehen

siveincome-netoftax

--

(553,569)

--

(553,569)

-

-

(553,569)

-

776,352

222,783

Tran

sfertostatutoryreserves

-

155,270

-

-

(155,270)

-

Tran

sactionswithownersrecordeddirectlyin

equity

Finalcashdividen

dfo

rtheyearended

Decem

ber31,2017

(Rs.1.50pershare)

-

-

-

-

(1,500,557)

(1,500,557)

Balan

ceasatJune30,2018(un-Audited)

10,002,524

2,705,533

(872,884)

774,183

1,510,989

14,120,345

TotalC

omprehensiveIn

come

Lossaftertaxationforthesixmonthsen

ded

Decem

ber31,2018

-

-

-

-

(310,253)

(310,253)

Othercomprehen

siveincome-netoftax

-

-

(2,005,991)

-

(99,517)

(2,105,508)

-

-

(2,005,991)

-

(409,770)

(2,415,761)

Tran


-

(62,050)

-

-

62,050

-

Balan

ceasatDecember31,2018(au

dited)

10,002,524

2,643,483

(2,878,875)

774,183

1,163,269

11,704,584

TotalC

omprehensiveIn

come

Profitaftertaxationforthesixmonthsen

ded

June30,2019

-

-

-

-

498,164

498,164

Othercomprehen

siveincome-netoftax

-

-

(273,864)

-

-(273,864)

-

-

(273,864)

-

498,164

224,300

Tran


-99,633

--

(99,633)

-

Balan

ceasatJune30,2019

10,002,524

2,743,116

(3,152,739)

774,183

1,561,800

11,928,884

Thean

nexed

notes1to38form

anintegralpartoftheseconden

sedinterimfinan

cialstatemen

ts.

(Deficit)/surpluson

revaluationof

10

CONDENSEDINTERIMCASHFLOWSTATEMENT(UN-AUDITED)FORTHESIXMONTHSENDEDJUNE30,2019

Note

June30,2019 June30,2018

-----------'Rupeesin'000-----------

CASHFLOWFROMOPERATINGACTIVITIES

Profitbeforetaxation 638,507 1,267,208

Less:Dividendincome 5,435 26,542

633,072 1,240,666

Adjustments:

Depreciation 253,369 145,517

Amortization 21,073 21,757

Provisionsandwriteoffs-net 28 145,645 (71,158)

Gainonsaleoffixedassets (204) (36)

Financechargesonleasedassets 75,185 -

Unrealizedlossonsecurities - 698

495,068 96,778

1,128,140 1,337,444

(Increase)/decreaseinoperatingassets

Lendingstofinancialinstitutions 4,364,295 (1,049,911)

Held-for-tradingsecurities - (3,986,775)

Advances (16,976,675) (8,733,121)

Othersassets(excludingadvancetaxation) (3,270,490) (72,941)

(15,882,870) (13,842,748)

Increase/(decrease)inoperatingliabilities

Billspayable (51,285) (441,600)

Borrowingsfromfinancialinstitutions (17,182,330) (41,141,151)

Deposits 24,100,930 10,878,679

Liabilitiesagainstassetssubjecttofinancelease - -

Otherliabilities(excludingcurrenttaxation) 4,179,665 536,506

11,046,980 (30,167,566)

Paymentsagainstoff-balancesheetobligations - -

Incometaxpaid (153,422) (680,307)

Netcashflowusedinoperatingactivities (3,861,172) (43,353,177)

CASHFLOWFROMINVESTINGACTIVITIES

Netinvestmentsinavailable-for-salesecurities 2,637,439 41,549,252

Netinvestmentsinheld-to-maturitysecurities 125,008 5,562,857

Dividendsreceived 5,435 26,542

Investmentsinoperatingfixedassets (179,474)

(158,676)

Proceedsfromsaleoffixedassets 240 214

Netcashflowgeneratedfrominvestingactivities 2,588,648 46,980,189

CASHFLOWFROMFINANCINGACTIVITIES

Dividendpaid (36) (1,500,798)

Netcashflowusedinfinancingactivities (36) (1,500,798)

Effectsofexchangeratechangesoncashandcashequivalents - -

(Decrease)/increaseincashandcashequivalents (1,272,560) 2,126,214

Cashandcashequivalentsatbeginningoftheperiod 16,056,813 12,173,369

Cashandcashequivalentsatendoftheperiod 14,784,253 14,299,583


Sixmonths

ended

Sixmonths

ended

11

1. STATUSANDNATUREOFBUSINESS

2 BASISOFPRESENTATION

2.1

2.2

2.3

2.4

STATEMENTOFCOMPLIANCE3

TheBankofKhyber("theBank")wasestablishedunderTheBankofKhyberAct,1991andisprincipallyengagedin

thebusinessofcommercialbankingandrelatedservices.TheBankacquiredthestatusofascheduledbankin

1994andislistedonthePakistanStockExchangeLimited.TheregisteredofficeoftheBankissituatedat24-The

Mall,PeshawarCantt,Peshawarandithasbeentemporarilyshiftedto1stFloor,StateLifeBuilding,34-TheMall,

PeshawarCantt.TheBankoperates169branchesincluding84Islamicbankingbranches(2018:169branches

including84Islamicbankingbranches).ThelongtermcreditratingsoftheBankassignedbyThePakistanCredit

RatingAgencyLimited(PACRA)andJCR-VISare'A'and'A'respectivelyandtheshort-termcreditratingsassigned

are'A-1'(A-One)and'A-1'(A-One)respectively.

InaccordancewiththedirectivesoftheFederalGovernmentregardingtheshiftingofthebankingsystemtoIslamicmodes,theStateBankofPakistan(SBP)hasissuedvariouscircularsfromtimetotime.Permissibleformsoftrade-relatedmodesoffinancingincludepurchaseofgoodsbythebanksfromtheircustomersandimmediateresaletothematappropriatemark-upinpriceondeferredpaymentbasis.Thepurchasesandsalesarisingunder the respectivearrangements (except forMurabaha financingsaccounted forunderIslamicFinancialAccountingStandard-1"Murabaha")arenotreflectedinthiscondensedinterimfinancialinformationassuch,butarerestrictedtotheamountoffacilityactuallyutilizedandtheappropriateportionofmark-upinpricethereon.However,theIslamicbankingbranchesoftheBankhavecompliedwiththerequirementsas setout in the IslamicFinancialAccountingStandards (IFAS) issuedby the InstituteofCharteredAccountantsofPakistanandnotifiedundertheprovisionsofCompaniesAct,2017.

ThefinancialresultsoftheIslamicBankingGrouphavebeenincludedinthiscondensedinterimfinancialinformationforreportingpurpose,aftereliminatingtheeffectsofinter-branchtransactionsandbalances.KeyfinancialfiguresoftheIslamicBankingGrouparedisclosedinnote35tothesefinancialinformation.

Thedisclosuresmadeinthiscondensedinterimfinancialinformationhavebeenlimitedbasedontheformatprescribed by the State Bank of Pakistan (SBP) vide BPRD Circular No. 05 datedMarch 22, 2019 andInternational Accounting Standard 34, Interim Financial Reporting. They do not include all disclosuresrequiredforannualfinancialstatementsandthiscondensedinterimfinancialinformationshouldbereadinconjunctionwiththefinancialstatementsoftheBankfortheyearendedDecember31,2018.

Thesecondensedinterimfinancialstatementshavebeenpreparedinaccordancewiththeaccountingand

reportingstandardsasapplicableinPakistanforinterimfinancialreporting.Theaccountingandreporting

standardsasapplicableinPakistanforinterimfinancialreportingcompriseof:- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International

AccountingStandardsBoard(IASB)asnotifiedundertheCompaniesAct,2017;-IslamicFinancialAccountingStandards(IFAS)issuedbytheInstituteofCharteredAccountantsofPakistan

asarenotifiedundertheCompaniesAct,2017;-ProvisionsofanddirectivesissuedundertheBankingCompaniesOrdinance,1962andtheCompaniesAct,

2017;and-Directives issuedbytheStateBankofPakistan(SBP)andtheSecuritiesandExchangeCommissionof

Pakistan(SECP).WhenevertherequirementsoftheBankingCompaniesOrdinance,1962,theCompaniesAct,2017orthe

directivesissuedbytheSBPandtheSECPdifferwiththerequirementsofIAS34orIFAS,therequirementsof

theBankingCompaniesOrdinance,1962,theCompaniesAct,2017andthesaiddirectives,shallprevail.

ThiscondensedinterimfinancialinformationhasbeenpresentedinPakistaniRupee,whichistheBank'sfunctionalandpresentationcurrency.Thefigureshavebeenroundedofftothenearestthousandrupees,unlessotherwisestated.

Inthiscondensedinterimfinancialinformation,investmentsinassociatesarereportedonthebasisofdirectequityinterestandarenotconsolidatedoraccountedforbyusingtheequitymethodofaccounting.

NOTESTOTHECONDENSEDINTERIMFINANCIALSTATEMENTS(UN-AUDITED)FORTHESIXMONTHSENDEDJUNE30,2019

2.5

12

3.2

4 BASISOFMEASUREMENT

5

5.1

5.2

SIGNIFICANTACCOUNTINGPOLICIES,ESTIMATESANDJUDGEMENTSANDFINANCIALRISKMANAGEMENT

TheSBP,videBSDCircularNo.10,datedAugust26,2002hasdeferredtheapplicabilityofInternational

Accounting Standard 39, Financial Instruments: Recognition and Measurement and International

Accounting Standard 40, Investment Property for banking companies till further instructions. Further,

accordingtoanotificationofSECPissuedvideSRO411(I)/2008datedApril28,2008,IFRS7"Financial

Instruments:Disclosure"hasnotbeenmadeapplicableforbanks.MoreoverSBPvideBPRDcircularNo.4,

datedFebruary25,2015hasdeferredtheapplicabilityofIslamicFinancialAccountingStandard(IFAS)3,

Profit and Loss Sharing onDeposits. Accordingly, the requirements of these standards have not been

consideredinthepreparationofthesefinancialstatements.However,investmentshavebeenclassifiedand

valuedinaccordancewiththerequirementsprescribedbySBPthroughitsvariouscirculars.

SECPvideitsnotificationSRO633(I)/2014datedJuly10,2014,adoptedIFRS-10,ConsolidatedFinancial

Statements,effectivefromtheperiodsstartingfromJune30,2014.However,videitsnotificationSRO56

(I)/2016datedJanuary28,2016,ithasbeennotifiedthattherequirementsofIFRS-10andsection228ofthe

CompaniesAct,2017willnotbeapplicablewithrespecttotheinvestmentinmutualfundsestablished

underTruststructure.

Thiscondensedinterimfinancialinformationhasbeenpreparedunderthehistoricalcostconventionexcept

thatleaseholdlandhavebeenstatedatrevaluedamount,availableforsalesecuritiesatfairvalues,net

obligationsinrespectofdefinedbenefitschemesandleaseliabilityunderIFRS16attheirpresentvalues.

Theaccountingpolicies,underlyingestimatesandjudgementsandmethodofcomputationfollowedinthe

preparationofthiscondensedinterimfinancial informationaresameasthoseappliedinpreparingthe

financialstatementsoftheBankfortheyearendedDecember31,2018exceptforthosedisclosedunder

note5.2.

Significantaccountingpolicies

Standards,interpretationsandamendmentstoapprovedaccountingstandardsthatare

effectiveinthecurrentperiod

Therearecertainnewandamendedstandards,interpretationsandamendmentsthataremandatoryfor

theBank'scurrentaccountingperiodbut,exceptforIFRS16(referNote5.2.2)areconsiderednottobe

relevantordonothaveanysignificanteffectontheBank'soperations.Theseinclude:-IAS28-LongterminterestsinassociatesandJointVenture(AmendmentstoIAS28)-IFRIC23-UncertaintyoverIncomeTaxTreatments-AnnualimprovementstoIFRSStandards2-15-2017cycle-IAS19Planamendment,curtailmentorsettlement(AmendmentstoIAS19)-IFRS15-Revenuefromcontractswithcustomers(Note5.2.1)

IFRS15,RevenuefromContractswithCustomers,whichreplacedIAS18,RevenueandIAS11,Construction

Contracts,hasbeenappliedeffectivefromJanuary01,2018.Itappliestoallcontractswithcustomersexcept

leases,financialinstrumentsandinsurancecontracts.Thestandardestablishesamoresystematicapproach

forrevenuemeasurementandrecognitionbyintroducingafive-stepmodelgoverningrevenuerecognition.

Thefive-stepmodelrequirestheBankto(i)identifythecontractwiththecustomer,(ii)identifyeachofthe

performance obligations included in the contract, (iii) determine the amount of consideration in the

contract,(iv)allocatetheconsiderationtoeachoftheidentifiedperformanceobligationsand(v)recognize

revenueaseachperformanceobligationissatisfied.


3.3

5.2.1

13

TherearenosignificantimpactsfromtheadoptionofIFRS15inrelationtothetimingofwhentheBank

recognizes revenues or when revenue should be recognized gross as a principal or net as an agent.

Therefore,theBankwillcontinuetorecognizefeeandcommissionincomechargedforservicesprovidedas

theservicesareprovided(forexampleoncompletionoftheunderlyingtransaction).TheAccountingpolicy

isupdatedtoreflecttheterminologyinthenewstandardbutithashadnoeffectonfinancialinformation

reportedinthecurrentorcomparativeperiods.Interestincomeandexpensecontinuestoberecognized

usingtheeffectiveinterestratemethodforfinancialinstrumentsmeasuredathistoricalcost.Therehas

been no restatement of profit or loss for comparative periods. Accordingly, these interim financial

statementsdonot includedetaileddisclosuresoftheamountsbywhich line itemsareaffectedbythe

applicationofIFRS15comparedtorevenuestandardsnolongerineffect.


TheBankhasadoptedIFRS16retrospectivelyfromJanuary01,2019,usingthemodifiedretrospective

approach,buthasnotrestatedcomparativesforthe2018reportingperiod,aspermittedunderthespecific

transitionalprovisionsinthestandard.

5.2.2 IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an

ArrangementcontainsaLease,SIC-15OperatingLeases-IncentivesandSIC-27EvaluatingtheSubstanceof

TransactionsInvolvingtheLegalFormofaLease.Alesseerecognizesaright-of-useassetrepresentingits

rightofusingtheunderlyingassetandacorrespondingleaseliabilityrepresentingitsobligationstomake

leasepayments.Lessoraccountingremainssimilartothecurrentstandardi.e.lessorscontinuetoclassify

leasesaseitherfinanceoroperatingleases.

OnadoptionofIFRS16,theBankhasrecognisedliabilitiesinrespectofleaseswhichhadpreviouslybeen

classifiedasoperatingleasesunderIAS17.Theseliabilitieswereinitiallymeasuredasthepresentvalueof

the remaining lease payments, discounted using the Bank’s incremental monthly weighted average

borrowingratefrom01January2019totheendoftheirrespectiveleasetermsrangingfrom12.73%to

16.23%.The lease liability issubsequentlymeasuredatamortisedcostusingtheeffective interestrate

method.

OnadoptionofIFRS16,theassociatedright-of-useassetsweremeasuredattheamountequaltothelease

liability,adjustedbytheamountofprepaidleasepaymentsrecognisedinthestatementoffinancialposition

immediatelybeforethedateofinitialapplication.

Theright-of-useassetsrecognisedsubsequenttotheadoptionaremeasuredbasedontheinitialamountof

theleaseliabilityadjustedforanyleasepaymentsmadeatorbeforethecommencementdate,plusany

initialdirectcostsincurred.Theright-of-useassetsaredepreciatedonastraightlinebasisoverthelease

termasthismethodmostcloselyreflectstheexpectedpatternofconsumptionoffutureeconomicbenefits.

Theright-of-useassetsarereducedbyimpairmentlosses,ifany,andadjustedforcertainremeasurements

ofleaseliability.

Therecognisedright-of-useassetsareasfollows June30, January01,

2019 2019

Property 1,118,602 1,213,428

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

Theeffectofthischangeinaccountingpolicyisasfollows:

ImpactonStatementofFinancialPosition

Increaseinfixedassets-right-of-useassets 1,118,602 1,213,428

Decreaseinotherassets-advancerentandotherprepayments (113,707) (112,607)

Increaseinotherassets-advancetaxation 8,903 -

1,013,798 1,100,821

Increaseinotherliabilities-leaseliabilityagainstright-of-useassets (999,873) (1,100,821)

Increaseinnetassets 13,925 -

14

EarningspershareforthesixmonthsendedJune30,2019areRs0.01persharehigherasaresultoftheadoption

ofIFRS16.

TheBankhasoptednottorecogniseright-of-useassetsforleasesoflowvalue.Thepaymentsassociated

withsuchleasesarerecognisedasanexpenseonastraightlinebasisovertheleaseterm.

Standards,interpretationsandamendmentstoapprovedaccountingstandardsthatarenotyeteffective

TheSECP,throughSRO229(I)/2019datedFebruary14,2019,hasnotifiedthatIFRS9,FinancialInstruments,is

applicableforaccountingperiodsendingonorafterJune30,2019.However,basedontheguidancereceivedfrom

theSBP,therequirementsofIFRS9havenotbeenconsideredforPakistanoperationsoftheBankinpreparationof

thesecondensedinterimfinancialinformation.


ImpactonProfitandLossaccount

Forthesix

monthsended

June30,2019

(Rupees'000)

Depreciationexpenseofright-of-useassets (94,826)

Interestexpenseonleaseliabilities (75,185)

Rentexpense 192,839

Increaseinprofitbeforetax 22,828

Increaseintax (8,903)

increaseinprofitaftertax 13,925

5.3

Standard,InterpretationorAmendment

Effectivedate(periodsendingonorafter)

IFRS9-FinancialInstruments:ClassificationandMeasurement June30,2019

IFRS3-DefinitionofaBusiness(Amendments)IAS1-PresentationofFinancialStatements(Amendments)IAS8-AccountingPolicies,ChangesinAccountingEstimatesandErrors January01,2020

January01,2020January01,2020

Effectivedate(annualperiodsbeginningonorafter)

IFRS9:'FinancialInstruments'addressesrecognition,classification,measurementandderecognitionoffinancial

assetsandfinancialliabilities.Thestandardhasalsointroducedanewimpairmentmodelforfinancialassetswhich

requiresrecognitionofimpairmentchargebasedonan'ExpectedCreditLosses'(ECL)approachratherthanthe

'incurredcreditlosses'approachascurrentlyfollowed.TheECLhasimpactonallassetsoftheBankwhichare

exposedtocreditrisk.

TheBankisintheprocessofassessingthefullimpactofthisstandard.

Thebankexpectsthattheadoptionoftheremainingamendmentswillnotaffectitsfinancialstatementsinthe

periodofinitialapplication.

Criticalaccountingestimatesandjudgements5.4

Thebasisforaccountingestimatesadoptedinthepreparationofthiscondensedinterimfinancialinformationare

thesameasthatappliedinthepreparationofthefinancialstatementsfortheyearendedDecember31,2018.

FinancialRiskManagement5.5

ThefinancialriskmanagementobjectivesandpoliciesadoptedbytheBankareconsistentwiththosedisclosedin

thefinancialstatementsfortheyearendedDecember31,2018.

The following new standards and interpretations of and amendments to existing accounting and reporting

standardswillbeeffectivefromthedatesmentionedbelowagainsttherespectivestandard,interpretationor

amendment:

15


(Un-audited) (Audited)

June30,

2019

December31,

2018

------------Rupeesin'000------------6 CASHANDBALANCESWITHTREASURYBANKS

Inhand

Localcurrency 2,037,469 2,110,143

Foreigncurrency 303,663 247,451

2,341,132 2,357,594

WithStateBankofPakistanin

Localcurrencycurrentaccount 7,582,442 9,051,401

Foreigncurrencycurrentaccount 74,695 82,680

Foreigncurrencydepositaccount 120,866 73,760

7,778,003

9,207,841

WithNationalBankofPakistanin

Localcurrencycurrentaccount 1,029,528

767,556

Localcurrencydepositaccount 4,416

6,658

Foreigncurrencydepositaccount 22,372

9,517

1,056,316

783,731

Prizebonds 85,148

2,287

11,260,599

12,351,4537 BALANCESWITHOTHERBANKS

InPakistan

Incurrentaccounts 2,993,644

3,008,582

Indepositaccounts 50,396

577,196

3,044,040

3,585,778

OutsidePakistan

Incurrentaccounts 58,132

18,785

Indepositaccounts 431,510

110,825

489,642 129,610

Provisionfordoubtfulplacementswiththebanks (10,028) (10,028)

3,523,654

3,705,360

8 LENDINGSTOFINANCIALINSTITUTIONS

Call/cleanmoneyLendings 500,000

2,500,000

Repurchaseagreementlendings(ReverseRepo) -

5,195,642

BaiMuajjalreceivablefromStateBankofPakistan 2,831,347

-

Placementswithfinancialinstitutions 238,944

238,944

3,570,291

7,934,586

Less:ProvisionheldagainstLendingtofinancialinstitutions (238,944)

(238,944)

Lendingstofinancialinstitutions-netofprovision 3,331,347

7,695,642


June30,2019 December31,2018

8.1

-----------------------------------------Rupeesin'000---------------------------------------

Domestic

Otherassetsespeciallymentioned -

-

-

-

Substandard - - - -

Doubtful - - - -

Loss 238,944 238,944 238,944 238,944

238,944 238,944 238,944 238,944Overseas

Notpastduebutimpaired - - - -

Overdueby:

Upto90days - - - -

91to180days - - - -

181to365days - - - -

>365days - - - -

- - - -

Total 238,944 238,944 238,944 238,944

Categoryofclassification Classified

lending

Provision

held

Classified

lending

Provision

held

16



9 INVESTMENTS June30,2019 December31,2018

9.1 Investmentsbytype:

-------------------------------------------------------------------Rupeesin'000-------------------------------------------------------------------Held-for-tradingsecurities

FederalGovernmentSecurities - - - - - - - -

ProvincialGovernmentSecurities - - - - - - - -

Shares - - - - - - - -

NonGovernmentDebtSecurities - - - - - - - -

ForeignSecurities - - - - - - - -

- - - - - - - -

Available-for-salesecurities

FederalGovernmentSecurities 65,971,811 - (4,925,897) 61,045,914 68,450,985 - (4,524,391) 63,926,594

ProvincialGovernmentSecurities - - - - - - - -

Shares 821,854 (566,126) 81,529 337,257 683,990 (566,126) 95,352 213,216

NonGovernmentDebtSecurities 6,937,780 (275,879) (6,000) 6,655,901 7,233,909 (275,879) - 6,958,030

ForeignSecurities -

-

- - - -

- -

73,731,445

(842,005)

(4,850,368)

68,039,072

76,368,884

(842,005)

(4,429,039) 71,097,840

Held-to-maturitysecurities

FederalGovernmentSecurities 22,969,887

-

-

22,969,887

23,094,895

-

- 23,094,895

ProvincialGovernmentSecurities -

-

-

-

-

-

- -

NonGovernmentDebtSecurities -

-

-

-

-

-

- -

ForeignSecurities -

-

-

-

-

-

- -

22,969,887

-

-

22,969,887

23,094,895

-

- 23,094,895

Associate 40,504

-

-

40,504

40,504

-

- 40,504

Subsidiaries -

-

-

-

-

-

- -

Total 96,741,836

(842,005)

(4,850,368)

91,049,463

99,504,283

(842,005)

(4,429,039) 94,233,239


9.1.1 Investmentsgivenascollateral ---------Rupeesin'000--------

MarketTreasuryBills - 7,406,373

PakistanInvestmentBonds 3,958,776 21,965,384

3,958,776 29,371,757

9.2 Provisionfordiminutioninvalueofinvestments

9.2.1 Openingbalance 842,005 865,176

Exchangeadjustments - -

Charge/(reversal)

Chargefortheperiod/year - -

(Reversal)fortheperiod/year - (3,755)

(Reversal)ondisposals - (19,416)

- (23,171)

Transfers-net - -

Amountswrittenoff - -

Closingbalance 842,005 842,005

9.2.2 Particularsofprovisionagainstdebtsecurities (Un-audited) (Audited)


Categoryofclassification

------------------------------Rupeesin'000-----------------------------Domestic

Otherassetsespeciallymentioned - - - -

Substandard - - - -

Doubtful - - - -

Loss 275,879 275,879 275,879 275,879

275,879 275,879 275,879 275,879

Overseas

Notpastduebutimpaired - - - -

Overdueby:

Upto90days - - - -

91to180days - - - -

181to365days - - - -

>365days - - - -

- - - -

Total 275,879 275,879 275,879 275,879

Carrying

value

Cost/

amortized

cost

Surplus/

(deficit)

Carrying

value

Cost/

amortized

cost

Provision

for

diminution

June30,

2019

December

31,2018

Non

performing

investments

Non

performing

investments

Provisions Provisions

Provision

for

diminution

Surplus/

(deficit)

The market value of securities classified as held-to-maturity amounted to Rs. 20,656,513 thousand as at June 30, 2019 (December 31, 2018: Rs.

21,062,000thousand).9.3

17


10.3.1

10.3.2

GeneralprovisionrepresentsprovisionagainstconsumerfinanceportfolioasrequiredbythePrudentialRegulationsissuedbytheSBP.

StateBankofPakistanthroughvariouscircularshasallowedbenefitoftheforcedsalesvalue(FSV)ofplant&machineryundercharge,pledged

stocks&mortgagedresidential,commercialandindustrialproperties(landandbuildingonly)heldascollateralagainstNon-PerformingLoans

(NPLs)foramaximumoffiveyearsfromthedateofclassification.AsatJune30,2019theBankhasavailedcumulativebenefitofforcedsalevalues

ofRs.472,405thousand(December2018:Rs.285,790thousand).IncreaseinunappropriatedprofitnetoftaxamountingtoRs.307,063thousand

(December2018:Rs.185,764thousand)isnotavailableforthedistributionofcashorstockdividendtoshareholdersorbonustoemployees.

10 ADVANCESPerforming Nonperforming Total

-----------------------------------------------------------Rupeesin'000------------------------------------------------------

Loans,cashcredits,runningfinances,etc. 68,903,480 59,077,654 4,699,373 4,121,876 73,602,853 63,199,530

Islamicfinancingandrelatedassets 41,281,887 35,294,489 326,892 313,506 41,608,779 35,607,995

Billsdiscountedandpurchased 851,071 136,480 80,947 222,970 932,018 359,450

Advances-gross 111,036,438 94,508,623 5,107,212 4,658,352 116,143,650 99,166,975

Provisionagainstadvances

-Specific - - 4,260,750 4,119,221 4,260,750 4,119,221

-General 39,967 35,851 - - 39,967 35,851

39,967 35,851 4,260,750 4,119,221 4,300,717 4,155,072

Advances-netofprovision 110,996,471

94,472,772

846,462

539,131

111,842,933 95,011,903


10.1 Particularsofadvances(Gross) -----------Rupeesin'000----------

Inlocalcurrency 116,143,650 99,166,975

Inforeigncurrencies - -

116,143,650 99,166,975

10.2



Categoryofclassification

--------------------------------Rupeesin'000------------------------------------Domestic

Otherassetsespeciallymentioned 39,270

54

10,308 -

Substandard 66,271

6,259

129,817 4,361

Doubtful 565,181

132,442

239,992 45,855

Loss 4,436,490

4,121,995

4,278,235 4,069,005

5,107,212

4,260,750

4,658,352 4,119,221

Overseas

Notpastduebutimpaired -

-

- -

Overdueby:

Upto90days -

-

- -

91to180days -

-

- -

181to365days -

-

- -

>365days -

-

- -

-

-

- -

Total 5,107,212 4,260,750 4,658,352 4,119,221

(Un-audited) Audited


10.3 Specific General Total Specific General Total

------------------------------------------------------Rupeesin'000-----------------------------------------------------------

Openingbalance 4,119,221 35,851 4,155,072 4,278,567 24,954 4,303,521

Exchangeadjustments - - - - - -

Chargefortheperiod/year 188,355 4,116 192,471 309,531 10,897 320,428

(Reversal) (46,826) - (46,826) (468,877) - (468,877)

141,529 4,116 145,645 (159,346) 10,897 (148,449)

Amountswrittenoff - - - - - -

Amountschargedoff-agriculturefinancing - - - - - -

Closingbalance 4,260,750 39,967 4,300,717 4,119,221 35,851 4,155,072

Provision

December31,

2018

June30,

2019

June30,

2019

June30,

2019

June30,

2019

December31,

2018

December31,

2018

December31,

2018

Advances include Rs.5,107,212 thousand (December 2018: Rs. 4,658,352 thousand) which have been placed under non-performing

statusasdetailedbelow:

Particulars of provision

againstadvances

Non

performing

loans

ProvisionNon

performing

loans

18



------------Rupeesin'000------------

11 FIXEDASSETS

Capitalwork-in-progress 11.1 380,125 291,647

Propertyandequipment 1,855,686 1,924,775

Rightofuseasset 5.2.2 1,118,602 -

3,354,413 2,216,422

11.1 Capitalwork-in-progress

Civilworks 285,700 284,396

Equipment 7,251 7,251

Advancestosuppliers 87,174 -

380,125 291,647

11.2 Additionstofixedassets

Followingadditionshavebeenmadetofixedassetsduringtheperiod:


------------Rupeesin'000-------------

Capitalwork-in-progress 88,478 31,404Propertyandequipment

FreeholdlandLeaseholdland - -

- -

Buildingonfreeholdland - -

Buildingonleaseholdland - -

Furnitureandfixture 4,945 16,413

Electricalofficeandcomputerequipment 66,299 110,643

Vehicles 112 3,393

Renovation 18,133 111,168

Books - 80

89,489 241,697

177,967 273,101

11.3 Disposalsoffixedassets

Thenetbookvalueoffixedassetsdisposedoffduringtheperiodisasfollows:


Freeholdland - -

Leaseholdland - -

Buildingonfreeholdland - -

Buildingonleaseholdland - -

Furnitureandfixture 36 309

Electricalofficeandcomputerequipment - 10

Vehicles - -

Renovation - 973

36 1,292

12 INTANGIBLEASSETS

Workinprogress 1,016 8,300

Computersoftware 58,266 70,550

59,282 78,850

Note

June30,

2019

December31,

2018

June30,

2019

December31,

2018

June30,

2019

December31,

2018

------------Rupeesin'000------------

19



12.1 Additionstointangibleassets ----------Rupeesin'000----------

Followingadditionshavebeenmadetointangibleassetsduringtheperiod:

Developedinternally - -

Directlypurchased 1,507 48,390

Throughbusinesscombination - -

Total 1,507 48,390

12.2 Disposalsofintangibleassets

Thenetbookvalueofintangibleassetsdisposedoffduringtheperiodisasfollows:

Developedinternally - -

Directlypurchased - -

Throughbusinesscombinations - -

Total - -

13 DEFERREDTAXASSET/(LIABILITY)-NET

Deductibletemporarydifferenceson

-Re-measurementofdefinedbenefitplan 27,586 27,586

-Deficitonrevaluationofinvestments 1,697,629 1,550,164

-Acceleratedtaxdepreciation 89,134 50,978

-Provisionagainstloansandadvances 86,939 -

-Provisionforbalanceswithotherbanks 3,510 3,510

-Provisionfordiminutioninvalueofinvestments 77,981 78,157

-Provisionforotherassets 3,448 3,448

-IslamicPoolManagementreserve 56,310 49,899

2,042,537 1,763,742

Taxabletemporarydifferenceson

-(Reversal)/provisionagainstloansandadvances-net - (6,291)

2,042,537 1,757,451

14 OTHERASSETS

Income/mark-upaccruedinlocalcurrency-netofprovision 8,010,374 4,386,767

AdvancesforPre-IPO 100,000 100,000

Advances,deposits,advancerentandotherprepayments 89,600 660,898

Advancetaxation(paymentslessprovisions) 546,286 670,828

Non-bankingassetsacquiredinsatisfactionofclaims - -

ReceivablefromProvidentFundTrust 26,171 -

Marktomarketgainonforwardforeignexchangecontracts 224,279 -

Receivableonaccountofsaleofsecurities 42,850 87,902

Stationaryandstampsonhand 20,826 18,863

Others 178,681 263,831

9,239,067 6,189,089

Less:Provisionheldagainstotherassets 144,426 144,426

OtherAssets(Netofprovision) 9,094,641 6,044,663

Surplusonrevaluationofnon-bankingassetsacquiredinsatisfactionofclaims - -

Otherassetstotal 9,094,641 6,044,663

14.1 Provisionheldagainstotherassets

AdvancesforPre-IPO 100,000 100,000

Others 44,426 44,426

144,426 144,426

14.1.1 Movementinprovisionheldagainstotherassets

Openingbalance 144,426 143,833

Chargefortheperiod/year - 593

Reversals - -

Closingbalance 144,426 144,426

15 BILLSPAYABLE

InPakistan 843,841 895,126

OutsidePakistan - -

843,841 895,126

June30,

2019

December31,

2018

20



----------Rupeesin'000-----------

16 BORROWINGS

Secured

BorrowingsfromStateBankofPakistan

Underexportrefinancescheme 3,420,200 3,299,000

UnderLocallyManufacturedMachinery(LMM)scheme - -

Longtermfinancingschemeforexportorientedprojects(LTF-EOP) 224,721 -

LongTermFinancingFacility(LTFF) 1,383,474 1,209,271

LivestockandDairy 53,120 40,000

5,081,515 4,548,271

Repurchaseagreementborrowings - 18,815,672

- -

Borrowingsfromdirectors(includingchiefexecutive)ofthebank - -

BaiMuajjalBorrowing - 10,478,171

5,081,515 33,842,114

Unsecured

BaiMuajjalBorrowing 4,078,269 -

Callborrowings 8,500,000 1,000,000

17,659,784 34,842,114

17 DEPOSITSANDOTHERACCOUNTS



Inlocal

currency

Inforeign

currenciesTotal

Inlocal

currency

Inforeign

currenciesTotal

----------------------------------------------------------Rupeesin'000-------------------------------------------------------

Customers

Currentdeposits 42,100,754

388,630

42,489,384

33,724,537

658,829 34,383,366

Savingdeposits 75,055,580

298,164

75,353,744

56,316,293

134,854 56,451,147

Termdeposits 70,288,454

-

70,288,454

74,575,968

- 74,575,968

Others 6,806,178

-

6,806,178

5,595,363

- 5,595,363

194,250,966

686,794

194,937,760

170,212,161

793,683 171,005,844

FinancialInstitutions

Currentdeposits 67,619 - 67,619 2,689 - 2,689

Savingdeposits 263,107 - 263,107 159,023 - 159,023

Termdeposits - - - - - -

330,726 - 330,726 161,712 - 161,712

194,581,692 686,794 195,268,486 170,373,873 793,683 171,167,556

June30,

2019

December31,

2018

Borrowingsfromsubsidiarycompanies,managedmodarabasandassociated

undertakings

21



18 OTHERLIABILITIES -----------Rupeesin'000-----------

Mark-up/return/interestpayableinlocalcurrency 4,513,428 2,331,098

Mark-up/return/interestpayableinforeigncurrency 145 69

Unearnedcommissionandincomeonbillsdiscounted 68,256 119,605

Accruedexpenses 174,079 180,357

Unclaimeddividends 29,024 29,060

Branchadjustmentaccount 517,445 754,017

Unremittedheadofficeexpenses - -

Charityfundpayable 34,277 9,156

Provisionagainstoff-balancesheetobligations - -

Employeesbenefitspayable 136,402 276,373

Securitydepositsagainstlease - -

Securitydepositsagainstijarah 351,226 340,901

Deferredincomemurabaha 130,360 117,499

Islamicpoolmanagementreserve 148,064 142,569

Sharesubscriptionmoneyrefund 1,091 1,091

Retentionmoney 23,721 24,903

Markupinsuspense 41,677 22,383

DeferredincomeonBai-Maujjal 2,444,799 -

Leaseliabilityagainstright-of-useassets 5.2.2 999,873 -

Billspaymentsystemoverthecounter 90,455 2,724

Others 153,552 133,798

9,857,874 4,485,603

19 DEFICITONREVALUATIONOFASSETS

(Deficit)/surplusonrevaluationof:

- Availableforsalesecurities 9.1 (4,850,368) (4,429,039)

- Fixedassets(leaseholdland) 774,183 774,183

- Non-bankingassetsacquiredinsatisfactionofclaims - -

(4,076,185) (3,654,856)

Deferredtaxondeficitonrevaluationof:

- Availableforsalesecurities 1,697,629 1,550,164

- Fixedassets - -

- Non-bankingassetsacquiredinsatisfactionofclaims - -

1,697,629 1,550,164

(2,378,556) (2,104,692)

20 CONTINGENCIESANDCOMMITMENTS

- Guarantees 20.1 15,503,896 15,959,908

- Commitments 20.2 13,476,057 13,545,311

28,979,953 29,505,219

20.1 Guarantees:

Financialguarantees 2,771,854 3,719,981

Performanceguarantees 12,527,771 11,689,103

Otherguarantees 204,271 550,824

15,503,896 15,959,908

20.2 Commitments:

Documentarycreditsandshort-termtrade-relatedtransactions

- Lettersofcredit 5,668,560 10,334,256

Commitmentsinrespectof:

- Forwardforeignexchangecontracts 20.2.1 7,301,778 3,206,101

- Forwardgovernmentsecuritiestransactions - -

- Derivatives - -

- Forwardlending - -

- Operatingleases - -

Commitmentsforacquisitionof:

- Fixedassets 505,719 4,954

- Intangibleassets - -

Othercommitments - -

13,476,057 13,545,311

Note June30,

2019

December31,

2018

22


20.3 Othercontingentliabilities

Duringfinancialyear2011,thetaxauthoritiesissuedanamendedorderforthetaxyear2009disallowingcertainexpenditureonaccount

oflackofevidenceforsuchexpenditureresultinginanadditionaltaxdemandofRs.308,900thousand.TheBankfiledanappealaswellas

rectificationapplicationagainstthesaidorder.Basedonrectificationapplication,theorderwasamendedandaccordinglytheadditional

demandwasreducedtoRs.256,349thousand.During2012,theCommissionerInlandRevenue(Appeals)[CIR(A)]throughanorderdated

June01,2012hasdeletedcertainadditionsonaccountofdisallowancesexceptfortheadditionsundercertainheadsofexpenseshaving

taximpactofapproximatelyRs.23,000thousand.TheBankhadfiledanappealagainsttheorderoftheAppellateTribunalInlandRevenue

(ATIR)inrespectofremainingadditionswhichalsodecidedinfavoroftheBank.Subsequently,CIRwentintoappealinPeshawarHigh

Court.ThemanagementisconfidentthatmatterwillbedecidedintheBank'sfavor.


------------Rupeesin'000----------

20.2.1 Commitmentsinrespectofforwardforeignexchangecontracts

Purchase 3,417,083 1,705,102

Sale 3,884,695 1,500,999

7,301,778 3,206,101

June30,

2019

December31,

2018

(Un-audited) (Un-audited)

Note

June30,2019 June30,2018

----------Rupeesin'000-----------21 MARK-UP/RETURN/INTERESTEARNED

On:

a) Loansandadvances 5,614,928

3,031,197

b) Investments 4,063,332

3,938,800

c) LendingstoFinancialInstitutions 576,206

153,466

d) Balanceswithbanks 17,760

10,633

10,272,226

7,134,096

22 MARK-UP/RETURN/INTERESTEXPENSED

On:

a) Deposits 6,736,119

3,164,121

b) Borrowings 1,074,148

1,179,044

7,810,267

4,343,165

23 FEEANDCOMMISSIONINCOME

Branchbankingcustomerfees 20,622

45,769

Consumerfinancerelatedfees 3,043

4,016

Creditrelatedfees(debitcards) 17,707

13,851

Creditrelatedfees 31,664

36,006

Investmentbankingfees 13,186

17,760

Commissionontrade 8,016

2,658

Commissiononguarantees 84,942

88,015

Commissiononremittancesincludinghomeremittances 13,779

14,549

Others 2,429

2,400

195,388

225,024

24 (LOSS)/GAINONSECURITIES-NET

Realized 24.1 2,192 11,930

Unrealized - (698)

2,192 11,232

24.1 Realized(loss)/gainon:

FederalGovernmentSecurities 2,192 11,930

ProvincialGovernmentSecurities - -

Shares - -

NonGovernmentDebtSecurities - -

ForeignSecurities - -

Associates - -

Subsidiaries - -

2,192 11,930

Sixmonths

ended

Sixmonths

ended

23



June30,2019 June30,2018

-----------Rupeesin'000-----------

25 OTHERINCOME

Rentonproperty 14,006 23,872

Gainonsalefixedassets-net 204 442

ServiceincomeonGovernmentschemes 2,198 2,726

Postal,swiftandotherservices 40,826 22,225

Rebatefromfinancialinstitutions 2,526 3,927

59,760 53,192

26 OPERATINGEXPENSES

Totalcompensationexpense 1,082,671

1,124,159

Propertyexpense

Rentandtaxes -

188,151

Insurance -

-

Utilitiescost 65,664

53,661

Security(includingguards) 67,826

62,966

Repairandmaintenance(includingjanitorialcharges) 1,963

1,982

Depreciation 166,956

66,384

302,409

373,144

Informationtechnologyexpenses

Softwaremaintenance 38,130

3,781

Hardwaremaintenance 11,488

15,989

Depreciation 72,164

65,737

Amortization 21,073

21,757

Networkcharges 5,820

4,675

ATMcharges 57,489

57,704

Others 974 1,007

207,138 170,650

Otheroperatingexpenses

Directors'feesandallowances 7,922

6,080

FeesandallowancestoShariahBoard 296

383

Legalandprofessionalcharges 24,332

11,557

Outsourcedservicescosts 39,296

38,806

Travellingandconveyance 30,521

33,367

NIFTclearingcharges 7,301

5,997

Depreciation 14,249

13,395

Traininganddevelopment 5,089

3,368

Postageandcouriercharges 10,719

9,860

Communication 30,742

30,681

Stationeryandprinting 27,115

26,289

Marketing,advertisementandpublicity 22,271

21,336

Donations -

25

Auditorsremunerations 7,642

9,587

Repairandmaintenance 6,665 2,749

Insuranceexpense 22,148 18,149

Brokerageandcommission 18,717 11,359

Rentandtaxes 657 604

Entertainment 12,335 14,325

Newspapersandperiodicals 1,003 770

Feesandsubscription 2,341 1,792

Depositprotectionpremium 32,444 -

Cashcarriagecharges 22,925 18,584

Others 88,544 18,354

435,274 297,417

2,027,492 1,965,370

Sixmonths

ended

Sixmonths

ended

24

31 FAIRVALUEMEASUREMENTS

31.1 Fairvalueoffinancialassets

Level1:

Level2:

Level3:

FairvaluemeasurementsusinginputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetsorliability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).

Fairvaluemeasurementsusinginputfortheassetorliabilitythatarenotbasedonobservablemarketdata(i.e.unobservableinputs).

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs

usedinmakingthemeasurements:

Fairvaluemeasurementsusingquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.


Thefairvalueofquotedinvestmentsotherthanthoseclassifiedasheldtomaturityisbasedonquotedmarketprices.Thefair

valueofunquotedequityinvestmentsisdeterminedonthebasisofbreak-upvalueoftheseinvestmentsaspertheirlatest

availableauditedfinancialstatements.Thefairvalueoffixedtermloans,otherassets,otherliabilitiesandfixedtermdeposits

cannotbecalculatedwithsufficientreliabilityduetotheabsenceofcurrentandactivemarketfortheseassetsandliabilities

andreliabledataregardingmarketratesforsimilarinstruments.Theprovisionforimpairmentofloansandadvanceshasbeen

calculatedinaccordancewiththeBank'saccountingpolicy.

Intheopinionofthemanagement,thefairvalueoftheremainingfinancialassetsandliabilitiesarenotsignificantlydifferent

fromtheircarryingvaluessinceassetsandliabilitiesareeithershort-terminnatureorinthecaseofcustomerloansand

deposits,arefrequentlyre-priced.


Note

June30,2019 June30,2018

------------Rupeesin'000-------------

27 OTHERCHARGES

PenaltiesimposedbyStateBankofPakistan 2,287 130

28 PROVISIONSANDWRITEOFFS-NET

Provisionsagainstlendingtofinancialinstitutions 8.1 - -

Provisions/(reversal)fordiminutioninvalueofinvestments 9.2 - (5,763)

Provisions/(reversal)againstloans&advances 10.3 145,645 (65,395)

Baddebtswrittenoffdirectly - -

Recoveryofwrittenoff/chargedoffbaddebts - -

145,645 (71,158)

29 TAXATION

Current 277,964 493,238

Priorperiods - -

Deferred (137,621) (2,382)

140,343 490,856

29.1


June30,2019 June30,2018

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

30 BASICANDDILUTEDEARNINGPERSHARE

Profitfortheperiod 498,164,000 776,352,000

Weightedaveragenumberofordinaryshares 1,000,252,485 1,000,252,485

Basicearningspershare 0.50 0.78

Sixmonths

ended

Sixmonths

ended

Sixmonths

ended

Sixmonths

ended

Includes super tax, levied through Finance Act, 2019, at the rate of 4% on the taxable income for the period

endedJune30,2019.

25


Valuationtechniquesandinputsusedindeterminationoffairvalueswithinlevel1

GovernmentofPakistan(GoP)-IjarahSukuks

TermFinance,BondsandSukukcertificates

The table below analyzes financial instruents measured at the end of the reporting period by the level in the fair value heirarchy in to which

thefairvaluemeasurementiscategorized:

PakistanInvestmentBonds/MarketTreasuryBills

Thevaluationtechniquesusedforaboveassetsaresameasdisclosedinthemostrecentannualfinancialstatements.

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

Financial instruments included in level 2 comprise of Sukuks Bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance

certificates,FXoptionsandForwardExchangeContracts.


Fullypaid-upordinaryshares

(c)Financialinstrumentsinlevel3

Financialinstrumentsincludedinlevel1compriseofinvestmentsinlistedordinaryshares.

Currently,nofinancialinstrumentsareclassifiedinlevel3.

(a)Financialinstrumentsinlevel1

(b)Financialinstrumentsinlevel2

Investmentsindebtsecurities(comprisingtermfinancecertificates,bonds,Sukukcertificatesandanyother

securityissuedbyacompanyorabodycorporateforthepurposeofraisingfundsintheformofredeemable

capital)arevaluedonthebasisoftheratesannouncedbytheMutualFundsAssociationofPakistan(MUFAP)in

accordancewiththemethodologyprescribedbytheSecuritiesandExchangeCommissionofPakistan.Inthe

determinationoftherates,theMUFAPtakesintoaccounttheholdingpatternofthesesecuritiesandcategorizes

theseastraded,thinlytradedandnon-tradedsecurities.

Fair values of GoP Ijarah Sukuks are derived using the PKISRV rates announced by the Financial Market

Association(FMA)throughReuters.Theseratesdenoteanaverageofquotesreceivedfromeightdifferentpre-

defined/approveddealers/brokers.

FairvaluesofPakistanInvestmentBondsandTreasuryBillsarederivedusingthePKRVrates(Reuterspage).

Fairvaluesofinvestmentsinlistedequitysecuritiesarevaluedonthebasisofclosingquotedmarketprices

availableatthePakistanStockExchange.

(Un-audited)

June30,2019

Level1 Level2 Level3 Total

Onbalancesheetfinancialinstruments --------------------------------Rupeesin'000-----------------------------

Financialassets-measuredatfairvalue

Investments

FederalGovernmentSecurities - 61,045,914 - 61,045,914

Shares 280,999 - - 280,999

TermFinanceCertificates -

1,969,000

- 1,969,000

Financialassets-disclosedbutnotmeasuredatfairvalue

Investments

FederalGovernmentSecurities -

22,969,887

- 22,969,887

Shares -

56,258

- 56,258

Non-GovernmentDebtSecurities -

4,686,901

- 4,686,901

Associates -

40,504

- 40,504

Off-balancesheetfinancialinstruments-measuredatfairvalue

Forwardpurchaseofforeignexchange -

3,417,083

- 3,417,083

Forwardsaleofforeignexchange -

3,884,695

- 3,884,695

(Audited)

December31,2018

Level1 Level2 Level3 Total

Onbalancesheetfinancialinstruments ------------------------------Rupeesin'000------------------------------

Financialassets-measuredatfairvalue

Investments

FederalGovernmentSecurities -

63,926,594

- 63,926,594

Shares 156,958 - - 156,958

TermFinanceCertificates - 1,600,000 - 1,600,000

Financialassets-disclosedbutnotmeasuredatfairvalue

Investments

FederalGovernmentSecurities - 23,094,895 - 23,094,895

Shares - 56,258 - 56,258

Non-GovernmentDebtSecurities - 5,358,030 - 5,358,030

Associates - 40,504 - 40,504

Off-balancesheetfinancialinstruments-measuredatfairvalue

Forwardpurchaseofforeignexchange - 1,705,102 - 1,705,102

Forwardsaleofforeignexchange - 1,500,999 - 1,500,999


Operatingfixedassets(Leaseholdland) Leasehold land are revalued on regular basis using professional values on the panel of Pakistan Banker's

Association.Thevaluationisbasedontheirassessmentofmarketvalueoftheproperties.


26

32 SEGMENTINFORMATION

32.1 Segmentdetailswithrespecttobusinessactivities (Un-audited)

June30,2019

-----------------------------------------------Rupeesin'000----------------------------------------------Profit&loss

Netmark-up/return/profit 1,142,413 (411,592) 145,682 1,585,456 2,461,959

Nonmark-up/return/interestincome 156,318 107,758 12,106 75,790 351,972

Totalincome/loss 1,298,731 (303,834) 157,788 1,661,246 2,813,931

Segmentdirectexpenses 1,394,801 188,427 28,535 418,016 2,029,779

Totalexpenses 1,394,801 188,427 28,535 418,016 2,029,779

Provisions - 1,430,286 6,006 (1,290,647) 145,645

Profitbeforetax/loss (96,070) (1,922,547) 123,247 2,533,877 638,507

Balancesheet

Cashandbankbalances 7,582,443 481,906 6,661,772 58,132 14,784,253

Lendingstofinancialinstitutions - 3,331,347 - - 3,331,347

Investments 76,185,590 (737)

- 14,864,610 91,049,463

Advances-performing 61,265,325 2,008,610 4,332,408 44,236,590 111,842,933

Operatingfixedassets/intangibleassets -

-

-

3,413,695 3,413,695

Deferredtaxassets 86,938

1,868,254

3,448

83,897 2,042,537

Others 4,816,131

265,140

358,400

3,654,970 9,094,641

Totalassets 149,936,427

7,954,520

11,356,028

66,311,894 235,558,869

Billspayable -

-

843,841

- 843,841

Borrowings -

12,578,269

-

5,081,515 17,659,784

Depositsandotheraccounts 146,451,365

7,810,739

1,952,686

39,053,696 195,268,486

Others 7,393,407

394,315

98,578

1,971,574 9,857,874

Totalliabilities 153,844,772

20,783,323

2,895,105

46,106,785 223,629,985

Equity (3,908,345)

(12,828,803)

8,460,923

20,205,109 11,928,884

Totalequityandliabilities 149,936,427

7,954,520

11,356,028

66,311,894 235,558,869

Contingenciesandcommitments 18,721,520 739,370 1,361,808 8,157,255 28,979,953

(Un-audited)

June30,2018

Profitandloss

Netmark-up/return/profit 1,969,207

(304,711)

75,473

1,050,962 2,790,931

Nonmark-up/return/interestincome 185,234

101,371

12,776

71,238 370,619

Totalincome 2,154,441

(203,340)

88,249

1,122,200 3,161,550

Segmentdirectexpenses 1,298,694

79,112

24,237

563,457 1,965,500

Totalexpenses 1,298,694

79,112

24,237

563,457 1,965,500

Provisions(loss) -

1,424,522

(4,575)

(1,491,105) (71,158)

Profitbeforetax 855,747

(1,706,974)

68,587

2,049,848 1,267,208

(Audited)December31,2018

----------------------------------------------Rupeesin'000---------------------------------------------Balancesheet

Cashandbankbalances 9,051,401 688,021 6,298,606 18,785 16,056,813

Lendingstofinancialinstitutions - 7,695,642 - - 7,695,642

Investments 90,491,491 1,518,261 - 2,223,487 94,233,239

Advances-performing 54,109,118 1,977,368 4,253,967 34,671,450 95,011,903

Operatingfixedassets/intangibleassets - - - 2,295,272 2,295,272

Deferredtaxassets 1,640,876 (3,184) 3,448 116,311 1,757,451

- - - - -

Others 3,168,513 89,272 220,291 2,566,587 6,044,663

Totalassets 158,461,399 11,965,380 10,776,312 41,891,892 223,094,983

Billspayable - - 895,126 - 895,126

Borrowings - 30,293,843 - 4,548,271 34,842,114

Depositsandotheraccounts 128,375,667 6,846,702 1,711,676 34,233,511 171,167,556

Others 3,364,202 179,425 44,856 897,120 4,485,603

Totalliabilities 131,739,869 37,319,970 2,651,658 39,678,902 211,390,399

Total


Commercial

BankingTotal

Corporate

Finance

Tradingand

Sales

Retail

Banking

- --

-

-

Total


Corporate

Finance

RetailBanking

CommercialBanking

Corporate

Finance

Tradingand

Sales

Retail

Banking

Commercial

Banking

Trading&

Sales

----------------------------------------------Rupeesin'000---------------------------------------------

Equity 26,721,530 (25,354,590)

8,124,654

2,212,990 11,704,584

Totalequityandliabilities 158,461,399 11,965,380

10,776,312

41,891,892 223,094,983

Contingenciesandcommitments 18,769,612 3,206,101 2,646,165 4,883,341 29,505,219

27

NOTESTO

THECONDEN

SEDIN

TERIM

FINANCIALSTATEMEN

TS(UN-AUDITED

)FO

RTHESIXM

ONTH

SEN

DED

JUNE30,2019

TheGovernmen

tofKhyberPakhtunkhwa(GoKP)holdscontrollinginterest(70.20%shareh

olding)inth

eBan

kan

dth

ereforeentitieswhichareowned

and/orcontrolledbytheGoKP,orw

heretheGoKPmayexercise

significan

tinfluen

ce,arerelated

partiesoftheBan

k.TheBan

kintheordinarycourseofb

usinessen

tersintotransactionwithGovernmen

t-related

entities.Suchtransactionsincludelendingto,dep

ositsfromand

provisionofotherban

kingservicestoGovernmen

t-relatedentities.

RELATEDPARTY

TRANSA

CTIONS

33

TheBan

khasrelated

partyrelationshipwithitsshareh

olders,employeeben

efitplans,associate,directors,keym

anagem

entpersonnelandotherrelated

parties.

TheBan

ken

tersintotransactionswithrelated

partiesintheordinarycourseofbusinessan

donsubstan

tiallythesameterm

sasfo

rcomparab

letransactionswithpersonofsimilarstan

ding.Contributiontoand

accrualsinrespecto

fstaffretiremen

tben

efitplanaremad

einaccordan

cewithactuarialvaluations.Rem

unerationtotheexecutivesaredetermined

inaccordan

cewithterm

softheirappointm

ents.

Detailsoftran

sactionswithrelated

partiesduringtheperiod,o

therthan

thosewhichhavebeendisclosedelsew

hereinthesefinan

cialstatemen

tsareasfollows:

(Un-audited)

(Audited

)June30,2019

Decem

ber31,2018

Advances

Open

ingbalan

ce-

276,454

--

-260,785

--

Additionduringtheperiod/year

-7,635

--

-73,501

--

Rep

aidduringtheperiod/year

-26,748

--

-57,832

--

Closingbalan

ce-

257,341

--

-276,454

--

Provisionheldagainstadvances

--

--

--

--

Depositsandotheraccounts

Open

ingbalan

ce-

43,815

29,951

2,179,378

-26,773

21,546

1,960,438

Receivedduringtheperiod/year

-

168,790

33,229

2,564,878

-330,924

38,136

1,079,463

Withdrawnduringtheperiod/year

-

164,590

30,021

171,111

-313,882

29,731

860,523

Closingbalan

ce-

48,015

33,159

4,573,145

-43,815

29,951

2,179,378

Otherliabilities

Interest/m

ark-uppayab

le-

1,160

1,230

118,947

-1,119,447

842,314

1,524,050

(Un-audited)

(Un-audited

)

June30,2019

June30,2018

----------------------------------------------------------------------------------Rupeesin'000------------------------------------------------------------------------------------

Income

Mark-up/return/interestearned

-

2,457

-

-

-4,776

--

Expense

Mark-up/return/interestpaid

-1,160

1,230

118,947

-626

381

132,967

Operatingexpen

ses

--

--

-6,301

--

Directors

Key

Man

agement

Personnel

Associate

Employee

Funds

Directors

Key

Man

agem

ent

Personnel

Associate

Employee

Funds

Directors

Key

Man

agement

Personnel

Associate

Employee

Funds

Directors

Key

Man

agem

ent

Personnel

Associate

Employee

Funds

----------------------------------------------------------------------------------Rupeesin'000------------------------------------------------------------------------------------

28


(Un-audited) Audited

------------Rupeesin'000------------

34

MinimumCapitalRequirement(MCR):

Paid-upcapital(netoflosses)10,002,525 10,002,524

CapitalAdequacyRatio(CAR):

EligibleCommonEquityTier1(CET1)Capital 9,448,833 9,587,071

EligibleAdditionalTier1(ADT1)Capital -

-

TotalEligibleTier1Capital 9,448,833

9,587,071

EligibleTier2Capital -

35,851

TotalEligibleCapital(Tier1+Tier2) 9,448,833

9,622,922

Riskweightedassets(RWAs):

Creditrisk 57,014,869

55,368,559

Marketrisk 11,368,008

12,766,137

Operationalrisk 10,259,721

10,259,721

Total 78,642,598

78,394,417

CommonEquityTier1CapitalAdequacyRatio 12.01% 12.23%

Tier1CapitalAdequacyRatio 12.01% 12.23%

TotalCapitalAdequacyRatio 12.01% 12.28%

LeverageRatio(LR):

EligibleTier-1Capital 9,448,833

9,587,071

TotalExposure 275,635,081

263,853,741

LeverageRatio 3.43% 3.63%

LiquidityCoverageRatio(LCR):

TotalHighQualityLiquidAssets 61,508,030

60,817,347

TotalNetCashOutflow 52,759,777

55,418,370

LiquidityCoverageRatio 116.58% 109.74%

NetStableFundingRatio(NSFR):

TotalAvailableStableFunding 133,023,557 116,343,436

TotalRequiredStableFunding 115,319,411 97,573,326

NetStableFundingRatio 115.35% 119.24%

June30,

2019

December31,

2018

CAPITALADEQUACY,LEVERAGERATIO&LIQUIDITYRATIO

29


35 ISLAMICBANKINGBUSINESS

(Un-Audited) (Audited)

Note

----------Rupeesin'000-----------ASSETS

Cashandbalanceswithtreasurybanks 4,021,545 4,222,345

Balanceswithotherbanks 1,633,473 1,629,801

Duefromfinancialinstitutions 35.1 2,831,347 2,000,000

Investments 35.2 12,017,112 10,573,630

Islamicfinancingandrelatedassets-net 35.3 41,450,323 35,466,569

Fixedassets 672,956 280,407

Intangibleassets 4,636 5,845

Duefromheadoffice 6,116,462 -

Otherassets 3,896,766

867,929

TotalAssets 72,644,620

55,046,526

LIABILITIES

Billspayable 285,489

336,698

Duetofinancialinstitutions 9,000,000

1,500,000

Depositsandotheraccounts 35.4 53,056,411

45,894,040

Duetoheadoffice -

1,078,829

Subordinateddebt -

-

Otherliabilities 4,632,237

1,168,149

66,974,137

49,977,716

NETASSETS 5,670,483

5,068,810REPRESENTEDBY

Islamicbankingfund 460,000

460,000

Reserves 46,538

44,855

(Deficit)/surplusonrevaluationofassets (58,500)

(34,432)

Unappropriatedprofit 5,222,445

4,598,387

5,670,483

5,068,810

CONTINGENCIESANDCOMMITMENTS 35.5

(Un-Audited) (Un-audited)

Note

-----------Rupeesin'000-----------

Profit/returnearned 35.6 2,938,757

1,536,148

Profit/returnexpensed 35.7 1,207,880

590,892

Netprofit/return 1,730,877

945,256

OTHERINCOME

FeeandCommissionIncome 52,500

39,833

DividendIncome -

-

ForeignExchangeIncome 34,227 27,481

Gainonsecurities 4,306 -

Otherincome 18,426 29,045

Totalotherincome 109,459 96,359

1,840,336 1,041,615OTHEREXPENSES

Operatingexpenses 800,224 724,681

WorkersWelfareFund - -

Othercharges 35 100

Totalotherexpenses 800,259 724,781

Profitbeforeprovisions 1,040,077 316,834

Provisionsandwriteoffs-net 17,031 (27,880)

Profitbeforetaxation 1,023,046 344,714

Taxation 398,988 134,438

Profitaftertaxation 624,058 210,276

TheBankisoperating84(December2018:84)Islamicbankingbranchesand39(December2018:39)IslamicbankingwindowsasatJune30,2019.

June30,

2019

December31,

2018

The profit and loss account of the Bank's Islamic banking branches for the six months ended June 30, 2019 is as follows:

June30,

2019

June30,

2018

NOTESTO

THECONDEN

SEDIN

TERIM

FINANCIALSTATEMEN

TS(UN-AUDITED

)FO

RTHESIXM

ONTH

SEN

DED

JUNE30,2019

30

(Un-audited)

(Audited

)

June30,2019

Decem

ber31,2018

Inlo

cal

currency

Inforeign

currencies

Total

Inlocal

curren

cy

Inforeign

curren

cies

Total

--------------------------------------------------------Rupeesin'000----------------------------------------------------

35.1

Duefromfinan

cialin

stitutions

BaiM

uajjalreceivablefromStateBan

kofPakistan

2,831,347

-2,831,347

--

-

Calllen

dings

--

-2,000,000

-2,000,000

2,831,347

-2,831,347

2,000,000

-2,000,000

(Un-audited)

(Audited

)

June30,2019

Decem

ber31,2018

--------------------------------------------------------------------------Rupeesin'000-----------------------------------------------------------------------------

35.2

Investmentsbysegm

ents:

FederalG

overnmentSecurities:

-GoPijarah

sukuks

1,346,240

-

(58,500)

1,287,740

6,250,032

-

(34,432)

6,215,600

-BaiM

uajjalsukuks

6,388,711

-

-

6,388,711

-

-

-

-

Non-GovernmentDebtSecurities

-Un-listed

4,340,661

-

-

4,340,661

4,358,030

-

-

4,358,030

12,075,612

-

(58,500)

12,017,112

10,608,062

-

(34,432)

10,573,630

(Un-audited)

(Audited

)

-----------Rupeesin'000----------

35.3

Islamicfinan

cingan

drelatedassets-net

Ijarah

1,179,528

1,138,904

Murabah

a2,736,351

3,268,313

Musharaka

-

-

Dim

inishingmusharaka

4,641,067

4,291,097

Salam

-

-

Istisna

4,996,304

3,849,993

Runningmusharka

28,054,630

23,026,000

Qarzehasna

900

33,688

GrossIslamicfinan

cingan

drelatedassets

41,608,780

35,607,995

Less:provisionagainstIslamicfinan

cings

-Specific

144,448

125,439

-Gen

eral

14,009 1

5,987

158,457

141,426

Islamicfinan

cingan

drelatedassets-netofprovision

41,450,323

35,466,569

Provisionfor

dim

inution

June30,

2019

Decem

ber

31,2018

(Deficit)

Carrying

value

Cost

Provisionfor

dim

inution

(Deficit)

Carrying

value

Cost

Profitequalizationreserve

37 GENERAL

37.1 Comparatives

37.2 Figureshavebeenroundedtothenearestthousandrupees,unless,otherwisestated.

38 DATEOFAUTHORIZATIONFORISSUE

Comparative information has been reclassified, rearranged or additionally incorporated in this condensed interim financial

information for the purposes of better presentation. The comparative information has also been reclassified and / or restated

as a result of revised format of interim financial information as more fully explained in note 2.4 to this condensed interim

financialinformation.

This condensed interim financial information was authorised for issue on August22,2019 by the Board of Directors oftheBank.

The profit equalization reserves amounting to Rs.46,538 thousand (2018: Rs. 44,855 thousand) classified in other liabilities,

whichhasbeenpresentedasreservesinnote35.


31


35.4 Depositsandotheracocunts June30,2019 December31,2018

------------------------------------------------------Rupeesin'000-----------------------------------------------------Customers

Currentdeposits 21,931,160 61,641 21,992,801 19,196,004 322,813 19,518,817

Savingsdeposits 25,417,306 - 25,417,306 21,761,903 - 21,761,903

Termdeposits 2,629,256 - 2,629,256 2,309,946 - 2,309,946

Others 2,832,336 - 2,832,336 2,212,882 - 2,212,882

52,810,058

61,641

52,871,699 45,480,735 322,813 45,803,548

FinancialInstitutions

Currentdeposits 876

-

876 1,494 - 1,494

Savingsdeposits 183,836

-

183,836 88,998 - 88,998

52,994,770

61,641

53,056,411 45,571,227 322,813 45,894,040


35.5 Contingenciesandcommitments --------Rupeesin'000--------

-Guarantees 4,360,676 4,608,139

-Commitments 879,694 1,500,966

5,240,370 6,109,105


35.6 Profit/returnearnedoffinancing,investmentsandplacements --------Rupeesin'000--------

Profitearnedon:

Financing 2,173,551 1,193,115

Investments 764,847 341,349

Placements 359 1,684

2,938,757 1,536,148

35.7 Profitondepositsandotherduesexpensed

Depositsandotheraccounts 851,826 272,594

DuetoFinancialInstitutions 356,054 318,298

1,207,880 590,892


35.8 Islamicbankingbusinessunappropriatedprofit --------Rupeesin'000--------

Openingbalance 4,598,387 4,094,931

Add:Islamicbankingprofitfortheyear 1,023,046 825,338

Less:Taxation 398,988 321,882

Less:Reserves - -

Closingbalance 5,222,445 4,598,387

June30,

2019

December

31,2018

TotalInlocal

currency

Inforeign

currenciesTotal

Inlocal

currency

Inforeign

currencies

June30,

2019

December

31,2018

June30,

2019

June30,

2018

/thebankofkhyber

24, The Mall, Peshawar Cantt.

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for the period ended June 30, 2019 - Bank of Khyber · Dr. Shahzad Khan Bangash Chairman Shakeel...

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