128
The Bank of Khyber
CONTENTS
Vision ..................................................................................................
Mission .............................................................................................. .
Core Values .........................................................................................
Corporate Informa�on ...................................................................... . ..
No�ceofTwentyNinthAnnualGeneralMee�ng................................. ..
Chairman’sReview....................................................................................
Directors’ReviewReport..........................................................................
StatementofCompliance..........................................................................
ReviewReporttotheMembers...............................................................
StatementofInternalControls.................................................................
ReportofShariahBoard...........................................................................
Auditor’sReporttotheMembers............................................................
Financialstatements
StatementofFinancialposi�on..........................................................
ProfitandLossAccount......................................................................
StatementofComprehensiveIncome................................................
StatementofChangesinEquity..........................................................
CashFlowStatement..........................................................................
NotestotheFinancialStatements......................................................
Pa�ernofShareholding...........................................................................
CategoryofShareholders.........................................................................
BranchNetwork.......................................................................................
ForeignCorrespondentBanks..................................................................
FormofProxy...........................................................................................
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The Bank of Khyber
2
Vision
TobecomeaLeadingBankprovidingefficientanddynamicservicesinbothIslamicandConven�onalbankingthroughexpandedna�onwidenetwork.
Mission
Toincreaseshareholder’svalueandprovideexcellentserviceandinnova�veproductstocustomersthrougheffec�vecorporategovernance,friendlyworkenvironmentandcontribu�ng
towardsanequitablesocioeconomicgrowth.
CoreValues
HighestqualityofserviceProfessionalism
IntegrityTeamwork
Innova�onandu�liza�onoflatesttechnologyRiskMi�ga�on
CorporateSocialResponsibili�es
A N N U A L R E P O R T 2 0 1 9
3
CORPORATEINFORMATION
BoardofDirectors
ShakeelQadirKhan
Chairman/Non-Execu�veDirector
A�fRehman
Non -Execu�veDirector
MaqsoodIsmail Ahmad
Non -Execu�veDirector
AsadMuhammadIqbal
IndependentDirector
JavedAkhtar
IndependentDirector
ShaharyarAhmad
IndependentDirector
RashidAliKhan
IndependentDirector
ManagingDirector /CEO (Ac�ng)
IhsanUllahIhsan
ShariahBoard
Mu�iMuhammadZahid
Chairman
ShariahBoard
Mu�iMuhammadIbrahimEssa Member ShariahBoard
QaziAbdulSamad ResidentShariah
BoardMember (RSBM)
Board AuditCommi�ee
AsadMuhammadIqbal Chairman
A�fRehman Member
JavedAkhtar Member
ShaharyarAhmad Member
RashidAliKhan Member
BoardHumanResource&Remunera�on Commi�ee
ShaharyarAhmad Chairman
MaqsoodIsmail Ahmad Member
AsadMuhammadIqbal Member
ManagingDirector Member
BoardRiskManagementCommi�ee
MaqsoodIsmail Ahmad Chairman
Javed Akhtar Member
A�fRehman Member
RashidAliKhan Member
ManagingDirector Member
A N N U A L R E P O R T 2 0 1 9
The Bank of Khyber
4
BoardI.TSteeringCommi�ee
A�fRehman
Chairman
ShaharyarAhmad
Member
AsadMuhammadIqbal
Member
RashidAliKhan
Member
ManagingDirector
Member
BoardCompliance
Commi�ee
RashidAliKhan
Chairman
ShaharyarAhmad
Member
JavedAkhtar
Member
ChiefFinancialOfficer
MahmoodAhmedQureshi
CompanySecretary
ZahidSahibzada
RegisteredOffice/HeadOffice
TheBankofKhyber
24
–
TheMall,PeshawarCan�.
1st
Floor,StateLifeBuilding ,
34 –
TheMall,
PeshawarCan�. ,Pakistan
UAN#
00 -92 -91 -111959595
URL:
www.bok.com.pk
Auditors
EYFordRhodes
CharteredAccountants
LegalAdvisors
Mr.NisarAhmedKhanAdvocate,Peshawar,
M/s .
MohsinTayebaly&Co.,Karachi
RegistrarandShareRegistra�onOffice
THKAssociates(Pvt)Ltd.
1st Floor,40 -C,Block6
P.E.C.H.S, Karachi– 75530
Pakistan .
A N N U A L R E P O R T 2 0 1 9
NOTICEOFTWENTYNINTHANNUALGENERALMEETING
No�ceisherebygiventhattheTwentyNinthAnnualGeneralMee�ngoftheShareholdersofTheBankofKhyberwillbeheldonFriday,March27,2020at10:00a.m.atPearlCon�nentalHotel,PeshawarCan�totransactthefollowingbusiness:
OrdinaryBusiness
1. ToconfirmtheminutesoftheTwentyEightAnnualGeneralMee�ng(AGM)heldonMarch27,2019.
2. Toreceive,considerandadopttheAuditedAccountsoftheBankfortheyearendedDecember31,2019,togetherwiththeDirectors’andAuditors’Reportsthereon.
3. ToappointauditorsfortheyearendingDecember31,2020andfixtheirremunera�on.Bank’sauditorsMessrs.EYFordRhodes,CharteredAccountants,re�reandbeingeligible,offerthemselvesforre-appointment.
4. Toconsider,andifthoughtfit,approveasrecommendedbytheBoardofDirectors,[email protected]%totheshareholdersoftheBank.
SpecialBusiness
5. Toapprovetransmissionofannualauditedfinancialstatements,auditor’sreportanddirectors’reportetc.(AnnualAuditedAccounts)alongwithno�ceofgeneralmee�ngtotheshareholdersofTheBankofKhyberthroughCD/DVD/USBattheirregisteredaddressesasallowedbytheSecuri�esandExchangeCommissionofPakistan(SECP)andifthoughtfittopassthefollowingresolu�onasordinaryresolu�on:
“RESOLVEDTHATtransmissionofannualauditedfinancialstatements,auditor’sreportanddirectors’reportetc.(AnnualAuditedAccounts)alongwithno�ceofgeneralmee�ngtotheshareholdersofTheBankofKhyberthroughCD/DVD/USBattheirregisteredaddressesinso�formi.e.CD/DVD/USBasno�fiedbySECPvideitsSRONo.470(I)2016datedMay31,2016beandisherebyapproved.”
AstatementofMaterialFactsunderSec�on134(3)oftheCompaniesAct,2017rela�ngtosaidSpecialBusinessisgivenhereunder.
OtherBusiness
6. AnyotherbusinesswiththepermissionoftheChair.
5
ByOrderoftheBoard
ZahidSahibzadaPeshawar:March6,2020CompanySecretary
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
The Bank of Khyber
6 A N N U A L R E P O R T 2 0 1 9
Notes:
(I) ShareTransferBooksoftheBankwillremainclosedfromSaturday,March21,2020toFriday,March27,2020(bothdaysinclusive)todeterminethenamesofmembersen�tledtoreceivethe5%CashDividendanda�endandvoteinthemee�ng.
TransfersreceivedinorderattheofficeofourShareRegistrar,M/s.THKAssociates(Pvt)Limited,
locatedat1stFloor,40-C,Block-6,P.E.C.H.S.,Karachi–75400bythecloseofbusinessonFriday,March20,2020willbetreatedin�meforthesaidpurpose.
(ii) Allmembersareen�tledtoa�endandvoteatthemee�ng.
(iii) Amemberen�tledtoa�endandvoteattheMee�ng,isen�tledtoappointanothermemberasaproxytoa�end,speakandvoteforhim/her.
(iv) Aninstrumentofproxyapplicableforthemee�ngisbeingprovidedwiththeno�cesenttomembers.Furthercopiesoftheinstrumentofproxy,ifrequired,maybeobtainedfromtheRegisteredOfficeoftheBankduringnormalofficehours.
(v) AninstrumentofproxyandaPowerofA�orneyorotherauthority(ifany)underwhichitissigned,ornotarizedcopyofsuchPowerofA�orneymustbevalidanddepositedattheRegisteredOfficeoftheBanknotlessthan48hoursbeforethe�meofthemee�ng.
(vi) IncaseofProxyforanindividualbeneficialownerofCDC,a�estedcopiesofbeneficialowner’sNICorpassport,AccountandPar�cipant’sI.D.numbersmustbedepositedalongwiththeFormofProxy.IncaseofProxyforcorporatemembers,he/sheshouldbringtheusualdocumentsrequiredforsuchpurpose.
(vii)Membersare requested topromptlycommunicateanychange in theiraddresses toourabove-men�onedShareRegistrar.
(viii)FormofProxy,ifrequired,shouldbesignedonRs.5/-RevenueStamp.StatementofMaterialFactsunderSec�on134(3)oftheCompaniesAct,2017
ItemNo.5
TheSECPthroughSRO470(I)2016datedMay31,2017hasallowedcompaniestocirculatetheannualbalancesheetandprofitandlossaccount,auditor’sreportanddirectors’reportetc.(annualauditedaccounts) along with no�ce of general mee�ng to its shareholders in electronic form throughCD/DVD/USB at their registered addresses. This would result in �mely delivery of Annual AuditedAccounts to the shareholders. The Bank has placed a standard request form on its website i.e.www.bok.com.pkcontainingpostalandemailaddressesofCompanySecretary/ShareRegistrar,sothatshareholdersmayrequestahardcopy,whichwillbedispatchedtothereques�ngshareholdersattheirregisteredaddresses,freeofcostwithinoneweekoftherequest.
The Bank of Khyber
CHAIRMAN’SREVIEWREPORT
Iampleasedtopresentthisreportontheoverallperformanceandeffec�venessoftheBoardinachievingtheBank’sobjec�ves.We,intheBoardrecognizetheimportanceof,andarecommi�edto,highstandardsofcorporategovernance,alignedwiththeneedsoftheBankandtheinterestsofallourstakeholders.
MyfellowDirectorsandIarefullyawareoftherole,responsibili�es,applicablelawsandregula�onstoeffec�velygoverntheaffairsoftheBank.WefullyappreciatetheimportanceofsoundgovernanceintheefficientrunningoftheBank,and inpar�culartheeffec�venessand independenceoftheBoard,whichprovidespolicyguidelinesfortheManagementtofollow.
Thecomposi�onoftheBoardofDirectorsreflectsmixofvariedbackgroundsandrichexperienceinthefieldsofManagement,Business,ITandBanking.TheBoardprovidesstrategicdirec�ontotheManagement and is available for guidance. The Board approves the budget and ensure that acompetentManagementteamisinposi�ontoachievethegoalsset.TheBoardensurescomplianceofallregulatoryrequirementsapplicabletotheBank.TheBoardisablyassistedbyitsCommi�eesviz,AuditCommi�ee,HumanResource&Remunera�onCommi�ee,RiskManagementCommi�ee,I.TSteeringCommi�eeandComplianceCommi�ee.
AsrequiredundertheCodeofCorporateGovernance,theBoardhasapprovedaformalprocessforitsannualperformanceevalua�onthroughanin-housemechanismbasedonscoredques�onnaires.However,mandatoryevalua�on throughexternalagencyonce in threeyears isbeingconductedthroughPakistanIns�tuteofCorporateGovernance(PICG).
In compliance to theCodeofCorporateGovernance, theBoardhasarrangedDirector’sTrainingProgramformajorityofitsDirectorssoastoacquaintthemwiththeregula�ons,applicablelaws,theirdu�esandresponsibili�es.
ItakethisopportunitytothankourshareholdersandcustomersforthetrusttheyplacedintheBoardofDirectorsandtheManagementteamandtheemployeesfortheirsincereeffortsthroughouttheyearunderreview.
ShakeelQadirKhanChairman–BoardofDirectors
Peshawar–March4,2020
7 A N N U A L R E P O R T 2 0 1 9
Directors'ReporttotheShareholders
DearShareholders
OnbehalfoftheBoardofDirectors,wearepleasedtopresentthe29thAnnualReportoftheBankofKhyberalongwithauditedfinancial statementsandauditors' report for thefinancialyearendedDecember31,2019.
FinancialHighlights
Theopera�ngresultsandappropria�ons,asrecommendedbytheBoard,areasunder: (Rs.inmillions)Opera�ngProfit 2,240 Reversalagainstnon-performingadvances,investments&others 21Profitbeforetaxa�on 2261Taxa�on (955) Profita�ertax 1,306TotalAssets 306,305Advances(Gross) 113,976 Investments(Net) 146,911Deposits 182,168
EconomyReview
OverallmacroeconomicperformanceremainedweakduringtheyearasreflectedbydepressedGDPgrowth,highinfla�onandweakerPKRagainstothermajorcurrencies.Inthisbackdrop,theStateBankofPakistan(SBP)graduallyraisedpolicyrateto13.25%tocontrolinfla�on.Alltheseac�onswereaimedtostabilizeeconomy,containdemand,encourageexportsanddiscourageimportsresul�ngintolowertradedeficitcomparedtothepreviousyear.Nonetheless,withsloweddownac�vity,GDPgrowthisexpectedtofurthergodownbelow3%duringthecurrentfiscalyear.Duringtheyear,themarketvalueofapredominantpor�onofthebank'sinvestmentcameundertremendouspressureduetodifficultmacroeconomicenvironment,however,thebankhasremainedcompliantwiththeregulatoryrequirements.
Inaddi�on,inviewoflessthantargetedrevenuecollec�onandhighcostofborrowing,fiscaldeficitremainedhighwhichle�veryli�leornoroomwiththegovernmentfordevelopmentalspending.Hence,businesseswereconstrainedtooperateinnotverybenignenvironment.Nonetheless,theSBPhasmaintainedPolicyRateatthecurrentlevelduringthelastthreereviews.Thetrendofothermajoreconomicindicatorssuggestthatinterestratehavepeakedoutandthelikelihoodoffurtherraiseisveryremote.
The Bank of Khyber
8 A N N U A L R E P O R T 2 0 1 9
PerformanceReview
Despite various challenges, the bank has performed well against all major balance sheet andprofitability indicators in theyear2019.While thebank's grossmark-up income increased fromRs.14,686milliontoRs.24,657million,NetInterestIncomeslightlydecreasedfromRs.5,139milliontoRs.4,918million.Thisisprimarilyduetolageffectwherebythebank'sassetswererepricedupwardwithdelaywhereasdepositorswerepaidahigherreturnassoonastheratesmovedup.
NonMark-upincomerecordedacommendabletoRs.1,112millionagainstlossofRs.526millioninthe last year. This increasewas primarily due to capital gain of Rs.290million during the year.Administra�veandotherexpensesremainedundercontrolasthesamedecreasedbyaround8%andstoodatRs.3,790million.Thebankrecordedapre-taxprofitofRs.2,261million increasingfromRs.707millionofayearagowhereasnetprofita�ertaxwasrecordedatRs.1,306millionagainstRs.466millionoflastyear.
Thebankrecordedahealthyincreaseof37%initstotalassetsincreasingfromRs.223,094milliontoRs.306,305million. This increasewas predominantly led by increase in investment bookwhichincreasedfromRs.94,233milliontoRs.146,911million,anincreaseof56%.Thiswasfollowedbyanincreaseof16%inNetLoansandAdvanceswhichincreasedfromRs.95,012milliontoRs.109,742million.Thebank'sstrategyduringtheyearhasbeentopreserveassetqualityandbookhighqualitycreditexposuresonselec�vebasis.Thegrowthininvestmentwasfundedbymobilizingliabilityfromtheinterbankmarketwhereasdepositgrowthhasbeenprimarilychanneledforfundingtheadvancesbook.Thisdepositgrowthwasmainlydriventhroughnewcustomeracquisi�onanddeepeningoftheexis�ngcustomerbase.
Withreduc�onindeficitonaccountofmarktomarketvalua�onofAFSpor�olioandrecordingofprofit during the current year, the shareholders' equity clocked in at Rs.14,201million againstRs.11,705millionlastyear.ReturnonAssets(ROA)andReturnonEquity(ROE)stoodat0.43%and9.20%respec�vely.
Thebankconsolidateditsbranchnetworkat169branchesand3sub-branchesalloverthecountryincludingGilgitBal�stan,andAzadJammu&Kashmir.InordertocatertothebankingneedsofpublicinthenewlymergeddistrictsoftheerstwhileFATA,thebankrelocatedfourbranchestoareaswhereitwasnotpresentpreviously.Duringtheyear,atotalof84brancheswerefunc�oningasdedicatedIslamicBankingbranches.
FutureOutlook
Overall stabiliza�onefforts of theGovt. have started to yield resultswith the expecta�ons thatinfla�onwillbecontainedduring2020.Anycutinpolicyratemaycomeonlya�erno�ceabledeclineininfla�onnumbersisrecorded,thepossibilityofwhichishightowardssecondhalftheyear.Moreover,a�erheavydownwardadjustmentlastyear,theexchangeratehasstabilizedwhichwillencourage foreign investment in the country. Nonetheless, unfavorable balance of trade, high
The Bank of Khyber
9 A N N U A L R E P O R T 2 0 1 9
currentaccountdeficit,highborrowingcostoftheGovt.andlowtaxcollec�ons�llcon�nuetoposerisks.
Nowwhentheeconomicstabilityhasbeensomewhatachieved,theGovernmentmusttakestepstos�mulateeconomicac�vitywhichshouldspurgrowthandhelpin(a)increasingsupplyofgoodsandservicesforimportsubs�tu�onandcrea�ngexportablesurplus(b)crea�onofjobs,andresultantlyenhancingdisposableincomesand(c)eventuallyreduceoreliminatefiscaldeficit.Thiswillalsoneedto be supplemented by higher developmental spending forwhich fiscal space is required to becreated.
Thebankhaspreparedacomprehensiveplanfortheyear2020withrenewedvigorforbusinesswhileremainingcognizantofthemarketdynamics.Thebank'stargetwillbetogeneratedepositgrowthdriven primarily through CASA from the private sector. Special a�en�onwill be given to HomeRemi�ancebusinessforchannelinginforexthroughtheformalsector.Thiswillbeaidedthroughbroadeningofproductsuiteandfurthersupportedthroughthebank'sdigitalbankingpla�ormwhichisexpectedtobefunc�onalduringtheyear.ThebankplanstomanagetheliquidityimpactiftheTreasurySingleAccountmechanismisimplementedduringtheyear.
On the asset side, the bank intends to diversify financing por�olio by gradually moving fromGovernmentbackedlendingtoprivatesectorforfreshloanswithpoten�alofancillarybusinessandtradefinanceopportuni�es.Besides,othertargetareasremainConsumerFinancing,AgricultureandSMEstofosterdevelopmentandgenerateeconomicac�vity.ThebankwillalsoexecutedifferentGovernmentIni�a�veswhichincludeInsafRozgarSchemeoftheprovincialgovt.fortheeconomicupli�ofthenewlymergeddistrictsandefficientexecu�onofthePM'sKamyabJawanSchemeacrossthecountry.Itisexpectedthatthebankwillalsofacilitateexecu�onofafewmoresuchschemes.
RiskManagementFramework
TheBankemphasizesonmaintaininghighriskmanagementstandardstoensurethattherisksbeingfacedbytheBankareproperlyiden�fied,assessedandappropriatemi�ga�ontoolsareadoptedkeeping in view their nature and concentra�on. Since an effec�ve riskmanagement frameworkdemandsac�veinvolvementofBoardofDirectors(BoD)andseniormanagementintheformula�onandoversightofriskmanagementprocess,arobustgovernancestructureexistsattheBoardandManagementlevelswhichprovidestrategicdirec�onandhasapprovedoverallbusinessstrategiesandsignificantpoliciesincludingthoserelatedtomanagingandtakingrisks.BoDalsoensuresthatseniormanagement is fully capableofmanaging ac�vi�es that theyundertakeduring courseofbusiness.
TheBoardhasalsoformedaspecializedBoard'sRiskManagementCommi�ee(“BRMC”)tooverseethe riskmanagementac�vi�es. TheBRMCheld regularmee�ngsasper thegivenmandateandthoroughlyreviewedprimaryrisks includingCredit,Market,Liquidity,Opera�onal,EnvironmentalandCountryrisks.Inaddi�on,theBRMCalsotookstockofothermaterialitemssuchasfollowupand
10
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
The Bank of Khyber
managementofnon-performingaccounts,interestrateenvironment,andaffordedguidanceinthemanagementofriskassetspor�oliovis-à-viscapital.Attheseniormanagementlevel,theBankhasdedicated commi�ees which include, inter-alia, the Head Office Credit Commi�ees and AssetsLiabilityCommi�ee(“ALCO”).Thesecommi�eesdischargetheirresponsibili�esinaccordancewiththeirrespec�vetermsofreference.
RiskManagementstructureattheBankhasbeenformedinlinewithregulatoryrequirementsandinlinewithindustrybestprac�ces.Thestructurefundamentallyensuresindependenceofriskfrombusinessfunc�onstoavoidconflictof interestandfostersbe�ercontrolenvironment.Whilethebranchesini�atebusinessproposi�onsforfinancingorinvestmentandFIlimits,therelevantsupportofficialsattheHeadOffice,conductsdetailedanalysisoftheseproposalsbeforetheyareforwardedtoCreditRiskManagementDepartmentforconsidera�on.CreditRiskManagementDepartmenttakesintoaccountvariousfactorssuchasborrowers'financialposi�ons,industrydynamicsandqualityofcollateralforevalua�onandformthebasisofonwardrecommenda�ontotheapprovalauthority.Undercreditriskmanagementpolicy,adequateproceduresandlimitsaredefinedforensuringthatriskremainswithintheboundariessetbytheBoard.Ac�vemonitoringofkeyriskexposureshavehelped the bank to avoid increase in Non-Performing Loans (NPLs) due to adverse economiccondi�onscoupledwithhigherinterestrates.
Market, Liquidity, Opera�onal, Environmental, and Country risks are being looked a�er by theEnterpriseRiskManagementDivision(ERMD).Aproperrepor�ngframeworkhasbeenputinplacefor�melyrepor�ngvariousmarketandliquidityriskstoALCOmembers.ERMDisalsoresponsibleforupda�onofMarketRiskManagement(MRM)FrameworkencompassingAssetLiabilityManagement,InterestRateRiskinBankingandTradingBookcoupledwithTreasuryInvestmentsandEquitypor�oliomonitoringagainstdefinedRisktolerancelimits.
Thereisalsoaspecifiedrepor�ngframeworkwhichhasbeenputinplaceforrepor�ngofOpera�onalRisk. ERMD conducts Risk Control Self-Assessment (RCSA)workshopswhich assess documentedprocessflowsofvariousbankingtransac�onstakingplaceindaytodayfunc�oningoftheBankforinherentandresidualrisks.AnAutomatedsolu�on/so�wareforOpera�onallossincidentrepor�ngisinplaceandcanbeaccessedbyeveryemployeeoftheBankforrepor�ngofcontrolbreachesleadingtolosses.Opera�onalLossDataalsohelpstheBankintakingcorrec�vemeasuresforvariouscontrollapsesiden�fiedinit.Duetoeverincreasingimportanceofenvironmentalhazardsanditsrelatedimpactonoverallecosystem,bankhasestablishedadedicatedenvironmentalriskmanagementdeskforminimizingeffluents,emissions,wastes,resourcedeple�on,etc.,arisingoutofitsownac�vi�esorthatofitscustomersinlinewithSBPrequirements.Thebankisalsoplanningtodeveloparobustenvironmentalriskmanagementsystemincludingbutnotlimitedtodevelopmentofenvironmentalriskavoidancelist,categoriza�onofenvironmentalrisksofdifferentindustries,environmentalduediligencechecklistsandenvironmentalriskcovenants..
TheBankcon�nuedtocloselymonitormarketdevelopments,especiallyinterestrateenvironment,andappropriatelyrealigneditsbusinessstrategytocontroldownsideonthebank'sbalancesheet.
11 A N N U A L R E P O R T 2 0 1 9
The Bank of Khyber
The bank has applied a mul�-pronged strategy whereby resources were deployed for ensuringfinancialstabilityandprotec�onofstakeholders'interestwhichhasledtheBanktoremainwellabovevariousregulatoryrequirementspertainingtocapitaladequacyandliquiditycoverageasperBaselIIIguidelines.
InternalControls
Aninternalcontrolsystemisdesignedtoprovidereasonableassurancethatthecompanyensurescomplianceofpolicies,plansandlaws,efficientuseofresources,accomplishmentofgoalsbesidesavailabilityandintegrityoffinancialandmanagementinforma�on.TheinternalcontrolsystemoftheBank is comprehensive, effec�vely implemented and being monitored regularly. The Bank hasincreaseditsemphasisoncontrolprocedurestoconfirmthatcorporatepoliciesareexecutedandcorrec�onsareappliedasandwhenrequired.
BoardofDirectors
ThetotalnumberofDirectorsareeightasperthefollowing:
i. Male : Eight(8)ii. Female : Nil
AppointmentofafemaledirectorontheBoardoftheBankisunderconsidera�onandintheyear2020asuitablefemaledirectorisexpectedtobeinductedontheBoard.
Duringtheyear2019,detailsofBoardandBoardCommi�eemee�ngsandtheira�endancebytheDirectorsareasunder:
12 A N N U A L R E P O R T 2 0 1 9
* Mr.ShakeelQadirKhanassumedofficeofChairmanonDecember23,2019replacingDr.ShahzadKhanBangash.
** Mr.RashidAliKhanrejoinedtheBoardonMarch4,2019.*** Mr.A�f Rehman assumedofficeofDirector on his appointment as Secretary Financeon
December23,2019.**** Mr.Saif-ul-Islamrelinquishedposi�onofManagingDirectoronSeptember26,2019.***** Mr.IhsanUllahIhsanwasappointedAc�ngManagingDirectoronDecember6,2019.
Directors'TrainingProgram
IncompliancewiththeCodeofCorporateGovernance,fourDirectorsnamelyMr.ShakeelQadirKhan,Mr.RashidAli Khan,Mr.AsadMuhammad Iqbal andMr. ShaharyarAhmedhave completed theDirectors'TrainingProgramthroughPakistanIns�tuteofCorporateGovernance(PICG).Dr.ShahzadKhanBangash,Chairmanhasa�endedtheDirector'sTrainingProgram,however,hiscer�ficate isawaited.
Mr.MaqsoodIsmailAhmadhasbeengrantedexemp�onbySecuri�es&ExchangeCommissionofPakistan(SECP)onthebasisofeduca�onandpreviousexperienceasDirectoroflistedcompanies.
13
S#
Directors
BoardMee�ngs Total=5
AuditCommi�ee Total =6
HR&RCommi�ee Total =6
R iskManagement Commi�eeTotal =5
ComplianceCommi�ee Total =3
I.TCommi�eeTotal =4
1
Dr.ShahzadKhanBangash
Non-Execu�veDirector
5Non-
Member
Non-
Member
Non-Member
Non-
Member
Non-Member
2
Mr.ShakeelQadirKhan
*
Non-Execu�veDirector
4
4
Non-
Member
2
Non-
Member
4
3
Mr.MaqsoodIsmailAhmad
Non-Execu�veDirector
4
Non-
Member
5
5
Non-
Member
Non-Member
4
Mr.AsadMuhammadIqbal
IndependentDirector
4
6
4
Non-
Member
Non-
Member
4
5
Mr.JavedAkhtar
IndependentDirector
4
6
Non-Member
5
3
Non-Member
6
Mr.ShaharyarAhmad
IndependentDirector
5
6
6
3
3
4
7
Mr.RashidAliKhan
**
IndependentDirector
4
4
4
3
3
8
Mr.A�fRehman***
Non-Execu�veDirector
-
-
-
-
-
-
8Mr.SaifulIslam*** *
Execu�veDirector4
Non-
Member
4 3 Non- Member
9
Mr.IhsanullahIhsan*****ManagingDirector(Ac�ng)
- Non- Member - - Non- Member -
A N N U A L R E P O R T 2 0 1 9
Non-Member
The Bank of Khyber
Further,Mr.Saif-ul-Islamhada�endedDirectors'TrainingProgramarrangedbyPICGandacquiredcer�fica�onduringtheyearunderreview.TheChiefFinancialOfficer,alsoacquiredcer�fica�onin2019.Addi�onally,theHeadTreasuryandCompanySecretaryhavealsocompletedDirector'sTrainingProgram.
PerformanceEvalua�on
TheBankhasanin-housemechanisminplaceforAnnualEvalua�onoftheBoard'sperformance.In-houseevalua�onexercisewasconductedandcompletedfor2019.
Athirdpartyevalua�onoftheBoard'sperformancewasconductedthroughPakistanIns�tuteofCorporateGovernance(PICG)whichwasstartedin2018andconcludedin2019.
Directors'Remunera�on
Thecurrentremunera�onofnon-execu�veandindependentdirectorshadbeenapprovedbytheshareholdersinthe27thAnnualGeneralMee�ngheldonMarch29,2018.Accordingtotheapproval,an amount of Rs.50,000/- per mee�ng (net of taxes) was approved for the non-execu�ve andindependent directors for a�ending Board and its commi�ees' mee�ngs. A Director's Travel,Accommoda�onandRemunera�onPolicywasapprovedduringtheyearoutliningen�tlementsandremunera�onofNon-Execu�veDirectors.
CreditRa�ng
JCR-VISCreditRa�ngCompanyLtd.(JCR-VIS)hasreaffirmedthemediumtolongtermandshorttermen�tyra�ngsoftheBankat“A”(SingleA)and “A-1”(AOne)respec�vely.Outlookontheassignedra�ngis“Stable”.
ThePakistanCreditRa�ngAgencyLimited(PACRA)hasalsomaintainedthelongtermandshorttermen�tyra�ngsoftheBankat“A”(SingleA)and“A1”(AOne).Ra�ngoutlookis“Stable”.
Thera�ngsdenotelowexpecta�onofcreditriskemana�ngfromstrongcapacityfor�melypaymentoffinancialcommitments.
CorporateSocialResponsibility
Being a socially responsible corporate en�ty, the Bank gives due considera�on to shoulder itsresponsibili�estothesocietyinwhichitoperates.TheBankaimstofosterarela�onshipwithcivilsocietybasedonmutualrespect,care,considera�onandcoopera�on.TowardsthisendtheBankundertookvariousCSRac�vi�esduringtheyeartosupporteduca�on,sports,culture&heritage,
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tourism,womenempowermentandenvironment.Ac�vi�esduringtheyearincluded:
a. SponsoredUniversityofEngineering&TechnologyMardan'sSportsFes�val.b. SponsoredCultureConnect's,CulturalExchangeevent.c. SponsoredUniversityofPeshawar,CDC,CareerFair.d. SponsoredKhyberMedicalCollegePeshawarSportsGala.e. SponsoredKPGolfassocia�onfor27thKPOpenGolfChampionship2019f. SponsoredKPKSquashAssocia�onforNa�onalWomenSquashChampionship.g. SponsoredBeaconHouseFCCampusPeshawar'sOlympiad.h. SponsoredUniversityofMalakand,JobFair.i. SponsoredKPKabaddiAssocia�onpar�cipa�oninWorldChampionship/Cup,Malaysia.j. SponsoredPlanta�on&GardeningatLadyreadingHospital,Peshawar.k. SponsoredSarhadChamberofCommerceBusinessExcellenceAwards.l. SponsoredImsciences,CareerDevelopmentCentre.m. SponsoredHazaraUniversity.n. SponsoredTheMirrorofSociety,UniversityofPeshawar.o. SponsoredJashan-E-KumratSportsFes�val2019.p. SponsoredIdara-e-Taleem-o-Aagahi(ITA),Children'sLiteratureFes�val(CLF)2019.q. Sponsored3rdNurKhanOpenGolfChampionship,PAFGolfClub.r. SponsoredKPKTableTennisAssocia�onPar�cipa�onin33rdNa�onalGamess. SponsoredBalouchistan1stLivestockExpo-19.t. SponsoredKPSquashAssocia�onfor1stBOKJuniorsquashChampionship.u. SponsoredKPBoardofInvestmentandTrade.v. SponsoredTreePlanta�onDriveofSBPPeshawar.w. SponsoredHultPrizeChallenge2019-20heldatImsciencesPeshawar
ValueofInvestmentsinEmployeesRe�rementBenefitFunds
BookValueofInvestmentsofProvidentandGratuityFundsasperun-auditedaccountsofthesefundsfortheyearendedDecember31,2019areRs.1,563.928millionandRs.831.993millionrespec�vely.
Pa�ernofShareholding
Thepa�ernandcategoryofshareholdingasatDecember31,2019isannexedwiththeAnnualReport.
SixYearsOpera�ngandFinancialData
Thesixyearshighlightsofopera�ngandfinancialdataisappendedbelow:
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2014 2015 2016 2017 2018 2019
Deposits 92,264 117,292 157,020 159,247 171,168 182,168
Advances(net)
40,057 36,454 31,644 83,369 95,012 109,742
Investments
72,431 88,296 141,602 140,474 94,233 146,911
TotalAssets
126,106 155,159 206,400 245,132 223,095 306,305
Capital&Reserves
13,211 13,973 14,685 14,943 13,809 14,982
Profitbeforetax
1,901 2,959 3,240 2,795 707 2,261
Profita�ertax
1,309 1,789 2,020 1,790 466 1,306
ReturnonEquity
9% 13% 14% 12% 4% 9%
EarningsPerShareEarningspersharefortheyear2019isRs.1.31
AuditorsThepresentAuditorsM/s.EYFordRhodesbeingeligibleforreappointmentofferedthemselvesforreappointment.TheBoardAuditCommi�eehasrecommendedtheappointmentofM/s.EYFordRhodes,CharteredAccountantsasStatutoryAuditorsoftheBankfortheyearendingDecember31,2020.
ServiceQualityTheBankendeavorstoprovideastandardofservicequalitythatisinlinewithBankstandardsandasper expecta�on of the customer. The Bank has set up a Service Quality Department to ensurecon�nuousmaintenanceandimprovementoftheBank'sservicetoitscustomers.
Customer's feedback is always important in formula�ng strategies and planning for improvingservices.Inaddi�on,inordertogaugethelevelofcustomerservicesoftheBank,sa�sfac�onsurveysarecarriedoutregularly,whicharefurthersharedwiththemanagementforimprovingtheoverallservices.CustomerSa�sfac�onSurveywasalsocarriedoutin2019throughanExternalVendortohaveunbiasedviews/opinionsandtheresultsofwhicharefurthersharedwiththeManagement.
TheBankofKhyberiscommi�edtocreateaservicecultureintheBankbasedonConsumerProtec�onandFairTreatment.TheFairTreatmentofConsumerattheBankstrivestoeducatethecustomerswheretheycanmakeinformedchoicesamongstavarietyofproductsandservices,understandtheirrights,haveahighleveloftrustandhavesmoothrecourseoftheirgrievances.
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ServiceQualityDepartmentreleaseseffec�veinforma�onforconsumersthroughitspublica�onsthroughWebsite,SocialMedia,SMSandotherpla�orms.Objec�veofthepublica�onsistokeeptheconsumer informed about the Products, Services, Rights and Responsibili�es and other usefulobliga�ons,whichareasperFairTreatmentofConsumerini�a�ves.
The Complaint Management Unit, which works under the umbrella of the Service QualityDepartment,givesutmostimportancetoeverysinglecomplaintandtriestoresolvethesewithintheshortestpossible�mebykeepingthecustomersinformedaboutthecomplaintescala�onlevels.
Itisper�nenttomen�onherethatwiththeeffortsofComplaintManagementUnittheaverageTurnAroundTimeforresolu�onofcomplaintsin2019hasreducedto03workingDayswhichwas3.7daysin2018,whereastheapprovedTATforcomplaintresolu�onis7/15days.
Eventsa�ertheBalanceSheetdate
NomaterialeventsoccurredsubsequenttothedateoftheBalanceSheetthatrequireadjustmentstotheenclosedfinancialstatements,exceptthosewhichhavealreadybeenmadeordisclosed.
Acknowledgement
OnbehalfoftheBoard,wewould liketothanktheStateBankofPakistan,FinanceDepartment,GovernmentofKhyberPakhtunkhwaandotherregulatoryauthori�esfortheircon�nuoussupportandguidance.Wewouldalsoliketothankourvaluedcustomersfortheircon�nuedpatronage.Mostimportantly,wewouldliketoexpressourgra�tudetoourshareholdersforplacingtheirtrustintheBoardofDirectors.Finally,wewouldliketoacknowledgethesincerity,dedica�onandhardworkofallourstaffmembers.Thecoopera�onoflocalandforeigncorrespondentbanksisalsoappreciated.
OnbehalfoftheBoardofDirectors
IhsanUllahIhsan ShakeelQadirKhanManagingDirector(Ac�ng) Chairman
ComplaintsPeriod From01-01-2019to31-12-2019
Numberofcomplaints 320 AverageTimetakeninse�lementofacomplaint 03Days
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StatementofCompliancewithListedCompanies(CodeofCorporateGovernance)Regula�ons,2019
Nameofcompany:TheBankofKhyberYearending:December31,2019
ThecompanyhascompliedwiththerequirementsoftheRegula�onsinthefollowingmanner:-1.Thetotalnumberofdirectorsare8asperthefollowing:-a.Male:Eight(8)b.Female:Nil2.Thecomposi�onoftheBoardisasfollows:
Category NameIndependentDirectors Mr.ShaharyarAhmed(Nominee)
Mr.JavedAkhtar Mr.AsadMuhammadIqbal Mr.RashidAliKhan (Nominee)Dr.ShahzadKhanBangash Mr.ShakeelQadirKhan Mr.MaqsoodIsmailAhmadMr.A�fRehman
Execu�veDirectors Mr.IhsanUllahIhsan(Ac�ngManagingDirector)
TheStateBankofPakistanhasraisedobserva�onontheindependencestatusofnomineeDirectors.TheBankmaintainstheindependencestatusofnomineeDirectorsonthebasisofclearancereceivedfromtheStateBankofPakistanunderFitandProperTest(FPT)criteriaandalsothattheseappointmentsaremadeunderSec�on11oftheBankofKhyberAct,1991,thesaidActbeingspecialenactmentprevailsoverotherlawsincludingtheListedCompanies(CodeofCorporateGovernance)Regula�ons,2017andtheCompaniesAct,2017.TheBankisdulysupportedbylegaladviceonthema�er.
Further,withrespecttothere-elec�onofthreeDirectorsinEOGMheldonJune01,2018,FPTdocumentshavebeendulysubmi�edtoStateBankofPakistan(SBP)andSBPhasnotrespondedrequiringanychangeinthestatus.
3. Thedirectorshaveconfirmedthatnoneofthemisservingasadirectoronmorethansevenlisted companies,includingthiscompany;
4. Thecompanyhaspreparedacodeofconductandhasensuredthatappropriatestepshavebeentakentodisseminateitthroughoutthecompanyalongwithitssuppor�ngpoliciesandprocedures;
5. TheBoardhasdevelopedavision/missionstatement,overallcorporatestrategyandsignificantpoliciesof
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thecompany.TheBoardhasensuredthatcompleterecordofpar�cularsofthesignificantpoliciesalongwiththeirdateofapprovalorupda�ngismaintainedbythecompany;
6. AllthepowersoftheBoardhavebeendulyexercisedanddecisionsonrelevantma�ershavebeentakenbytheBoard/shareholdersasempoweredbytherelevantprovisionsoftheCompaniesAct,2017,theBankofKhyberAct,1991andtheseRegula�ons;
7. Themee�ngsoftheBoardwerepresidedoverbytheChairmanand,inhisabsence,byadirectorelectedbytheBoardforthispurpose.TheBoardhascompliedwiththerequirementsofTheCompaniesAct,2017,TheBankofKhyberAct,1991andtheRegula�onswithrespecttofrequency,recordingandcircula�ngminutesofmee�ngoftheBoard;
8. TheBoardhaveaformalpolicyandtransparentproceduresforremunera�onofdirectorsinaccordancewiththeBankofKhyberAct,1991andtheseRegula�ons;
9. DuringtheyearMr.Saif-ul-Islam,ManagingDirectorandMr.MehmoodAhmedQureshi,ChiefFinancialOfficera�endedandcompletedDirector’sTrainingProgram.Further,Mr.ShakeelQadirKhan,Mr.RashidAliKhan,Mr.ShaharyarAhmedandMr.AsadMuhammadIqbalhavealreadycompletedtheDirector’sTrainingProgramthroughPakistanIns�tuteofCorporateGovernance.
10. TheBoardhasapprovedappointmentofchieffinancialofficer,companysecretaryandheadofinternalaudit,includingtheirremunera�on,termsandcondi�onsofemploymentandcompliedwithrelevantrequirementsoftheRegula�ons;
11. Chieffinancialofficerandchiefexecu�veofficerdulyendorsedthefinancialstatementsbeforeapprovaloftheBoard;
12. TheBoardhasformedcommi�eescomprisingofmembersgivenbelow.-
S.No NameOfCommi�ee CurrentMembership
1
AuditCommi�ee
1. Mr.AsadMuhammadIqbal - Chairman2. SecretaryFinance - Member3. Mr.JavedAkhtar - Member4. Mr.ShaharyarAhmad - Member5. Mr.RashidAliKhan - Member
2
HumanResource&Remunera�onCommi�ee
1. Mr.ShaharyarAhmad - Chairman2. Mr.MaqsoodIsmailAhmad - Member3. Mr.AsadMuhammadIqbal - Member4. TheManagingDirector - Member
3
RiskManagementCommi�ee
1. Mr.MaqsoodIsmailAhmad - Chairman2. TheSecretaryFinance - Member3. Mr.JavedAkhtar - Member4. Mr.RashidAliKhan - Member5. TheManagingDirector - Member
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4
I.TSteeringCommi�ee
1. TheSecretaryFinance - Chairman2. Mr.ShaharyarAhmad - Member3. Mr.AsadMuhammadIqbal - Member
4. Mr.RashidAliKhan - Member
5. TheManagingDirecto r - Member
5.
Compliance Commi�ee
1. Mr.RashidAliKhan - Chairman2. Mr.ShaharyarAhmad - Member3. Mr.JavedAkhtar - Member
13. Thetermsofreferenceoftheaforesaidcommi�eeshavebeenformed,documentedandadvisedtothecommi�eeforcompliance;
14. EveryBoardCommi�eemetatleastonceinaquarterandmee�ngsheldduringtheyearwereasfollows:
AuditCommi�ee6mee�ngsheldintheyear2019HR&Remunera�onCommi�ee6mee�ngsheldintheyear2019RiskManagementCommi�ee5mee�ngsheldintheyear2019I.TSteeringCommi�ee 4mee�ngsheldintheyear2019ComplianceCommi�ee 3mee�ngsheldintheyear2019(cons�tutedonAugust22,2019)
15. The Board has set up an effec�ve internal audit func�on/ the staffmembers of internal audit hasoutsourcedtheinternalauditfunc�onareconsideredsuitablyqualifiedandexperiencedforthepurposeandareconversantwiththepoliciesandproceduresofthecompany;
16. Thestatutoryauditorsofthecompanyhaveconfirmedthattheyhavebeengivenasa�sfactoryra�ngunder theQualityControlReviewprogramof the Ins�tuteofCharteredAccountantsofPakistanandregisteredwithAuditOversightBoardofPakistan,thattheyandalltheirpartnersareincompliancewithInterna�onalFedera�onofAccountants(IFAC)guidelinesoncodeofethicsasadoptedbytheIns�tuteofCharteredAccountantsofPakistanandthattheyandthepartnersofthefirminvolvedintheauditarenotacloserela�ve(spouse,parent,dependentandnon-dependentchildren)ofthechiefexecu�veofficer,chieffinancialofficer,headofinternalaudit,companysecretaryordirectorofthecompany;
17. ThestatutoryauditorsorthepersonsassociatedwiththemhavenotbeenappointedtoprovideotherservicesexceptinaccordancewiththeAct,theseRegula�onsoranyotherregulatoryrequirementandtheauditorshaveconfirmedthattheyhaveobservedIFACguidelinesinthisregard;
18. Weconfirmthatallrequirementsofregula�ons3,6,8,27,32,33and36oftheRegula�onshavebeencompliedwithexceptforfollowingma�ers:
AppointmentofafemaleDirectorontheBoardoftheBankisunderconsidera�onandasuitablefemale
DirectorisexpectedtobeinductedontheBoardin2020.
TheAuditCommi�eeoftheBoardiscomprisedofDirectorshavingrequisiteeduca�onandexperienceinBankingandFinanceandManagement.Mr.RashidAliKhanholdsaMasterofBusinessAdministra�ondegree fromCornelUniversitywith concentra�on in financewhich should qualify him as financiallyliteratemember.
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19. Explana�onfornon-compliancewithrequirements,otherthanregula�ons3,6,7,8,27,32,33and36arebelow:
DirectorsappointedontheBoardareacquaintedwiththerulesandregula�onstoexecutetheirdu�eswithasenseofobjec�vejudgement.AtthebeginningoftermofeachDirector,theCompanySecretarywasprovidingcopiesofallapplicablelawsandregula�onstotheDirectorstoacquaintthemwiththeirrolesandresponsibili�esaccordingtotheCompaniesAct,2017andtheBankofKhyberAct,1991.
However,asperrequirementofthenewCCGregula�ons,theChairmanatthebeginningoftermofeachDirectorshallissuele�ertoDirectorsse�ngouttheirrole,obliga�ons,powersandresponsibili�esinaccordancewiththeActandtheBankofKhyberAct,1991,theirremunera�onanden�tlement.TheChairmanhasprovidedregula�onsse�ngoutroleandresponsibili�estonewDirectorinductedin2019.
Although, the Bank provides relevant regula�ons to the Directors, the Bank shall arrange formalorienta�oncoursesfortheDirectorstobe�eracquaintthemwithresponsibili�esofDirectors.
________________ __________________
IhsanUllahIhsan ShakeelQadirKhanManagingDirector(Ac�ng) Chairman
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StatementofInternalControls
ThisstatementisissuedincomplianceoftherequirementsoftheStateBankofPakistan(SBP),issuedvideBSDCircularNo.7ofof2004,“GuidelinesonInternalControls”andOSEDCircularNo.1of2014“Instruc�onsonInternalControlsOverFinancialRepor�ng(ICFR)”.
TheBankfollowsSBP’sdirec�vesforInternalControlsoverFinancialRepor�ng(ICFR),underCOSOframeworkandhascompliedwiththeSBP’sstagewise implementa�onroadmap.Aspartofthisexercise,theBankhasdocumentedacomprehensiveICFRFrameworkwhichhasbeenapprovedbytheBoardofDirectors. As requiredunder the SBP’s guidelines, theBank’s external auditors areengagedannuallytoprovidetheirLongFormReport(LFR)onICFR,whichisthensubmi�edtoSBP.
Aninternalcontrolsystemisasetofproceduresandac�vi�esdesignedtoiden�fy,evaluatemi�gaterisksinprocessesandopera�onsinordertosupporttheoverallobjec�vesandvisionoftheBank.TheBoardofDirectorsisul�matelyresponsiblefortheinternalcontrolsystem.ItistheresponsibilityoftheBank’smanagementtoestablishasystemforadequateandreasonablyeffec�veinternalcontrolenvironmentonanongoingbasis.ManagementoftheBankisfullyawareofitsresponsibilityandhasimplementedandmaintainedsystemofinternalcontrolundertheapprovedpolicyoftheBoardofDirectors.
The internal control structure of the Bank comprise of the Board of Directors (BOD), SeniorManagement,RiskManagementGroup,MaterialRiskControllers, FinancialControlDepartment,Opera�ons&SupportGroup,Compliance&ControlsDivision,InternalAuditDivision,InternalControlUnit (ICFR) and the controls & self-assessment including whistle blowing standard opera�ngproceduresimplementedatvariousfunc�onswithintheBank.Allsignificantpoliciesandproceduremanualsareinplaceandareupdatedonreasonableintervalstomi�gatethethreats.
Internal Audit Division conducts audit of relevant ac�vi�es and processes to evaluate theeffec�venessof thecontrolenvironment throughout theBank. It isan independentdivisionandreports directly to Board Audit Commi�ee (BAC).It also ac�vely monitors implementa�on ofcorrec�ve/remedial steps in coordina�on with management to ensure that iden�fied risks areproperlyaddressedandmi�gatedintheinterestoftheBank.Moreoverallprocesscontrolexcep�onsand gaps/objec�ons raised by internal/external auditors, controlling departments withinmanagementor regulatorybodiesaredealtac�vely forprompt remedialmeasuresandarealsodiscussedathighestpossibleforumsincludingBOD,BACandManagementCommi�ees.
Management’sEvalua�ononEffec�venessofControlFramework
ThesystemofInternalControlisdesignedtomanageratherthantoeliminatetheriskoffailureto
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achieve the Bank’s business strategies and policies. It can therefore only provide reasonableassuranceandnotabsoluteassuranceagainstmaterialmisstatementandloss.
ThemanagementbelievesthattheBank’sexis�ngsystemofInternalControlisconsideredreasonableindesignandisbeingeffec�velyimplementedandmonitored.Basedontheworkperformed,themanagementiden�fiesareasforprocessimprovementsaswellasaddi�onalcontrolsrequiredtobeput in place, and areas requiring strengthening of exis�ng controls. Themanagement takes allreasonablestepstoensurethatthe�melinesandpriori�esassignedtothesameareadheredto.
TheBankshallcon�nueitsendeavortofurtherenhanceitsInternalControldesignandassessmentprocessinaccordancewithindustrybestprac�ces.
Bank’s Board of Directors endorses the management’s evalua�on of effec�veness of controlframeworkincludingICFR.
OnbehalfoftheBoardofDirectors
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ManagingDirectorDirector
Date:March4,2020Peshawar
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ReportofShariahBoard(Fortheyear2019)
InthenameofAllah,theBeneficent,theMerciful
The worldwide success of Islamic Banking is now an open fact. The main a�rac�on for theestablishmentofanIslamicBanksinPakistanistosafeguardtheMuslimsfromindulgingintononShariah transac�ons especially in their financial affairs. Therefore, strict adherence to ShariahcomplianceisthebackboneofIslamicbankingandfinancingandgiveslegi�macytotheprac�cesofIslamicbanks.ConsideringthisstatusofShariahcomplianceinIslamicbanking,ShariahGovernanceFramework of State Bank of Pakistan consider the Board of Directors (BOD) and Execu�veManagement(EM)ofthebanksolelyresponsibletoensurethattheopera�onsofIslamicbankingareconductedinmannerthatcomplywithShariahprinciplesatall�mes.However,we(ShariahBoard)arerequiredtosubmitareportontheoverallShariahcomplianceoftheIslamicbankingofBOK.
Theyearunderreviewwasthe16thyearofIslamicBankingbeingoperatedinTheBankofKhyber,under thebrandnameof 'Raast IslamicBanking'.TheBankofKhyberhas84standalone IslamicBankingBranches(IBBs)and39IslamicBankingWindows(IBWs)opera�nginconven�onalBranches.
Tomaintainthepublicconfidence,thereisapropercheckandbalancemechanismintheBankofKhyber(BOK)toensurethatallac�vi�esofthebankareinlinewiththeIslamicprinciples.Inthisregard,BODhasappointedusasmembersShariahBoard(SB)toconsider,decideandsuperviseallShariahrelatedma�ersofthebank.Duringtheyear2019,weheldfourmee�ngstoreviewvariousproducts,policies,standardopera�ngprocedures,financingtransac�onsandShariahproceduresofthetransac�onsandmetwiththeBODtwicetodiscuss issuesrelevanttoShariah.Wehavealsoa�endedall internal/externalShariahaudit/reviewreports,Shariahcomplianceinspec�onreportanddesignateoneofourmembersasResidentShariahBoardMember(RSBM)whoremainsfull�meavailable, to oversee the procedures to be adopted for implementa�on of the resolu�ons,pronouncementsandfatwasoftheSBandprovideguidancethereon.
Besideus(SB),ShariahComplianceDivision,hasperformedtheirfunc�onsunderourguidanceandsupervision to ensure that the Bank’s business units, branches, IBWs and other Head OfficedepartmentshadcompliedtoapprovedpoliciesandShariahguidelinesissuedbyus(SB)&SBP.Duringtheyearunderreview,ShariahReviewUnitofSCDhasalsoconductedShariahcompliance/controlreviewofIslamicbankingbusinessesandtheiralignmentwiththeShariahguidelinesontestcheckbasis andmajor findings of the review have been presented to Shariah Board regularly. In thesupervisionofRSBM,theyhavealsoreviewedProfitandLossDistribu�onandPoolManagementbeforedeclara�onanddisbursementofprofittoinvestmentaccountholders.
QaziAbdulSamad Mu�iMuhammadIbrahimEssa ResidentShariahBoardMember MemberShariahBoard
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The Bank of Khyber
ApartfromShariahReview,InternalShariahAuditDepartmenthasconductedShariahAuditofalmostallIBBs.BesideinternalShariahaudit,tohaveanindependentassessmentoftheShariahgovernanceandcomplianceenvironmentanexternalShariahaudithasalsobeenconducted.Thereportsofbothexternaland internalauditaresubmi�edtous(SB)forShariahCommentsanddetermina�onofcorrec�veac�ons.TheSCDhasensured,onongoingbasis,thecomplianceandimplementa�onoftheSBdecisionsoninternal/externalShariahreview/auditwhereaswe(SB)hassubmi�edQuarterlyShariahReviewreportstoBODtobringtheShariahComplianceenvironmentstatusintheirno�ceasrequiredunderBOKAct1991.
IslamicBankingTrainingswereheldon-siteaswellasoff-siteforthestaffofIBG-BOK.TheTrainingDivisionofHRDGrouphasarrangedvarioustrainingsinTrainingacademyandotherpremisesofthebank where we (SB members) conducted sessions, Group discussions and case studies. Also aExecu�veManagement(EM)aresolelyresponsibletoensurethattheopera�onsofTheBankofKhyber,IslamicBankingareconductedinamannerthatcomplywiththeShariahprinciplesatall�mes, therefore special sessionhasbeenarranged for thoseEMmemberswhoarenotdirectlyworkinginIBG.Publicawarenessprogramsforbank’sclientandgeneralpublicinvariouspartofthecountryduringtheyearwerealsoorganized.
Toestablishouropinionasexpressedinthisreport,basedonourpersonalinvolvementsintheIslamicbankingofBOK,theac�vatesofShariahComplianceDivisioninoursupervision,ourreviewoftheworkcarriedoutbyInternal/ExternalShariahAudit/ShariahReviewUnitandverifica�onofthedifferentcompliancereports,tothebestofourknowledgeweareoftheviewthat:
I. Theabove-men�onedmechanismisofhighlevelinShariahComplianceandbanklevelofShariahcomplianceistothehigheststandards.Therefore,inouropiniontheaffairsofIslamicBankinghavebeencarriedoutinaccordancewiththerulesandprinciplesofShariah.
ii. TheIBG-BOKhascompliedwithShariahrulesandprinciplesinthelightofFatawa(decisions),rulingsandguidelinesissuedbytheShariahBoard.
iii. TheIBG-BOKhascompliedwithdirec�ves,regula�ons,instruc�onsandguidelinesrelatedtoShariahcomplianceissuedbySBPinaccordancewiththerulingsofSBP’sShariahcommi�ee.
iv. BOK has a comprehensive mechanism in place to ensure Shariah compliance in its overallopera�ons. The mechanism comprising of Internal Shariah Audit Department, a ShariahComplianceDivision,full�meResidentShariahBoardMember(RSBM)inthebankandregular/frequentin-houseandexternaltrainingsforIslamicBankingstaffinlinewithShariahGovernanceFrameworkofSBPisinplace.
v. IBG-BOKhasawell-definedsystem in theshapeofShariahComplianceReviewand InternalShariahAuditinplacewhichissoundenoughtoensurethatanyearningsrealizedfromsourcesor
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bymeansprohibitedbytheShariahhavebeencreditedtocharityaccountandarebeingproperlyu�lized.Duringtheyear2019,anamountofRs.32.554MillionhasbeentransfertoCharityaccountinwhichaveryminorpor�onhasbeencreatedfromsourcesorbymeansprohibitedbyShariahRules&Principlesandmajorpor�onrecoveredasdefaultobliga�onamountduetolatepayments.
vi. IslamicBankingdepositsareacceptedonMusharakahbasisandtheBankhasacquiredso�ware“Al-Qist” for Profit Distribu�on and Pool Management. SCD has monthly reviewed Profitsdistribu�onbeforeitsdisbursementandpostdisbursementShariahAudithasbeenconductedquarterly.
vii. Thelevelofawareness,capacityandsensi�za�onofthestaff,managementandBODforShariahComplianceremainedexcellentanacceptable.
viii.TheShariahBoardappreciatesthevisionoftheBoardofDirectorsandManagementregardingShariah compliance in Islamic banking and declare that we have been provided adequateresourcesenablingustodischargeourdu�eseffec�vely.Recommenda�ons:
Tocon�nuethehighlevelofShariahcomplianceinallaspects,ShariahBoardrecommendtheensuresof Shariahcompliance inall cases toachieve Islam's socio-economicobjec�vesandvalues.
As the SB is commi�ed to guide the bank towards a comprehensive Shariah complianceenvironment, therefore Shariah Board give following recommenda�ons for furtherimprovement.
o SB appreciate the approach of management regarding public awareness programs andrecommendtocon�nuethe IslamicBankingawarenesscampaignthroughcoordina�onwithUlama’a& Shariah Scholars in the coming years also as itwill definitely help to reduce themisconcep�onsamongthegeneralpublicandboostnotonlyIslamicBankingofBOKbutalsooverallIslamicBankingconceptinthesociety.
o ShariahBoardalsoappreciatestrongapproachofthemanagementtowardsincreaseinIslamicbankingbusiness,effortsforpromo�onandmarke�ngofIslamicBankingproducts,introduc�onofnewproductsandrecommendthatthesamemaybecon�nuedinfuture.
May Almighty Allah grant us success in this world and the herea�er, and on the Day of
Judgment,andforgiveourmistakesthatwemayhavecommi�edwillinglyorunwillingly.
Qazi Abdul Samad Mufti Muhammad Ibrahim Essa Mufti Muhammad Zahid Resident Shariah Board Member Member Shariah Board Chairman Shariah Board
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The Bank of Khyber
Chief Financial Officer Managing Director Director Director
STATEMENT OF FINANCIAL POSITIONAS AT DECEMBER 31, 2019
Director
2019 2018
Note ------------- Rupees in '000 --------------
ASSETS
Cash and balances with treasury banks 7 12,137,805
12,351,453
Balances with other banks 8 8,230,072
3,705,360
Lendings to financial institutions 9 13,863,449
7,695,642
Investments 10 146,911,102
94,233,239
Advances 11 109,742,292
95,011,903
Fixed assets 12 3,334,670
2,216,422
Intangible assets 13 286,255
78,850
Deferred tax assets 14 1,031,154
1,757,451
Other assets 15 10,768,453
6,044,663
306,305,252
223,094,983
LIABILITIES
Bills payable 16 1,172,155
895,126
Borrowings 17 94,656,461
34,842,114
Deposits and other accounts 18 182,167,572
171,167,556
Liabilities against assets subject to finance lease -
-
Subordinated debt -
-
Deferred tax liabilities -
-
Other liabilities 19 14,107,711
4,485,603
292,103,899
211,390,399
NET ASSETS 14,201,353
11,704,584
REPRESENTED BY
Share capital 20 10,002,524 10,002,524
Reserves 2,904,691 2,643,483
Deficit on revaluation of assets 21 (780,670) (2,104,692)
Unappropriated profit 2,074,808 1,163,269
14,201,353 11,704,584
CONTINGENCIES AND COMMITMENTS 22
The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements.
39
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
Note ---------- Rupees in '000 ----------
23 24,656,535
14,686,465
24 19,739,030 9,547,084
4,917,505 5,139,381
25 397,634 406,893
13,393 49,540
284,734 139,225
26 289,764 (1,226,265)
27 126,957 104,262
1,112,482 (526,345)
Total income 6,029,987 4,613,036
Operating expenses 28 3,620,419 4,052,247
Workers welfare fund - -
Other charges 29 169,349 25,150
3,789,768 4,077,397
2,240,219 535,639
30 21,092 170,962
- -
2,261,311 706,601
31 (955,272) (240,502)
1,306,039 466,099
---------------- Rupees -----------------
32 1.31 0.47
The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements.
Dividend income
Provisions and write offs - net
PROFIT AFTER TAXATION
NON MARK-UP / INTEREST EXPENSE
Extra ordinary / unusual items
Mark-up / return / interest earned
Mark-up / return / interest expensed
Net mark-up / interest income
Total non-markup / interest income
Other income
NON MARK-UP / INTEREST INCOME
Gain / (loss) on securities
PROFIT BEFORE TAXATION
Basic and diluted earnings per share
Fee and commission income
PROFIT BEFORE PROVISIONS
Foreign exchange income
Taxation
Total non-markup / interest expenses
Chief Financial Officer Managing Director Director Director Director
40
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
Note ----------- Rupees in '000 ----------
Profit after taxation for the year 1,306,039 466,099
Other comprehensive income
Items that may be reclassified to profit and loss account in
subsequent periods:
Net change in fair value of available for sale securities 21 2,036,953
(3,937,785)
Related deferred tax 14.1 (712,931)
1,378,225
1,324,022
(2,559,560)
Items that will not be reclassified to profit and loss account in
subsequent periods:
Re-measurement loss of defined benefit obligation 35.1.8 (162,624)
(78,818) Related current tax 56,918
-
Related deferred tax 14.1 (27,586)
(20,699) (133,292)
(99,517)
Total other comprehensive income / (loss) 1,190,730
(2,659,077) Total comprehensive income / (loss) 2,496,769
(2,192,978)
The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements.
Chief Financial Officer Managing Director Director Director Director
The Bank of Khyber
41 A N N U A L R E P O R T 2 0 1 9
STA
TEM
ENT
OF
CH
AN
GES
IN E
QU
ITY
F
OR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
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9
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stm
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tsA
sset
s
Bal
ance
as
at J
anu
ary
01
, 20
18
10
,00
2,5
24
2,5
50
,26
3
(31
9,3
15
)
77
4,1
83
2,3
90
,46
4
15
,39
8,1
19
Pro
fit
afte
r ta
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on
-
-
-
-
46
6,0
99
4
66
,09
9
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er c
om
pre
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- n
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f ta
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-
(2,5
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59
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sfer
to
sta
tuto
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3,2
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-
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,22
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-
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com
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9
3,2
20
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59
,56
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-
(19
2,7
37
)
(2,6
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s w
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-
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(
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Bal
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as
at D
ece
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31
, 20
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24
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43
,48
3
(2
,87
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77
4,1
83
1,1
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,26
9
11
,70
4,5
84
Pro
fit
afte
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-
-
-
-
1,3
06
,03
9
1
,30
6,0
39
Oth
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pre
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- n
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f ta
x-
-
1,3
24
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-
(13
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92
)
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0
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mp
reh
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ve in
com
e-
-
1,3
24
,02
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-
1
,17
2,7
47
2,4
96
,76
9
Tran
sfer
to
sta
tuto
ry r
eser
ve-
26
1,2
08
-
-
(26
1,2
08
)
-
Tran
sact
ion
s w
ith
ow
ne
rs, r
eco
rde
d d
ire
ctly
in e
qu
ity
Cas
h d
ivid
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-
-
-
-
-
-
Bal
ance
as
at D
ece
mb
er
31
, 20
19
10
,00
2,5
24
2,9
04
,69
1
(1,5
54
,85
3)
77
4,1
83
2,0
74
,80
8
14
,20
1,3
53
The
ann
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no
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1 t
o 4
6 a
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s I t
o II
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tegr
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thes
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.
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
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----
----
----
----
----
----
----
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----
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----
----
----
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----
----
--
Shar
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al S
tatu
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rve
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(def
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) o
n r
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of
Un
app
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pro
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M
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irec
tor
Dir
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r
D
irec
tor
42
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
2019 2018
Note ------------- Rupees in '000 --------------CASH FLOW FROM OPERATING ACTIVITIES
Profit before taxation 2,261,311 706,601
Less: Dividend income 13,393 49,540
2,247,918 657,061
Adjustments:
Depreciation - Property and equipment 317,333
288,936
Depreciation - Non banking assets acquired in satisfaction of claims 2,461
-
Depreciation - Right-of-use assets 329,381
-
Amortization 43,450
42,663
Provisions and write offs-net (21,092)
(170,962)
Mark-up expense on lease liability against right-of-use assets 151,587
-
Net loss on termination of lease 1,469
-
Unrealized exchange gain on cash and cash equivalent (234,651)
(140,920)
(Gain) / loss on sale of fixed assets (506)
566
589,432
20,283
2,837,350
677,344
Increase in operating assets
Lendings to financial institutions (6,167,807)
(6,166,536)
Held-for-trading securities (15,499)
-
Advances (14,809,177)
(11,494,467)
Others assets (excluding advance taxation) (5,274,431)
(643,804)
(26,266,914)
(18,304,807)
Increase/ (decrease) in operating liabilities
Bills payable 277,029 (236,115) Borrowings from financial institutions 59,814,347 (29,347,472) Deposits 11,000,016 11,920,582 Other liabilities 8,368,794
(759,305)
79,460,186
(18,422,310)
Income tax paid (477,001)
(824,930)
Net cash flow from / (used in) operating activities 55,553,621
(36,874,703)
CASH FLOW FROM INVESTING ACTIVITIES
Net investments in available-for-sale securities (55,529,197)
43,394,289
Net investments in held-to-maturity securities 5,003,666
(1,068,362)
Dividends received 13,393
49,540
Investments in operating fixed assets (614,650)
(258,038)
Proceeds from sale of fixed assets 666
726
Net cash flow (used in) / from investing activities (51,126,122)
42,118,155
CASH FLOW FROM FINANCING ACTIVITIES
Dividend paid (57)
(1,500,928)
Payment against lease liabilities (351,029)
-
Net cash flow used in financing activities (351,086)
(1,500,928)
Net Inecrease in cash and cash equivalents 4,076,413
3,742,524
Net foreign exchange difference 234,651
140,920
Increase in cash and cash equivalents 4,311,064 3,883,444
Cash and cash equivalents at beginning of the year 33 16,056,813 12,173,369
Cash and cash equivalents at end of the year 33 20,367,877 16,056,813
Additional information on operational cash flows from interest
Interest paid (12,695,435) (10,856,477)
Interest received 23,167,848 14,277,864
The annexed notes 1 to 46 and annexures I to III form an integral part of these financial statements.
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2019
Chief Financial Officer Managing Director Director Director Director
1. STATUS AND NATURE OF BUSINESS
The Bank of Khyber ("the Bank") was established under The Bank of Khyber Act, 1991 and is principally engaged in the business of commercial banking and related services. The Bank acquired the status of a scheduled bank in 1994 and is listed on the Pakistan Stock Exchange Limited. The registered office of the Bank is situated at 24 - The Mall, Peshawar Cantt, Peshawar and it has been temporarily shifted to 1st Floor, State Life Building, 34 - The Mall, Peshawar Cantt. The Bank operates 169 branches including 84 Islamic banking branches (2018: 169 branches including 84 Islamic banking branches). The long term credit ratings of the Bank assigned by The Pakistan Credit Rating Agency Limited (PACRA) and JCR-VIS are 'A' and 'A' respectively and the short-term credit ratings assigned are 'A1' (A-One) and 'A-1' (A-One) respectively.
2. BASIS OF PRESENTATION 2.1 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the
State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-related modes of financing include purchase of goods by the banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under the respective arrangements (except for Murabaha financings accounted for under Islamic Financial Accounting Standard - 1 "Murabaha") are not reflected in these financial statements as such, but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up thereon. However, the Islamic banking branches of the Bank have complied with the requirements as set out in the Islamic Financial Accounting Standards (IFAS), issued by the Institute of Chartered Accountants of Pakistan (lCAP) as are notified under the provisions of Companies Act, 2017.
2.2 These financial statements have been prepared in conformity with the format of financial statements prescribed by the State Bank of Pakistan (SBP) vide BPRD Circular No. 02, dated January 25, 2018.
2.3 The financial results of the Islamic Banking Group have been included in these financial statements for reporting purpose, after eliminating the effects of inter-branch transactions and balances. Key financial figures of the Islamic Banking Group are disclosed in Annexure "II" to these financial statements.
2.4 These financial statements have been presented in Pakistani Rupee, which is the Bank's functional and presentation currency. The figures have been rounded off to the nearest thousand rupees, unless otherwise stated.
2.5 These are separate financial statements of the Bank in which investments in associates are reported on the basis of direct equity interest and are not consolidated or accounted for by using equity method of accounting.
3 STATEMENT OF COMPLIANCE
3.1 These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The accounting and reporting standards comprise of:
- 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, 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).
Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by SBP and SECP differ with the requirements of the IFRS or IFAS, requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the said directives shall prevail.
43
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
3.2 The SBP, vide BPRD Circular No. 4, dated October 23, 2019, has deferred the applicability of IFRS 9, Financial Instruments until January 01, 2021. The SBP, vide BSD Circular No. 10, dated August 26, 2002 has also deferred the applicability of International Accounting Standard 39, Financial Instruments: Recognition and Measurement (before its replacement by IFRS 9) and International Accounting Standard 40, Investment Property for banking companies till further instructions. Further, according to a notification of SECP dated April 28, 2008, IFRS 7 "Financial Instruments: Disclosure" has not been made applicable for banks. Accordingly, the requirements of these standards have not been considered in the preparation of these financial statements. However, investments have been classified and valued in accordance with the requirements prescribed by SBP through its various circulars.
3.3 IFRS 8, 'Operating Segments' is effective for the Bank's accounting period beginning on or after January 1, 2009. All banking companies in Pakistan are required to prepare their annual financial statements in line with the format prescribed under BPRD Circular No. 02 dated January 25, 2018, 'Revised Forms of Annual Financial Statements', effective from the accounting year ended December 31, 2018. Management believes that as the SBP has defined the segment categorization in the above mentioned circular, the SBP requirements prevail over the requirements specified in IFRS 8. Accordingly, segment information disclosed in these financial statements is based on the requirements laid down by the SBP.
3.4 SBP through BPRD Circular No. 04 of 2015 dated February 25, 2015 has deferred applicability of Islamic Financial Accounting Standard-3 for Profit & Loss Sharing on Deposits (IFAS-3) issued by the Institute of Chartered Accountants of Pakistan and notified by the Securities and Exchange Commission of Pakistan (SECP), vide their SRO No. 571 of 2013 dated June 12, 2013 for Institutions offering Islamic Financial Services (IIFS). The standard will result in certain new disclosures in the financial statements of the Bank as and when notified by SBP.
3.5 Standards, interpretations of and amendments to published approved accounting standards that are effective in the current year.
The Bank has adopted the following accounting standards and amendments of lFRSs and the improvements to accounting
standards which became effective for the current year:
3.5.1 May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers which replaces all existing revenue requirements and related interpretations and is effective for annual periods beginning on or after July 01, 2018. IFRS 15 redefined the principles for recognising revenue and is applicable to all contracts with customers other than contracts in the scope of other standards (such as interest and fee income integral to financial instruments which would be in the scope of IFRS 9 and Lease Income). Certain requirements in IFRS 15 are also relevant for the recognition and measurement of gains or losses on disposal of non-financial assets that are not in the ordinary course of business.
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled to in exchange for transferring goods or services to a customer.
The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures.
The Bank's revenue streams that are within the scope of IFRS 15 relate to certain fee and commission income. The accounting policy for recognition of such income is disclosed in Note 6.13 to these financial statements. The application of this standard did not have any material impact on these financial statements, except for change in description of accounting policy.
3.5.2 IFRS 16 Leases supersedes lAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases on statement of financial position.
44
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
The Bank has lease contracts for various properties. Before the adoption of IFRS 16, the Bank classified each of its leases (as lessee) at the inception date as an operating lease. In an operating lease, the leased asset was not capitalised and the lease payments were recognised as rent expense in profit or loss on a straight-line basis over the lease term. Any prepaid rent and accrued rent were recognised under other asset and other liabilities, respectively.
Upon adoption of lFRS 16, the Bank applied the recognition and measurement approach of IFRS 16 for all leases, except for short-term leases and leases of low-value assets. The standard also provides practical expedients, which have been applied by the Bank.
The Bank adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of January 01, 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. The Bank elected to use the transition practical expedient to not reassess whether a contract is or contains a lease at January 01, 2019. Instead, the Bank applied the standard only to contracts that were previously identified as leases applying lAS 17 and IFRIC 4 at the date of initial application.
Accordingly, the Bank recognised right-of-use assets and lease liabilities for those leases where the Bank is the lessee and which were previously accounted for as operating leases. The right-of-use assets and lease liabilities were recognised on the present value of future cash flows, discounted using the incremental borrowing rate at the date of initial application.
45
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
There was no difference between present value of the operating lease commitments discounted using incremental borrowing rate at the year end preceding the date of initial application and lease liabilities recognised in statement of financial position at the date of initial application of IFRS 16.
------------------ 'Rupees in '000 --------------
1,071,946 1,410,383
1,879 -
Decrease in other assets - advances, deposits, advance rent
(99,632) (112,607)
974,193 1,297,776
(1,090,747) (1,297,776)
(116,554) -
---(Rupees in '000)---
(151,587)
Loss on termination during the year (1,469)
(329,381)
365,883
36,502
(116,554)
Reduction in earning per share (0.12)
(Increase) / decrease in operating expenses
For the year ended
December 31, 2019
Impact on Profit and Loss Account
Decrease in profit
- Depreciation on right-of-use assets
Decrease in net assets
As at December
31, 2019
- Rent expense
As at January
01, 2019
Other liabilities - accrued rent
Increase in mark-up expense - lease liability against right-of-use assets
Impact on Statement of Financial Position
Increase in fixed assets - right-of-use assets
and other prepayments
Increase in total assets
Increase in other liabilities - lease liability against
right-of-use assets
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
3.5.3 IFRIC 23 - Uncertainty over Income Tax
The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of lAS 12 Income Taxes. It does not apply to taxes or levies outside the scope of lAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:
- Whether an entity considers uncertain tax treatments separately. - The assumptions an entity makes about the examination of tax treatments by taxation authorities. - How an entity determines taxable profit / (loss), tax bases, unused tax losses, unused tax credits and tax rates. - How an entity considers changes in facts and circumstances.
The interpretation did not have any material impact on the financial statements of the Bank.
3.6 Standards, interpretations of and amendments to published approved accounting standards that are not yet effective
The following IFRS as notified under the Companies Act, 2017 and the amendments and interpretations thereto will be effective for accounting periods beginning on or after January 01, 2020:
- Amendments to lAS 1 Presentation of Financial Statements and lAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (effective for annual periods beginning on or after January 01, 2020). The amendments are intended to make the definition of material in lAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. In addition, the IASB has also issued guidance on how to make materiality judgements when preparing their general purpose financial statements in accordance with IFRS.
- Amendment in IFRS 3 "Business Combination" - Definition of a Business (effective for business combinations for which acquisition date is on and after the beginning of annual period beginning on and after January 01, 2020). The IASB has issued amendments aiming to resolve the difficulties that arise when an entity determines whether it has acquired a business or a group of assets. The amendments clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments include an election to use a concentration test. The standard is effective for transactions in the future and therefore would not have an impact on past financial statements.
- IFRS 9 'Financial Instruments' - SBP vide its BPRD Circular No. 04 of 2019 dated October 23, 2019 directed the banks in Pakistan to implement IFRS 9 with effect from January 01, 2021. IFRS 9 replaces the existing guidance in lAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from lAS 39. SBP has directed the Bank to conduct an impact assessment as at December 31, 2019 which is due to be submitted to SBP by April 30, 2020.
- IFRS 14 'Regulatory Deferral Accounts' permits an entity which is a first-time adopter of International Financial Reporting Standards to continue to account, with some limited changes, for 'regulatory deferral account balances' in accordance with its previous reporting framework, both on initial adoption of IFRS and in subsequent financial statements. Regulatory deferral account balances and movements in them, are presented separately in the statement of financial position, profit and loss account, statement of other comprehensive income, and specific disclosures are required. IFRS 14 was originally issued by IASB in January 2014 with Initial application date for a period beginning on or after January 01, 2016. During November 2019, the SECP modified the effective date for applicability of IFRS 14 for the annual reporting periods beginning on or after July 01, 2019.
- The IASB has also issued the revised Conceptual Framework for Financial Reporting (the Conceptual Framework) in March 2018 which is effective for annual periods beginning on or after January 01, 2020 for preparers of financial statements who develop accounting policies based on the Conceptual Framework. The revised Conceptual Framework is not a standard, and none of the concepts override those in any standard or any requirements in a standard. The purpose of the Conceptual Framework is to assist lASB in developing standards, to help preparers develop consistent accounting policies if there is no applicable standard in place and to assist all parties to understand and interpret the standards.
46 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
Furthermore, following new standards have been issued by IASB which are yet to be notified by SECP for the purpose of applicability in Pakistan.
Standard
IFRS 1 - First time adoption of lFRSs IFRS 17 - Insurance Contracts
4 BASIS OF MEASUREMENT
Accounting convention
These financial statements have been prepared under the historical cost convention except that certain operating fixed assets are stated at revalued amounts, certain investments, certain non-banking assets acquired in satisfaction of claims and derivative financial instruments are stated at fair value and the recognition of certain employees benefits at present value, as disclosed in their respective notes.
5 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with applicable accounting and reporting standards require management
to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
The areas where various assumptions and estimates are significant to the Bank’s financial statements or where judgment was exercised in application of accounting policies are as follows:
5.1 Classification of investments - In classifying investments the Bank follows the guidance provided in SBP circulars. - Investments classified as 'held for trading', are securities which are acquired with an intention to trade by taking advantage of
short term market / interest rate movements and are to be sold within 90 days of acquisition. - Investments classified as 'held to maturity' are non-derivative financial assets with fixed or determinable payments and fixed
maturity. In making this judgment, the Bank evaluates its intention and ability to hold such investment to maturity. - The investments which are not classified as 'held for trading' or 'held to maturity' are classified as 'available for sale'.
5.2 Impairment of available-for-sale equity investments The Bank determines that "available-for-sale" equity investments are impaired when there has been a significant or prolonged
decline in the fair value below its cost. This determination of what is significant or prolong requires management to exercise judgment. In making this judgment, the Bank evaluates among other factors, the volatility in share price. In addition, impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and sector performance, changes in technology and operational and financial cash flows.
5.3 Provision against non-performing loans and advances and debt securities classified as investments The Bank reviews its loan portfolio and debt securities classified as investments to assess the amount of non-performing loans
and advances and debt securities and provision required there-against. While assessing this requirement various factors including the delinquency in the account, financial position of the borrower, the forced sale value of securities and requirements of the Prudential Regulations are considered. For portfolio impairment provision on consumer advances and loans to small enterprises, the Bank follows the general provision requirement set out in Prudential Regulations.
47 A N N U A L R E P O R T 2 0 1 9
January 01, 2021
IASB effective date (annual
periods beginning on or after)
January 01, 2014
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
5.4 Income taxes While making the estimates for income taxes currently payable by the Bank, management looks at the current income tax laws
and the decisions of appellate authorities on certain issues in the past. In making provision for deferred taxes, estimates of the Bank's future taxable profits and expected reversal of deductible temporary differences are taken into account.
5.5 Depreciation, amortization and revaluation of operating fixed assets In making estimates of the depreciation / amortization, management uses method which reflects the pattern in which economic
benefits are expected to be consumed by the Bank. The method applied is reviewed at each financial year end and if there is a change in the expected pattern of consumption of the future economic benefits embodied in the assets, the method is changed to reflect the change in pattern. Such change is accounted for as change in accounting estimates in accordance with International Accounting Standard - 8: Accounting Policies, Changes in Accounting Estimates and Errors.
Further, the Bank estimates the revalued amount of leasehold land on a regular basis. The estimates are based on valuations carried out by independent professional valuers under the current market conditions.
5.6 Defined benefit plan The liability of the defined benefit plan (gratuity) is determined using actuarial advice using the Projected Unit Credit Method. The
actuarial valuation involves making assumptions about discount rates, expected rates of returns on assets and future salary increases, which have been disclosed in note 35.1. Actuarial assumptions are entity's best estimates of the variables that will determine the ultimate cost of providing post-employment benefits. Changes in these assumptions in future years may affect the liability / asset under the plan in those years. The latest actuarial valuation has been carried out on December 31, 2019.
5.7 Leases
5.7.1 Estimating the incremental borrowing rate The Bank cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate ('IBR') to
measure lease liabilities. The IBR is the rate of interest that the Bank would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
5.7.2 Determination of the lease term for lease contracts with renewal and termination options The Bank determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.
The Bank has several lease contracts that include extension and termination options. The Bank applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Bank reassesses the lease term if there is a significant event or change in circumstances that is within its control that affects its ability to exercise or not to exercise the option to renew or to terminate.
6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted in the preparation of these financial statements are consistent with those of the previous
financial year except the change explained in note 3.5.
6.1 Cash and cash equivalents For the purpose of cash flow statement, cash and cash equivalents include cash and balances with treasury banks and balances
with other banks in current and deposit accounts.
6.2 Lendings to / borrowings from financial institutions The Bank enters into transactions of borrowing (re-purchase) from and lending (reverse re-purchase) to financial institutions, at
contracted rates for a specified period of time. These are recorded as under:
48 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
49
a) Sale under repurchase agreements Securities sold with a simultaneous commitment to repurchase at a specified future date (repos) continue to be recognized in the
statement of financial position and are measured in accordance with accounting policies for investment and counterparty liability is included in borrowings from financial institutions. The difference between sale and repurchase price is treated as mark-up/return/interest expense and accrued over the term of the repo agreement.
b) Purchase under resale agreements Securities purchased with a corresponding commitment to resell at a specified future date (reverse repos) are not recognized in
the statement of financial position, instead amounts paid under these agreements are included in lending's to financial institutions. The difference between purchase and resale price is treated as mark-up/return/interest income and accrued over the term of the reverse repo agreement.
c) Other lendings Other lendings include term lendings and unsecured lendings to financial institutions. These are stated net of provision. Mark-up /
interest income on such lending is recorded on time proportion basis using effective interest rate method except mark-up on impaired / delinquent lendings, which are recognized on receipt basis.
d) Other borrowings Other borrowings including borrowings from SBP are recorded at proceeds received. Mark-up expense on such borrowings is
charged to the profit and loss account on time proportion basis using effective interest method.
6.3 Investments
6.3.1 Classification The Bank classifies its investments as follows:
6.3.2 Held-for-trading These are securities which are either acquired for generating a profit from short-term fluctuations in market prices, interest rate
movements and dealer's margin or are securities included in a portfolio in which a pattern of short-term profit taking exists.
6.3.3 Held-to-maturity These are securities with fixed or determinable payments and fixed maturity in respect of which the Bank has the positive intent
and ability to hold to maturity. In Bai Muajjal, the Bank sells Sukuk on credit to Government of Pakistan. The credit price is agreed at the time of sale and such
proceeds are received at the end of the credit period.
6.3.4 Available-for-sale These are investments that do not fall under the "held for trading" or "held to maturity" categories.
6.3.5 Associates Investments in associated companies are stated at cost. Provision is made for impairment in value, if any.
6.3.6 Regular way contracts All purchases and sales of investments that require delivery within the timeframe established by regulation or market convention
are recognized at trade date, which is the date at which the Bank commits to purchase or sell the investments.
6.3.7 Initial measurement Investments other than those categorized as “held for trading” are initially recognized at fair value, which includes transaction
costs associated with investments. Investments classified as “held for trading” are initially recognized at fair value and transaction costs are expensed in the profit and loss account.
A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
50
6.4 Subsequent measurement
6.4.1 Held-for-trading These are measured at subsequent reporting dates at fair value. Gains and losses on re-measurement are included in the profit
and loss account.
6.4.2 Held-to-maturity These are measured at amortized cost using the effective interest rate method, less any impairment loss recognized to reflect
irrecoverable amounts.
6.4.3 Available-for-sale Quoted-securities classified as available-for-sale investments are measured at subsequent reporting dates at fair value. Surplus /
(deficit) arising on revaluation of quoted securities which are classified as 'available for sale', is included in the statement of comprehensive income and is shown in the statement of financial position as part of equity. The surplus / (deficit) arising on these securities is taken to the profit and loss account when actually realised upon disposal or in case of impairment of securities. The unrealised surplus / (deficit) arising on revaluation of quoted securities which are classified as held for trading is taken to the profit and loss account.
Premium or discount on debt securities classified as available for sale and held to maturity is amortised using effective interest method and taken to the profit and loss account.
Unquoted equity securities are valued at the lower of cost or break-up value. A decline in the carrying value is charged to the profit and loss account. The break-up value of these equity securities is calculated with reference to the net assets of the investee company as per the latest available audited financial statements. Investments in other unquoted securities are valued at cost less impairment losses.
6.4.4 Impairment Provision for diminution in the value of securities is made after considering impairment, if any, in their value and charged to profit
and loss account. Impairment is recognized when there is an objective evidence of significant or prolonged decline in the value of such securities. Provision for impairment against debt securities is made as per the aging criteria prescribed by the Prudential Regulations of SBP.
6.5 Advances
6.5.1 Advances (including Islamic financings) are stated net of specific and general provisions. Specific and general provision against advances is determined on the basis of Prudential Regulations and other directives issued by the SBP and charged to the profit and loss account. Advances are written-off when there are no realistic prospects of recovery.
Receivables against lease finance where Bank is a lessor (other than Ijarah) Leases where the Bank transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee are
classified as finance leases. A receivable is recognised at an amount equal to the present value of the lease payments including any guaranteed residual value.
6.5.2 Murabaha Funds disbursed for purchase of goods are recorded as 'Advance for Murabaha'. On culmination of Murabaha, i.e. sale of goods to
customers, Murabaha financings are recorded at the deferred sale price net of profit. Goods that have been purchased but remained unsold are recorded as inventories. Profit is recorded at the time of sale of goods under Murabaha as deferred income and is included in the amount of Murabaha financings. Profit is taken to the profit and loss account over the period of the Murabaha.
6.5.3 Ijarah financings Ijarah financings executed on or before December 31, 2008 have been accounted for under finance method, thereafter all Ijarah
financings are accounted for under IFAS 2
A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
(a) Under Finance method, the present value of minimum Ijarah payments have been recognized and shown under financings. The unearned income, i.e. the excess of aggregate Ijarah rentals over the cost of the asset and documentation charges under Ijarah facility is deferred and then amortized over the term of the Ijarah, so as to produce a constant rate of return on net investment in the Ijarah. Gains / losses on termination of Ijarah contracts are recognized as income on a receipt basis. Income on Ijarah is recognized from the date of delivery of the respective assets to the Mustajir (lessee).
(b) Under IFAS 2 method, assets underlying Ijarah financing have been carried at cost less accumulated depreciation and impairment losses, if any, and are shown under financing. Rentals accrued from Ijarah financings net of depreciation charged are taken to profit and loss account. Depreciation on Ijarah assets is charged by applying the straight line method over the Ijarah period which is from the date of delivery of respective assets to Mustajir up to the date of maturity / termination of Ijarah agreement.
6.5.4 Diminishing Musharakah Diminishing Musharakah represents an asset in joint ownership, whereby a partner promises to buy the equity share of the other
partner until the title to the equity is totally transferred to him. The partner using the asset pays the proportionate rental of such asset to the other partner (the Bank). Profit on Diminishing Musharakah financing is recognized on accrual basis.
6.5.5 Salam Salam is a sale transaction where the seller undertakes to supply some specific goods / commodities to the buyer at a future date
against an advance price fully paid on spot. In Salam Bank financing, the Bank purchase some specific goods / commodities from its customers to be delivered to within an agreed time. The goods are then sold and the amount hence financed is received back by Bank.
6.5.6 Istisna In Istisna financing, the Bank places an order to client (seller/manufacturer) to manufacture and deliver specific
goods/commodities at an agreed price. The goods are then sold and the amount hence financed is received back by the Bank.
6.5.7 Inventories The Bank values its inventories at the lower of cost or net realizable value. Cost of inventories represents the actual purchase
made by the Bank / customers as an agent on behalf of the Bank for subsequent sale. The net realizable value is the estimated selling price in the ordinary course of business less the estimated cost necessary to make the sale.
6.5.8 Provision against non-performing advances: Provision for non-performing advances is determined in accordance with the requirements of the Prudential Regulations. The
Bank reviews its loan portfolio to assess amount of non-performing loans and determine provision required there against. While assessing this requirement various factors including the past dues, delinquency in the account, financial position and future business / financial plan of the borrower, value of collateral held and requirements of Prudential Regulations are considered. The Bank is allowed to consider the effect of Forced Sale Value (FSV) of collaterals in determining the amount of provision, however, no benefit of FSV of collateral is taken in determining the provisioning amount.
The amount of general provision against domestic consumer and SME advances is determined in accordance with the relevant Prudential Regulations and SBP directives.
Advances are written-off when there are no realistic prospects of recovery.
6.6 Operating fixed assets and depreciation
6.6.1 Capital-work-in progress Capital-work-in progress is stated at cost less accumulated impairment losses, if any. These are transferred to operating fixed
assets as and when the assets are available for use.
6.6.2 Tangible fixed assets Property and equipment, except land, which is not depreciated, are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of fixed assets. Leasehold land is carried at revalued amount while freehold land is carried at cost less accumulated impairment losses, if any.
51 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit and loss account when incurred.
Depreciation on fixed assets is charged to income over the useful life of the asset on a systematic basis by using the straight line method at the rates stated in note 12.3. Depreciation charge commences from the month when the asset is available for use and continues till the month the asset is discontinued either through disposal or retirement.
Revaluation of leasehold land is carried out with sufficient regularity to ensure that the carrying amount of the land does not differ materially from the fair value. Any revaluation increase in the carrying amount of land is recognized in other comprehensive income and presented as a separate component of equity as “revaluation surplus on fixed assets“, except to the extent that it reverses a revaluation decrease / deficit for the same asset previously recognized in profit and loss account, in which case the increase is first recognized in profit and loss account to the extent of the decrease previously charged. Any decreases that reverse previous increases of the same asset are first recognized in other comprehensive income to the extent of the remaining surplus attributable to the asset. All other decreases are charged to profit and loss account. The revaluation reserve is not available for distribution to the Bank’s shareholders.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses on disposal of fixed assets are included in the profit and loss account, except that the related surplus on revaluation of fixed assets (net of deferred tax) is directly transferred to un-appropriated profit.
6.6.3 Intangible assets Intangible assets having finite useful life are stated at cost less accumulated amortization and impairment losses, if any. Intangible
assets are being amortized using the straight-line method over their useful lives as stated in note 13.2. Amortization is charged from the month of acquisition and up to the month of deletion. The useful lives and amortization method are reviewed and adjusted, if appropriate, at each reporting date. Costs associated with maintaining computer software are recognized as an expense when incurred.
6.6.4 Leases The Bank assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
Bank as a lessee The Bank applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Bank recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets The Bank recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term.
The right-of-use assets are presented within note 12 fixed assets and are subject to impairment in line with the Bank's policy as described in note 6.8 Impairment of non-financial assets.
Lease liabilities At the commencement date of the lease, the Bank recognises lease liabilities measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed payments (less any lease incentives receivable), variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Bank and payments of penalties for terminating the lease, if the lease term reflects exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
52 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
On adoption of IFRS 16, the Bank has recognised liabilities in respect of leases which had previously been classified as operating leases under IAS 17. These liabilities are now measured as the present value of the remaining lease payments, discounted using the weighted average rate from January 01, 2019 the respective lease rates ranging from 10.17% to 13.40% per annum. The associated right-of-use assets are measured at the amount equal to the lease liability, adjusted by the amount of prepaid lease payments.
6.7 Assets acquired in satisfaction of claims Non - banking assets acquired in satisfaction of claims are initially measured at settlement amount and upon revaluation, are
carried at revalued amounts less accumulated depreciation and impairment, if any. The useful lives and depreciation method are reviewed annually and adjusted, if appropriate. These assets are revalued as per SBP's requirement by independent professionally qualified valuers to ensure that their net carrying value does not differ materially from their fair value. A surplus arising on revaluation of assets is credited to the 'surplus on revaluation of Non-banking assets acquired in satisfaction of claims' account and any deficit arising on revaluation is taken to profit and loss account directly. Legal fees, transfer costs and direct costs of acquiring title of assets is charged to profit and loss account and not capitalized.
6.8 Impairment of non-financial assets The carrying amounts of the Bank’s non-financial assets, other than deferred tax asset, are reviewed at each reporting date for
impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. If such indication exists, and where the carrying value exceeds the estimated recoverable amount, assets are written down to their recoverable amount. Recoverable amount is the greater of net selling price and value in use. The resulting impairment loss is taken to the profit and loss account except for the impairment loss on revalued assets, which is adjusted against the related revaluation surplus to the extent that the impairment loss does not exceed the surplus on revaluation of that asset.
6.9 Provisions against off - balance sheet obligations The Bank, in the ordinary course of business, issues letters of credit, guarantees, bid bonds, performance bonds etc. The
commission against such contracts is recognised in the profit and loss account under "fee and commission income" over the period of contracts. The Bank's liability under such contracts is measured at the higher of the amount representing unearned commission income at the reporting date and the best estimate of the amount expected to settle any financial obligation arising under such contracts.
6.10 Taxation Income tax expense comprises of current and deferred tax. Income tax expense is recognized in the profit and loss account except
to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
6.10.1 Current Provision for current taxation is based on taxable income for the year determined in accordance with the prevailing laws of
taxation on income earned. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the profits for the year. The charge for the current year also includes adjustments, where considered necessary relating to prior years, arising from assessments finalized during the year for such years.
6.10.2 Deferred Deferred tax is recognized using the balance sheet liability method on all temporary differences at the reporting date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is calculated at the tax rates that are expected to apply to the periods when the differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the reporting date.
Deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax, if any, on revaluation of fixed asset and investments is recognized as an adjustment to surplus / (deficit) arising on revaluation in accordance with the requirements of IAS-12 "Income Taxes".
The carrying amount of deferred income tax assets are reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit or taxable temporary differences will be available to allow all or
53 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
part of the deferred income tax asset to be utilised.
In making the estimates for current and deferred taxes, the management looks at the income tax law and the decisions of appellate authorities on certain issues in the past. There are certain matters where the Bank's view differs with the view taken by the income tax department and such amounts are shown as contingent liability.
6.11 Employee benefits
6.11.1 Defined benefit plan The Bank operates a funded gratuity scheme for all its permanent employees. Contributions are made to the fund by the Bank in
accordance with the rules of the scheme. Employees are entitled to the benefits under the scheme which comprises of one last drawn basic salary for each completed year of service. Contributions to the fund are made on the basis of actuarial recommendations. Actuarial valuation was carried out on December 31, 2019 using the Projected Unit Credit Method. Actuarial gains / losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in other comprehensive income.
Previously, the bank's policy was to pay gratuity equal to two months basic pay for each completed year of service which has now
been revised. Effective January 01, 2019, the gratuity equal to one month basic pay for each completed year shall be payable to permanent employees on retirement or discharge by the Bank or if he / she leaves the Bank's service voluntarily, other than those dismissed for misconduct. The Board of Dirctors of the Bank approved that gratuity at the rate of two months basic pay shall be paid upto the year ended December 31, 2018 and the new policy shall be applicable from January 01, 2019 onwards.
6.11.2 Defined contribution plan The Bank operates a recognized contributory provident fund covering all its permanent employees. Equal monthly contributions
are made by the Bank and the employees to the fund at a rate of 8.33% (2018: 15%) of basic salary.
6.12 Financial instruments
6.12.1Financial assets and liabilities Financial assets and financial liabilities are recognized at the time when the Bank becomes a party to the contractual provision of
the instrument. Financial assets are de-recognized when the contractual right to future cash flows from the asset expires or is transferred along with the risk and reward of the asset. Financial liabilities are de-recognized when obligation specific in the contract is discharged, cancelled or expired. Any gain or loss on de-recognition of the financial asset and liability is recognized in the profit and loss account of the current period. The particular recognition and subsequent measurement methods adopted for significant financial assets and financial liabilities are disclosed in the individual policy statements associated with them.
6.12.2 Derivative financial instruments Derivative financial instruments are initially recognized at fair value on the date on which the derivative contract is entered into
and are subsequently re-measured at fair value using appropriate valuation techniques. All derivative financial instruments are carried as assets when fair value is positive and liabilities when fair value is negative. Any change in the fair value of derivative financial instruments is taken to the profit and loss account.
6.13 Revenue(a) Income on Murabaha is accounted for on culmination of Murabaha transaction and is recognized as revenue on a time
proportionate basis. Unearned profit is accounted for by crediting deferred Murabaha income, which is recorded as a liability.
(b) Interest / return / mark-up on regular loans / advances (other than Murabaha) and debt securities investments is recognized on time proportion basis. Where debt securities are purchased at premium or discount, the same is amortized through the profit and loss account using the effective interest rate method.
(c) Interest / return / mark-up recoverable on classified loans and advances and investments is recognized on receipt basis. Interest / return / mark-up on classified rescheduled / restructured loans and advances and investments is recognized as permitted by the regulations of the SBP.
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The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
55 A N N U A L R E P O R T 2 0 1 9
(d) For Ijarah contracts written up to December 31, 2008, the Bank follows finance method in recognizing income. Under this method the unearned finance income i.e. the excess of aggregate Ijarah rentals over the cost of the asset and documentation charges under Ijarah facility, is deferred and then amortized over the term of the Ijarah, so as to produce a constant rate of return on net investment in the Ijarah. Gains / losses on termination of Ijarah contracts are recognized as income on receipt basis. Income on Ijarah is recognized from the date of delivery of the respective assets to the Mustajir.
(e) Rentals on Ijarah contracts written subsequent to December 31, 2008 are recognized as income on accrual basis as and when the rentals become due. Income is recognized net of depreciation charged in the profit and loss account.
(f) Dividend income is recognized when the Bank’s right to receive the dividend is established.
(g) Fee, commission, liquidated damages etc. are recorded on accrual basis when the service has been provided. Fee and commission which in substance amount to an additional interest charge, are recognized over the life of the underlying transaction on a level yield basis.
(h) Gain / loss on sale of investments is credited / charged to profit and loss account.
(i) The Bank earns fee and commission income from a diverse range of financial services it provides to its customers. Fee and commission income is recognised at an amount that reflects the consideration to which the Bank expects to be entitled in exchange for providing the services.
The Bank recognises fees earned on transaction-based arrangements at a point in time when the Bank has provided the service to the customer. Where the contract requires services to be provided over time, income is recognised on a systematic basis over the life of the agreement.
6.14 Foreign currencies
a) Foreign currency transactions and balances
Transactions in foreign currencies are translated into Pakistani Rupees at the exchange rates prevailing on the transaction date. Monetary assets and liabilities in foreign currencies are expressed in Rupee terms at the rates of exchange prevailing on the reporting date. Foreign bills purchased and forward foreign exchange contracts are valued at forward rates applicable to their respective maturities.
b) Translation gains and losses Translation gains and losses are included in profit and loss account.
c) Commitments Commitments for outstanding forward foreign exchange contracts disclosed in the financial statements are translated at forward
rates applicable to their respective maturities. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated in foreign currencies are expressed in Rupee terms at the rates of exchange prevailing on the reporting date.
6.15 Segment reporting A segment is a distinguishable component of the Bank that is engaged in providing products and services (business segment), or in
providing products or services within a particular economic environment (geographical segment), which is subject to risk and rewards that are different from those of other segments. The Bank's primary format of reporting is based on business segments.
6.15.1 Business segments The Bank comprises of following main business segments:
a) Corporate finance This includes, services provided in connection with mergers and acquisition, underwriting, privatization, securitization, research,
debts instruments, equity, syndication, IPO and secondary private placements.
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
56 A N N U A L R E P O R T 2 0 1 9
b) Trading and sales It includes fixed income, equity, foreign exchanges, commodities, credit, funding, own position securities, lending and repos,
brokerage debt and prime brokerage.
c) Retail banking It includes retail lending and deposits, banking services, trust and estates, private lending and deposits, banking services and retail
offered to its retail customers.
d) Commercial banking Commercial banking includes project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees,
bills of exchange and deposits.
6.15.2 Geographical segments The Bank conducts all its operations in Pakistan.
6.16 Provisions Provisions are recognized when the Bank has a legal or constructive obligation arising as a result of past events, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.
Provision against identified non-funded losses is recognized when intimated and reasonable certainty exists for the Bank to settle the obligation. The loss is charged to the profit and loss account net of expected recovery and is classified under other liabilities.
6.17 Borrowings / deposits and their costa) Borrowings / deposits are recorded at the proceeds received.b) Borrowings / deposits cost are recognized as expense in the period in which these are incurred using effective mark-up / interest
rate method.
6.18 Off setting Financial assets and financial liabilities are set off and the net amount is reported in the financial statements when there is a legally
enforceable right to set off and the Bank intends to either settle on a net basis, or to realize the assets and to settle the liabilities simultaneously.
6.19 Earnings per share The Bank presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by dividing the profit or loss attributable
to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the year
6.20 Dividends and appropriations to reserves Dividend and appropriation to reserves, except appropriations which are required under the law, after the reporting date, are
recognized in the Bank’s financial statements in the year in which these are approved.
6.21 Fiduciary assets Assets held in a fiduciary capacity are not treated as assets of the Bank in statement of financial position.
6.22 Statutory reserve Every Bank incorporated in Pakistan is required to transfer 20% of their profit to a statutory reserve until the reserve equals share
capital, thereafter 10% of the profit of the Bank is to be transferred to this reserve.
6.23 Acceptances Acceptances comprise undertakings by the Bank to pay bill of exchange drawn on customers. Acceptances are recognised as
financial liability in the statement of financial position with a contractual right of reimbursement from the customer as a financial asset. Therefore, commitments in respect of acceptances have been accounted for as financial assets and financial liabilities.
The Bank of KhyberNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
57 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
7 CASH AND BALANCES WITH TREASURY BANKS Note ----------- Rupees in '000 ------------
In hand:
Local currency 2,157,981 2,110,143
Foreign currency 356,957 247,451
2,514,938 2,357,594
With State Bank of Pakistan in:
Local currency current account 7.1 5,894,936
9,051,401
Foreign currency current account 7.2 42,353
82,680
Foreign currency deposit account 7.3 90,458
73,760
6,027,747
9,207,841
With National Bank of Pakistan in:
Local currency current account 571,912
767,556
Local currency deposit account 7.4 3,002,591
6,658
Foreign currency deposit account 13,385
9,517
3,587,888
783,731
Prize bonds 7,232
2,287
12,137,805
12,351,453
7.1
7.2
7.3
7.4
2019 2018
Note ------------ Rupees in '000 ------------
8 BALANCES WITH OTHER BANKS
In Pakistan:
In current account 2,427,921
3,008,582
In deposit account 8.1 4,683,413
577,196
7,111,334
3,585,778
Outside Pakistan:
In current account 935,782
18,785
In deposit account 8.2 192,984
110,825
1,128,766
129,610
Provision for doubtful placement with the bank 8.3 (10,028)
(10,028)
8,230,072
3,705,360
8.1
8.2
2019 2018
8.3 Particulars of provision for doubtful placement with a bank ------------ Rupees in '000 ------------
Opening balance (10,028) (10,028)Charge for the year - -Reversals - -
- -
Closing balance (10,028) (10,028)
The current accounts are maintained under the requirements of section 22 of the Banking Companies Ordinance, 1962 as amended from time to time.
This represents mandatory reserves maintained in respect of foreign currency deposits under FE-25 scheme, as prescribed by the SBP.
These represent accounts maintained for mandatory reserve requirements with the SBP. These accounts carry mark up rate of 2019: 0.70% (2018: 1.35 %) per annum.
These represent placements of funds with banks outside Pakistan, which have been generated through the foreign currency deposit scheme (FE-25). These placements carry no mark-up.
These represent short-term deposits with banks at mark-up rates ranging from 2019: 2.00% to 13.75% (2018: 2.00 % to 10.59%) per annum.
These accounts carry mark up rate of 2019: 10.25% to12.5% (2018: 7.00%) per annum.
58
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
20
19
20
18
9LE
ND
ING
S TO
FIN
AN
CIA
L IN
STIT
UTI
ON
S
Cal
l mo
ney
len
din
gs9
.2-
2,5
00
,00
0
Rep
urc
has
e ag
reem
ent
len
din
gs (
Rev
erse
Rep
o)
9.3
9,0
32
,10
25
,19
5,6
42
Bai
Mu
ajja
l rec
eiva
ble
wit
h S
tate
Ban
k o
f Pa
kist
an9
.42
,83
1,3
47
-
Pla
cem
ents
wit
h f
inan
cial
inst
itu
tio
ns
2,2
38
,94
42
38
,94
4
Less
: pro
visi
on
hel
d a
gain
st le
nd
ing
to f
inan
cial
inst
itu
tio
ns
14
,10
2,3
93
7,9
34
,58
6
Len
din
g to
fin
anci
al in
stit
uti
on
s -
net
of
pro
visi
on
9.5
(23
8,9
44
)(2
38
,94
4)
13
,86
3,4
49
7,6
95
,64
2
9.1
Par
ticu
lars
of
len
din
gs
In lo
cal c
urr
ency
13
,86
3,4
49
7,6
95
,64
2
In f
ore
ign
cu
rren
cies
--
Tota
l1
3,8
63
,44
97
,69
5,6
42
9.2
9.3
9.4
9.5
20
19
20
18
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
Op
enin
g b
alan
ce(2
38
,94
4)
(23
8,9
44
)
Ch
arge
fo
r th
e ye
ar-
-
Rev
ersa
ls-
-
--
Clo
sin
g b
alan
ce(2
38
,94
4)
(23
8,9
44
)
9.6
Mar
ket
Trea
sury
Bill
s1
,82
3,6
70
4,4
50
,90
5
6,2
74
,57
5
5,1
95
,64
2-
5,1
95
,64
2
Paki
stan
Inve
stm
ent
bo
nd
s2
,75
7,5
27
-
2,7
57
,52
7
--
-
Tota
l4
,58
1,1
97
4,4
50
,90
5
9,0
32
,10
2
5,1
95
,64
2-
5,1
95
,64
2
No
te
This
rep
rese
nts
un
secu
red
len
din
gs t
o c
om
mer
cial
ban
ks a
t th
e m
ark-
up
rat
e N
il (2
01
8: 9
.50
% t
o 1
0.5
0%
).
Thes
e ar
e se
cure
d a
gain
st g
ove
rnm
ent
secu
riti
es c
arry
ing
mar
k-u
p r
ates
ran
gin
g fr
om
13
.20
% t
o 1
3.7
5%
(2
01
8: 1
0.2
0%
to
10
.45
%)
per
an
nu
m w
ith
mat
uri
ties
up
to
Jan
uar
y 0
6, 2
02
0.
This
car
ries
pro
fit
at t
he
rate
of
10
.40
% (
20
18
: Nil)
per
an
nu
m w
ith
mat
uri
ties
up
to
Feb
ruar
y 0
7, 2
02
0.
Par
ticu
lars
of
pro
visi
on
aga
inst
len
din
gs t
o f
inan
cial
inst
itu
tio
ns
20
18
20
19
Mar
ket
valu
e o
f se
curi
ties
hel
d a
s co
llate
ral a
s at
Dec
emb
er 3
1, 2
01
9 a
mo
un
ted
to
Rs.
9,0
13
.30
mill
ion
(2
01
8: R
s. 5
,19
5.6
4 m
illio
n).
Th
ese
carr
y m
ark-
up
at
rate
ran
gin
g fr
om
13
.20
% t
o 1
3.7
5%
(2
01
8: 1
0.2
0%
to
10
.45
%)
per
an
nu
m w
ith
mat
uri
ties
up
to
Jan
uar
y 0
2, 2
02
0.
He
ld b
y B
ank
Fu
rth
er
give
n
as c
olla
tera
l
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
To
tal
Hel
d b
y B
ank
Fu
rth
er g
iven
as
colla
tera
l T
ota
l Se
curi
tie
s h
eld
as
colla
tera
l aga
inst
len
din
g to
fin
anci
al in
stit
uti
on
s
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
59
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
9.7
Cat
ego
ry o
f cl
assi
fica
tio
n
----
----
----
----
----
----
----
----
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
Do
me
stic
:
Oth
er a
sset
s es
pec
ially
men
tio
ned
-
-
-
-
Sub
stan
dar
d-
-
-
-
Do
ub
tfu
l -
-
-
-
Loss
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
Ove
rse
as
No
t p
ast
du
e b
ut
imp
aire
d-
-
-
-
Ove
rdu
e b
y:
Up
to 9
0 d
ays
-
-
-
-
91
to
18
0 d
ays
-
-
-
-
18
1 t
o 3
65
day
s-
-
-
-
> 3
65
day
s-
-
-
-
-
-
-
-
Tota
l2
38
,94
4
2
38
,94
4
23
8,9
44
23
8,9
44
10
INV
ESTM
ENTS
10
.1In
vest
me
nts
by
typ
e:
He
ld f
or
trad
ing
secu
riti
es
Shar
es1
5,4
99
-
-
15
,49
9
-
-
-
-
15
,49
9
-
-
15
,49
9
-
-
-
-
Ava
ilab
le-f
or-
sale
se
curi
tie
s
Fed
eral
Go
vern
men
t Se
curi
ties
12
5,2
58
,84
4
-
(2,4
78
,77
2)
12
2,7
80
,07
2
68
,45
0,9
85
-
(4,5
24
,39
1)
63
,92
6,5
94
Shar
es7
84
,75
3
(56
6,1
26
)
92
,68
6
31
1,3
13
68
3,9
90
(56
6,1
26
)
95
,35
2
21
3,2
16
No
n G
ove
rnm
ent
Deb
t Se
curi
ties
5,8
54
,48
4
(17
5,9
99
)
(6,0
00
)
5,6
72
,48
5
7,2
33
,90
9
(27
5,8
79
)
-
6,9
58
,03
0
13
1,8
98
,08
1
(74
2,1
25
)
(2,3
92
,08
6)
12
8,7
63
,87
0
76
,36
8,8
84
(84
2,0
05
)
(4,4
29
,03
9)
71
,09
7,8
40
He
ld-t
o-m
atu
rity
se
curi
tie
s
Fed
eral
Go
vern
men
t Se
curi
ties
18
,09
1,2
29
--
18
,09
1,2
29
23
,09
4,8
95
--
23
,09
4,8
95
18
,09
1,2
29
--
18
,09
1,2
29
23
,09
4,8
95
--
23
,09
4,8
95
Ass
oci
ate
40
,50
4-
-4
0,5
04
40
,50
4-
-4
0,5
04
Tota
l1
50
,04
5,3
13
(74
2,1
25
)(2
,39
2,0
86
)1
46
,91
1,1
02
99
,50
4,2
83
(84
2,0
05
)(4
,42
9,0
39
)9
4,2
33
,23
9
----
----
----
----
----
----
----
----
----
----
-- -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
20
18
Pro
visi
on
fo
r
dim
inu
tio
n
Su
rplu
s /
(def
icit
)
20
19
Car
ryin
g va
lue
Co
st /
amo
rtiz
ed c
ost
Pro
visi
on
fo
r
dim
inu
tio
n
Car
ryin
g
valu
e
Co
st /
amo
rtiz
ed
co
st
Su
rplu
s /
(def
icit
)
20
18
20
19
Cla
ssif
ied
len
din
g
Pro
visi
on
he
ld
Cla
ssif
ied
len
din
g
Pro
visi
on
hel
d
60 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
10
.1.1
Mar
ket
trea
sury
bill
s an
d P
akis
tan
Inve
stm
ent
Bo
nd
s ar
e el
igib
le f
or
re-d
isco
un
tin
g w
ith
SB
P.
10
.2In
vest
me
nt
in a
sso
ciat
e -
un
liste
d s
har
es
20
19
4,0
50
,37
43
0%
20
18
4,0
50
,37
43
0%
10
.3Su
mm
ary
of
fin
anci
al in
form
atio
n o
f as
soci
ate
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ee
s '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
75
2,6
87
44
2,7
04
30
9,9
83
11
1,5
22
(15
,69
4)
10
.4
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Fed
era
l Go
vern
me
nt
Secu
riti
es:
Mar
ket
Trea
sury
Bill
s6
9,2
53
,78
1
-
17
,68
4
69
,27
1,4
65
16
,04
8,3
82
-
(6,7
21
)
Paki
stan
Inve
stm
ent
Bo
nd
s6
6,2
07
,58
1
-
(2,4
81
,45
6)
63
,72
6,1
25
69
,24
7,4
66
-
(4,4
83
,23
8)
Ijara
h S
uku
ks7
,88
8,7
11
-
(15
,00
0)
7,8
73
,71
1
6,2
50
,03
2
-
(34
,43
2)
14
3,3
50
,07
3
-
(2,4
78
,77
2)
14
0,8
71
,30
1
91
,54
5,8
80
-
(4,5
24
,39
1)
Shar
es:
List
ed C
om
pan
ies
46
2,2
58
(2
84
,39
0)
9
2,6
86
27
0,5
54
34
5,9
96
(28
4,3
90
)
9
5,3
52
Un
liste
d C
om
pan
ies
33
7,9
94
(2
81
,73
6)
-
5
6,2
58
3
37
,99
4
(2
81
,73
6)
-
80
0,2
52
(5
66
,12
6)
9
2,6
86
32
6,8
12
68
3,9
90
(56
6,1
26
)
9
5,3
52
No
n G
ove
rnm
en
t D
eb
t Se
curi
tie
s
List
ed
1,4
20
,50
5
(38
,50
5)
(6,0
00
)
1,3
76
,00
0
1,7
38
,38
5
(13
8,3
85
)
-
Un
liste
d
4,4
33
,97
9
(13
7,4
94
)
4,2
96
,48
5
5,4
95
,52
4
(13
7,4
94
)
-
5,8
54
,48
4
(17
5,9
99
)
(6,0
00
)
5,6
72
,48
5
7,2
33
,90
9
(27
5,8
79
)
-
Ass
oci
ate
Tau
rus
Secu
riti
es L
imit
ed
40
,50
4
-
-
40
,50
4
40
,50
4
-
-
To
tal
Inve
stm
en
ts
15
0,0
45
,31
3
(74
2,1
25
)
(2,3
92
,08
6)
14
6,9
11
,10
2
99
,50
4,2
83
(84
2,0
05
)
(4,4
29
,03
9)
10
.4.1
Ijara
h S
uku
ks in
clu
des
Bai
-Mu
ajja
l Su
kuks
wit
h G
ove
rnm
ent
of
Paki
stan
am
ou
nti
ng
to R
s.6
,38
8.7
11
mill
ion
(2
01
8: N
il) c
arry
ing
pro
fit
at t
he
rate
of
13
.11
% t
o 1
3.4
4%
(2
01
8: N
il).
10
.5In
vest
me
nts
giv
en
as
colla
tera
l 2
01
9
----
----
----
- R
up
ee
s in
'00
0 -
----
----
---
Mar
ket
Trea
sury
Bill
s
5
8,7
60
,12
8
Paki
stan
Inve
stm
ent
Bo
nd
s
2
9,1
91
,56
5
87
,95
1,6
93
This
rep
rese
nts
mar
ket
valu
es o
f se
curi
ties
at
year
en
d. C
ost
/ am
ort
ize
d
cost
Bas
ed
on
th
e f
inan
cial
sta
tem
en
ts -
De
cem
be
r 3
1, 2
01
8
Inve
stm
en
ts b
y se
gme
nts
Co
st/
amo
rtiz
ed c
ost
20
19
20
18 S
urp
lus
/ (d
efic
it)
Pro
visi
on
fo
r
dim
inu
tio
n
Pro
visi
on
fo
r
dim
inu
tio
n
Su
rplu
s /
(de
fici
t)
Car
ryin
g
valu
e
Ass
ets
Liab
iliti
es
Equ
ity
Re
ven
ue
Ne
t lo
st
Tau
rus
Secu
riti
es L
imit
ed -
inco
rpo
rate
d in
Pak
ista
n
Ye
ar
en
de
d
Nu
mb
er
of
shar
es
Tau
rus
Secu
riti
es
Lim
ite
d -
inco
rpo
rate
d in
Pak
ista
n
Pe
rce
nta
ge o
f
ho
ldin
g
40
,50
4
40
,50
4
(25
,38
6)
Co
st
Ru
pe
es
in '0
00
To
tal
Co
mp
reh
en
sive
loss
16
,04
1,6
61
64
,76
4,2
28
6,2
15
,60
0
87
,02
1,4
89
15
6,9
58
56
,25
8
21
3,2
16
1,6
00
,00
0
5,3
58
,03
0
6,9
58
,03
0
40
,50
4
94
,23
3,2
39
20
18
7
,40
6,3
73
2
1,9
65
,38
4
2
9,3
71
,75
7
Car
ryin
g va
lue
61
A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 201810.6 Provision for diminution in value of investments Note ------------- Rupees in '000 --------------
Opening balance 842,005 865,176
Charge / reversals
Charge for the year - -
Reversals for the year 30 (99,880) (3,755)
Reversal on disposals - (19,416)
(99,880)
(23,171)
Closing balance 10.7 742,125
842,005
10.7
10.8 Particulars of provision against debt securities
Category of classification NPI Provision NPI Provision
Domestic
Other assets especially mentioned - - - -
Substandard -
-
-
-
Doubtful -
-
-
-
Loss 175,999
175,999
275,879
275,879
175,999
175,999
275,879
275,879
Overseas
Not past due but impaired -
-
-
-
Overdue by:
Upto 90 days -
-
-
-
91 to 180 days -
-
-
-
181 to 365 days -
-
-
-
> 365 days -
-
-
-
-
-
-
-
Total 175,999
175,999
275,879
275,879
10.9
10.9.1 Details of investment in preference shares - unlisted
37% 19,500,000 10 195,000 195,000
10.9.2
This includes impairment reversal of Rs. 99.88 million (2018: 23.171 million) in respect of available-for-sale debt securities.
20182019
5.24% to 13.44%
Principal terms of
investments in Federal
Government securities
Yield / return
per annumMaturity Redemption Coupon
On maturity
------------- Rupees in '000 -------------
------------------------------------- Rupees in '000 ---------------------------------
Paid-up
value per
share
Market Treasury Bills
Total cost on
December 31, 2019
Total paid-up
value
June 30, 2020 to
March 25, 2022
Percentage
of holding
This represents 2.5% non-cumulative, non voting and non redeemable preference shares convertible at any time from the date of issue. The Bank has received these preference shares against the settlement of a debt.
At maturity
Half yearlyGovernment of Pakistan
Sukuk
Pakistan Investment Bonds 7.25% to 12.00%March 26, 2020 to
August 09, 2028On maturity Half yearly
January 16, 2020 to
December 17, 202012.75% to 14.22% On maturity
Saudi Pak Leasing Company Limited
Name of company
No. of
shares
Federal government securities other than those offered as collateral, are held by the Bank to meet Statutory Liquidity Requirements (SLR) of the SBP calculated on the basis of time and demand liabilities.
62 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
10.9.3 Quality of available for sale securities
------------ Rupees in '000 -----------
Federal Government securities - Government guaranteed
Market treasury bills 69,253,781 16,048,382
Pakistan investment bonds 48,116,352 46,152,571
Ijarah sukuks 7,888,711 6,250,032
125,258,844
68,450,985
Non Government debt securities - listed
Categorised based on long term rating by credit rating agency
- AA+, AA, AA- 1,257,000
1,200,000
- A+, A, A- 125,000
400,000
- Unrated 38,505
138,385
1,420,505
1,738,385
Non Government debt securities - unlisted
Categorised based on long term rating by credit rating agency
- AAA 3,322,857
3,859,286
- AA+, AA, AA- 568,031
1,000,000
- A+, A, A- 405,597
498,744
- Unrated 137,494
137,494
4,433,979
5,495,524
10.9.4
2019 2018
10.9.5 Particulars relating to held to maturity securities are as follows:
Federal Government Securities - Government guaranteed
Pakistan investment bonds 18,091,229
23,094,895
10.9.6
11 ADVANCES
2019 2018 2019 2018 2019 2018
finances, etc 63,059,355
59,077,654
4,546,955
4,121,876
67,606,310
63,199,530
assets 45,669,716
35,294,489
260,133
313,506
45,929,849
35,607,995
220,363
136,480
219,630
222,970
439,993
359,450
Advances - gross 108,949,434
94,508,623
5,026,718
4,658,352
113,976,152
99,166,975
Provision against advances
- Specific -
-
4,190,185
4,119,221
4,190,185
4,119,221
- General 43,675
35,851
-
-
43,675
35,851
43,675
35,851
4,190,185
4,119,221
4,233,860
4,155,072
Advances - net of provision 108,905,759
94,472,772
836,533
539,131
109,742,292
95,011,903
2019 2018
11.1 Particulars of advances (gross) ----------- Rupees in '000 -----------
In local currency 113,976,152 99,166,975
In foreign currency - -
113,976,152 99,166,975
Bills discounted and purchased
Cost
------------ Rupees in '000 ------------
Cost
Information relating to investment in ordinary shares of listed and unlisted companies is disclosed in Annexure III to these financial
statements.
The year end market value of securities classified as held-to-maturity amounted to Rs. 17,036 million (2018: Rs. 21,062 million).
Performing Non performing Total
----------------------------------------------------------- Rupees in '000 -----------------------------------------------------------
Loans, cash credits, running
Islamic financing and related
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
11
.2
Cat
ego
ry o
f cl
assi
fica
tio
n
Do
me
stic
:
Oth
er a
sset
s es
pec
ially
men
tio
ned
31
,35
8
-
10
,30
8-
Sub
stan
dar
d9
6,4
15
3,6
76
12
9,8
17
4,3
61
Do
ub
tfu
l2
20
,46
9
22
,50
1
23
9,9
92
45
,85
5
Loss
4,6
78
,47
6
4,1
64
,00
8
4,2
78
,23
54
,06
9,0
05
5,0
26
,71
8
4,1
90
,18
5
4,6
58
,35
24
,11
9,2
21
Ove
rse
as:
No
t p
ast
du
e b
ut
imp
aire
d-
-
--
Ove
rdu
e b
y:
Up
to 9
0 d
ays
-
-
--
91
to
18
0 d
ays
-
-
--
18
1 t
o 3
65
day
s-
-
--
> 3
65
day
s-
-
--
-
-
--
Tota
l5
,02
6,7
18
4,1
90
,18
5
4,6
58
,35
24
,11
9,2
21
11
.3
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
Op
enin
g b
alan
ce4
,11
9,2
21
35
,85
1
4,1
55
,07
2
4,2
78
,56
7
24
,95
44
,30
3,5
21
Ch
arge
fo
r th
e ye
ar4
04
,23
2
7,8
24
41
2,0
56
30
9,5
31
10
,89
73
20
,42
8
Rev
ersa
ls(3
33
,26
8)
-
(33
3,2
68
)
(46
8,8
77
)
-(4
68
,87
7)
70
,96
4
7,8
24
78
,78
8
(15
9,3
46
)
10
,89
7(1
48
,44
9)
Am
ou
nts
wri
tten
off
-
-
-
-
--
Clo
sin
g b
alan
ce4
,19
0,1
85
43
,67
54
,23
3,8
60
4,1
19
,22
13
5,8
51
4,1
55
,07
2
11
.4P
arti
cula
rs o
f p
rovi
sio
n a
gain
st a
dva
nce
sSp
eci
fic
Ge
ne
ral
Tota
lSp
ecif
icG
ener
alTo
tal
In lo
cal c
urr
ency
4,1
90
,18
54
3,6
75
4,2
33
,86
04
,11
9,2
21
35
,85
14
,15
5,0
72
In f
ore
ign
cu
rren
cies
--
--
--
4,1
90
,18
54
3,6
75
4,2
33
,86
04
,11
9,2
21
35
,85
14
,15
5,0
72
20
19
20
18
Gen
eral
Tota
l
20
19
20
18
Par
ticu
lars
of
pro
visi
on
aga
inst
ad
van
ces
Spe
cifi
cG
en
era
lTo
tal
Spec
ific
Ad
van
ces
incl
ud
e R
s. 5
,02
6.7
18
mill
ion
s (2
01
8: R
s.4
,65
8.3
52
mill
ion
s) w
hic
h h
ave
bee
n p
lace
d u
nd
er n
on
-per
form
ing
stat
us
as d
etai
led
bel
ow
:
20
18
20
19
----
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
-
Pro
visi
on
No
n p
erfo
rmin
g
loan
s P
rovi
sio
n N
on
pe
rfo
rmin
g
loan
s
63
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
64 A N N U A L R E P O R T 2 0 1 9
2019 2018
11.5 PARTICULARS OF WRITE OFFs:
Against provisions - -
Directly charged to profit & loss account - 65
-
65
11.5.1 Write offs of Rs. 500,000 and above
- Domestic -
-
- Overseas -
-
Write offs of below Rs. 500,000 -
65
-
65
DETAILS OF LOAN WRITE OFF OF RS. 500,000/- AND ABOVE
11.6
2019 2018
12 FIXED ASSETS ----------- Rupees in '000 -----------
Capital work-in-progress 12.1 503,430
291,647
Property and equipment 12.3 1,759,294
1,924,775
Right-of-use asset 12.8 1,071,946 -
3,334,670 2,216,422
12.1 Capital work-in-progress
Civil works 389,264
284,396
Equipment 8,080
7,251 Advances to suppliers 106,086
-
503,430
291,647
12.2 Movement in capital work-in-progress
Opening balance 291,647
260,243
Additions 225,462
194,027
Transfers (13,679)
(162,623)
Closing balance 503,430 291,647
Note
In terms of sub-section (3) of section 33A of the Banking Companies Ordinance, 1962, a statement in respect of written off loans or financial relief of Rs. 500,000 or above allowed to a person(s) during the year ended December 31, 2019 is given in Annexure 'I'. However, these write-offs do not affect the Bank's right to recover debts from these customers.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
State Bank of Pakistan through BSD Circular No.1 dated October 21, 2011 has allowed benefit of the forced sales value (FSV) of plant &
machinery under charge, pledged stocks & mortgaged residential, commercial and industrial properties (land and building only) held as
collateral against Non-Performing Loans (NPLs) for a maximum of five years from the date of classification. As at December 31, 2019 the
Bank has availed cumulative benefit of forced sale values of Rs. 572.478 million (2018: Rs. 285.790 million). Increase in unappropriated
profit net of tax amounting to Rs. 372.11 million (2018: Rs. 185.764 million) is not available for the distribution of cash or stock dividend
to shareholders or bonus to employees.
----------- Rupees in '000 -----------
65 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
12
.3P
rop
ert
y an
d e
qu
ipm
en
t
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
At
Jan
uar
y 0
1, 2
01
9
Co
st /
Re
valu
ed
am
ou
nt
58
,00
0
8
91
,44
1
28
8,5
67
25
1,6
01
9
80
,25
3
25
,06
8
7
90
,65
5
7
86
3,2
86
,37
1
Acc
um
ula
ted
de
pre
ciat
ion
-
-
8
4,1
18
14
0,1
45
6
55
,46
0
18
,28
9
4
62
,90
6
6
78
1,3
61
,59
6
Net
bo
ok
valu
e5
8,0
00
89
1,4
41
2
04
,44
9
1
11
,45
6
32
4,7
93
6,7
79
32
7,7
49
10
8
1
,92
4,7
75
Year
en
de
d D
ece
mb
er
31
, 20
19
Op
en
ing
net
bo
ok
valu
e5
8,0
00
89
1,4
41
20
4,4
49
11
1,4
56
32
4,7
93
6,7
79
32
7,7
49
10
8
1,9
24
,77
5
Ad
dit
ion
s -
-
-
10
,26
4
96
,64
1
12
1
44
,94
7
39
15
2,0
12
Dis
po
sals
-
-
-
87
73
-
-
-
16
0
De
pre
ciat
ion
ch
arge
-
-
28
,66
0
25
,84
2
14
8,1
18
2,6
06
11
2,0
75
32
31
7,3
33
Clo
sin
g n
et b
oo
k va
lue
58
,00
0
89
1,4
41
17
5,7
89
95
,79
1
27
3,2
43
4,2
94
26
0,6
21
11
5
1,7
59
,29
4
At
De
cem
be
r 3
1, 2
01
9
Co
st /
Re
valu
ed
am
ou
nt
58
,00
0
89
1,4
41
28
8,5
67
26
0,2
89
1,0
66
,52
2
25
,18
9
83
5,5
99
82
5
3,4
26
,43
2
Acc
um
ula
ted
de
pre
ciat
ion
-
-
11
2,7
78
16
4,4
98
79
3,2
79
20
,89
5
57
4,9
78
71
0
1,6
67
,13
8
Net
bo
ok
valu
e5
8,0
00
89
1,4
41
17
5,7
89
95
,79
1
27
3,2
43
4,2
94
26
0,6
21
11
5
1,7
59
,29
4
20
19
Fre
eh
old
lan
d
To
tal
Bo
oks
L
eas
ho
ld
imp
rove
me
nt
Ve
hic
les
Ele
ctri
cal,
off
ice
and
co
mp
ute
r
eq
uip
me
nt
Fu
rnit
ure
and
fix
ture
Bu
ildin
g o
n
fre
eh
old
lan
d
Le
ase
ho
ld
lan
d
10
%
Rat
e o
f d
ep
reci
atio
n
(pe
rce
nta
ge)
10
%1
0%
- 2
0%
10
% -
33
.33
%2
0%
10
- 2
0%
66 A N N U A L R E P O R T 2 0 1 9
At
Jan
uar
y 1
, 20
18
Co
st /
Rev
alu
ed a
mo
un
t5
8,0
00
89
1,4
41
28
8,5
67
2
38
,75
2
87
3,4
98
21
,68
1
69
1,0
17
70
63
,06
3,6
62
Acc
um
ula
ted
dep
reci
atio
n
-
-
55
,45
7
11
9,3
42
53
4,7
79
16
,13
7
36
3,9
94
64
71
,09
0,3
56
Net
bo
ok
valu
e5
8,0
00
89
1,4
41
23
3,1
10
1
19
,41
0
33
8,7
19
5,5
44
32
7,0
23
59
1,9
73
,30
6
Year
en
de
d D
ece
mb
er
31
, 20
18
Op
enin
g n
et b
oo
k va
lue
58
,00
0
89
1,4
41
23
3,1
10
1
19
,41
0
33
8,7
19
5,5
44
32
7,0
23
59
1,9
73
,30
6
Ad
dit
ion
s -
-
-
16
,41
3
11
0,6
43
3,3
93
11
1,1
68
80
24
1,6
97
Dis
po
sals
-
-
-
30
9
10
-
97
3
-1
,29
2
Dep
reci
atio
n c
har
ge
-
-
28
,66
1
2
4,0
58
12
4,5
59
2,1
58
10
9,4
69
31
28
8,9
36
Clo
sin
g n
et b
oo
k va
lue
58
,00
0
8
91
,44
1
20
4,4
49
1
11
,45
6
3
24
,79
3
6
,77
9
3
27
,74
9
1
08
1,9
24
,77
5
At
De
cem
be
r 3
1, 2
01
8
Co
st /
Rev
alu
ed a
mo
un
t5
8,0
00
89
1,4
41
2
88
,56
7
25
1,6
01
98
0,2
53
25
,06
8
7
90
,65
5
7
86
3,2
86
,37
1
Acc
um
ula
ted
dep
reci
atio
n
-
-
8
4,1
18
14
0,1
45
65
5,4
60
18
,28
9
4
62
,90
6
6
78
1,3
61
,59
6
Net
bo
ok
valu
e5
8,0
00
89
1,4
41
2
04
,44
9
1
11
,45
6
32
4,7
93
6,7
79
32
7,7
49
10
81
,92
4,7
75
12
.4
12
.5
S. N
o
1 2 3
Part
icu
lars
of
lan
ds
are
as f
ollo
w:
The
leas
eho
ldla
nd
of
the
Ban
kw
asla
stre
valu
edo
nFe
bru
ary
10
,2
01
7b
yan
ind
epen
den
tva
luer
.Th
ere
valu
atio
nw
asca
rrie
do
ut
on
the
bas
iso
fp
rofe
ssio
nal
asse
ssm
ent
of
mar
ket
valu
eth
atre
sult
edin
surp
lus
sho
wn
inn
ote
21
.Th
eto
tal
reva
luat
ion
surp
lus
on
lan
dag
greg
atin
gto
Rs
77
4.1
83
mill
ion
(20
18
:R
s7
74
.18
3m
illio
n)
has
bee
nin
clu
ded
inth
eca
rryi
ng
valu
eo
fle
aseh
old
lan
d.
Had
the
lan
dn
ot
bee
nre
valu
ed,
the
tota
lca
rryi
ng
amo
un
to
fth
ela
nd
asat
Dec
emb
er3
1,
20
19
wo
uld
hav
eb
een
Rs.
11
7.2
58
mill
ion
(20
18
:R
s1
17
.25
8
mill
ion
). T
he
forc
ed s
ale
valu
e o
f th
e le
aseh
old
lan
d a
sses
sed
as
Rs.
80
2.2
93
mill
ion
(2
01
8: R
s 8
02
.29
3 m
illio
n).
To
tal
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ees
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
Ele
ctri
cal,
off
ice
and
co
mp
ute
r
equ
ipm
ent
Veh
icle
s
Are
a (s
q. f
eet
s)
20
,49
7
10
,88
0
20
,39
8
Loca
tio
n
The
Mal
l, Pe
shaw
ar C
antt
. Pes
haw
ar
Fays
al T
ow
n, L
aho
re
Ph
ase
V, H
ayat
abad
, Pes
haw
ar
Nat
ure
Leas
ed h
old
lan
d
Free
ho
ld la
nd
wit
h m
ult
i sto
ry b
uild
ing
Free
ho
ld la
nd
wit
h m
ult
i sto
ry b
uild
ing
Rat
e o
f d
epre
ciat
ion
(per
cen
tage
)1
0%
Bo
oks
L
eash
old
imp
rove
men
t
20
%1
0 -
20
%1
0 %
Fre
e h
old
lan
d
10
% -
33
.33
%1
0%
- 2
0%
20
18
Lea
se h
old
lan
d
Bu
ildin
g o
n
free
ho
ld la
nd
Fu
rnit
ure
and
fix
ture
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
67
12.6
Furniture and
fixture 1,576 1,489
87 144
57
Auction Shafiq Electronics
Office equipment 10,372 10,299
73 520
447
Auction Shabir Ahmad
Leasehold
improvement 3 3
- 2
2
Auction Yousaf Khan
2019 11,951 11,791 160 666 506
2018 18,987 17,696 1,292
726
(566)
12.6.1 This amount also represents disposal made to employees during the year having net book value of Rs.72.226 thousand.
12.7
2019 2018
--------- Rupees in '000 ---------
Building on free hold land 1,964
1,964
Furniture and fixture 62,603
62,223
Office equipment 517,831
361,083
Vehicles 18,742
11,455
Library books 649
626
leasehold improvement 299,296
207,156
901,085
644,507
12.8 Right of use assets:
2019 2018
1,410,383
-
- Additions 6,890
-
- Termination of lease (15,946)
-
- Depreciation charge (329,381)
-
Closing net book value 1,071,946
-
12.9 Lease obligation against right-of-use assets:
2019 2018
1,297,776 -
- Additions 6,890 -- Termination of lease (14,477) -- Interest 151,587
- Payment (351,029)
-
Closing net book value 1,090,747
-
Sale
proceeds
Details of disposals of fixed assets
Effect of initial application of IFRS 16 as at January 01, 2019
The Bank has lease contracts for real estate that are used in its operations including Branches, Head office and other offices.
Leases generally have lease terms between 1.5 years to 5 years. The Bank’s obligations correspond to the lessor’s title to the
leased assets. Generally, the Bank is restricted from assigning and subleasing the leased assets.
Effect of initial application of IFRS
For information regarding cash outflow refer to statement of cash flows.
-------------------------------------- Rupees in '000 ----------------------------------------
Gain /
(loss) on
disposal
This has arisen due to adoption of IFRS 16 as detailed in note 3.5.2. Movement in right-of-use assets is as follows:
This has arisen due to adoption of IFRS 16 as detailed in note 3.5.2. Movement in right-of-use assets is as follows:
The gross carrying amount (cost) of fully depreciated assets, that are still in use are as follows:
Mode of
disposal
Particular of
purchasers Description Cost
Accumulated
depreciation
Net book
value
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
--------- Rupees in '000 ---------
--------- Rupees in '000 ---------
68 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
13 INTANGIBLE ASSETS Note ----------- Rupees in '000 ----------
Capital work in progress 13.1 226,693 8,299
Licenses and computer softwares 13.2 59,562 70,551
286,255 78,850
13.1 Movement in capital work-in-progress
Opening balance 8,299 71,752
Transfer in 13.1.1 226,693 22,125
Transfer out (8,299) (37,681)
Write off - (47,897)
Closing balance 226,693 8,299
13.1.1
13.2 Licenses and computer softwares
At January 01, 2019
Cost 59,393
138,898
198,291
Accumulated amortization and impairment 46,355
81,385
127,740
Net book value 13,038
57,513
70,551
Year ended December 31, 2019
Opening net book value 13,038 57,513 70,551
Purchases 17,370
15,091
32,461
Amortization charge 14,287
29,163
43,450
Closing net book value 16,121
43,441
59,562
At December 31, 2019
Cost 76,763
153,989
230,752
Accumulated amortization and impairment 60,642
110,548
171,190
Net book value 16,121
43,441
59,562
Rate of amortization (percentage)
Useful life - years
Remaining amortization years
At January 01, 2018
Cost 58,926
90,975
149,900
Accumulated amortization and impairment 30,675 54,402 85,077
Net book value 28,251
36,573
64,823
Year ended December 31, 2018
Opening net book value 28,251
36,573
64,824
Purchases 467
47,923
48,390
Amortization charge 15,680
26,983
42,663
Closing net book value 13,038
57,513
70,551
At December 31, 2018
Cost 59,393 138,898 198,291
Accumulated amortization and impairment 46,355 81,385 127,740
Net book value 13,038 57,513 70,551
Rate of amortization (percentage)
Useful life - years
Remaining amortization years
13.3 Particulars of assets written-off 2019 2018
---------- Rupees in '000 -----------
Against provision - -
Directly charged to profit and loss - 47,897
- 47,897
Licenses
0-3
---------------------- Rupees in '000 --------------------
33.33%
3
Total Computer
software
--------------------- Rupees in '000 ---------------------
0-3
The outstanding balance represents the cost of underdevelopment core banking software Temenos (T-24). Addition includes an amount of Rs.18.424 million (2018: NIL) in respect of payroll cost of employees working on implementation of T-24.
Licenses Computer
software Total
33.33%
3
69 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
20
19
20
18
14
DEF
ERR
ED T
AX
ASS
ETS
No
te
----
----
----
Ru
pe
es
in '0
00
---
----
----
--
Def
err
ed
tax
ass
et a
risi
ng
in r
esp
ect
of:
Pro
visi
on
fo
r b
alan
ces
wit
h o
ther
ban
ks3
,51
0
3,5
10
Pro
visi
on
fo
r d
imin
uti
on
in v
alu
e o
f in
vest
men
ts4
3,0
23
78
,15
7
Pro
visi
on
fo
r o
ther
ass
ets
3,4
48
3,4
48
Re-
mea
sure
men
t o
f d
efin
ed b
enef
it p
lan
-
27
,58
6
Isla
mic
Po
ol M
anag
emen
t re
serv
e4
7,8
10
49
,89
9
Acc
eler
ated
tax
dep
reci
atio
n
85
,27
6
50
,97
8
Def
icit
on
rev
alu
atio
n o
f in
vest
men
ts2
18
37
,23
3
1,5
50
,16
4
Pro
visi
on
aga
inst
loan
s an
d a
dva
nce
s -
net
10
,85
4
-
1,0
31
,15
4
1,7
63
,74
2
Def
err
ed
tax
liab
ility
ari
sin
g in
re
spe
ct o
f:
Rev
ersa
l aga
inst
loan
s an
d a
dva
nce
s -
net
-
(6,2
91
)
Def
err
ed
tax
ass
et -
net
14
.11
,03
1,1
54
1,7
57
,45
1
14
.1R
eco
nci
liati
on
of
def
err
ed
tax
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
Pro
visi
on
fo
r b
alan
ces
wit
h o
ther
ban
ks3
,51
0
-
-
3
,51
0
-
-
3
,51
0
Pro
visi
on
fo
r d
imin
uti
on
in v
alu
e o
f in
vest
men
ts8
7,2
03
(9,0
46
)
-
78
,15
7
(35
,13
4)
-
43
,02
3
Pro
visi
on
fo
r o
ther
ass
ets
3,4
48
-
-
3,4
48
-
-
3,4
48
Re-
mea
sure
men
t o
f d
efin
ed b
enef
it o
blig
atio
ns
48
,28
5
-
(20
,69
9)
27
,58
6
-
(27
,58
6)
-
Isla
mic
po
ol m
anag
emen
t re
serv
e4
2,3
52
7,5
47
-
49
,89
9
(2,0
89
)
-
47
,81
0
Acc
eler
ated
tax
dep
reci
atio
n
79
35
0,1
85
-5
0,9
78
34
,29
8-
85
,27
6
Def
icit
on
rev
alu
atio
n o
f in
vest
men
ts1
71
,93
9-
1,3
78
,22
51
,55
0,1
64
-(7
12
,93
1)
83
7,2
33
Pro
visi
on
aga
inst
loan
s an
d a
dva
nce
s2
2,2
21
(28
,51
2)
-(6
,29
1)
17
,14
5-
10
,85
4
Def
err
ed
tax
ass
et -
net
37
9,7
51
20
,17
41
,35
7,5
26
1,7
57
,45
11
4,2
20
(74
0,5
17
)1
,03
1,1
54
Re
cogn
ize
d
in P
rofi
t an
d
Loss
acc
ou
nt
Re
cogn
ize
d in
Oth
er
Co
mp
reh
en
sive
Inco
me
As
at
De
cem
be
r 3
1,
20
19
As
at J
anu
ary
01
, 20
18
Rec
ogn
ized
in
Pro
fit
and
Lo
ss
acco
un
t
Rec
ogn
ized
in
Oth
er
Co
mp
reh
ensi
ve
Inco
me
As
at
Dec
emb
er 3
1,
20
18
70 A N N U A L R E P O R T 2 0 1 9
14.2 The management of the Bank believes that it is highly probable that the Bank will be able to achieve the profits and consequently the deferred asset is fully realizable in future. The above assertion is based on financial projection for five years future taxable profits which is based on key assumptions that primarily include the growth of low cost deposits, growth in high yield customer advances, investment returns, branch expansion plans, potential provision against advances, interest rates, cost of funds and expected recoveries of classified advances.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
15 OTHER ASSETS Note
Income/ mark-up accrued in local currency 5,875,454 4,386,767
Profit receivable on Bai Muajjal 2,833,733 -
Advances, deposits, advance rent and other prepayments 51,940 160,898
Advance taxation (payments less provisions) 235,255 670,828
Branch adjustment account 280,825
-
Pre-IPO investment 600,000
600,000
Stationary and stamps on hand 36,590
18,863
Assets acquired in satisfaction of claims 15.1 369,339
-
Mark to market gain on forward foreign exchange contracts 88,606
47,685
Employees benefits 35.1.3 407,700
-
Others 133,437
304,048
10,912,879
6,189,089
Less: Provision held against other assets 15.2 (144,426)
(144,426)
Total 10,768,453
6,044,663
15.1 Non-banking assets acquired in satisfaction of claims
Opening Balance -
-
Additions 371,800
-
Revaluation -
-
Disposals -
-
Depreciation (2,461)
-
Impairment -
-
Closing Balance -
-
369,339 -
15.2 Provision held against other assets
Advances for Pre-IPO (100,000)
(100,000)
Others (44,426)
(44,426)
(144,426)
(144,426)
15.3 Movement in provision held against other assets
Opening balance (144,426)
(143,833)
Charge for the year -
593
Reversals -
-
Closing balance (144,426)
(144,426)
16 BILLS PAYABLE
In Pakistan 1,172,155
895,126
Outside Pakistan -
-
1,172,155
895,126
17 BORROWINGS
Secured
Borrowings from State Bank of Pakistan (SBP)
- Under Export Refinance Scheme 17.1 3,165,914
3,299,000
- Long Term Financing Facility 17.2 1,531,984
1,209,271
- Livestock Dairy 75,966
40,000
4,773,864
4,548,271
Bai Muajjal Borrowing 17.3 26,668,034
10,478,171
Repurchase agreement borrowings 17.4 60,714,563 18,815,672
87,382,597 29,293,843
Unsecured
Call borrowings 17.5 2,500,000 1,000,000
Total 94,656,461 34,842,114
---------------- Rupees in '000 ---------------
71 A N N U A L R E P O R T 2 0 1 9
17.1 The Bank has entered into agreements for financing with the State Bank of Pakistan for extending export finance to customers. As per the
agreements, the Bank has granted to SBP the right to recover the outstanding amount from the Bank at the date of maturity of finance by
directly debiting the current account maintained by the Bank with the SBP. Against these facilities, State Bank of Pakistan charges mark-
up of 3.00% (2018: 3.00% ) per annum from the Bank. Currently the Bank earns a spread ranging from 1.00% to 2.00% (2018: 1.00% to
2.00%) per annum. The borrowings are repayable within six months from the deal date.
17.2 These borrowings have been obtained from SBP for providing financing facilities to exporters for adoption of new technologies and
modernization of their plant and machinery. These borrowings are repayable within a period ranging from 3 years to 10 years. Against
these facilities, State Bank of Pakistan charges mark-up ranging from 3.00% to 4.5% (2018: 3.00% to 4.5%) per annum from the Bank.
Currently the Bank earns a spread ranging from 1.50% to 3.00% (2018: 1.50% to 3.00%) per annum.
17.3 This represents secured borrowing under Bai Muajjal carrying profit ranging from 12.70% to 13.70% (2018: 6.04% to 10.06%) per annum
with maturities up to July 27, 2020 and are secured by way of government securities given as collateral as referred in note 10.5.
17.4 Repurchase agreement with financial institution carries interest rate ranging from 12.00% to 13.50% (2018: 10.18%) per annum with
maturities up to January 03, 2020 and are secured by way of investments given as collateral as referred in note 10.5.
17.5 Call borrowing from financial institutions carries interest rate of 5.00% (2018: 9.00 %) per annum with maturities up to January 02, 2020.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
17.6 Particulars of borrowings with respect to currencies ----------- Rupees in '000 -----------
In local currency 94,656,461
34,842,114
In foreign currency -
-
94,656,461
34,842,114
18 DEPOSITS AND OTHER ACCOUNTS
-------------------------------------------------------------- Rupe-es in '000 ----------------------------------------------------
Customers
Current deposits 34,537,778
349,580
34,887,358
33,724,537
658,829
34,383,366
Saving deposits 69,985,691
215,904
70,201,595
56,316,293
134,854
56,451,147
Term deposits 67,682,671
-
67,682,671
74,575,968
-
74,575,968
Others 8,319,314
-
8,319,314
5,595,363
-
5,595,363
180,525,454
565,484
181,090,938
170,212,161
793,683
171,005,844
Financial Institutions
Current deposits 114,724
-
114,724
2,689
-
2,689
Saving deposits 961,910
-
961,910
159,023
-
159,023
1,076,634
-
1,076,634
161,712
-
161,712
181,602,088
565,484
182,167,572
170,373,873
793,683
171,167,556
2019 2018
18.1 Composition of deposits ----------- Rupees in '000 ----------
Individuals 35,118,180 32,873,404 Government (Federal / Provincial) 113,654,808 107,132,822 Public sector entities 4,444,771 12,926 Banking companies 52,044 36,073 Non-banking financial institutions 1,024,591
125,639
Private sector 27,873,178
30,986,692
182,167,572 171,167,556
18.2 This includes deposits eligible to be covered under insurance arrangements amounting to Rs.55,958.31 million
as of December 31, 2019 (2018: Rs. 41,516.91 million).
2019 2018
In local
currency
In foreign
currency Total
In local
currency
In foreign
currency Total
72 A N N U A L R E P O R T 2 0 1 9
2019 2018
19 OTHER LIABILITIES Note
Mark-up/ return/ interest payable in local currency 9,374,207 2,331,098
Mark-up/ return/ interest payable in foreign currency 555 69
Unearned income - Bai Muajjal Sukuk 1,872,952 -
Unearned commission and income on bills discounted 68,810
119,605
Deferred income on government schemes 33,790
37,427
Deferred income murabaha 151,809
117,499
Income reserve 14,009
4,389
Islamic pool management reserve 19.1 136,602
142,569
Accrued expenses 210,364 180,357
Unclaimed dividends 29,003
29,060
Share subscription money refund 19.2 1,091
1,091
Retention money 25,164
24,903
Bills payment system over the counter (BPS-OTC) 442,718
-
Mark up in suspense 38,927
22,383
Charity fund 21,593
9,156
Security deposits against ijarah 345,116
340,901
Branch adjustment account -
754,017
Employees benefits 35.1.3 -
276,373
Mark to market loss on forward foreign exchange contracts 162,430
-
Others 87,824
94,706
14,107,711
4,485,603
19.1
19.2
19.3
20 SHARE CAPITAL
20.1 Authorized capital
2019 2018 2019 2018
--------- Rupees in '000 ---------
1,500,000,000
1,500,000,000
Ordinary shares of Rs. 10 each. 15,000,000
15,000,000
20.2 Issued, subscribed and paid up
2019 2018 2019 2018
Ordinary shares of Rs. 10 each
722,698,448
722,698,448
Fully paid in cash 7,226,984
7,226,984
277,554,037
277,554,037
Issued as fully paid bonus shares 2,775,540
2,775,540
1,000,252,485
1,000,252,485
10,002,524
10,002,524
20.3 The Bank has only one class of shares and at reporting date, the Government of Khyber Pakhtunkhwa and Ismail
Industries Limited held 702,208,233 (2018: 702,208,233) and 244,339,031 (2018: 241,639,031) ordinary shares
respectively. Moreover, the Bank has no reserved shares under options.
------------- Rupees in '000 -------------
This represents lease liability recognised due to adoption of IFRS 16 as detailed in note 3.5.2.
This includes equity portion of Profit Equalization - Reserve amounting to Rs. 42.141 million (2018: Rs. 44.855 million),
which has been presented as reserve in Annexure-II.
Share subscriptions pertaining to disputed cases pending for decisions with Securities and Exchange Commission of
Pakistan.
Number of shares
Number of shares
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
--------- Rupees in '000 ---------
Lease liability against right-of-use assets 19.3 1,090,747 -
73
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
21 DEFICIT ON REVALUATION OF ASSETS Note --------------- Rupees in '000 --------------
Deficit on revaluation of:
- Available for sale (AFS) securities 10.1 (2,392,086) (4,429,039)
- Deferred tax on AFS securities 14.1 837,233 1,550,164
(1,554,853) (2,878,875)
- Fixed assets 12.4 774,183 774,183
(780,670) (2,104,692)
22 CONTINGENCIES AND COMMITMENTS
- Guarantees 22.1 15,054,505
15,959,908
- Commitments 22.2 36,682,215
13,545,311
51,736,720
29,505,219
22.1 Guarantees:
Financial guarantees 2,030,105
3,719,981
Performance guarantees 12,820,129
11,689,103
Other guarantees 204,271
550,824
15,054,505
15,959,908
22.2 Commitments:
Documentary credits and short-term trade-related transactions
- Letters of credit 6,920,481
10,334,256
Commitments in respect of:
- Forward government securities transactions 22.3 10,000,000
-
- Forward foreign exchange contracts 22.4 19,026,323
3,206,101
Commitments for acquisition of:
- Operating fixed assets 416,496
4,954
- Intangible assets 318,915
-
36,682,215
13,545,311
22.3 Commitments in respect of forward government securities transactions
Forward purchase - Pakistan Investment Bonds (PIBs) 10,000,000 -
10,000,000 -
22.4 Commitments in respect of forward foreign exchange contracts
Purchase 9,069,099
1,705,102
Sale 9,957,224
1,500,999
19,026,323 3,206,101
22.5
2019 2018
23 MARK-UP / RETURN / INTEREST EARNED --------------- Rupees in '000 -------------
On:
a) Loans and advances 12,782,497 6,868,962
b) Investments 9,434,051 6,724,660
c) Balances with banks 126,796 28,471
d) Lendings to financial institutions 943,337 349,571
e) Sukuk bonds 1,369,854 714,801
24,656,535 14,686,465
The income tax assessments of the Bank have been finalized up to tax year 2019.
During financial year 2011, the tax authorities issued an amended order for the tax year 2009 disallowing certain expenditures on account of
lack of evidence for such expenditure resulting in an additional tax demand of Rs. 308.9 million. The Bank filed an appeal as well as rectification
application against the said order. Based on rectification application, the order was amended and accordingly the additional demand was
reduced to Rs. 256.349 million. During 2012, the Commissioner Inland Revenue (Appeals) [CIR (A)] through an order dated June 01, 2012 has
deleted certain additions on account of disallowances except for the additions under certain heads of expenses having tax impact of
approximately Rs. 23 million. The Bank had filed an appeal against the order of the Appellate Tribunal Inland Revenue (ATIR) in respect of
remaining additions which also decided in favour of the Bank. Subsequently, CIR went in to appeal in Peshawar High Court. The management is
confident that matter will be decided in Bank's favour.
74 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
24 MARK-UP / RETURN / INTEREST EXPENSED Note ------------- Rupees in '000 ---------------
Deposits 15,340,577
7,644,080
Borrowings 4,398,453
1,903,004
19,739,030
9,547,084
25 FEE AND COMMISSION INCOME
Branch banking customer fees 42,450
68,123
Consumer finance related fees 5,298
7,643
Debit card related fees 39,954
32,839
Credit related fees 64,108
67,231
Investment banking fees 29,739
16,653
Commission on trade 12,838 5,847
Commission on guarantees 170,444 173,715
Commission on cash management 55 -
Commission on remittances including home remittances 28,210 29,788
Others 4,538 5,054
397,634 406,893
26 GAIN / (LOSS) ON SECURITIES
Realised 26.1 291,583 (1,226,265) Unrealised (1,819) -
289,764 (1,226,265)
26.1 Realised gain / (loss) on:
Federal Government Securities 258,612
(1,018,594)
Shares 34,892
(207,671)
Non Government Debt Securities (1,921)
-
291,583
(1,226,265)
27 OTHER INCOME
Postal, swift and other services 100,169
70,753 Rent on property 2,791
2,579
Service income on Government schemes 18,038
7,289 Rebate from financial institutions 5,453
24,204
Gain / (Loss) on sale fixed assets 506
(563)
126,957
104,262
75 A N N U A L R E P O R T 2 0 1 9
Total cost for the year included in other operating expenses relating to outsourced activities is Rs.80.109 million (2018: Rs. 81.482 million) which pertains to the payment to companies incorporated in Pakistan. Outsourced activities mainly include janitorial services, cash sorters etc.
28.1
2019 2018
28 OPERATING EXPENSES Note
Total compensation expense 28.2 1,729,028 2,268,930
Property expense
Rent and taxes 5,609 354,889
Utilities cost 145,921 123,054
Security (including guards) 136,559
120,118
Repair and maintenance 3,841
3,577
Depreciation - Right of use assets 329,381
-
Depreciation - Non banking assets acquired in
satisfaction of claims 2,461
-
Depreciation 140,735
138,130
764,507
739,768
Information technology expenses
Software maintenance 80,020
34,386
Hardware maintenance 23,949
31,221
Depreciation 148,031
124,559
Amortization 43,450
42,663
Network charges 12,735
11,645
ATM charges 131,192
120,653
Others -
1,989
439,377
367,116
Other operating expenses
Directors' fees and allowances 9,213
10,941
Fees and allowances to Shariah Board 320
352
Legal and professional charges 23,385
34,782
Travelling and conveyance 66,882
65,837
Depreciation 28,567
26,247
Assets written off 13.3 -
47,897
Entertainment 28,840
27,542
Newspapers and periodicals 1,728
1,533
Outsourced services cost 34.1 79,059
81,482
Postage and courier charges 24,806
23,890
Communication 51,144
63,031
Brokerage and commission 51,732
22,078
Rent and taxes 1,587
1,621
Stationery and printing 45,068
48,778
Marketing, advertisement and publicity 40,846
34,306
Cash carriage charges 44,442
39,803
Donations -
59
Repair and maintenance 11,606
5,112
Insurance 40,167
37,916
Training and development 8,775 8,425
NIFT clearing charges 13,644 11,159
Auditors remuneration 28.3 11,375 13,164
Fee and subscription 6,615 3,291
Deposit protection premium 66,427 40,836
Others 31,279 26,351
687,507 676,433
3,620,419 4,052,247
-------------- Rupees in '000 ----------------
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
76
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
2019 2018
28.2 Total compensation expense Note --------------- Rupees in '000 --------------
Managerial remuneration
Fixed 932,007 867,417
Variable - cash bonus / awards etc. 65,485 81,322
Contribution to defined contribution plan 69,217
114,141
Charge for defined benefit plan 35.1.7 (570,324)
101,062
Charge for compensated absences 5,427
47,833
Rent and house maintenance 367,946
344,767
Fuel ceiling entitlement 223,697
215,862
Utilities 122,481
114,572
Voluntary separation scheme 195,573
114,963
Medical 148,460
115,418
Insurance 47,162
52,575
Special duty allowance 23,177
20,632
Conveyance 82,080
73,072
Others 16,640
5,293
Grand total 1,729,028
2,268,929
28.3 Auditors' remuneration
Audit fee 3,019
3,019
Fee for other statutory certifications 5,886
7,979
Out-of-pocket expenses 2,470
2,166
11,375
13,164
29 OTHER CHARGES
Penalties imposed by State Bank of Pakistan 17,762
25,150
Others - mark-up expense on lease liability against
right-of-use assets 151,587
-
169,349
25,150
30 PROVISIONS AND WRITE OFFS - NET
Reversal for diminution in value of investments 10.6 99,880
23,171
(Provisions)/reversal against loans and advances 11.3 (78,788)
148,449
Loans write offs -
(65)
Provisions against other assets 15.3 -
(593)
21,092
170,962
31 TAXATION
Current 889,822
276,392
Prior years 79,670
(15,716)
Deferred (14,220)
(20,174)
31.1 955,272
240,502
31.1 Relationship between tax expense and accounting profit
Profit before tax 2,261,311 706,601
Profit at the applicable rate of 35% (2018: 35%) 791,459
247,310
Prior year tax 31.1.1 79,670 (15,716)
Super tax 87,919 28,370
Permanent difference 40,794 -
Others (44,570) (19,462)
955,272 240,502
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
77 A N N U A L R E P O R T 2 0 1 9
31.1.1
32 BASIC AND DILUTED EARNING PER SHARE 2019 2018
Profit for the year - Rupees 1,306,039,000 466,099,000
Weighted average number of ordinary shares 1,000,252,485
1,000,252,485
Basic earnings per share - rupee/share 1.31
0.47
32.1 There is no dilution effect on basic earnings per share
2019 2018
33 CASH AND CASH EQUIVALENTS -------------- Rupees in '000 ---------------
Cash and balance with treasury banks 12,137,805
12,351,453
Balance with other banks 8,230,072
3,705,360
20,367,877
16,056,813
33.1
34 STAFF STRENGTH
Permanent 1,334
1,373
On contractual basis 8
15
Bank's own staff strength at the end of the year 1,342
1,388
Bank's own average staff strength 1,365
1,366
34.1
35 EMPLOYEE BENEFITS
35.1 General description-gratuity fund
35.1.1 Number of employees under the scheme
The number of employees covered under the scheme are 1,334 (2018: 1,245).
35.1.2 Principal actuarial assumptions
2019 2018
Discount rate 11.25% 13.25%
Expected rate of return on plan assets 11.25% 13.25%
Expected rate of salary increase-long term 9.25% 11.25%
Expected rate of salary increase-short term 9.25% 8.25%
Average expected remaining working life (years) 8.81 9.73
The actuarial valuation was carried out as at December 31, 2019 using the following significant assumptions:
Cash and cash equivalents are carried at cost. For the purpose of the cash flow statement, cash and cash
equivalents comprise cash and bank balances and short-term investments that are highly liquid and readily
convertible to known amounts of cash and subject to an insignificant risk of changes in value.
General description of the type of defined benefit plan and the accounting policy for recognizing actuarial gains
and losses are disclosed in notes 5.6 and 6.11 to these financial statements.
This includes super tax of Rs. 102 million, in respect of accounting year 2017. The Finance Supplementary
(Second Amendment) Act, 2019 has reversed the phase-wise reduction in rate of super tax for banking
companies from 4% to 3% and further levied additional super tax charge at 4% for tax year 2018 (accounting
year 2017) which was previously not chargeable.
---------- Per annum ----------
Number
In addition to the above, 883 (2018: 841) employees of outsourcing services companies were assigned to the
Bank as at the end of the year. No staff was assigned by the Bank to perform activities outside Pakistan.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
78 A N N U A L R E P O R T 2 0 1 9
35.1.3 Reconciliation of payable to defined benefit plan 2019 2018
Note
35.1.4 (457,349) (972,179)
865,049 792,299
407,700 (179,880)
35.1.4 Movement in defined benefit obligation
Obligations at the beginning of the year 972,179 857,481
Current service cost 52,500 95,419
Interest cost 40,144 75,366
Past service cost (benefit rule changes) 35.1.4.2 (562,374) -
Past service cost (late joiners) 4,964 -
Benefits paid (184,898) (103,899)
Re-measurement loss 35.1.8 134,834 47,812
Obligation at the end of the year 35.1.4.1 457,349 972,179
35.1.4.1
35.1.4.2
2019 2018
35.1.5 Movement in fair value of plan assets Note
Fair value at the beginning of the year 792,299 714,264
Expected return on plan assets 105,558 69,723
Contribution by the Bank 179,880 143,217
Benefits paid by the Fund (184,898) (103,899)
Re-measurements 35.1.8 (27,790) (31,006)
Fair value at the end of the year 865,049 792,299
35.1.6 Movement in payable/receiveable under defined
benefit scheme
Opening balance (179,880) (143,217)
Charge for the year 570,324 (101,062)
Contribution by the Bank 179,880
143,217
Re-measurement loss recognised in OCI 35.1.8 (162,624)
(78,818)
Closing balance 407,700
(179,880)
35.1.7 Cost recognised in profit and loss
Current service cost (52,500)
(95,419)
Past service cost 557,410
-
Net interest 65,414
(5,643)
570,324 (101,062)
35.1.8 Re-measurement recognised in OCI
Loss on obligation
- Financial assumptions 40,659 12,550 Experience adjustment
- Due to actual salary increase -
11,099
- Due to actual withdrawal 94,175
9,261
- Due to other reasons -
14,902
134,834
47,812
Return on plan assets over interest income 27,790
31,006
Total remeasurement recognized in OCI 162,624
78,818
35.1.9 Components of plan assets
Cash and cash equivalents 1,892 5,559
Investment in term deposit receipts (TDR) 803,164 728,072
Shares 20,257 20,261
Non-Government debt securities 59,736 58,407
885,049 812,299
Less: provision against securities (20,000) (20,000)
865,049 792,299
----------- Rupees in '000 ------------
Present value of obligation
Fair value of plan assets
This includes Rs.1.478 million (2018: Rs.15.223 million) payable to outgoing employees.
The negative past service cost is due to the amendment in the gratuity plan as approved by Board of Directors in the meeting held on May 24, 2019. The change in the HR policy has been disclosed in note 6.11.1.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
----------- Rupees in '000 ------------
35.1.5
79
35.1.10 Sensitivity analysis
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined
benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation
calculated with the projected unit credit method at the end of the reporting period) has been applied, as applied when
calculating the gratuity liability recognized within the statement of financial position.
A N N U A L R E P O R T 2 0 1 9
2019 2018
Current liability 457,349 972,179
1% increase in discount rate 426,212 885,860
1% decrease in discount rate 489,528 1,071,939
1 % increase in expected rate of salary increase 463,262 1,075,467
1 % decrease in expected rate of salary increase 449,572 881,570
10% increase in withdrawal rates 457,477 973,363
10% decrease in withdrawal rates 454,257
970,379
1 Year Mortality age set back 458,828
971,092
1 Year Mortality age set forward 452,886
972,667
35.1.11 Expected contribution to be paid to the Fund in the next
financial year -
179,880
35.1.12 Expected charge for the next financial year 22,261
123,496
2019 2018
35.1.13 Maturity profile
Particulars
Year 1 62,029 81,567
Year 2 38,455 47,630
Year 3 35,726 59,627
Year 4 65,928 49,757
Year 5 38,025 102,980
Year 6 to 10 295,360 660,035
Year 11 and above 847,893 4,961,231
35.1.14 Funding policy
Contributions to the Fund are made on the basis of actuarial recommendation.
35.1.15
2019 2018
1.57% 0.50%
-1.50% 3.50%
9.50% 6.17%
8.50% 10.00%
35.2
35.3 DEFINED CONTRIBUTION PLAN - EMPLOYEES' PROVIDENT FUND
General description of the Fund is disclosed in note 6.11.2 to these financial statements. The number of employees covered under the scheme are 1,334 (2018: 1,373). During the year the Bank has contributed Rs. 69.217 million (2018: Rs. 114.140 million) to the Fund.
COMPENSATED ABSENCES
Asset volatility
Changes in TDR yields
During the year the bank discontinued the leave encashment policy by paying off outstanding liability in respect of leave encashment hence no liability is outstanding as at December 31, 2019 (2018: 96.493 million).
------------ Rupees in '000 ------------
Undiscounted Payments
Present Value of Defined
Benefit Obligation
Inflation risk
Life expectancy / withdrawal rate
Significant risk associated
------------ Rupees in '000 ----------
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
80 A N N U A L R E P O R T 2 0 1 9
36
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82 A N N U A L R E P O R T 2 0 1 9
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25
0
1
88
18
8
1
25
-
18
8
9
39
6
37
5
4
38
25
0
3
13
-
12
4
1,5
00
7
37
5
-
2
50
-
-
31
3
9
38
2,5
00
1
,87
7
7
51
68
8
-
1,1
87
7
,00
3
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
Mr.
Sh
ehza
d K
han
Ban
gash
(C
hai
rman
)
Mr.
Sh
akee
l Qad
ir K
han
Mr.
Asa
d M
uh
amm
ad Iq
bal
Mr.
Maq
soo
d Is
mai
l Ah
mad
Tota
l am
ou
nt
pai
d
Mr.
Sh
ehza
d K
han
Ban
gash
(C
hai
rman
)
Mr.
Sh
akee
l Qad
ir K
han
Mr.
Jav
ed A
khta
r
Mr.
Sh
ehya
r A
hm
ed
Mr.
Jav
ed A
khta
r
Mr.
Sh
ehya
r A
hm
ed
Sr.
No
.N
ame
Sr.
No
.N
ame
Mr.
Ras
hid
Ali
Kh
an
Mr.
Asa
d M
uh
amm
ad Iq
bal
Mr.
Maq
soo
d Is
mai
l Ah
mad
To
tal a
mo
un
t p
aid
Mr.
Ras
hid
Ali
Kh
an
Ris
k
man
age
me
nt
com
mit
tee
Tota
l am
ou
nt
pai
d
Me
etin
g Fe
es
and
Allo
wan
ces
Pai
d
20
19
For
Bo
ard
Co
mm
itte
es
For
bo
ard
me
etin
gsA
ud
it
com
mit
tee
HR
&R
C
com
mit
tee
IT S
tee
rin
g
com
mit
tee
Co
mp
lian
ce
com
mit
tee
20
18
For
bo
ard
mee
tin
gsA
ud
it c
om
mit
tee
HR
&R
C
com
mit
tee
Mee
tin
g Fe
es a
nd
Allo
wan
ces
Paid
For
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ard
Co
mm
itte
es
IT s
teer
ing
com
mit
tee
Co
mp
lian
ce
Co
mm
itte
e
Ris
k
man
agem
ent
com
mit
tee
Tota
l am
ou
nt
pai
d
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
83 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
36
.3
Ch
airm
anR
esi
de
nt
me
mb
er
No
n-r
esi
de
nt
me
mb
ers
Ch
airm
anR
esid
ent
mem
ber
No
n-r
esid
ent
mem
ber
-
-
-
50
2
,63
9
1
50
2,1
00
4
,34
0
1,9
80
52
5
1,6
79
45
2
-
-
-
-
-
-
1
57
16
2
-
1
19
-
3
3
2,2
57
4
,50
2
1,9
80
69
4
4,3
18
63
5
1
1
1
2
1
3
b. M
on
thly
rem
un
erat
ion
De
scri
pti
on
c. B
on
us
d. T
rave
llin
g an
d a
cco
mm
od
atio
n
Tota
l am
ou
nt
Tota
l nu
mb
er o
f p
erso
ns
a. M
eeti
ng
fees
an
d a
llow
ance
s
20
18
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
Re
mu
ne
rati
on
pai
d t
o s
har
iah
bo
ard
me
mb
ers
20
19
37
FAIR
VA
LUE
MEA
SUR
EMEN
TS
37
.1Fa
ir v
alu
e o
f fi
nan
cial
ass
ets
The
fair
val
ue
of q
uo
ted
inve
stm
ents
oth
er th
an th
ose
cla
ssif
ied
as
hel
d to
mat
uri
ty is
bas
ed o
n q
uo
ted
mar
ket p
rice
s. T
he
fair
val
ue
of u
nq
uo
ted
eq
uit
y in
vest
men
ts is
det
erm
ined
on
the
bas
is o
f b
reak
-up
val
ue
of
thes
e in
vest
men
ts a
s p
er t
hei
r la
test
ava
ilab
le a
ud
ited
fin
anci
al s
tate
men
ts. T
he
fair
val
ue
of
fixe
d t
erm
loan
s, o
ther
ass
ets,
oth
er li
abili
ties
an
d f
ixed
ter
m
dep
osi
ts c
ann
ot b
e ca
lcu
late
d w
ith
su
ffic
ien
t rel
iab
ility
du
e to
the
abse
nce
of c
urr
ent a
nd
act
ive
mar
ket f
or
thes
e as
sets
an
d li
abili
ties
an
d re
liab
le d
ata
rega
rdin
g m
arke
t rat
es fo
r si
mila
r in
stru
men
ts. T
he
pro
visi
on
for i
mp
airm
ent o
f lo
ans
and
ad
van
ces
has
bee
n c
alcu
late
d in
acc
ord
ance
wit
h th
e B
ank'
s ac
cou
nti
ng
po
licy
as s
tate
d in
no
te 5
.3.
The
mat
uri
ty a
nd
re-p
rici
ng
pro
file
an
d e
ffec
tive
rate
s ar
e st
ated
in n
ote
s 4
2.4
.1 a
nd
42
.2.5
resp
ecti
vely
.
In t
he
op
inio
n o
f th
e m
anag
emen
t, t
he
fair
val
ue
of
the
rem
ain
ing
fin
anci
al a
sset
s an
d li
abili
ties
are
no
t si
gnif
ican
tly
dif
fere
nt
fro
m t
hei
r ca
rryi
ng
valu
es s
ince
ass
ets
and
liab
iliti
es a
re
eith
er s
ho
rt-t
erm
in n
atu
re o
r in
the
case
of c
ust
om
er lo
ans
and
dep
osi
ts, a
re fr
equ
entl
y re
-pri
ced
.
The
Ban
k m
easu
res
fair
val
ues
usi
ng
the
follo
win
g fa
ir v
alu
e h
iera
rch
y th
at re
flec
ts th
e si
gnif
ican
ce o
f th
e in
pu
ts u
sed
in m
akin
g th
e m
easu
rem
ents
:
Leve
l 1: F
air v
alu
e m
easu
rem
ents
usi
ng
qu
ote
d p
rice
s (u
nad
just
ed) i
n a
ctiv
e m
arke
ts fo
r id
enti
cal a
sset
s o
r lia
bili
ties
.
Leve
l 2: F
air v
alu
e m
easu
rem
ents
usi
ng
inp
uts
oth
er th
an q
uo
ted
pri
ces
incl
ud
ed w
ith
in L
evel
1 th
at a
re o
bse
rvab
le fo
r th
e as
sets
or l
iab
ility
, eit
her
dir
ectl
y (i
.e. a
s p
rice
s) o
r in
dir
ectl
y (i
.e.
der
ived
fro
m p
rice
s).
Leve
l 3: F
air v
alu
e m
easu
rem
ents
usi
ng
inp
ut f
or t
he
asse
t or l
iab
ility
that
are
no
t bas
ed o
n o
bse
rvab
le m
arke
t dat
a (i
.e. u
no
bse
rvab
le in
pu
ts).
84 A N N U A L R E P O R T 2 0 1 9
37.2 The table below analyses the financial and non-financial assets carried at fair values, by valuation methods. For financial assets, the Bank essentially carries its investments in debt and equity securities at fair values. Valuation of investments is carried out as per guidelines specified by the SBP. In case of non-financial assets, the Bank has adopted revaluation model (as per IAS 16) in respect of leasehold land.
Level 1 Level 2 Level 3 Total
On balance sheet financial instruments
Financial assets - measured at fair value
Investments
Federal Government Securities -
116,391,361
-
116,391,361
Shares 270,554
-
-
270,554
Term Finance Certificates -
1,376,000
-
1,376,000
-
Financial assets - disclosed but not measured at
fair value
Investments
Federal Government Securities -
24,479,940
-
24,479,940
Shares -
56,258
-
56,258
Non-Government Debt Securities -
4,296,485
-
4,296,485
Associates -
40,504
-
40,504
Off-balance sheet financial instruments - measured
at fair value
Forward purchase of foreign exchange -
9,069,099
-
9,069,099
Forward sale of foreign exchange -
9,957,224
-
9,957,224
Level 1 Level 2 Level 3 Total
On balance sheet financial instruments
Financial assets measured at fair value
Available-for-sale securities
- Federal Government Securities - 63,926,594 - 63,926,594 - Shares in listed companies 156,958 - - 156,958 - Term Finance Certificates (TFCs) -
1,600,000
-
1,600,000
value
Investments
Federal Government Securities -
23,094,895
- 23,094,895
Shares -
56,258
- 56,258
Non-Government Debt Securities -
5,358,030
-
5,358,030
Associates -
40,504
-
40,504
Off-balance sheet financial instruments - measured at
fair value
Forward purchase of foreign exchange -
1,705,102
-
1,705,102
Forward sale of foreign exchange -
1,500,999
-
1,500,999
2019
2018
------------------------------------- Rupees in '000 --------------------------------------
---------------------------------- Rupees in '000 -----------------------------------
The valuation techniques used for above assets are same as disclosed in note 6.3 & 6.4 of these financial statements.
Financial assets - disclosed but not measured at fair
The Bank's policy is to recognize transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the year.
Leased hold land is carried at revalued amount as determined by professional valuer, based on their assessment of market value and has been classified under level-3 as the effect of changes in the unobservable inputs used in the valuation cannot be determined with certainty.
(a) Financial instruments in level 1Financial instruments included in level 1 comprise of investments in listed ordinary shares.
(b) Financial instruments in level 2Financial instruments included in level 2 comprise of Sukuk Bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance certificates, FX options and Forward Exchange Contracts.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
85
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
(c) Financial instruments in level 3
Currently, no financial instruments are classified in level 3.
Valuation techniques and inputs used in determination of fair values within level 1
Fair values of investments in listed equity securities are valued on the basis of closing quoted market prices available at the Pakistan Stock Exchange.
Fully paid-up ordinary shares
Valuation techniques and inputs used in determination of fair values within level 2
Pakistan Investment Bonds / Market Treasury Bills Fair values of Pakistan Investment Bonds and Treasury Bills are derived using the PKRV rates for fixed rate securities and PKFRV rates for floating rate PIB's.(Reuters page).
Government of Pakistan (GoP) - Ijarah Sukuks Fair values of GoP Ijarah Sukuks are derived using the PKISRV rates announced by the Financial Market Association (FMA) through Reuters. These rates denote an average of quotes received from eight different pre-defined / approved dealers / brokers.
Term Finance, Bonds and Sukuk certificates Investments in debt securities (comprising term finance certificates, bonds, Sukuk certificates and any other security issued by a company or a body corporate for the purpose of raising funds in the form of redeemable capital) are valued on the basis of the rates announced by the Mutual Funds Association of Pakistan (MUFAP) in accordance with the methodology prescribed by the Securities and Exchange Commission of Pakistan. In the determination of the rates, the MUFAP takes into account the holding pattern of these securities and categorises these as traded, thinly traded and non-traded securities.
Valuation techniques and inputs used in determination of fair values within level 3
Operating fixed assets (Leasehold land) Leasehold land are revalued on regular basis using professional valuers on the panel of Pakistan Banker's Association. The valuation is based on their assessment of market value of the properties.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
86 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
38 SEGMENT INFORMATION
38.1 Segment details with respect to business activities
Profit and loss
Net mark-up/return/profit 3,014,563 791,016 555,400 556,526 4,917,505
Non mark-up / return / interest income 163,299 866,308 23,437 59,437 1,112,482
Total income 3,177,862 1,657,324 578,837 615,963 6,029,987
Segment direct expenses 1,021,731 2,186,361 183,877 397,799 3,789,768
Total expenses 1,021,731 2,186,361 183,877 397,799 3,789,768
Provisions / (reversals) 41,658 1,206,160 18,362 (1,287,272) (21,092)
Profit before tax 2,114,473 (1,735,197) 376,598 1,505,436 2,261,311
Balance sheet
Cash and bank balances 5,894,936 4,876,397 8,660,762 935,782 20,367,877
Lendings to financial institutions - 13,863,449 - - 13,863,449
Investments 13,546,197 133,364,905 - - 146,911,102
Advances - performing 71,792,054 7,909,726 4,647,170 20,366,624 104,715,574
Advances - non performing 263,510 1,755,876 58,329 2,949,003 5,026,718
Operating fixed assets/intangible assets - - - 3,620,925 3,620,925
Deferred tax assets 885,286 26,109 3,448 116,311 1,031,154
Others 5,964,368 496,990 291,879 4,015,216 10,768,453
Total assets 98,346,351 162,293,452 13,661,588 32,003,861 306,305,252-
Bills payable - - 1,172,155 - 1,172,155
Borrowings - 89,882,597 - 4,773,864 94,656,461
Deposits and other accounts 76,510,380 80,299,466 - 25,357,726 182,167,572
Others 5,925,239 6,218,679 - 1,963,793 14,107,711
Total liabilities 82,435,619 176,400,742 1,172,155 32,095,383 292,103,899
Equity 15,910,732 (14,107,290) 12,489,433 (91,522) 14,201,353
Total equity and liabilities 98,346,351 162,293,452 13,661,588 32,003,861 306,305,252
Contingencies and commitments 14,600,793 31,243,663 207,609 5,684,655 51,736,720
Additions- Operating fixed assets - - - 152,012 152,012
Profit and loss
Net mark-up/return/profit 3,287,594
327,439 216,370 1,307,978 5,139,381
353,550
(1,012,370) 24,283 108,192 (526,345)
Total Income 3,641,144
(684,931) 240,654 1,416,170 4,613,036
Segment direct expenses 2,525,386
715,405 75,981 760,625 4,077,397
Total expenses 2,525,386
715,405 75,981 760,625 4,077,397
Provisions / (reversals) (14,936)
(98,715) 43,149 (100,460) (170,962)
Profit before tax 1,130,694
(1,301,621) 121,524 756,005 706,601
Cash and bank balances 9,051,401
688,021 6,298,606 18,785 16,056,813
Investments -
7,695,642 - - 7,695,642
Lendings to financial institutions 90,491,491
1,518,261 - 2,223,487 94,233,239
Advances - performing 53,927,972
1,864,977 4,212,236 30,348,366 90,353,551
Advances - non performing 181,146
112,391 41,731 4,323,084 4,658,352
Operating fixed assets/intangible assets -
- - 2,295,272 2,295,272
Deferred tax assets 1,640,876
(3,184) 3,448 116,311 1,757,451
Others 3,168,513
89,272 220,290 2,566,587 6,044,663
Total assets 158,461,399
11,965,380 10,776,311 41,891,892 223,094,983
Bills payable -
- 895,126 - 895,126
Borrowings -
30,293,843 - 4,548,271 34,842,114
Deposits and other accounts 128,375,667
6,846,702 1,711,676 34,233,511 171,167,556
Others 3,364,202
179,424 44,856 897,120 4,485,603
Total liabilities 131,739,869
37,319,969 2,651,658 39,678,902 211,390,399
Equity 26,721,530
(25,354,590) 8,124,654 2,212,990 11,704,584
Total equity and liabilities 158,461,399
11,965,379 10,776,312 41,891,892 223,094,983
Contingencies and commitments 18,769,612
3,206,101 2,646,165 4,883,341 29,505,219
Additions- Operating fixed assets -
- - 241,697 241,697
Balance sheet
2019
------------------------------------------------ Rupees in 000 ----------------------------------------------------
2018
-------------------------------------------------------- Rupees in 000 ---------------------------------------------
Non mark-up / return / interest income
Corporate
Finance
Trading and
Sales
Retail
Banking
Commercial
Banking Total
Corporate
Finance
Trading and
Sales
Retail
Banking
Commercial
Banking Total
87 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
38.2 Segment details with respect to geographical locations
Geographical segment analysis
Profit before tax
In Pakistan 2,114,473
(1,735,197)
376,599
1,505,436
2,261,311
Outside Pakistan -
-
-
-
-
2,114,473
(1,735,197)
376,599
1,505,436
2,261,311
Total assets
In Pakistan 98,346,351
162,293,452
13,661,588
32,003,861
306,305,252
Outside Pakistan -
-
-
-
-
98,346,351
162,293,452
13,661,588
32,003,861
306,305,252
Net assets employed
In Pakistan 15,910,732
(14,107,290)
12,489,433
(91,522)
14,201,353
Outside Pakistan -
-
-
-
-
Total equity and liabilities 15,910,732
(14,107,290)
12,489,433
(91,522)
14,201,353
Contingencies and commitments 14,600,793 31,243,663 207,609 5,684,655
51,736,720
Profit before tax
In Pakistan 1,130,694
(1,301,621)
121,524
756,005
706,602
Outside Pakistan -
-
-
-
-
Total Income 1,130,694
(1,301,621)
121,524
756,005
706,602
Total assets
In Pakistan 158,461,399
11,965,380
10,776,311
41,891,892
223,094,983
Outside Pakistan -
-
-
-
-
158,461,399
11,965,380
10,776,311
41,891,892
223,094,983
Net assets employed
In Pakistan 26,721,530
(25,354,590)
8,124,654
2,212,990
11,704,584
Outside Pakistan -
-
-
-
-
26,721,530
(25,354,590)
8,124,654
2,212,990
11,704,584
Contingencies and commitments 18,769,612
3,206,101
2,646,165
4,883,341
29,505,219
39 TRUST ACTIVITIES
2019
------------------------------------------------- Rupees in 000 --------------------------------------------------
2018
The Bank is not engaged in any significant trust activities.
Corporate
Finance
Trading and
Sales
Retail
Banking
Commercial
Banking Total
Corporate
Finance
Trading and
Sales
Retail
Banking
Commercial
Banking Total
------------------------------------------------- Rupees in 000 --------------------------------------------------
88 A N N U A L R E P O R T 2 0 1 9
40
REL
ATE
D P
AR
TY T
RA
NSA
CTI
ON
S
Ad
van
ces
Op
enin
g b
alan
ce-
12
3,5
98
-
-
-
26
0,7
85
-
-
Ad
dit
ion
du
rin
g th
e ye
ar-
39
,85
9
-
-
-
67
,77
1
-
-
Rep
aid
du
rin
g th
e ye
ar-
19
,11
2
-
-
-
13
,89
4
-
-
Tran
sfer
in /
(o
ut)
- n
et-
10
,28
1
-
-
-
(19
1,0
64
)
-
-
Clo
sin
g b
alan
ce-
15
4,6
26
-
-
-
1
23
,59
8
-
-
Pro
visi
on
hel
d-
-
-
-
-
-
-
-
De
po
sits
an
d o
the
r ac
cou
nts
Op
enin
g b
alan
ce-
24
,08
1
30
,06
7
2
,18
5,6
83
-
2
6,7
73
2
1,5
46
1,9
60
,43
8
Rec
eive
d d
uri
ng
the
year
-
1
28
,44
6
39
,56
4
8
45
,04
6
-
1
83
,58
9
3
8,1
36
1,0
79
,46
3
Wit
hd
raw
n d
uri
ng
the
year
-
1
27
,38
9
40
,97
2
6
88
,32
1
-
1
60
,80
8
2
9,7
31
86
0,5
23
Tran
sfer
in /
(o
ut)
- n
et-
(11
7)
-
-
-
(25
,47
3)
1
16
6,3
05
Clo
sin
g b
alan
ce-
25
,02
1
28
,65
9
2
,34
2,4
08
-
2
4,0
81
3
0,0
67
2,1
85
,68
3
Oth
er
liab
iliti
es
Acc
rued
mar
k-u
p-
28
8
1,7
18
58
,71
6
-
7
88
84
2
1,5
24
20
19
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
20
18
Det
ails
of
tran
sact
ion
s w
ith
rel
ated
par
ties
du
rin
g th
e ye
ar, o
ther
th
an t
ho
se w
hic
h h
ave
bee
n d
iscl
ose
d e
lsew
her
e in
th
ese
fin
anci
al s
tate
men
ts a
re a
s fo
llow
s:
The
Ban
kh
asre
late
dp
arty
rela
tio
nsh
ipw
ith
its
maj
ori
tysh
areh
old
ers
(Go
vern
men
to
fK
hyb
erPa
khtu
nkh
wa
and
Ism
ail
Ind
ust
ries
Lim
ited
),as
soci
ates
,d
irec
tors
,
key
man
agem
ent
per
son
nel
, sta
ff r
etir
emen
t b
enef
it p
lan
an
d o
ther
rel
ated
par
ties
.
Ban
kin
gtr
ansa
ctio
ns
wit
hre
late
dp
arti
esar
eca
rrie
do
ut
inth
en
orm
alco
urs
eo
fb
usi
nes
sat
agre
edte
rms.
Co
ntr
ibu
tio
nto
and
accr
ual
sin
resp
ect
of
staf
f
reti
rem
ent
ben
efit
pla
nar
em
ade
inac
cord
ance
wit
hac
tuar
ial
valu
atio
ns.
Rem
un
erat
ion
toth
eex
ecu
tive
s,d
iscl
ose
din
no
te3
6to
thes
efi
nan
cial
stat
emen
tsar
e
det
erm
ined
in a
cco
rdan
ce w
ith
ter
ms
of
thei
r ap
po
intm
ents
.
Dir
ect
ors
Key
man
age
me
nt
pe
rso
nn
el
Ass
oci
ate
E
mp
loye
e
Fun
ds
Dir
ecto
rs
Key
man
agem
ent
per
son
nel
Ass
oci
ate
Em
plo
yee
Fun
ds
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
89 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
Inco
me
Mar
k-u
p /
ret
urn
/ in
tere
st e
arn
ed-
2
,94
9
-
-
-
1,8
09
-
-
Exp
en
se
Mar
k-u
p /
ret
urn
/ in
tere
st e
xpen
sed
-
81
0
2
,94
8
2
26
,91
7
-
82
4
1,2
81
1
34
,64
1
Op
erat
ing
exp
ense
s2
0,4
14
9
4,2
12
-
-
35
,09
7
8
9,7
15
-
-
40
.1
20
18
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
20
19
Go
vern
men
to
fK
hyb
erPa
khtu
nkh
wa
(Go
KP
)h
old
s7
0.2
0%
shar
eho
ldin
gin
the
Ban
kan
dth
eref
ore
enti
ties
wh
ich
are
ow
ned
and
/o
rco
ntr
olle
db
yth
eG
oK
P,o
r
wh
ere
the
Go
KP
may
exer
cise
sign
ific
ant
infl
uen
ce,
are
also
rela
ted
par
ties
of
the
Ban
k.Th
eB
ank
inth
eo
rdin
ary
cou
rse
of
its
bu
sin
ess
ente
rsin
totr
ansa
ctio
nw
ith
vari
ou
sd
epar
tmen
tso
fth
eG
oK
Pan
dit
sre
late
den
titi
esh
ow
ever
,it
isim
pra
ctic
able
tod
iscl
ose
thes
etr
ansa
ctio
ns.
Such
tran
sact
ion
sin
clu
de
dep
osi
tsfr
om
and
pro
visi
on
of
oth
er b
anki
ng
serv
ices
to
su
ch d
epar
tmen
ts a
nd
en
titi
es.
Dir
ect
ors
Key
man
age
me
nt
pe
rso
nn
el
Ass
oci
ate
E
mp
loye
e
Fun
ds
Dir
ecto
rs
Key
man
agem
ent
per
son
nel
Ass
oci
ate
Em
plo
yee
Fun
ds
90 A N N U A L R E P O R T 2 0 1 9
The full disclosures on the CAPITAL ADEQUACY, LEVERAGE RATIO AND LIQUIDITY REQUIREMENTS as per SBP instructions issued from time to time is also placed on Bank's website. Please follow the link https://www.bok.com.pk/downloads for detailed disclosures.
2019 2018
41
Minimum Capital Requirement (MCR):
Paid-up capital (net of losses) 10,002,524 10,002,524
Capital Adequacy Ratio (CAR):
Eligible common equity tier 1 (CET 1) capital 13,204,421 9,587,071 Eligible additional tier 1 (ADT 1) capital - - Total eligible tier 1 capital 13,204,421 9,587,071 Eligible tier 2 capital - 35,851 Total eligible capital (Tier 1 + Tier 2) 13,204,421
9,622,922
Risk Weighted Assets (RWAs):
Credit risk 58,970,352
55,368,559
Market risk 16,711,426
12,766,137
Operational risk 10,642,475
10,259,721
Total 86,324,253
78,394,417
Common equity tier 1 capital adequacy ratio 15.30% 12.23%
Tier 1 capital adequacy ratio 15.30% 12.23%
Total capital adequacy ratio 15.30% 12.28%
CET1 minimum ratio 6.00% 6.00%
ADT-1 minimum ratio 1.50% 1.50%
Tier 1 minimum ratio 7.50% 7.50%
Total capital minimum ratio 10.00% 10.00%
Capital conservation buffer (CCB- consisting of CET1 only) 2.50% 1.90%
Total capital plus CCB 12.50% 11.90%
Leverage Ratio (LR):
Eligible tier-1 capital 13,204,421
9,587,071 Total exposures 305,453,822
263,853,741
Leverage ratio 4.32% 3.63%
Liquidity Coverage Ratio (LCR):
Total high quality liquid assets 60,536,707
60,817,347
Total net cash outflow 48,785,693
55,418,370
Liquidity coverage ratio 124.09% 109.74%
Net Stable Funding Ratio (NSFR):
Total available stable funding 132,085,894 116,343,436
Total required stable funding 111,614,902 97,573,326
Net stable funding ratio 118.34% 119.24%
41.1
------------- Rupees in '000 -------------
National minimum capital requirements prescribed by SBP
CAPITAL ADEQUACY, LEVERAGE RATIO AND LIQUIDITY
REQUIREMENTS
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
91
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
42 RISK MANAGEMENT
Banks are in business of taking risk in order to earn acceptable required return. Risk management in Bank of Khyber is performed at each level of authority and is managed through an ongoing process of identification, measurement and monitoring subject to risk limits and other controls.
The Bank is exposed to credit, market, operational and liquidity risks. For mitigation of these risks, Risk Management Group (RMG) is equipped with dedicated resources having expertise in various areas of risk. Credit Risk management department is responsible to assess credit risk present in a loan proposal and makes its recommendations for rectification/management of various credit risk in a loan proposal.
Enterprise Risk Management Division (ERMD) is responsible for Market and Liquidity Risk policy formulation, procedures development, controlling of market and liquidity related various risks including monitoring of exposures against limits and assessment of risks in new businesses. ERMD ensures that the bank’s position in Money Market, Foreign exchange, and Capital Market transactions remain within the assigned internal and regulatory limits. Market and liquidity Early Warning Indicators (EWI) and Portfolio-wise Management Action Triggers (MAT) are duly reported to the management. Similarly ERMD also assess the impact of operational risk of loss due to an event or action causing failure of technology, process infrastructure, personnel and other external events. Their impact is assessed through Risk Control Self Assessment (RCSAs), Key risk indicators (KRIs) and loss data base. Owing to growing importance of regulatory reporting, a Basel II and Regulatory reporting department has also been established to keep the Bank in line with various regulatory requirements, and Enterprise Risk Management Division works in liaison with it for capital adequacy ratio, Liquidity Coverage Ratio, and Net Stable Funding Ratio calculation and reporting to SBP.
The Bank is fully aware that risk management could not be solely performed by a dedicated centralized department but instead to have an effective risk management framework, Front line staff of the Bank, senior management and Board oversight is needed to aid in Implementation of the framework. The Bank has a dedicated Management Risk Management Committee (MRMC) and Board Risk Management Committee (BRMC). BRMC is also responsible to review the extent of design and adequacy of risk management framework. The Bank also has a management level Risk Management Committee which is responsible for the smooth implementation of risk management framework within the entire Bank.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
92
The Bank of KhyberN
OTE
S TO
TH
E FI
NA
NC
IAL
STA
TEM
ENTS
FO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
42
.1C
red
it r
isk
C
red
it r
isk
is t
he
po
ten
�al
th
at t
he
cou
nte
rpar
ty w
ill c
ause
a fi
nan
cial
loss
to
th
e B
ank
du
e to
its
inab
ility
or
un
will
ingn
ess
to m
eet
its
con
trac
tual
ob
liga�
on
s. T
he
Ban
k is
exp
ose
d t
o c
red
it r
isk
thro
ugh
its
len
din
g an
d in
vest
men
t ac�
vi�
es a
s w
ell a
s fr
om
co
n�
nge
nt l
iab
ili�
es.
The
mai
n o
bje
c�ve
of t
he
cred
it r
isk
man
agem
ent
pro
cess
is t
o id
en�
fy, a
sses
s, m
easu
re a
nd
mo
nit
or
cred
it r
isk
in a
ll th
e fi
nan
cial
exp
osu
re o
f th
e B
ank.
Th
e B
ank
has
est
ablis
hed
a c
red
it r
isk
man
agem
ent
fram
ewo
rk to
man
age
cred
it ri
sk o
n re
la�
on
ship
as
wel
l as
at p
or�
olio
leve
l.
Cre
dit
risk
man
agem
ent i
s go
vern
ed b
y th
e B
oar
d R
isk
Man
agem
ent C
om
mi�
ee a
nd
oth
er in
stru
c�o
ns
and
gu
idel
ines
ou
tlin
e b
y SB
P. T
he
Ban
k a�
emp
ts to
co
ntr
ol r
isk
by
mo
nit
ori
ng
cred
it e
xpo
sure
, lim
i�n
g n
on
per
form
ing
cou
nte
r p
ar�
es a
nd
co
n�
nu
ally
ass
essi
ng
the
cred
it w
ort
hin
ess
of t
he
bo
rro
wer
s. T
he
Ban
k m
anag
es li
mit
s an
d c
on
tro
ls c
on
cen
tra�
on
s o
f cre
dit
ris
k to
ind
ivid
ual
co
un
terp
ar�
es a
nd
gro
up
s an
d to
ind
ust
ries
, wh
ere
app
licab
le.
The
Ban
k h
as a
do
pte
d s
tan
dar
diz
ed a
pp
roac
h t
o m
easu
re c
red
it r
isk
regu
lato
ry c
apit
al c
har
ge in
co
mp
lian
ce w
ith
Bas
el-I
I req
uir
emen
ts. T
he
app
roac
h r
elie
s u
po
n t
he
asse
ssm
ent
of
exte
rnal
cre
dit
ra�
ng
agen
cies
. Th
e B
ank
is in
the
pro
cess
of c
on
�n
uo
usl
y im
pro
vin
g th
e sy
stem
an
d b
rin
gin
g it
in li
ne
wit
h th
e B
asel
fram
ewo
rk re
qu
irem
ents
.
The
Ban
k h
as d
edic
ated
Cu
sto
mer
Ris
k R
a�n
g (C
RR
) an
d F
acili
ty R
isk
Ra�
ng
(FR
R)
Mo
del
s fo
r va
rio
us
cust
om
er t
ypes
. Th
e m
od
els
aim
to
mea
sure
cre
dit
ris
k p
ose
d b
y a
cou
nte
rpar
ty a
s w
ell f
acili
ty it
has
ap
plie
d f
or
by
asse
ssin
g va
rio
us
qu
alit
a�ve
an
d q
uan
�ta
�ve
a�
rib
ute
s ke
epin
g in
vie
w b
est
ind
ust
ry p
rac�
ces
in t
he
fiel
d o
f cr
edit
ris
k m
anag
emen
t. E
ach
ris
k ra
�n
g m
od
el c
ove
rs a
ded
icat
ed p
roce
du
ral
guid
elin
es fo
r it
s co
nsi
sten
t im
ple
men
ta�
on
wit
hin
the
Ban
k. T
he
Ban
k h
as a
lso
ap
pro
ved
a d
edic
ated
ris
k ra
�n
g p
olic
y p
rovi
din
g b
road
po
licy
guid
elin
es fo
r m
inim
um
acc
epta
ble
ris
k fo
r va
rio
us
bo
rro
wer
s o
f th
e B
ank.
42
.1.1
Len
din
gs t
o fi
nan
cial
ins�
tu�
on
s
Cre
dit
ris
k b
y p
ub
lic/p
riva
te s
ect
or
20
19
20
18
20
19
20
18
20
19
20
18
Pu
blic
/ G
ove
rnm
ent
2,8
31
,34
7-
-
-
-
-
Pri
vate
11
,27
1,0
46
7,9
34
,58
6
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
14
,10
2,3
93
7,9
34
,58
6
23
8,9
44
23
8,9
44
23
8,9
44
23
8,9
44
42
.1.2
Inve
stm
en
t in
de
bt
secu
ri�
es
Cre
dit
ris
k b
y in
du
stry
se
cto
r
No
te
20
19
20
18
20
19
20
18
20
19
20
18
Tex�
le4
4,6
58
44
,65
8
44
,65
8
44
,65
8
44
,65
8
44
,65
8
Pow
er (
elec
tric
ity)
, gas
, wat
er, s
anit
ary
3,3
63
,87
13
,93
5,1
14
-
-
-
-
Fin
anci
al2
,16
5,4
15
2,8
15
,38
4
40
,38
4
4
0,3
84
40
,38
4
4
0,3
84
Oth
ers
28
0,5
40
43
8,7
53
90
,95
7
1
90
,83
7
9
0,9
57
19
0,8
37
5,8
54
,48
47
,23
3,9
09
1
75
,99
9
27
5,8
79
17
5,9
99
2
75
,87
9
Cre
dit
ris
k b
y p
ub
lic /
pri
vate
se
cto
r
Pu
blic
/ G
ove
rnm
ent
14
3,3
50
,07
39
1,5
45
,88
0
-
-
-
-
Pri
vate
5,8
54
,48
47
,23
3,9
09
1
75
,99
9
2
75
,87
9
17
5,9
99
2
75
,87
9
14
9,2
04
,55
79
8,7
79
,78
9
17
5,9
99
27
5,8
79
17
5,9
99
27
5,8
79
Gro
ss le
nd
ings
N
on
-pe
rfo
rmin
g le
nd
ings
P
rovi
sio
n h
eld
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
Gro
ss in
vest
me
nts
N
on
-pe
rfo
rmin
g in
vest
me
nts
P
rovi
sio
n h
eld
93
The Bank of KhyberN
OTE
S TO
TH
E FI
NA
NC
IAL
STA
TEM
ENTS
FO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
42
.1.3
Ad
van
ces
Cre
dit
ris
k b
y in
du
stry
se
cto
r
20
19
20
18
20
19
20
18
20
19
20
18
Agr
icu
ltu
re, f
ore
stry
, hu
n�
ng
and
fish
ing
3,2
70
,39
0
3,1
96
,82
8
23
9,2
46
22
9,2
98
21
1,4
97
21
5,5
14
Min
ing
and
qu
arry
ing
43
,15
1
56
,72
1
-
-
-
-
Tex�
le9
,57
5,9
94
12
,88
1,4
65
55
5,5
90
55
5,5
90
55
5,5
90
55
5,5
90
Ch
emic
al a
nd
ph
arm
aceu
�ca
ls1
,33
0,9
07
1,6
48
,06
7
89
,09
3
12
5,1
99
89
,09
3
12
5,1
99
Petr
o c
hem
ical
82
7,5
65
1,0
93
,00
9
19
,72
9
22
,62
7
7,1
79
3,0
00
Au
to lo
ans
66
5,5
93
60
6,1
65
3,2
47
3,3
02
3,2
47
2,3
50
Cem
ent
4,6
49
,50
5
3,4
32
,79
2
2,5
32
2,6
47
2,5
32
2,6
47
Suga
r2
,25
9,1
99
2,8
37
,30
9
84
9,1
99
65
7,6
99
84
8,3
51
65
0,4
76
Engi
nee
rin
g9
29
92
9
92
9
92
9
92
9
92
9
Foo
twea
r an
d le
ath
er g
arm
ents
12
0,4
43
11
0,1
22
10
6,7
04
10
6,7
04
10
6,7
04
10
6,7
04
CN
G /
gas
sta
�o
ns
10
6,5
09
10
5,9
22
27
,05
6
30
,79
7
19
,90
4
27
,54
9
Au
tom
ob
ile a
nd
tra
nsp
ort
a�o
n e
qu
ipm
ent
1,0
44
,48
1
1,0
38
,84
1
26
8,4
49
29
2,9
89
19
2,1
51
19
8,6
00
Trad
e3
,54
8,0
78
3
,42
4,0
08
4
93
,06
8
3
48
,55
5
26
0,3
38
2
64
,02
9
Co
nst
ruc�
on
1,8
70
,17
7
1,4
64
,83
4
21
5,1
06
19
2,2
71
18
7,6
75
1
90
,58
5
Co
mm
un
ica�
on
71
,19
1
7
6,4
27
67
,19
1
67
,19
1
6
7,1
91
6
7,1
91
Gh
ee a
nd
co
oki
ng
oil
73
7,5
47
64
5,6
49
43
,16
9
43
,16
9
4
3,1
69
4
3,1
69
Foo
d a
nd
bev
erag
es1
,57
9,4
51
2
,04
0,1
57
6
09
,84
8
5
90
,34
8
5
53
,46
1
53
8,8
52
Pow
er (
elec
tric
ity)
, gas
, wat
er, s
anit
ary
98
,43
1
6
35
,26
8
1
7,8
40
1
7,8
40
17
,84
0
14
,92
5
Fin
anci
al3
53
,28
9
6
87
,04
3
1
60
,21
6
1
60
,21
6
1
60
,21
5
16
0,2
16
Serv
ices
1,8
03
,27
2
1
,89
5,5
81
9
2,0
83
1
11
,46
7
36
,73
0
3
2,8
30
Met
al p
rod
uct
s4
,28
6,7
56
3,2
42
,61
7
18
7,0
10
24
,58
3
14
0,5
41
24
,58
3
Ind
ivid
ual
s /
per
son
al2
,34
6,8
86
2,7
07
,03
9
50
,31
2
53
,88
9
45
,31
2
48
,77
3
Mis
cella
neo
us
man
ufa
ctu
rin
g5
,30
7,8
23
4,1
93
,95
6
65
8,5
51
82
3,4
85
39
8,0
14
68
3,1
38
Co
mm
od
ity
35
,00
0,0
00
49
,19
5,6
50
-
-
-
-
Oth
ers
33
,07
8,5
85
1,9
50
,57
6
27
0,5
50
19
7,5
57
24
2,5
22
16
2,3
72
11
3,9
76
,15
2
99
,16
6,9
75
5,0
26
,71
8
4,6
58
,35
2
4,1
90
,18
5
4,1
19
,22
1
Cre
dit
ris
k b
y p
ub
lic /
pri
vate
se
cto
r
20
19
20
18
20
19
20
18
20
19
20
18
Pu
blic
/ G
ove
rnm
ent
65
,33
8,8
34
49
,59
5,3
09
-
--
-
Pri
vate
48
,63
7,3
18
49
,57
1,6
66
5,0
26
,71
8
4,6
58
,35
24
,19
0,1
85
4,1
19
,22
1
11
11
3,9
76
,15
2
99
,16
6,9
75
5,0
26
,71
8
4,6
58
,35
24
,19
0,1
85
4,1
19
,22
1
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
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---
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00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
No
n-p
erf
orm
ing
adva
nce
s G
ross
ad
van
ces
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
Ru
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in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
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----
---
Pro
visi
on
he
ld
No
n-p
erf
orm
ing
adva
nce
s G
ross
ad
van
ces
Pro
visi
on
he
ld
No
te
94
The Bank of Khyber
A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
42
.1.4
Co
n�
nge
nci
es
and
co
mm
itm
en
ts
Cre
dit
ris
k b
y in
du
stry
se
cto
r 2
01
92
01
8
Agr
icu
ltu
re, f
ore
stry
, hu
n�
ng
and
fish
ing
55
9,0
27
25
3,7
91
Engi
nee
rin
g5
,03
4
64
4,4
06
Petr
och
emic
als
2,6
70
,29
1
1,8
96
,04
4
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lth
-
1,0
95
,05
5
Tex�
le6
19
,71
5
26
1,8
59
Info
rma�
on
tec
hn
olo
gy-
43
,79
0
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ent
99
9,6
05
12
2,8
10
Au
tom
ob
ile a
nd
tra
nsp
ort
a�o
n e
qu
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42
6,6
94
69
5,9
11
CN
G a
nd
filli
ng
sta�
on
s1
,05
3,3
66
5
98
,88
9
Co
nst
ruc�
on
8,6
90
,72
7
5,3
95
,54
5
Pow
er (
elec
tric
ity)
, gas
, wat
er, s
anit
ary
39
7,4
17
1,8
99
,99
9
Gh
ee a
nd
co
oki
ng
oil
34
8,1
39
97
,32
8
Trad
ing
and
sal
es5
47
,86
3
3,4
26
,19
2
Serv
ices
31
6,2
66
2
16
,01
6
Oth
er p
riva
te s
ecto
rs-
4
,48
5,8
94
Go
vern
men
t1
,49
6,1
67
1,2
01
,15
6
Oth
ers
3,8
44
,67
5
7
,16
5,5
80
21
,97
4,9
86
29
,50
0,2
65
Cre
dit
ris
k b
y p
ub
lic /
pri
vate
se
cto
r
Pu
blic
/ G
ove
rnm
ent
1,4
96
,16
7
1,2
01
,15
6
Pri
vate
20
,47
8,8
19
28
,29
9,1
09
21
,97
4,9
86
29
,50
0,2
65
42
.1.5
Co
nce
ntr
a�o
n o
f ad
van
ces
20
19
20
18
Fun
ded
71
,37
5,5
83
54
,20
3,2
17
No
n f
un
ded
7,1
62
,34
6
5,8
38
,12
6
Tota
l exp
osu
re7
8,5
37
,92
96
0,0
41
,34
3
Th
e b
ank
top
10
exp
osu
res
on
th
e b
asis
of
tota
l (fu
nd
ed a
nd
no
n-f
un
ded
exp
osu
res)
agg
rega
ted
to
Rs.
78
.53
8 m
illio
n (
20
18
: Rs.
60
,04
1 m
illio
n)
are
as f
ollo
win
g:
The
san
c�o
ned
lim
its
agai
nst
th
ese
top
10
exp
osu
res
aggr
egat
ed t
o R
s. 8
2,7
45
mill
ion
(2
01
8: R
s 6
2,9
71
mill
ion
).
---
----
----
----
---
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'00
0 -
----
----
----
----
---
---
----
----
----
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Ru
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0 -
----
----
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---
The Bank of Khyber
95 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO
THE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
Tota
l fu
nd
ed
cla
ssifi
ed
th
ere
in
Am
ou
nt
Pro
visi
on
he
ld
Am
ou
nt
Pro
visi
on
hel
d
OA
EM3
1,3
58
-1
0,3
08
-
Sub
stan
dar
d9
6,4
15
3,6
76
12
9,8
17
4,3
61
Do
ub
�u
l 2
20
,46
92
2,5
01
23
9,9
92
45
,85
5
Loss
4
,67
8,4
76
4,1
64
,00
8
4,2
78
,23
5
4,0
69
,00
5
Tota
l5
,02
6,7
18
4,1
90
,18
5
4,6
58
,35
2
4,1
19
,22
1
42
.1.6
Ad
van
ces
- P
rovi
nce
/ R
egi
on
-wis
e d
isb
urs
em
en
t an
d u
�liz
a�o
n
Pro
vin
ce /
Re
gio
n
Pu
nja
b6
4,8
42
,76
6
63
,23
0,6
06
50
0,0
00
62
,16
0
-
1,0
50
,00
0
-
Sin
dh
11
,37
2,2
46
73
3,5
88
10
,46
1,0
18
-
-
17
7,6
40
-
KP
K in
clu
din
g FA
TA2
1,4
51
,97
5
-
-
21
,00
1,9
75
-
45
0,0
00
-
Bal
och
ista
n2
4,8
15
-
-
-
24
,81
5
-
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Isla
mab
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2,2
64
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7
-
-
18
,95
7,0
79
-
13
,30
7,3
38
-
AJK
incl
ud
ing
Gilg
it-B
al�
stan
32
7,2
28
-
-
-
-
-
32
7,2
28
Tota
l 1
30
,28
3,4
47
63
,96
4,1
94
10
,96
1,0
18
40
,02
1,2
14
24
,81
5
14
,98
4,9
78
32
7,2
28
Pro
vin
ce /
Re
gio
n
Pu
nja
b6
0,4
96
,28
15
9,6
11
,69
08
84
,59
0-
--
-
Sin
dh
23
,48
8,4
68
95
0,0
00
22
,53
8,4
68
--
--
KP
K in
clu
din
g FA
TA4
1,3
30
,82
95
62
,16
0-
21
,80
1,6
38
-1
8,9
67
,03
1-
Bal
och
ista
n7
4,1
70
--
-7
4,1
70
--
Isla
mab
ad5
5,4
62
,12
21
,05
0,0
00
17
7,6
40
1,7
50
,00
0-
52
,48
4,4
82
-
AJK
incl
ud
ing
Gilg
it-B
al�
stan
28
3,2
67
--
--
-2
83
,26
7
Tota
l 1
81
,13
5,1
37
62
,17
3,8
50
23
,60
0,6
98
23
,55
1,6
38
74
,17
07
1,4
51
,51
32
83
,26
7
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
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in '0
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---
----
----
----
----
----
----
----
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----
----
----
----
----
----
----
----
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20
18
U�
liza�
on
Dis
bu
rse
me
nts
Pu
nja
bSi
nd
h K
PK
U�
liza�
on
---
----
----
----
----
----
----
----
----
----
----
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Ru
pe
es
in 0
00
---
----
----
----
----
----
----
----
----
----
----
---
20
19
20
18
Bal
och
ista
nIs
lam
abad
AJK
incl
ud
ing
Gilg
it-B
al�
stan
20
19
Isla
mab
ad A
JK in
clu
din
g
Gilg
it-B
al�
stan
Dis
bu
rsem
ents
P
un
jab
Sin
dh
KP
K
Bal
och
ista
n
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
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Ru
pe
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in '0
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---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
The Bank of Khyber
96
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
42
.2
Mar
ket r
isk
It
is t
he
risk
th
at t
he
valu
e o
f th
e o
n a
nd
off
-bal
ance
sh
eet
po
si�
on
s o
f th
e B
ank
will
be
adve
rsel
y aff
ecte
d b
y m
ove
men
ts in
mar
ket
rate
s o
r p
rice
s su
ch a
s in
tere
st r
ates
, eq
uit
y p
rice
s an
d/o
r co
mm
od
ity
pri
ces
resu
l�n
g in
a lo
ss o
f ea
rnin
gs, a
nd
cap
ital
. Mar
ket
risk
s ar
ise
gen
eral
ly fr
om
tra
din
g ac
�vi
�es
, op
en fo
reig
n c
urr
ency
po
si�
on
s, h
old
ing
com
mo
n e
qu
ity,
an
d
oth
er p
rod
uct
s. A
ll su
ch in
stru
men
ts a
nd
tran
sac�
on
s ar
e ex
po
sed
to g
ener
al a
nd
sp
ecifi
c m
arke
t mo
vem
ents
.
Th
e B
ank’
s M
arke
t Ris
k M
anag
emen
t str
uct
ure
co
nsi
sts
of B
RM
C fo
r B
oar
d o
vers
igh
t, M
RM
C a
nd
Ass
et a
nd
Lia
bili
�es
Co
mm
i�ee
(ALC
O) a
t th
e se
nio
r m
anag
emen
t lev
el a
nd
ded
icat
ed
Mar
ket
and
Liq
uid
ity
Ris
k M
anag
emen
t D
epar
tmen
t r
epo
r�n
g d
irec
tly
to H
ead
En
terp
rise
Ris
k M
anag
emen
t D
ivis
ion
. En
terp
rise
Ris
k M
anag
emen
t D
ivis
ion
is r
esp
on
sib
le fo
r p
olic
y fo
rmu
la�
on
, pro
ced
ure
s d
evel
op
men
t, c
on
tro
llin
g o
f m
arke
t ri
sks
incl
ud
ing
mo
nit
ori
ng
of
exp
osu
res
agai
nst
lim
its
and
ass
essm
ent
of
risk
in n
ew b
usi
nes
ses.
Mar
ket
risk
au
tho
rity
, in
clu
din
g b
oth
ap
pro
val o
f mar
ket r
isk
limit
s an
d a
pp
rova
l of m
arke
t ris
ks is
ves
ted
in B
RM
C a
nd
ALC
O.
Th
e B
ank
seek
s to
mi�
gate
mar
ket
risk
by
emp
loyi
ng
stra
tegi
es t
hat
co
rrel
ate
pri
ce, r
ate
and
sp
read
mo
vem
ents
of
its
earn
ing
asse
ts, l
iab
ili�
es a
nd
tra
din
g ac
�vi
�es
. Var
iou
s b
road
lim
its
are
set
and
rec
om
men
ded
by
ALC
O t
o B
RM
C a
pp
rova
l fo
r p
rop
er m
anag
emen
t o
f Mar
ket
risk
. ER
MD
has
dev
elo
ped
a d
edic
ated
Fin
anci
al In
s�tu
�o
ns
(FIs
) mo
del
for
inte
r-b
ank
lines
se�
ng
to d
iffer
ent
fin
anci
al in
s�tu
�o
ns.
Th
e in
tra-
day
po
si�
on
s ar
e m
anag
ed b
y tr
easu
ry d
ivis
ion
th
rou
gh M
anag
emen
t A
c�o
n T
rigg
er(M
AT)
/ D
eale
rs li
mit
s. S
tres
s te
s�n
g is
ca
rrie
d o
ut f
or b
oth
Ban
kin
g an
d tr
adin
g b
oo
ks a
s p
er S
BP
gu
idel
ines
.
Th
e B
ank
has
ad
op
ted
sta
nd
ard
ized
ap
pro
ach
to
mea
sure
mar
ket
risk
reg
ula
tory
ch
arge
in c
om
plia
nce
wit
h B
asel
II a
nd
III r
equ
irem
ents
. ER
MD
is p
rep
arin
g st
ress
tes
�n
g re
po
rt a
nd
m
arke
t ris
k ca
pit
al c
har
ge o
n q
uar
terl
y b
asis
.
42
.2.1
Bal
ance
sh
eet
sp
lit b
y tr
adin
g an
d b
anki
ng
bo
oks
Ban
kin
g b
oo
k
Tra
din
g b
oo
k
To
tal
Ban
kin
g b
oo
k
Tra
din
g b
oo
k
To
tal
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
12
,13
7,8
05
-
12
,13
7,8
05
12
,35
1,4
53
-
12
,35
1,4
53
Bal
ance
s w
ith
oth
er b
anks
8,2
30
,07
2
-
8,2
30
,07
2
3,7
05
,36
0
-
3,7
05
,36
0
Len
din
gs t
o fi
nan
cial
ins�
tu�
on
s1
3,8
63
,44
9
-
13
,86
3,4
49
7,6
95
,64
2
-
7,6
95
,64
2
Inve
stm
ents
18
,09
1,2
29
12
8,8
19
,87
3
1
46
,91
1,1
02
2
3,0
94
,89
5
71
,13
8,3
44
9
4,2
33
,23
9
Ad
van
ces
10
9,7
42
,29
2
-
10
9,7
42
,29
2
95
,01
1,9
03
-
95
,01
1,9
03
Fixe
d a
sset
s3
,33
4,6
70
-
3,3
34
,67
0
2
,21
6,4
22
-
2
,21
6,4
22
Inta
ngi
ble
ass
ets
28
6,2
55
-
2
86
,25
5
78
,85
0
-
7
8,8
50
Def
erre
d t
ax a
sset
s1
,03
1,1
54
-
1,0
31
,15
4
1
,75
7,4
51
-
1
,75
7,4
51
Oth
er a
sset
s1
0,7
68
,45
3
-
10
,76
8,4
53
6,0
44
,66
3
-
6,0
44
,66
3
17
7,4
85
,37
9
12
8,8
19
,87
3
30
6,3
05
,25
2
15
1,9
56
,63
9
7
1,1
38
,34
4
22
3,0
94
,98
3
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
20
19
20
18
42
.2.2
Fo
reig
n e
xch
ange
risk
Fo
reig
n e
xch
ange
ris
k /
curr
ency
ris
k is
defi
ned
as
risk
of
loss
to
ear
nin
gs a
nd
cap
ital
ari
sin
g fr
om
ad
vers
e m
ove
men
ts in
cu
rren
cy e
xch
ange
rat
es. T
he
Ban
k u
nd
erta
kes
curr
ency
ris
k m
ost
ly o
r su
pp
ort
s it
s tr
ade
serv
ices
an
d m
ain
tain
s o
vera
ll fo
reig
n e
xch
ange
risk
po
si�
on
s to
the
exte
nt o
f sta
tuto
ry fo
reig
n e
xch
ange
exp
osu
re li
mit
pre
scri
bed
by
SBP.
Ex
po
sure
lim
its
such
as
cou
nte
rpar
ty, g
ap c
urr
ency
-wis
e n
et o
pen
po
si�
on
, po
r�o
lio-w
ise
man
agem
ent
ac�
on
tri
gger
s, d
eale
r an
d p
rod
uct
lim
its
are
also
in p
lace
in a
cco
rdan
ce w
ith
th
e B
ank’
s ap
pro
ved
po
licie
s to
lim
it r
isk
and
co
nce
ntr
a�o
n t
o t
he
acce
pta
ble
to
lera
nce
leve
ls. A
LCO
is r
egu
larl
y in
form
ed t
hro
ugh
rep
ort
s is
sued
on
reg
ula
r fr
equ
enci
es fo
r re
qu
ired
m
on
ito
rin
g. H
edgi
ng
stra
tegi
es a
nd
mar
k-to
-mar
ket v
alu
a�o
ns
are
use
d to
mi�
gate
exc
han
ge ri
sk re
sul�
ng
fro
m o
pen
po
si�
on
s, w
her
e re
qu
ired
.
The Bank of Khyber
97
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
Un
ited
Sta
tes
Do
llar
1,5
85
,60
1
50
5,0
45
14
,14
2,0
60
15
,22
2,6
16
95
9,5
15
99
3,6
59
7
,27
2,7
16
7,2
38
,57
2
Gre
at B
rita
in P
ou
nd
Ste
rlin
g6
4,2
48
81
,76
9
9,5
90
(7,9
30
)
76
,21
0
10
5,1
09
10
4,4
90
75
,59
1
Jap
anes
e Ye
n1
75
-
11
,05
1
11
,22
5
56
1
-
1,6
23
2,1
84
Euro
12
3,7
29
22
6,1
81
51
9,5
75
41
7,1
22
89
,22
2
14
7,2
86
68
8,2
52
63
0,1
89
Oth
er c
urr
enci
es6
9,2
36
10
1,8
66
50
,81
1
18
,18
1
49
,53
3
93
,69
5
2
23
,84
9
17
9,6
86
1,8
42
,98
9
91
4,8
61
14
,73
3,0
87
15
,66
1,2
14
1,1
75
,04
1
1,3
39
,74
9
8,2
90
,93
0
8,1
26
,22
2
Ban
kin
g b
oo
k T
rad
ing
bo
ok
Ban
kin
g b
oo
k T
rad
ing
bo
ok
Imp
act
of
1%
ch
ange
in f
ore
ign
exc
han
ge r
ate
s o
n:
-
9
46
-
3
0
-
-
-
-
42
.2.3
Equ
ity
po
si�
on
ris
k
Ban
kin
g b
oo
k T
rad
ing
bo
ok
Ban
kin
g b
oo
k T
rad
ing
bo
ok
Imp
act
of
5%
ch
ange
in e
qu
ity
pri
ces
on
:
-7
75
--
5,1
87
7,5
66
4,6
75
3,1
74
Net
fo
reig
n
curr
ency
exp
osu
re
Fo
reig
n
curr
ency
asse
ts
Fo
reig
n
curr
ency
liab
ili�
es
Fo
reig
n
curr
en
cy
liab
ili�
es
- O
ther
co
mp
reh
ensi
ve in
com
e
20
19
20
18
---
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
---
It is
th
e ri
sk o
f lo
ss t
o e
arn
ing
or
cap
ital
as
a re
sult
fro
m u
nfa
vou
rab
le fl
uct
ua�
on
s in
pri
ces
of
shar
es in
wh
ich
th
e B
ank
carr
ies
lon
g an
d /
or
sho
rt p
osi
�o
ns,
in it
s tr
adin
g b
oo
k.
ALC
O(A
sset
Liab
ility
Co
mm
i�ee
)is
resp
on
sib
lefo
rm
akin
gin
vest
men
td
ecis
ion
sin
the
cap
ital
mar
ket
and
se�
ng
limit
sas
per
BR
MC
app
rove
dcr
iter
iaas
per
Ban
k's
Bo
Dap
pro
ved
mar
ket
risk
man
agem
ent
po
licy.
Por�
olio
,se
cto
ran
dsc
rip
wis
elim
its
are
assi
gned
by
the
ALC
Oto
safe
guar
dag
ain
stco
nce
ntr
a�o
nri
skan
dth
ese
limit
sar
ere
view
edan
dre
vise
dp
erio
dic
ally
alo
ng
wit
hre
sult
so
fd
iffer
ent
stre
sste
sts.
The
trea
sury
div
isio
nen
sure
sco
mp
lian
ceo
fco
nce
ntr
a�o
nlim
its
set
by
ALC
O.
Lim
itb
reac
hes
ifan
yar
ep
rom
ptl
yre
po
rted
toA
LCO
for
its
ra�
fica
�o
nan
d
BR
MC
fo
r th
eir
info
rma�
on
.
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
---
20
19
20
18
- P
rofi
t an
d lo
ss a
cco
un
t
- O
ther
co
mp
reh
ensi
ve in
com
e
- P
rofi
t an
d lo
ss a
cco
un
t
Fo
reig
n
curr
en
cy
asse
ts
20
19
20
18
Net
fo
reig
n
curr
en
cy
exp
osu
re
Off
-bal
ance
shee
t it
ems
Off
-bal
ance
she
et it
em
s
---
----
----
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
---
The Bank of Khyber
98
NO
TES
TO
THE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
A N N U A L R E P O R T 2 0 1 9
42
.2.4
Y
ield
/ in
tere
st ra
te ri
sk in
the
ban
kin
g b
oo
k (I
RR
BB
)-B
ase
l II S
pe
cifi
c
Yi
eld
/ In
tere
st r
ate
sen
si�
vity
po
si�
on
for
on
-bal
ance
sh
eet
inst
rum
ents
is b
ased
on
th
e ea
rlie
r o
f co
ntr
actu
al r
e-p
rici
ng
or
mat
uri
ty d
ate
and
for
off
-bal
ance
sh
eet
inst
rum
ents
is b
ased
on
se�
lem
ent
dat
e. T
his
al
so re
fers
to th
e n
on
-tra
din
g m
arke
t ris
k. B
oK
has
ad
op
ted
sim
ple
GA
P a
nal
ysis
met
ho
d to
exe
cute
this
an
alys
is to
es�
mat
e th
e im
pac
t on
cap
ital
by
an a
ssu
med
ch
ange
(dec
line
by
1 b
asis
po
int)
in in
tere
st ra
tes
to y
ield
an
ap
pro
xim
a�o
n o
f th
e ch
ange
in n
et in
tere
st in
com
e th
at w
ou
ld re
sult
fro
m s
uch
an
inte
rest
rate
. mo
vem
ent.
- A
ll as
sets
an
d li
abili
�es
acr
oss
the
Yiel
d in
tere
st ra
te r
isk
sen
si�
ve G
AP
s ar
e as
sum
ed to
be
in u
niq
ue
clas
sifi
ca�
on
sin
ce th
e al
l ris
k se
nsi
�ve
ass
ets
and
liab
ili�
es a
re c
on
sid
ered
to b
e aff
ecte
d th
rou
gh c
han
ge in
yi
eld
cu
rve.
M
ajo
r so
urc
es
of i
nte
rest
rate
risk
are
:
i)
D
iffer
ence
s b
etw
een
the
�m
ing
of r
ate
chan
ges
and
the
�m
ing
of c
ash
flo
ws
(re-
pri
cin
g ri
sk);
ii)
C
han
gin
g ra
te re
la�
on
ship
s am
on
g d
iffer
ent y
ield
cu
rves
aff
ec�
ng
ban
k ac
�vi
�es
(bas
is ri
sk);
iii
) C
han
gin
g ra
te re
la�
on
ship
s ac
ross
the
ran
ge o
f mat
uri
�es
(yie
ld c
urv
e ri
sk);
an
d
iv)
In
tere
st-r
elat
ed o
p�
on
s em
bed
ded
in b
ank
pro
du
cts
(op
�o
ns
risk
).
Imp
act
of
1%
ch
ange
in in
tere
st r
ate
s o
n:
- P
rofi
t an
d lo
ss a
cco
un
t
- O
ther
co
mp
reh
ensi
ve in
com
e
42
.2.5
M
ism
atch
of
inte
rest
rat
e s
en
si�
ve a
sset
s an
d li
abili
�e
s
On
-bal
ance
sh
ee
t fi
nan
cial
inst
rum
en
ts
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
Bal
ance
s w
ith
oth
er b
anks
Len
din
g to
fin
anci
al in
s�tu
�o
ns
Inve
stm
ents
Ad
van
ces
Oth
er a
sset
s
Liab
ili�
es
Bill
s p
ayab
le
Bo
rro
win
gs
Dep
osi
ts a
nd
oth
er a
cco
un
ts
Oth
er li
abili
�es
On
-bal
ance
sh
ee
t ga
p
Off
-bal
ance
sh
ee
t fi
nan
cial
inst
rum
en
ts
Co
mm
itm
en
ts in
re
spe
ct o
f:
- fo
rwar
d f
ore
ign
exc
han
ge c
on
trac
ts p
urc
has
es
Off
-bal
ance
sh
ee
t ga
p
Tota
l yie
ld/i
nte
rest
ris
k se
nsi
�vi
ty g
ap
Cu
mu
la�
ve y
ield
/ in
tere
st r
isk
sen
si�
vity
gap
- fo
rwar
d f
ore
ign
exc
han
ge c
on
trac
ts s
ales
Ban
kin
g b
oo
kTr
adin
g b
oo
kB
anki
ng
bo
ok
Trad
ing
bo
ok
--
--
4,8
28
,08
8-
4,3
46
,41
4-
---
----
----
----
----
----
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
---
20
19
20
18
12
,13
7,8
05
3,1
06
,43
4
-
-
-
--
--
-9
,03
1,3
71
8,2
30
,07
2
4,8
76
,39
7
-
-
-
--
--
-3
,35
3,6
75
13
,86
3,4
49
11
,03
2,1
02
2,8
31
,34
7
-
-
--
--
--
14
6,9
11
,10
2
10
,92
0,4
86
8,8
65
,20
0
5,2
47
,91
0
47
,32
1,3
77
26
,33
2,4
72
27
,79
4,9
97
12
,18
7,9
28
6,1
29
,41
61
,74
4,0
00
36
7,3
16
10
9,7
42
,29
2
21
,03
7,5
92
38
,02
0,2
78
3,3
76
,28
6
3,0
63
,49
6
1,1
88
,83
62
0,7
37
,25
91
2,9
56
,21
87
,80
9,6
29
1,5
52
,69
7-
10
,76
8,4
53
-
-
-
-
--
--
-1
0,7
68
,45
4
30
1,6
53
,17
3
50
,97
3,0
11
49
,71
6,8
25
8,6
24
,19
6
50
,38
4,8
73
27
,52
1,3
08
48
,53
2,2
56
25
,14
4,1
46
13
,93
9,0
45
3,2
96
,69
72
3,5
20
,81
5
1,1
72
,15
5
-
-
-
-
--
--
-1
,17
2,1
55
94
,65
6,4
61
6
9,7
56
,43
9
1
4,0
60
,41
1
3,6
95
,85
5
3
,03
5,8
06
-
-7
5,9
66
1,5
31
,98
4-
2,5
00
,00
0
18
2,1
67
,57
2
20
,65
5,1
00
16
,06
3,8
70
4
0,5
85
,17
6
4
9,8
95
,17
1
8,6
48
,76
02
51
,09
52
,60
9,4
90
13
7,5
14
-4
3,3
21
,39
6
14
,10
7,7
11
-
-
-
-
--
--
-1
4,1
07
,71
0
29
2,1
03
,89
9
9
0,4
11
,53
9
30
,12
4,2
81
4
4,2
81
,03
1
52
,93
0,9
77
8
,64
8,7
60
25
1,0
95
2,6
85
,45
61
,66
9,4
98
-6
1,1
01
,26
1
9,5
49
,27
4
(39
,43
8,5
28
)
19
,59
2,5
44
(35
,65
6,8
35
)
(2,5
46
,10
4)
18
,87
2,5
48
48
,28
1,1
61
22
,45
8,6
90
12
,26
9,5
47
3,2
96
,69
7(3
7,5
80
,44
6)
9,0
69
,09
9
-
-
-
-
--
--
-9
,06
9,0
99
9,9
57
,22
4
-
-
-
-
--
--
-9
,95
7,2
24
(88
8,1
25
)
-
-
-
-
--
--
-(8
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96
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31
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---
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---
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r 5
to
10
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Mo
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ear
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r 1
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nth
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ose
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o y
ield
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isk
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rum
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ver
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o 3
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nth
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ate
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6)
The Bank of Khyber
99 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
On
-bal
ance
sh
eet
fin
anci
al in
stru
men
ts
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
Bal
ance
s w
ith
oth
er b
anks
Len
din
g to
fin
anci
al in
s�tu
�o
ns
Inve
stm
ents
Ad
van
ces
Oth
er a
sset
s
Liab
ili�
es
Bill
s p
ayab
le
Bo
rro
win
gs
Dep
osi
ts a
nd
oth
er a
cco
un
ts
Oth
er li
abili
�es
On
-bal
ance
sh
eet
gap
Off
-bal
ance
sh
eet
fin
anci
al in
stru
men
ts
Co
mm
itm
ents
in r
esp
ect
of:
- fo
rwar
d fo
reig
n e
xch
ange
co
ntr
acts
sal
es
Off
-bal
ance
sh
eet
gap
Tota
l Yie
ld /
Inte
rest
Ris
k Se
nsi
�vi
ty G
ap
Ove
r 1
Ove
r 3
Ove
r 6
Ove
r 1
Ove
r 2
Ove
r 3
Ove
r 5
to 3
to 6
Mo
nth
s to
1to
2to
3
to 5
to 1
0
Mo
nth
sM
on
ths
Year
Year
sYe
ars
Year
sYe
ars
0.30
%12
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83,2
77
-
-
-
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--
--
12,2
68,1
76
2.15
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705,
360
688,
021
-
-
-
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--
--
3,01
7,33
9
9.87
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695,
642
5,69
5,64
2-
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--
--
2,00
0,00
0
7.75
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7,75
9,84
78,
557,
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4,25
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638,
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4,80
9
15,3
75,9
6325
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10,7
37,7
792,
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000
11,3
93,4
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83,7
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17,9
99,9
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6,34
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37,3
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92
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8
1,58
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6,04
4,66
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-
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--
--
6,04
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219,
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260
28,4
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17,5
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59
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06,8
38
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88,9
83
13,4
37,8
31
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18
4,48
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3
-
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485,
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976,
466)
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30,5
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3,18
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9
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49,7
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259,
562
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138,
496)
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rwar
d fo
reig
n e
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ange
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ntr
acts
pu
rch
ases
1,70
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2
-
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1,70
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1,50
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70
3,18
8,01
9
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89,6
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mu
la�
ve Y
ield
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st R
isk
Sen
si�
vity
Gap
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466)
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(8
1,18
1,90
1)
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664,
031)
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476,
012)
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086,
330)
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18,9
19)
14,5
30,7
9519
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2018
Exp
ose
d t
o Y
ield
/ In
tere
st r
isk
---
----
----
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----
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----
----
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----
----
----
Ru
pee
s in
'000
---
----
----
----
----
----
----
----
----
----
----
----
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----
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Ab
ove
10
Year
sTo
tal
Up
to 1
Mo
nth
Effec
�ve
Yie
ld /
Inte
rest
rat
e
No
n-i
nte
rest
bea
rin
g fi
nan
cial
inst
rum
ents
42.3
Op
era�
on
al r
isk
The
Ban
k o
f Kh
yber
, lik
e al
l fin
anci
al in
s�tu
�o
ns,
is e
xpo
sed
to m
any
typ
es o
f op
era�
on
al ri
sks,
incl
ud
ing
the
po
ten
�al
loss
es a
risi
ng
fro
m in
tern
al a
c�vi
�es
or e
xter
nal
eve
nts
cau
sed
by
bre
akd
ow
ns
in in
form
a�o
n, c
om
mu
nic
a�o
n, p
hys
ical
saf
egu
ard
s,
bu
sin
ess
con
�n
uit
y, s
up
ervi
sio
n, t
ran
sac�
on
pro
cess
ing,
se�
lem
ent s
yste
ms
and
pro
ced
ure
s an
d th
e ex
ecu
�o
n o
f leg
al, fi
du
ciar
y an
d a
gen
cy re
spo
nsi
bili
�es
.
Bo
K d
efin
es O
per
a�o
nal
Ris
k as
" th
e ri
sk o
f lo
ss re
sul�
ng
fro
m in
adeq
uat
e o
r fai
led
inte
rnal
pro
cess
es, p
eop
le a
nd
sys
tem
s o
r fro
m e
xter
nal
eve
nts
. Th
is d
efin
i�o
n in
clu
des
lega
l ris
k, b
ut e
xclu
des
str
ateg
ic a
nd
rep
uta
�o
nal
risk
.”
A d
edic
ated
Op
era�
on
al R
isk
Man
agem
ent
Dep
artm
ent
is e
stab
lish
ed w
ith
in E
nte
rpri
se R
isk
Man
agem
ent
Div
isio
n (E
RM
D) t
o m
ain
tain
a s
yste
m o
f in
tern
al c
on
tro
ls d
esig
ned
to
kee
p o
per
a�o
nal
ris
k at
ap
pro
pri
ate
leve
ls k
eep
ing
in v
iew
th
e B
ank'
s fi
nan
cial
str
engt
h, t
he
char
acte
ris�
cs o
f th
e ac
�vi
�es
an
d th
e m
arke
t in
wh
ich
it o
per
ates
. Th
ese
inte
rnal
co
ntr
ols
are
per
iod
ical
ly u
pd
ated
an
d te
sted
.
The
Ban
k al
so h
as in
pla
ce a
Bu
sin
ess
Co
n�
nu
ity
Pla
n a
nd
ap
pro
pri
ate
ou
tso
urc
ing
mea
sure
s to
cat
er to
rela
ted
op
era�
on
al ri
sks.
Th
e O
per
a�o
nal
Ris
k M
anag
emen
t dep
artm
ent e
nga
ges
wit
h B
ank'
s b
usi
nes
s/ s
up
po
rt u
nit
s an
d re
gula
rly
colla
bo
rate
s in
det
erm
inin
g an
d r
evie
win
g th
e ri
sks,
an
d s
ugg
ests
co
ntr
ols
on
nee
d b
asis
. Ad
di�
on
ally
, all
the
po
licie
s, p
roce
du
res
and
sys
tem
s o
f th
e B
ank
are
revi
ewed
fro
m t
he
op
era�
on
al r
isk
per
spec
�ve
, an
d t
he
reco
mm
end
a�o
ns
of
ERM
D a
re t
aken
into
co
nsi
der
a�o
n b
efo
re th
eir a
pp
rova
l.
Cu
rren
tly
the
Ban
k u
ses
the
Bas
ic I
nd
icat
or
Ap
pro
ach
(B
IA)
for
asse
ssin
g it
s o
per
a�o
nal
ris
k ca
pit
al c
har
ge.
The
Ban
k al
so h
as a
n a
pp
rove
d o
per
a�o
nal
ris
k p
olic
y in
ter
ms
of
SBP
BP
RD
cir
cula
r 0
4 o
f 2
01
4.
As
par
t o
f p
ro-a
c�ve
op
era�
on
al r
isk
man
agem
ent,
Th
e O
per
a�o
nal
Ris
k M
anag
emen
t D
epar
tmen
t (O
RM
D) h
as a
lrea
dy
com
ple
ted
Ban
k w
ide
RC
SA w
ork
sho
ps.
Th
e p
roce
sses
wer
e th
oro
ugh
ly d
iscu
ssed
wit
h r
elev
ant
stak
eho
lder
s fo
r an
y co
ntr
ol f
ailu
res/
lap
ses.
Bas
ed o
n t
he
resu
lts
of
RC
SAs,
ad
equ
ate
Key
Ris
k In
dic
ato
rs (K
RIs
) fo
r va
rio
us
bu
sin
ess
lines
are
als
o d
evel
op
ed a
nd
map
ped
wit
h v
ario
us
risk
s. A
n A
uto
mat
ed s
olu
�o
n fo
r In
cid
ent r
epo
r�n
g is
du
ly in
pla
ce a
nd
can
be
acce
ssed
by
ever
y em
plo
yee
of t
he
ban
k fo
r re
po
r�n
g o
f co
ntr
ol b
reac
hes
lead
ing
to lo
sses
.
The Bank of Khyber
100
NO
TES
TO
THE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
A N N U A L R E P O R T 2 0 1 9
42
.3.1
O
pe
ra�
on
al ri
sk-d
iscl
osu
res
Bas
el I
I sp
eci
fic
B
asic
Ind
icat
or A
pp
roac
h (B
IA) i
s u
sed
for O
per
a�o
nal
Ris
k u
nd
er B
asel
II.
42
.4
Liq
uid
ity
risk
Liq
uid
ity
risk
is t
he
risk
th
at t
he
Ban
k is
un
able
to m
eet
its
pay
men
t o
blig
a�o
ns
asso
ciat
ed w
ith
its
fin
anci
al li
abili
�es
wh
en t
hey
fall
du
e, a
nd
to r
epla
ce fu
nd
s w
hen
th
ey a
re w
ith
dra
wn
. Liq
uid
ity
risk
is g
ove
rned
by
the
liqu
idit
y m
anag
emen
t po
licy
of t
he
Ban
k an
d is
man
aged
by
Mar
ket a
nd
Liq
uid
ity
Ris
k M
anag
emen
t Dep
artm
ent u
nd
er th
e su
per
visi
on
of A
LCO
.
Th
e B
ank’
s A
sset
an
d L
iab
ility
Co
mm
i�ee
(A
LCO
) m
anag
es t
he
liqu
idit
y p
osi
�o
n o
n a
reg
ula
r b
asis
an
d is
pri
mar
ily r
esp
on
sib
le fo
r th
e fo
rmu
la�
on
of
the
ove
rall
stra
tegy
an
d o
vers
igh
t o
f th
e as
set
and
liab
ility
fu
nc�
on
. ALC
O
mo
nit
ors
the
mai
nte
nan
ce o
f liq
uid
ity
ra�
os,
bo
th in
term
s o
f th
e o
vera
ll fu
nd
ing
mix
an
d a
void
ance
of u
nd
ue
relia
nce
on
larg
e in
div
idu
al d
epo
sits
. Th
e B
OD
has
ap
pro
ved
co
mp
reh
ensi
ve L
iqu
idit
y R
isk
Man
agem
ent P
olic
y w
hic
h
s�p
ula
tes
the
earl
y w
arn
ing
ind
icat
ors
(EW
I) o
f liq
uid
ity
risk
an
d m
ain
ten
ance
of v
ario
us
ra�
os
acco
rdin
g to
co
mfo
rtab
le, a
ccep
tab
le, w
arn
ing,
an
d s
tres
s zo
nes
. Mo
reo
ver,
Ban
k al
so h
as C
on
�n
gen
cy F
un
din
g P
lan
(CFP
) in
pla
ce
to a
dd
ress
liq
uid
ity
issu
es in
�m
es o
f str
ess
/ cr
isis
sit
ua�
on
. In
ad
di�
on
, ALC
O a
nd
BR
MC
are
bri
efed
ab
ou
t var
iou
s Li
qu
idit
y R
isk
stan
dar
ds
like
Liq
uid
ity
Co
vera
ge R
a�o
an
d it
s m
on
ito
rin
g to
ols
on
per
iod
ic b
asis
. Fu
rth
er th
e B
ank
has
des
ign
ed d
iffer
ent s
cen
ario
s o
f cas
h o
u�
low
s to
str
ess
test
effi
cien
cy o
f its
liq
uid
ass
ets
and
its
imp
act o
n p
rofi
t an
d lo
ss. B
ank
per
form
s re
gula
r liq
uid
ity
stre
ss te
sts
as p
art o
f its
liq
uid
ity
mo
nit
ori
ng
ac�
vi�
es. T
he
pu
rpo
se o
f th
e liq
uid
ity
stre
ss te
sts
is in
ten
ded
to e
nsu
re s
uffi
cien
t liq
uid
ity
for t
he
Ban
k u
nd
er b
oth
idio
syn
cra�
c an
d s
yste
mic
mar
ket s
tres
s co
nd
i�o
ns.
Th
e re
sult
s ar
e re
gula
rly
revi
ewed
by
ALC
O fo
r tak
ing
app
rop
riat
e m
easu
res.
B
ank'
s liq
uid
ity
risk
man
agem
ent
app
roac
h in
volv
es in
trad
ay li
qu
idit
y m
anag
emen
t, m
anag
ing
fun
din
g so
urc
es a
nd
eva
lua�
on
of s
tru
ctu
ral i
mb
alan
ces
in b
alan
ce s
hee
t st
ruct
ure
. Th
e B
ank’
s la
rge
and
sta
ble
bas
e o
f cu
sto
mer
d
epo
sits
, alo
ng
wit
h B
ank’
s st
ron
g ca
pit
al b
ase
sup
ple
men
ted
un
der
lyin
g st
ren
gth
an
d s
tro
ng
liqu
idit
y p
osi
�o
n d
uri
ng
the
year
. Ban
k al
so h
as a
su
bst
an�
al p
or�
olio
of m
arke
tab
le s
ecu
ri�
es t
hat
can
be
real
ized
in t
he
even
t o
f liq
uid
ity
stre
ss. T
he
leve
l of l
iqu
idit
y re
serv
es a
s p
er re
gula
tory
req
uir
emen
ts a
lso
mi�
gate
s liq
uid
ity
risk
.
A
s a
par
t o
f liq
uid
ity
man
agem
ent,
th
e B
ank
mai
nta
ins
bo
rro
win
g re
la�
on
ship
s w
ith
var
iou
s fi
nan
cial
ins�
tu�
on
s to
en
sure
th
e co
n�
nu
ed a
cces
s to
div
erse
mar
ket
of
fun
din
g so
urc
es. T
he
Ban
k’s
cred
it r
a�n
g to
geth
er w
ith
m
arke
t rep
uta
�o
n h
as e
nab
led
it to
sec
ure
am
ple
cal
l lin
es w
ith
loca
l an
d fo
reig
n B
anks
an
d c
an fu
lfil i
ts li
qu
idit
y ga
p if
a n
eed
ari
ses.
42
.4.1
Mat
uri
�e
s o
f as
sets
an
d li
abili
�e
s -
bas
ed
on
co
ntr
actu
al m
atu
rity
of
the
ass
ets
an
d li
abili
�e
s o
f th
e B
ank
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
12
,13
7,8
05
10
,13
7,8
05
2,0
00
,00
0
-
-
-
-
--
Bal
ance
s w
ith
oth
er b
anks
8,2
30
,07
2
3,5
80
,07
2
2,8
50
,00
0
-
1,8
00
,00
0
-
-
--
Len
din
g to
fin
anci
al in
s�tu
�o
ns
13
,86
3,4
49
-
9,0
32
,10
2
1,2
50
,00
0
75
0,0
00
2,8
31
,34
7
-
--
Inve
stm
ents
14
6,9
11
,10
2
36
7,3
16
-
-
10
,92
0,4
86
7,3
80
,56
3
1
,48
4,6
37
5,2
47
,91
02
7,8
46
,72
5
Ad
van
ces
10
9,7
42
,29
2
1
9,7
26
,39
7
11
0,0
58
1
34
,28
6
1,0
66
,85
1
6
35
,90
0
3
7,3
84
,37
7
3,3
76
,28
71
,27
8,9
19
Fixe
d a
sset
s3
,33
4,6
70
1,7
93
1
0,7
55
1
2,5
48
2
8,6
81
5
3,7
77
5
3,7
77
16
1,3
31
16
1,3
31
Inta
ngi
ble
ass
ets
28
6,2
55
-
-
-
-
8
84
30
1
,21
22
,00
7
Def
erre
d t
ax a
sset
s1
,03
1,1
54
-
-
-
-
-
-
-
-
Oth
er a
sset
s1
0,7
68
,45
3
7
44
,69
5
1,1
32
,53
7
1,6
42
,58
9
2,2
77
,61
4
2,3
50
1
38
,28
4
1
,25
8,0
24
9,1
96
30
6,3
05
,25
2
34
,55
8,0
78
15
,13
5,4
52
3,0
39
,42
3
16
,84
3,6
32
10
,90
4,8
21
39
,06
1,1
05
10
,04
4,7
64
29
,29
8,1
78
Liab
ili�
es
Bill
s p
ayab
le1
,17
2,1
55
1,1
72
,15
5
-
-
-
-
-
--
Bo
rro
win
gs9
4,6
56
,46
1
-
70
,76
0,5
20
1,4
95
,91
9
-
14
,06
0,4
10
-
3,6
95
,85
63
,03
5,8
06
Dep
osi
ts a
nd
oth
er a
cco
un
ts1
82
,16
7,5
72
11
6,1
85
,88
4
10
7,1
10
1,5
91
,68
5
1,0
22
,72
3
1,1
83
,34
0
32
,65
1,6
92
14
,70
9,6
55
7,1
27
,25
3
Oth
er li
abili
�es
14
,10
7,7
11
37
1,1
99
2,2
27
,19
1
2,5
98
,39
0
5,9
39
,17
7
4,4
52
4,4
52
38
1,2
58
71
,51
1
29
2,1
03
,89
9
11
7,7
29
,23
8
73
,09
4,8
21
5,6
85
,99
4
6,9
61
,90
0
15
,24
8,2
02
32
,65
6,1
44
18
,78
6,7
69
10
,23
4,5
70
Ne
t as
sets
14
,20
1,3
53
(83
,17
1,1
60
)
(57
,95
9,3
69
)
(2,6
46
,57
1)
9,8
81
,73
2
(4,3
43
,38
1)
6,4
04
,96
1
(8,7
42
,00
5)
19
,06
3,6
08
Shar
e ca
pit
al1
0,0
02
,52
4
Res
erve
s2
,90
4,6
91
Un
app
rop
riat
ed p
rofi
t2
,07
4,8
08
Surp
lus/
(defi
cit)
on
rev
alu
a�o
n o
f as
sets
(78
0,6
70
)
14
,20
1,3
53
Ove
r 1
4 d
ays
to
1 M
on
thU
pto
1 D
ayO
ver
1 t
o 7
day
s
Ove
r 1
to
2
Mo
nth
s
Ove
r 2
to
3
Mo
nth
s
Ove
r 3
to
6
Mo
nth
s
Ove
r 6
to
9
Mo
nth
s
20
19
Ove
r 7
to
14
day
s
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
Tota
l
The Bank of Khyber
101 A N N U A L R E P O R T 2 0 1 9
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
Liq
uid
ity
risk
is th
e ri
sk th
at th
e B
ank
is u
nab
le to
mee
t its
pay
men
t ob
liga�
on
s as
soci
ated
wit
h it
s fi
nan
cial
liab
ili�
es w
hen
th
ey fa
ll d
ue,
an
d to
rep
lace
fun
ds
wh
en t
hey
are
wit
hd
raw
n. L
iqu
idit
y ri
sk is
go
vern
ed b
y th
e liq
uid
ity
man
agem
ent p
olic
y o
f th
e B
ank
and
is m
anag
ed b
y M
arke
t an
d L
iqu
idit
y R
isk
Man
agem
ent D
epar
tmen
t un
der
the
sup
ervi
sio
n o
f ALC
O.
The
Ban
k’s
Ass
et a
nd
Lia
bili
ty C
om
mi�
ee (A
LCO
) man
ages
the
liqu
idit
y p
osi
�o
n o
n a
regu
lar b
asis
an
d is
pri
mar
ily re
spo
nsi
ble
for t
he
form
ula
�o
n o
f th
e o
vera
ll st
rate
gy a
nd
ove
rsig
ht o
f th
e as
set a
nd
liab
ility
fun
c�o
n. A
LCO
mo
nit
ors
the
mai
nte
nan
ce
of l
iqu
idit
y ra
�o
s, b
oth
in te
rms
of t
he
ove
rall
fun
din
g m
ix a
nd
avo
idan
ce o
f un
du
e re
lian
ce o
n la
rge
ind
ivid
ual
dep
osi
ts. T
he
BO
D h
as a
pp
rove
d c
om
pre
hen
sive
Liq
uid
ity
Ris
k M
anag
emen
t Po
licy
wh
ich
s�
pu
late
s th
e ea
rly
war
nin
g in
dic
ato
rs (E
WI)
of
liqu
idit
y ri
sk a
nd
mai
nte
nan
ce o
f va
rio
us
ra�
os
acco
rdin
g to
co
mfo
rtab
le, a
ccep
tab
le, w
arn
ing,
an
d s
tres
s zo
nes
. Mo
reo
ver,
Ban
k al
so h
as C
on
�n
gen
cy F
un
din
g P
lan
(C
FP)
in p
lace
to
ad
dre
ss li
qu
idit
y is
sues
in �
mes
of
stre
ss /
cri
sis
situ
a�o
n. I
n
add
i�o
n, A
LCO
an
d B
RM
C a
re b
rief
ed a
bo
ut v
ario
us
Liq
uid
ity
Ris
k st
and
ard
s lik
e Li
qu
idit
y C
ove
rage
Ra�
o a
nd
its
mo
nit
ori
ng
too
ls o
n p
erio
dic
bas
is. F
urt
her
the
Ban
k h
as d
esig
ned
diff
eren
t sce
nar
ios
of c
ash
ou
�lo
ws
to s
tres
s te
st e
ffici
ency
of i
ts li
qu
id
asse
ts a
nd
its
imp
act o
n p
rofi
t an
d lo
ss. B
ank
per
form
s re
gula
r liq
uid
ity
stre
ss te
sts
as p
art o
f its
liq
uid
ity
mo
nit
ori
ng
ac�
vi�
es. T
he
pu
rpo
se o
f th
e liq
uid
ity
stre
ss te
sts
is in
ten
ded
to e
nsu
re s
uffi
cien
t liq
uid
ity
for
the
Ban
k u
nd
er b
oth
idio
syn
cra�
c an
d
syst
emic
mar
ket s
tres
s co
nd
i�o
ns.
Th
e re
sult
s ar
e re
gula
rly
revi
ewed
by
ALC
O fo
r tak
ing
app
rop
riat
e m
easu
res.
Ban
k's
liqu
idit
y ri
sk m
anag
emen
t ap
pro
ach
invo
lves
intr
aday
liq
uid
ity
man
agem
ent,
man
agin
g fu
nd
ing
sou
rces
an
d e
valu
a�o
n o
f st
ruct
ura
l im
bal
ance
s in
bal
ance
sh
eet
stru
ctu
re. T
he
Ban
k’s
larg
e an
d s
tab
le b
ase
of
cust
om
er d
epo
sits
, alo
ng
wit
h
Ban
k’s
stro
ng
cap
ital
bas
e su
pp
lem
ente
d u
nd
erly
ing
stre
ngt
h a
nd
str
on
g liq
uid
ity
po
si�
on
du
rin
g th
e ye
ar. B
ank
also
has
a s
ub
stan
�al
po
r�o
lio o
f mar
keta
ble
sec
uri
�es
that
can
be
real
ized
in th
e ev
ent o
f liq
uid
ity
stre
ss. T
he
leve
l of l
iqu
idit
y re
serv
es
as p
er re
gula
tory
req
uir
emen
ts a
lso
mi�
gate
s liq
uid
ity
risk
.
As
a p
art
of
liqu
idit
y m
anag
emen
t, t
he
Ban
k m
ain
tain
s b
orr
ow
ing
rela
�o
nsh
ips
wit
h v
ario
us
fin
anci
al in
s�tu
�o
ns
to e
nsu
re t
he
con
�n
ued
acc
ess
to d
iver
se m
arke
t o
f fu
nd
ing
sou
rces
. Th
e B
ank’
s cr
edit
ra�
ng
toge
ther
wit
h m
arke
t re
pu
ta�
on
has
en
able
d it
to s
ecu
re a
mp
le c
all l
ines
wit
h lo
cal a
nd
fore
ign
Ban
ks a
nd
can
fulfi
l its
liq
uid
ity
gap
if a
nee
d a
rise
s.
42.3
.1
Op
era�
on
al r
isk-
dis
clo
sure
s B
asel
II s
pec
ific
Bas
ic In
dic
ato
r A
pp
roac
h (
BIA
) is
use
d fo
r O
per
a�o
nal
Ris
k u
nd
er B
asel
II.
42.4
Liq
uid
ity
risk
42.4
.1
Mat
uri
�es
of
asse
ts a
nd
liab
ili�
es -
bas
ed o
n c
ont
ract
ual
mat
uri
ty o
f th
e as
sets
an
d li
abili
�es
of
the
Ban
k
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
Bal
ance
s w
ith
oth
er b
anks
Len
din
g to
fin
anci
al in
s�tu
�o
ns
Inve
stm
ents
Ad
van
ces
Fixe
d a
sset
s
Inta
ngi
ble
ass
ets
Def
erre
d t
ax a
sset
s
Oth
er a
sset
s
Liab
ili�
es
Bill
s p
ayab
le
Bo
rro
win
gs
Dep
osi
ts a
nd
oth
er a
cco
un
ts
Oth
er li
abili
�es
Ne
t as
sets
Shar
e ca
pit
al
Res
erve
s
Un
app
rop
riat
ed p
rofi
t
Surp
lus/
(defi
cit)
on
rev
alu
a�o
n o
f as
sets
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
12
,13
7,8
05
10
,13
7,8
05
2,0
00
,00
0-
--
--
--
-
8,2
30
,07
23
,58
0,0
72
2,8
50
,00
0-
1,8
00
,00
0-
--
--
-
13
,86
3,4
49
-9
,03
2,1
02
1,2
50
,00
07
50
,00
02
,83
1,3
47
--
--
-
14
6,9
11
,10
23
67
,31
6-
-1
0,9
20
,48
67
,38
0,5
63
1,4
84
,63
75
,24
7,9
10
27
,84
6,7
25
19
,36
0,7
82
20
,05
7,6
29
10
9,7
42
,29
21
9,7
26
,39
71
10
,05
81
34
,28
61
,06
6,8
51
63
5,9
00
37
,38
4,3
77
3,3
76
,28
71
,27
8,9
19
1,7
84
,57
71
,18
8,8
35
3,3
34
,67
01
,79
31
0,7
55
12
,54
82
8,6
81
53
,77
75
3,7
77
16
1,3
31
16
1,3
31
16
1,3
31
60
9,6
00
28
6,2
55
--
--
88
43
01
,21
22
,00
72
27
,58
22
5,8
35
1,0
31
,15
4-
--
--
--
--
1,0
31
,15
4
10
,76
8,4
53
74
4,6
95
1,1
32
,53
7
1,6
42
,58
9
2,2
77
,61
4
2,3
50
13
8,2
84
1,2
58
,02
49
,19
69
,19
63
6,1
53
30
6,3
05
,25
2
34
,55
8,0
78
15
,13
5,4
52
3,0
39
,42
3
16
,84
3,6
32
10
,90
4,8
21
39
,06
1,1
05
10
,04
4,7
64
29
,29
8,1
78
21
,54
3,4
68
22
,94
9,2
06
1,1
72
,15
5
1,1
72
,15
5
-
-
-
-
--
--
-
94
,65
6,4
61
-
70
,76
0,5
20
1,4
95
,91
9
-
14
,06
0,4
10
-3
,69
5,8
56
3,0
35
,80
6-
-
18
2,1
67
,57
2
11
6,1
85
,88
4
10
7,1
10
1,5
91
,68
5
1,0
22
,72
3
1,1
83
,34
0
32
,65
1,6
92
14
,70
9,6
55
7,1
27
,25
33
,29
7,1
69
2,7
55
,91
5
14
,10
7,7
11
37
1,1
99
2,2
27
,19
1
2,5
98
,39
0
5,9
39
,17
7
4,4
52
4,4
52
38
1,2
58
71
,51
17
1,5
11
-
29
2,1
03
,89
9
11
7,7
29
,23
8
73
,09
4,8
21
5,6
85
,99
4
6,9
61
,90
0
15
,24
8,2
02
32
,65
6,1
44
18
,78
6,7
69
10
,23
4,5
70
3,3
68
,68
02
,75
5,9
15
14
,20
1,3
53
(83
,17
1,1
60
)
(57
,95
9,3
69
)
(2,6
46
,57
1)
9,8
81
,73
2
(4,3
43
,38
1)
6,4
04
,96
1(8
,74
2,0
05
)1
9,0
63
,60
81
8,1
74
,78
82
0,1
93
,29
1
10
,00
2,5
24
2,9
04
,69
1
2,0
74
,80
8
(78
0,6
70
)
14
,20
1,3
53
Ove
r 1
4 d
ays
to
1 M
on
thU
pto
1 D
ayO
ver
1 t
o 7
day
s
Ove
r 1
to
2
Mo
nth
s
Ove
r 2
to
3
Mo
nth
s
Ove
r 3
to
6
Mo
nth
s
Ove
r 6
to
9
Mo
nth
s
Ove
r 9
mo
nth
s to
1
year
Ove
r 2
to
3
year
s
Ove
r 1
to
2
year
s
Ove
r 7
to
14
day
sTo
tal
Ove
r 3
to
5
Year
sO
ver
5 Y
ear
s
--
-
--
-
--
-
33
,81
9,1
25
9,3
02
,51
41
1,1
23
,41
5
20
,73
7,2
60
12
,95
6,2
18
9,3
62
,32
7
31
1,2
97
28
6,2
80
1,4
82
,16
9
28
,70
5-
-
--
-
3,2
03
,07
2-
31
4,7
43
58
,09
9,4
59
22
,54
5,0
12
22
,28
2,6
54
--
-
-7
5,9
66
1,5
31
,98
4
28
0,5
95
80
4,5
51
45
0,0
00
2,4
38
,57
0-
-
2,7
19
,16
58
80
,51
71
,98
1,9
84
55
,38
0,2
94
21
,66
4,4
95
20
,30
0,6
70
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
12
,35
1,4
53
12
,35
1,4
53
--
--
--
-
Bal
ance
s w
ith
oth
er b
anks
3,7
05
,36
03
,70
5,3
60
--
--
--
-
Len
din
g to
fin
anci
al in
s�tu
�o
ns
7,6
95
,64
2-
7,1
95
,64
2-
-5
00
,00
0-
--
Inve
stm
ents
94
,23
3,2
39
25
3,7
21
4,9
95
,80
7-
2,4
88
,15
81
0,8
08
,14
42
,49
2,0
00
4,2
54
,91
91
,16
5,0
30
Ad
van
ces
95
,01
1,9
03
8,5
74
,50
13
2,2
66
54
3,3
51
27
0,5
40
2,1
61
,08
53
0,5
41
,41
51
,49
6,3
11
3,7
33
,67
0
Fixe
d a
sset
s2
,21
6,4
22
--
--
--
--
Inta
ngi
ble
ass
ets
78
,85
0-
--
--
--
-
Def
erre
d t
ax a
sset
s1
,75
7,4
51
--
--
--
--
Oth
er a
sset
s6
,04
4,6
63
5,8
30
,10
3-
--
-2
14
,56
0-
-
22
3,0
94
,98
3
30
,71
5,1
38
12
,22
3,7
15
54
3,3
51
2,7
58
,69
81
3,4
69
,22
93
3,2
47
,97
55
,75
1,2
30
4,8
98
,70
0
Liab
ili�
es
Bill
s p
ayab
le8
95
,12
6
89
5,1
26
-
-
--
--
-
Bo
rro
win
gs3
4,8
42
,11
4
17
,30
0
19
,83
7,1
72
-
2,0
79
,84
88
,72
1,1
23
2,9
01
,97
11
,28
4,7
00
-
Dep
osi
ts a
nd
oth
er a
cco
un
ts1
71
,16
7,5
56
28
2,0
29
42
,47
1
2,4
48
,37
1
15
,98
9,6
87
1,0
25
,78
26
4,9
28
,03
42
1,1
99
,25
45
,23
9,3
05
Oth
er li
abili
�es
4,4
85
,60
3
-
-
-
4,1
17
,57
7-
36
8,0
26
--
21
1,3
90
,39
9
1,1
94
,45
5
19
,87
9,6
43
2,4
48
,37
1
22
,18
7,1
12
9,7
46
,90
56
8,1
98
,03
12
2,4
83
,95
45
,23
9,3
05
Ne
t as
sets
11
,70
4,5
84
29
,52
0,6
83
(7,6
55
,92
8)
(1,9
05
,02
0)
(19
,42
8,4
14
)3
,72
2,3
24
(34
,95
0,0
56
)(1
6,7
32
,72
4)
(34
0,6
05
)
Shar
e ca
pit
al1
0,0
02
,52
4
Res
erve
s2
,64
3,4
83
Un
app
rop
riat
ed p
rofi
t1
,16
3,2
69
Surp
lus/
(defi
cit)
on
rev
alu
a�o
n o
f as
sets
(2,1
04
,69
2)
11
,70
4,5
84
Ove
r 7
to
14
day
s
Ove
r 1
4 d
ays
to 1
Mo
nth
Ove
r 1
to
2
Mo
nth
s
Ove
r 2
to
3
Mo
nth
s
20
18
Ove
r 3
to
6
Mo
nth
s
Ove
r 6
to
9
Mo
nth
sTo
tal
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ees
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
Up
to 1
Day
Ove
r 1
to
7
day
s
Ove
r 9
mo
nth
s
to 1
yea
rO
ver
5 Y
ears
Ove
r 1
to
2
year
s
Ove
r 2
to
3
year
s
Ove
r 3
to
5
Year
s
--
--
--
--
--
--
2,9
37
,95
91
5,4
85
,24
92
5,8
48
,26
31
7,1
12
,77
8
2,2
80
,97
11
,64
8,8
48
22
,05
6,5
41
16
,38
6,1
18
27
6,8
72
13
4,6
75
17
8,2
09
1,3
07
,91
8
-7
8,8
50
--
1,7
57
,45
1-
--
--
--
7,2
53
,25
31
7,3
47
,62
24
8,0
83
,01
33
4,8
06
,81
4
--
--
--
--
14
,23
9,5
43
16
,05
2,1
55
11
,15
4,6
33
4,5
77
,70
5
--
--
14
,23
9,5
43
16
,05
2,1
55
11
,15
4,6
33
4,5
77
,70
5
(6,9
86
,29
0)
1,2
95
,46
73
6,9
28
,38
03
0,2
29
,10
9
- - -
6,3
91
,21
1
5,2
86
,28
5
31
8,7
48
- - -
11
,99
6,2
44
- -
13
,98
8,5
87
-
13
,98
8,5
87
(1,9
92
,34
3)
The Bank of Khyber
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
102 A N N U A L R E P O R T 2 0 1 9
The Bank of Khyber
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
103 A N N U A L R E P O R T 2 0 1 9
42
.4.2
Mat
uri
�e
s o
f as
sets
an
d li
abili
�e
s -
bas
ed
on
exp
ect
ed
mat
uri
�e
s o
f th
e a
sse
ts a
nd
liab
ili�
es
of
the
Ban
k
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
12
,13
7,8
05
12
,13
7,8
05
-
-
-
-
-
-
--
Bal
ance
s w
ith
oth
er b
anks
8,2
30
,07
2
8,2
30
,07
2
-
-
-
-
-
-
--
Len
din
g to
fin
anci
al in
s�tu
�o
ns
13
,86
3,4
49
11
,03
2,1
02
2,8
31
,34
7
-
-
-
-
-
--
Inve
stm
ents
14
6,9
11
,10
2
8,1
29
,21
5
11
,83
2,4
70
3,7
78
,40
8
47
,95
0,3
83
20
,36
1,2
63
34
,43
3,4
34
9,3
02
,51
4
9,3
79
,41
51
,74
4,0
00
Ad
van
ces
10
9,7
42
,29
2
14
,92
6,0
55
36
,44
8,9
79
3,3
82
,31
2
19
,52
3,4
45
1,0
97
,40
6
1,0
97
,26
9
22
,28
8,2
80
8,2
53
,16
62
,72
5,3
80
Fixe
d a
sset
s3
,33
4,6
70
50
8,5
66
-
-
28
0,0
51
37
2,0
93
50
1,5
86
36
8,1
60
32
6,2
74
97
7,9
39
Inta
ngi
ble
ass
ets
28
6,2
55
-
91
4
1,2
12
2
29
,58
9
25
,83
5
2
8,7
05
-
-
-
Def
erre
d t
ax a
sset
s1
,03
1,1
54
-
-
-
-
1,0
31
,15
4
-
-
-
-
Oth
er a
sset
s1
0,7
68
,45
3
5,7
97
,43
6
14
0,6
33
1,2
58
,02
3
18
,39
2
3
6,1
54
3,2
03
,07
2
-
31
4,7
43
-
30
6,3
05
,25
2
6
0,7
61
,25
1
51
,25
4,3
43
8,4
19
,95
5
68
,00
1,8
60
22
,92
3,9
05
3
9,2
64
,06
6
31
,95
8,9
54
18
,27
3,5
98
5,4
47
,31
9Li
abili
�e
s
Bill
s p
ayab
le1
,17
2,1
55
1
,17
2,1
55
-
-
-
-
-
-
-
-
Bo
rro
win
gs9
4,6
56
,46
1
72
,26
9,4
80
14
,06
0,4
10
3,7
08
,89
9
3,0
61
,97
5
52
,17
2
52
,17
2
18
0,2
26
1,2
71
,12
7-
Dep
osi
ts a
nd
oth
er a
cco
un
ts1
82
,16
7,5
72
63
,97
6,4
96
16
,06
3,8
70
40
,58
5,1
76
49
,89
5,1
71
8,6
48
,76
0
25
1,0
95
2,6
09
,49
0
13
7,5
14
-
Oth
er li
abili
�es
14
,10
7,7
11
11
,13
5,9
56
8,9
04
38
1,2
58
14
3,0
21
-
2,4
38
,57
2
-
--
Net
ass
ets
29
2,1
03
,89
9
14
8,5
54
,08
7
30
,13
3,1
84
44
,67
5,3
33
53
,10
0,1
67
8,7
00
,93
2
2,7
41
,83
9
2,7
89
,71
6
1,4
08
,64
1-
14
,20
1,3
53
(87
,79
2,8
36
)
21
,12
1,1
59
(36
,25
5,3
78
)
14
,90
1,6
93
14
,22
2,9
73
36
,52
2,2
27
29
,16
9,2
38
16
,86
4,9
57
5,4
47
,31
9
Shar
e c
apit
al1
0,0
02
,52
4
Re
serv
es
2,9
04
,69
1
Un
app
rop
riat
ed
pro
fit
2,0
74
,80
8
Surp
lus/
(Defi
cit)
on
re
valu
a�o
n o
f
ass
ets
(78
0,6
70
)
14
,20
1,3
53
20
19
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
Ru
pe
es
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
--
Tota
lU
pto
1 M
on
thO
ver
1 t
o 3
Mo
nth
s
Ove
r 3
to
6
Mo
nth
s
Ove
r 6
Mo
nth
s to
1
Year
Ove
r 1
to
2
Year
s
Ove
r 2
to
3
Year
s
Ove
r 3
to
5
Year
s
Ove
r 5
to
10
Year
s
Ab
ove
10
Year
s
The Bank of Khyber
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TS
FOR
TH
E Y
EAR
EN
DED
DEC
EMB
ER 3
1, 2
01
9
104 A N N U A L R E P O R T 2 0 1 9
Der
iva�
ves
are
typ
e o
f fin
anci
al c
on
trac
t th
at v
alu
e is
det
erm
ined
by
un
der
lyin
g o
ne
or
mo
re a
sset
s o
r b
ench
mar
ks. G
lob
ally
Der
iva�
ves
are
kno
wn
an
d u
sed
to
be
very
co
mp
lex
and
ris
ky fi
nan
cial
inst
rum
ents
, ho
wev
er in
Pak
ista
n t
he
ban
ks u
sual
ly o
per
ates
in fo
rwar
ds,
futu
res,
sw
aps
and
op
�o
ns.
- C
urr
entl
y B
ank
of
Kh
yber
is n
ot
ded
icat
edly
invo
lved
in D
eriv
a�ve
s b
usi
nes
s o
r tr
adin
g h
ow
ever
it o
per
ates
in fo
reig
n c
urr
ency
forw
ard
s an
d s
wap
s, a
typ
e o
f fi
nan
cial
der
iva�
ves.
Th
e ri
sk/r
etu
rn a
�ri
bu
tes
of
fin
anci
al d
eriv
a�ve
s ar
e d
iscu
ssed
.
- In
ou
r ban
kin
g in
du
stry
der
iva�
ves
des
k is
op
erat
ed w
ith
in tr
easu
ry b
usi
nes
s th
rou
gh c
om
pet
ent r
eso
urc
es in
term
s o
f ad
equ
ate
syst
ems
and
qu
alifi
ed h
um
an re
sou
rces
.
- Th
e re
spo
nsi
bili
ty to
mo
nit
or a
nd
co
nta
in th
e ri
sks
in d
eriv
a�ve
s b
usi
nes
s re
sid
es w
ith
En
terp
rise
Ris
k M
anag
emen
t Div
isio
n. T
he
Ris
ks a
sso
ciat
ed w
ith
Fin
anci
al D
eriv
a�ve
s b
usi
nes
s ar
e:
Cre
dit
Ris
k:
Cre
dit
risk
refe
rs to
an
y d
efau
lt b
y a
par
ty in
volv
ed in
der
iva�
ves
tran
sac�
on
, res
ul�
ng
an a
dve
rse
imp
act o
n th
e p
rofi
tab
ility
of t
he
ban
k. T
he
cred
it ri
sk is
furt
her
cat
ego
rize
d in
to s
e�le
men
t an
d p
re-s
e�le
men
t ris
ks a
nd
are
co
ntr
olle
d v
ia
imp
osi
�o
n o
f lim
its
to d
eriv
a�ve
s tr
ansa
c�o
ns.
42
.5
D
eriv
a�ve
ris
k
Ass
ets
Cas
h a
nd
bal
ance
s w
ith
tre
asu
ry b
anks
12
,35
1,4
53
12
,35
1,4
53
--
--
--
--
Bal
ance
s w
ith
oth
er b
anks
3,7
05
,36
03
,70
5,3
60
--
--
--
--
Len
din
g to
fin
anci
al in
s�tu
�o
ns
7,6
95
,64
27
,69
5,6
42
--
--
--
--
Inve
stm
ents
94
,23
3,2
39
7,7
15
,18
61
3,3
00
,14
44
,29
9,5
77
7,8
04
,15
82
,24
3,9
29
16
,04
7,8
34
25
,55
9,6
32
14
,66
2,7
79
2,6
00
,00
0
Ad
van
ces
95
,01
1,9
03
11
,12
3,4
50
10
,60
8,6
39
2,8
99
,04
02
4,9
10
,31
41
,15
2,8
68
1,1
85
,31
32
2,6
47
,86
41
9,3
28
,90
21
,15
5,5
13
Fixe
d a
sset
s2
,21
6,4
22
--
--
27
6,8
72
13
4,9
23
17
8,2
09
80
,95
71
,54
5,4
61
Inta
ngi
ble
ass
ets
78
,85
0
-
-
-
-
-
78
,85
0-
--
Def
erre
d t
ax a
sset
s1
,75
7,4
51
-
-
-
-
1,7
57
,45
1
--
--
Oth
er a
sset
s6
,04
4,6
63
5,1
24
,12
5
17
8,2
21
41
2,1
76
31
8,5
00
11
,64
1
--
--
22
3,0
94
,98
3
47
,71
5,2
16
24
,08
7,0
04
7,6
10
,79
3
33
,03
2,9
72
5,4
42
,76
1
17
,44
6,9
20
48
,38
5,7
05
34
,07
2,6
38
5,3
00
,97
4
Liab
ili�
es
Bill
s p
ayab
le8
95
,12
6
89
5,1
26
-
-
-
-
--
--
Bo
rro
win
gs3
4,8
42
,11
4
26
,87
0,0
14
4,4
30
,92
9
2,2
91
,90
0
-
-
-4
0,0
00
1,2
09
,27
1-
Dep
osi
ts a
nd
oth
er a
cco
un
ts1
71
,16
7,5
56
57
,49
8,3
76
55
,70
6,8
38
40
,18
8,9
83
13
,43
7,8
31
63
3,8
68
56
8,3
06
2,2
74
,63
04
08
,72
44
50
,00
0
Oth
er li
abili
�es
4,4
85
,60
3
4,1
17
,62
4
36
7,9
79
-
-
-
--
--
Net
ass
ets
21
1,3
90
,39
9
89
,38
1,1
40
60
,50
5,7
46
42
,48
0,8
83
13
,43
7,8
31
63
3,8
68
56
8,3
06
2,3
14
,63
01
,61
7,9
95
45
0,0
00
11
,70
4,5
84
(41
,66
5,9
24
)
(36
,41
8,7
42
)
(34
,87
0,0
90
)
19
,59
5,1
41
4,8
08
,89
3
16
,87
8,6
14
46
,07
1,0
75
32
,45
4,6
43
4,8
50
,97
4
Shar
e ca
pit
al1
0,0
02
,52
4
Res
erve
s2
,64
3,4
83
Un
app
rop
riat
ed p
rofi
t1
,16
3,2
69
Surp
lus/
(Defi
cit)
on
rev
alu
a�o
n o
f as
sets
(2,1
04
,69
2)
11
,70
4,5
84
Ove
r 5
to
10
Year
s
Ab
ove
10
Year
sTo
tal
Up
to 1
Mo
nth
Ove
r 1
to
3
Mo
nth
s
Ove
r 3
to
6
Mo
nth
s
20
18
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
- R
up
ees
in '0
00
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
Ove
r 6
Mo
nth
s
to 1
Yea
r
Ove
r 1
to
2
Year
s
Ove
r 2
to
3
Year
s
Ove
r 3
to
5
Year
s
The Bank of Khyber
105
M
arke
t Ris
k:
'In
Pak
ista
n m
ain
ly d
eriv
a�ve
s p
rod
uct
s ar
e u
sed
to
hed
ge/c
ove
r in
tere
st r
ate
risk
an
d e
xch
ange
rat
e ri
sk b
y ta
kin
g p
osi
�o
ns
in in
tere
st r
ate
swap
s, c
ross
cu
rren
cy s
wap
s an
d fo
reig
n c
urr
ency
op
�o
ns.
Th
ese
risk
s ar
e co
ntr
olle
d th
ou
gh ta
kin
g co
un
ter p
osi
�o
ns
(bac
k to
bac
k p
osi
�o
ns)
an
d v
ia li
mit
s in
term
s o
f DV
01
(sen
si�
vity
lim
it) t
eno
r lim
its
and
inve
stm
ent l
imit
s.
O
pe
ra�
on
al R
isk:
'T
he
reso
urc
es in
term
s o
f peo
ple
an
d s
yste
ms
invo
lved
in t
he
man
agem
ent
of d
eriv
a�ve
s ac
�vi
�es
are
req
uir
ed to
be
adeq
uat
ely
qu
alifi
ed, t
rain
ed a
nd
co
mp
eten
t in
ord
er to
avo
id t
he
loss
es g
ener
ated
th
rou
gh m
is-
han
dlin
g o
f der
iva�
ves
bu
sin
ess.
43
En
viro
nm
en
t an
d s
oci
al ri
sk m
anag
em
en
t / g
ree
n b
anki
ng
So
cial
res
po
nsi
bili
ty in
th
e fi
nan
cial
sec
tor
has
evo
lved
an
d it
s si
gnifi
can
ce h
as in
crea
sed
co
nsi
der
ably
in t
he
pas
t co
up
le o
f dec
ades
. In
ord
er t
o m
eet
the
evo
lved
so
cial
ob
liga�
on
s, B
OK
has
ini�
ated
var
iou
s ac
�vi
�es
fo
cusi
ng
on
en
viro
nm
enta
l pre
serv
a�o
n a
nd
en
ergy
co
nse
rva�
on
. Fo
r th
is p
urp
ose
, th
e B
ank
aim
s to
pro
mo
te t
he
con
cep
t o
f o
wn
imp
act
red
uc�
on
, pap
erle
ss c
ult
ure
, car
bo
n e
mis
sio
ns
red
uc�
on
an
d e
nco
ura
gin
g p
lan
ta�
on
.
Bei
ng
a so
cial
ly r
esp
on
sib
le B
ank,
we
are
keen
to
pro
vid
e o
ur
inp
ut
in r
edu
c�o
n o
f em
issi
on
s, i
ncr
ease
in
aw
aren
ess
thro
ugh
en
viro
nm
ent
frie
nd
ly p
rac�
ces
and
red
uci
ng
ou
r o
wn
car
bo
n f
oo
tpri
nt
thro
ugh
es
tab
lish
men
t of S
ola
r po
wer
ed A
TMs.
Fu
rth
er, t
he
Ban
k p
lan
s to
intr
od
uce
so
lar p
ow
ered
bra
nch
es in
the
nea
r fu
ture
.
Du
rin
g th
e p
revi
ou
s ye
ar, t
he
Ban
k h
as p
rovi
ded
ren
ewab
le e
ner
gy (S
ola
r) fi
nan
cin
g fa
cili�
es fo
r ho
use
ho
lds
and
Agr
icu
ltu
re B
usi
nes
s (s
ola
r tu
be
wel
ls).
Bra
nch
es h
ave
bee
n in
stru
cted
to u
se e
ner
gy e
ffici
entl
y th
rou
gh
man
agin
g eq
uip
men
t, le
sser
use
of p
aper
, an
d e
nco
ura
gin
g p
lan
ta�
on
in th
e vi
cin
ity
of t
he
Bra
nch
es. B
ran
ches
are
als
o a
dvi
sed
to a
rran
ge m
ee�
ngs
in o
rder
to ra
ise
awar
enes
s am
on
g th
e st
aff re
gard
ing
con
serv
a�o
n
of e
ner
gy a
nd
en
viro
nm
enta
l pro
tec�
on
. In
ad
di�
on
to
th
at, B
OK
has
als
o c
on
vert
ed it
s A
TMs
fro
m c
on
ven
�o
nal
en
ergy
to
so
lar
ener
gy. F
inal
ly, m
arke
�n
g ac
�vi
�es
are
to
be
carr
ied
ou
t u
sin
g d
igit
al m
ediu
m s
uch
as
soci
al m
edia
. Th
e B
ank
also
aim
s to
dev
elo
p d
igit
al b
anki
ng
solu
�o
ns
in th
e n
ear f
utu
re in
ord
er to
inte
grat
e p
aper
less
cu
ltu
re w
ith
in th
e B
ank
as w
ell a
s am
on
g th
e cu
sto
mer
s.
44
EV
ENTS
AFT
ER T
HE
REP
OR
TIN
G D
ATE
Th
e b
oar
d o
f dir
ecto
rs in
its
mee
�n
g h
eld
on
Mar
ch 0
4, 2
02
0 h
as p
rop
ose
d a
cas
h d
ivid
end
of R
e. 0
.50
per
sh
are
( 5 %
) in
resp
ect o
f 20
19
(2
01
8: N
il) t
o b
e ap
pro
ved
in th
e fo
rth
com
ing
An
nu
al G
ener
al M
ee�
ng.
45
G
ENER
AL
- C
om
par
a�ve
figu
res
hav
e b
een
re-a
rran
ged
an
d re
clas
sifi
ed fo
r co
mp
aris
on
pu
rpo
ses.
46
D
ATE
OF
AU
THO
RIZ
ATI
ON
FO
R IS
SUE
Th
e fi
nan
cial
sta
tem
ents
wer
e au
tho
rize
d fo
r iss
ue
on
Mar
ch 0
4, 2
02
0 b
y th
e B
oar
d o
f Dir
ecto
rs o
f th
e B
ank.
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
C
hie
f Fi
nan
cial
Off
icer
M
anag
ing
Dir
ecto
r
D
irec
tor
Dir
ecto
r
D
irec
tor
The Bank of Khyber
106
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
18
A N N U A L R E P O R T 2 0 1 9
STA
TEM
ENT
SHO
WIN
G W
RIT
TEN
-OFF
LO
AN
S O
R A
NY
OTH
ER F
INA
NC
IAL
REL
IEF
OF
RU
PEE
S FI
VE
HU
ND
RED
TH
OU
SAN
D O
R A
BO
VE
PR
OV
IDED
DU
RIN
G T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
1
No
ora
ni I
nd
ust
ries
(P
vt)
Ltd
P-2
09
, Sam
un
dar
i Ro
ad,
Fais
alab
ad
1. M
r. Z
eesh
an N
oo
ran
i
C
NIC
33
10
0-0
75
55
74
-7
2. M
r. A
bb
as A
li N
oo
ran
i
C
NIC
33
10
0-6
45
83
15
-1
3. M
rs. S
ajid
a Su
ltan
No
ora
ni
C
NIC
33
10
0-0
70
77
15
-1
S/o
Su
ltan
Mah
mo
od
S/o
Su
ltan
Mah
mo
od
W/o
Su
ltan
Mah
mo
od
24
.99
9
1.3
99
-
26
.39
8-
-4
.23
4*
2
Fro
n�
er P
har
mac
eu�
cal (
Pvt
)
Ltd
W-1
0, I
nd
ust
rial
Est
ate,
Jam
rud
Ro
ad, P
esh
awar
1. M
r. A
man
Ulla
h K
han
C
NIC
17
30
1-5
49
45
57
1-5
2. M
r. R
iaz
Ah
mad
C
NIC
17
30
1-7
39
49
57
-9
3. M
rs. Q
amar
Ijaz
Ah
med
C
NIC
61
10
1-2
36
79
41
-8
S/o
Mu
ham
mad
Ah
mad
S/o
Mu
ham
mad
Ah
mad
W/o
Eja
z A
hm
ed
36
.10
6
1.1
35
-
37
.24
1-
-6
.92
3**
*In
clu
des
ove
rdu
e m
ark-
up
Rs.
3.2
45
Mill
ion
, Pen
alty
Rs.
0.9
89
Mill
ion
(to
tal R
s. 4
.23
4 M
illio
n)
**C
ost
of
Fun
d.
Rs
in M
illio
n
Pri
nci
pal
wri
�e
n-
off
Inte
rest
/
Mar
k-u
p
wri
�e
n-
off
/wai
ved
Oth
er
Fin
anci
al
Re
lief
Pro
vid
ed
S.
No
.
Nam
e a
nd
ad
dre
ss o
f th
e
bo
rro
we
r
Nam
e o
f in
div
idu
als
/ p
artn
ers
/ d
ire
cto
rs (
wit
h
CN
IC N
o.)
Fath
er'
s/H
usb
and
's N
ame
Ou
tsta
nd
ing
Liab
ili�
es
at B
egi
nn
ing
of
Year
Pri
nci
pal
Inte
rest
/
Mar
k-u
p
Oth
er
than
Inte
rest
/
Mar
k-u
p
Tota
l
An
nex
ure
- I 4
.23
4
6.9
23
Tota
l
The Bank of Khyber
107 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019 Annexure - II
2019 2018
Note
ASSETS
Cash and balances with treasury banks 6,807,574 4,222,345
Balances with other banks 6,289,995 1,629,801
Due from financial ins�tu�ons 1 4,831,347 2,000,000
Investments 2 11,602,166 10,573,630
Islamic financing and related assets - net 3 45,791,558 35,466,569
Fixed assets 610,038 280,407
Intangible assets 3,426 5,845
Due from head office 325,575 -
Other assets 4,410,288 867,929
Total Assets 80,671,967 55,046,526
LIABILITIES
Bills payable 285,589 336,698 Due to financial ins�tu�ons 18,891,848 1,500,000 Deposits and other accounts 4 50,079,326 45,894,040 Due to head office - 1,078,829 Other liabili�es 5 4,894,946 1,168,149
74,151,709 49,977,716 NET ASSETS 6,520,258 5,068,810
REPRESENTED BY
Islamic banking fund 460,000 460,000 Reserves 42,141 44,855 (Deficit) / surplus on revalua�on of assets (15,000) (34,432) Unappropriated profit 6 6,033,117 4,598,387
6,520,258 5,068,810
CONTINGENCIES AND COMMITMENTS 7
ISLAMIC BANKING BUSINESS
The Bank is opera�ng 84 (2018: 84) Islamic banking branches and 39 (2018: 39) Islamic banking windows at
the end of the year.
---------- Rupees in '000 ----------
The Bank of Khyber
108 A N N U A L R E P O R T 2 0 1 9
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
2019 2018
Note
Profit / return earned 8 6,591,437 3,354,422
Profit / return expensed 9 2,839,587 1,231,072
Net profit / return 3,751,850 2,123,350
OTHER INCOME
Fee and commission income 100,509 97,988
Dividend income - -
Foreign exchange income 120,103 58,851
Gain / (loss) on securi�es 4,334 -
Other income 49,550 30,389
274,496 187,228
4,026,346 2,310,578
OTHER CHARGES
Opera�ng expenses 1,618,499 1,488,109
Other charges 55,133 270
1,673,632 1,488,379
Profit before provisions 2,352,714 822,199
Provisions and write offs 3,134 3,139
Profit before taxa�on 2,355,848 825,338
Taxa�on 921,118 321,882
Profit a�er taxa�on 1,434,730 503,456
The profit and loss account of the Bank's Islamic banking branches for the year ended December 31, 2019 is
as follows:
---------- Rupees in '000 ----------
The Bank of Khyber
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
109 A N N U A L R E P O R T 2 0 1 9
1D
ue
fro
m fi
nan
cial
ins�
tu�
on
s
Cal
l len
din
gs2
,00
0,0
00
-2
,00
0,0
00
2,0
00
,00
0-
2,0
00
,00
0
Bai
mu
ajja
l rec
eiva
ble
fro
m S
tate
Ban
k o
f Pa
kist
an2
,83
1,3
47
2,8
31
,34
7-
--
4,8
31
,34
7-
4,8
31
,34
72
,00
0,0
00
-2
,00
0,0
00
2In
vest
me
nts
by
segm
en
ts:
Fed
era
l Go
vern
me
nt
Secu
ri�
es:
-
Go
P Ij
arah
Su
kuks
1,5
00
,00
0
-
(15
,00
0)
1,4
85
,00
0
6,2
50
,03
2
-(3
4,4
32
)6
,21
5,6
00
-
Bai
Mu
ajja
l 6
,38
8,7
11
-
-
6,3
88
,71
1
-
--
-
Oth
er
no
n-g
ove
rnm
en
t d
eb
t se
curi
�e
s
-
Pow
er /
gas
an
d o
ther
Su
kuks
3,7
28
,45
5
-
-
3,7
28
,45
5
4,3
58
,03
0
--
4,3
58
,03
0
11
,61
7,1
66
-
(15
,00
0)
11
,60
2,1
66
10
,60
8,0
62
-(3
4,4
32
)1
0,5
73
,63
0
20
19
20
18
3Is
lam
ic fi
nan
cin
g an
d r
ela
ted
ass
ets
No
te
Ijara
h3
.11
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3,1
68
1,1
38
,90
4
Mu
rab
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3.2
3,2
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,10
73
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inis
hin
g M
ush
arak
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3,8
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4,2
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7
Ru
nn
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shar
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1,3
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3,6
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9,9
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Gro
ss Is
lam
ic fi
nan
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g an
d r
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ted
ass
ets
45
,92
9,8
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35
,60
7,9
95
Less
: p
rovi
sio
n a
gain
st Is
lam
ic fi
nan
cin
gs
- Sp
ecifi
c1
23
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01
25
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9
- G
ener
al1
5,2
72
15
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7
13
8,2
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1,4
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mic
fin
anci
ng
and
rel
ated
ass
ets
- n
et o
f p
rovi
sio
n4
5,7
91
,55
83
5,4
66
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9
---
----
----
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20
19
20
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---
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---
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20
19
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In lo
cal
curr
en
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In f
ore
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curr
en
cy
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tal
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cal
curr
ency
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ore
ign
curr
ency
T
ota
l
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st
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visi
on
fo
r
dim
inu
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n
(D
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t)
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st
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lue
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inu
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rplu
s C
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ing
valu
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---
----
----
----
-- R
up
ee
s in
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----
----
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The Bank of Khyber
110
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
ECEM
BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
3.1
Ijar
ah
20
19
20
18
No
te
Un
der
IFA
S-II
3.1
.11
,05
8,7
38
1,1
24
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8
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der
fin
ance
met
ho
d3
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69
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ets/
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nto
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r IF
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56
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7
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5,8
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04
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4
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7
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As
at J
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01
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Ijara
has
sets
un
der
IFA
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are
stat
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cost
of
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of
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.
As
at D
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31
, 20
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18
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Co
st
The Bank of Khyber
111
NO
TES
TO T
HE
FIN
AN
CIA
L ST
ATE
MEN
TSFO
R T
HE
YEA
R E
ND
ED D
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BER
31
, 20
19
A N N U A L R E P O R T 2 0 1 9
3.1
.2N
et in
vest
me
nt
in Ij
arah
un
de
r fi
nan
ce m
eth
od
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9
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47
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8
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tals
5,4
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1,1
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-
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3,8
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-
6,6
55
Pro
fit
for
futu
re p
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1)
(29
1)
-
(1,0
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)
(59
4)
(43
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-
(1,0
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)
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nd
er fi
nan
ce m
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od
4,6
09
90
7
-
5,5
16
2,2
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25
-
5,6
31
20
19
20
18
3.2
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rab
aha
No
te
Mu
rab
aha
fin
anci
ng
3.2
.12
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5,4
68
2,9
46
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2
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van
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51
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3
21
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1
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7
3
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13
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ura
bah
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able
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ross
3.2
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5,4
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46
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2
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: Def
erre
d M
ura
bah
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com
e3
.2.4
13
4,3
09
1
17
,49
9
Pro
fit
rece
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le s
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wn
in o
ther
ass
ets
4,2
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18
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7
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fin
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ngs
2,6
25
,44
5
2,8
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0
3.2
.2Th
e m
ove
men
t in
Mu
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fin
anci
ng
du
rin
g th
e ye
ar is
as
follo
ws:
Op
enin
g b
alan
ce2
,94
6,8
72
2,8
07
,18
2
Sale
s d
uri
ng
the
year
5
,66
1,8
73
6,4
81
,99
1
Ad
just
ed d
uri
ng
the
year
5,8
53
,27
7
6,3
42
,30
1
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sin
g b
alan
ce
2,7
55
,46
8
2,9
46
,87
2
3.2
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ura
bah
a sa
le p
rice
5,6
61
,87
3
6,4
81
,99
1
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rab
aha
pu
rch
ase
pri
ce5
,30
6,0
14
6,1
63
,68
8
35
5,8
59
31
8,3
03
3.2
.4D
efer
red
mu
rab
aha
inco
me
Op
enin
g b
alan
ce1
17
,49
8
85
,88
8
Ari
sin
g d
uri
ng
the
year
35
5,8
70
31
8,3
03
Less
: Rec
ogn
ized
du
rin
g th
e ye
ar3
39
,05
9
28
6,6
92
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sin
g b
alan
ce1
34
,30
9
11
7,4
99
3.3
Is�
sna
Ad
van
ce a
gain
st Is
�sn
a4
,06
1,7
92
3,1
49
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3
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sna
Inve
nto
ry3
50
,00
05
0,0
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able
20
0,0
00
65
0,0
00
4,6
11
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23
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9,9
93
Ove
r fi
ve y
ears
T
ota
l
---
----
----
----
---
Ru
pe
es
in '0
00
---
----
----
----
--
20
19
20
18
No
t la
ter
than
on
e
year
Lat
er
than
on
e a
nd
less
than
five
ye
ars
Ove
r fi
ve
year
s
---
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-- R
up
ee
s in
'00
0 -
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
----
-
To
tal
No
t la
ter
than
on
e ye
ar
Lat
er t
han
on
e
and
less
th
an
five
yea
rs
The Bank of Khyber
112
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
A N N U A L R E P O R T 2 0 1 9
4 Deposits
Customers
Current deposits 17,920,864 57,675 17,978,539 19,196,004 322,813 19,518,817
Savings deposits 26,336,004 - 26,336,004 21,761,903 - 21,761,903
Term deposits 3,087,502 - 3,087,502 2,309,946 - 2,309,946
Others 2,490,098 - 2,490,098 2,212,882 - 2,212,882
49,834,468 57,675 49,892,143 45,480,735 322,813 45,803,548
Financial Ins�tu�ons
Current deposits 499 - 499 1,494 - 1,494
Savings deposits 186,684 - 186,684 88,998 - 88,998
50,021,651 57,675 50,079,326 45,571,227 322,813 45,894,040
2019 2018
4.1 Composi�on of deposits
- Individuals 16,221,670 12,729,148
- Government / public sector en��es 21,096,099 17,956,913
- Non-banking financial ins�tu�ons 186,937 90,492
- Private Sector 12,574,620 15,117,487
50,079,326 45,894,040
4.2
5 Other liabili�es 2019 2018
Note
Profit payable in local currency 249,141 152,128
Pool Management Reserves 94,461 97,714
Un-earned commission and income 23,233 59,469
Accrued expenses 38,932 47,186
Deferred income murabaha 151,809 117,499
Un-earned Bai Muajjal Sukuk 1,872,952 3,185
Security deposit against Ijarah 345,116 340,901
Charity fund 5.1 21,594 9,156
Tax payable 1,242,993 321,745
Lease liability 416,714 -
Bills payment system over the counter (BPS-OTC) 411,715 -
Income reserve 14,009 4,389
Others 12,277 14,777
4,894,946 1,168,149
5.1 Charity fund
Opening balance 9,156 -
Addi�ons during the year
Received from customers on account of delayed payment 30,752 6,431
Dividend purifica�on amount - 16
Other Non-Shariah compliant income 174 152
Others 1,629 2,557
32,555 9,156
Payments / u�liza�on during the year
Welfare 20,117 -
Health - -
20,117 -
Closing balance 21,594 9,156
6 Islamic banking business unappropriated profit
Opening balance 4,598,387 4,094,931
Add: Islamic banking profit for the year 2,355,848 825,338
Less: Taxa�on (921,118) (321,882)
Closing balance 6,033,117 4,598,387
7 Con�ngencies and commitments
-Guarantees 5,270,767 4,608,139
-Commitments 1,028,102 1,500,966
6,298,869 6,109,105
------------- Rupees in '000 -------------
This includes deposits eligible to be covered under insurance arrangements amoun�ng to Rs.25,248.34 (2018: Rs 23,005.65 million) as of December 31, 2019.
---------- Rupees in '000 ----------
--------------------------------------------------------- Rupees in '000 ---------------------------------------------------------------
2019 2018
In local
currency
In foreign
currency Total
In local
currency
In foreign
currency Total
The Bank of Khyber
113
A N N U A L R E P O R T 2 0 1 9
8 Profit/return earned of financing, investments and placement 2019 2018
Note
Profit earned on:
Financing 4,800,688 2,611,388
Investments 1,369,854 714,802
Placements 420,895 28,232
6,591,437 3,354,422
9 Profit on deposits and other dues expensed
Deposits and other accounts 2,104,426 729,516
Due to Financial Ins�tu�ons 735,161 501,556
2,839,587 1,231,072
---------- Rupees in '000 ----------
10 Pool management Islamic Banking Group of the Bank is opera�ng following pools/sub-pools. General pool Sub-pools i. Riba Free Special Deposit POOL-1 ii. Riba free special deposit pools - Treasury Interbank iii. Riba Free Special Deposit POOL-Corporate- i iv. Riba Free Special Deposit POOL-Corporate- ii v. Riba Free Special Deposit POOL-Corporate- iii vi. Riba Free Special Deposit POOL-Corporate- iv vii. Riba Free Special Deposit POOL-Mutual Fund / FI viii .RFSD-Daily Product-1 Pool ix. RFSD-Daily Product-3 Pool x. RFSD-Daily Product-4 Pool xi. RFSD-Daily Product-5 Pool xii. Khyber Islamic Investment Cer�ficates-1 xiii. Khyber Islamic Investment Cer�ficates-2 xiv. RFSD-ITMINAN MAHANA CERTIFICATE-POOL xv. Riba free special deposit pool - Islamic export refinance security (IERS) xvi. Riba free special deposit pool - Profit Equaliza�on Reserves (PER) xvii. Riba free special deposit pool -Investment Risk Reserves (IRR) Features of general pool In this pool all types of deposits are accepted on Musharakah basis against all types of assets and income from all types of assets. Cer�ficates can also be
issued for a fixed period.
Deposits received in this Pool are invested in Islamic assets like Murabaha, Ijarah, Diminishing Musharakah, Running Musharakah, Is�sna, Islamic Sukuks and any other Shariah Compliant Investment which are duly approved by the Shariah Advisor. Deposits are accepted through all BOK Islamic branches, as well as, Islamic desks established in Conven�onal branches of the Bank.
Features of sub-pools
In sub pools, deposits are accepted on Musharakah basis against specific assets and are offered expected profit rates. Cer�ficates can also be issued for a fixed period.
Deposits received in this pool are invested in Islamic assets like Ijarah, Diminishing Musharakah, Running Musharakah, Islamic Sukuks and any other
Shariah Compliant investment which are duly approved by the Shariah Advisor. Deposits are accepted through all Islamic branches of the Bank as well as Islamic desks established in conven�onal branches of the Bank.
These deposits are tagged with specific assets and deposits are accepted only when there is some opportunity of investment. These deposits require approval before acceptance.
Key features - Minimum investment is prescribed by the Bank for each sub-pool.- Profit payment on monthly basis.- Profit calculated on daily average balance for the month.- Investment as deposit and cer�ficate for 1 month, 3 months and 6 months etc.- Pre-mature termina�on is allowed without any adjustment if expected profit reduces for the coming months.
Risks of the special sub - pools All special pools are created as sub pools of the general pool. All administra�ve expenses of the pools are borne by the general pool as equity
contributor. However, depositors bear the risk of all direct losses and expenses of the pool. All residual income of the pool is transferred to the general pool being equity holders.
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
The Bank of Khyber
114
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
A N N U A L R E P O R T 2 0 1 9
Profit sharing and weightages for distribu�on of profit
Assignment of weightage for profit distribu�on to different types of profit bearing sources of funds is as follows:
While considering weightages emphasis shall be given to the quantum, type and the period of risk assessed by following factors:
i. Period of investment (number of months, years)
ii. Profit payment op�on (monthly, quarterly, yearly maturity)
iii. Purpose of deposit (Hajj, Umrah etc.)
iv. Type of customer (pensioners, widows, corporate, individual)
Weightages are declared five days before start of each month.
Brief highlights of profit earned and distributed to depositors and retained by IBG are as under:
2019 2018
Gross profit earned 6,865,933 3,541,650
Administra�ve expenses 1,673,632
1,488,379
Distributable share 5,192,301
2,053,271
Profit paid to IAH/PLS depositors 2,839,587
1,231,072
Charging expenses
Classifica�on of assets, revenues, expenses, gain and loss on the basis of sources of finance:
2019 2018
Financings
Agribusiness 1,019,877
810,392
Marble and mining 10,710
14,285
Chemical and pharmaceu�cals 667,738
951,369
Cement 3,222,372
4,692,143
Sugar 2,047,206
Tex�le 2,317,796
-
Automobile and transporta�on equipment 409,526
680,002
Petro chemical 4,905
9,609
Housing 378,658
254,311
Miscellaneous manufacturing 2,403,675
1,741,007
Personal 427,192
804,735
Contractors 403,974
-
Tradings 632,435
919,343
Services 204,814
417,662
Auto loans 480,027
516,629
Metal products 771,186
434,863
Commodity finance 30,000,000
20,000,000
Telecommunica�on -
-
CNG sta�on / gas 41,689 44,640
Consumer finance 175,991 166,660
Others 2,357,283 1,103,139
45,929,848 35,607,995
Investments
GOP Ijarah Sukuk 1,485,000 6,215,600
Power / electric / gas 3,728,455 4,358,030
5,213,455 10,573,630
51,143,303 46,181,625
---------- Rupees in '000 ----------
As per policy of the Bank, No gi� (Hiba) is given in favour of any par�cular customer or a par�cular class or category of customers/investors. However, bank reduced its own share of the bank’s addi�onal profit which is less than 60% of the Bank’s addi�onal profit ra�o.
All general and specific provisions created against non-performing financing and diminu�on in the value of investment as under pruden�al regula�ons and other SBP direc�ves have not been passed on to the PLS deposits as expense. However, income reversals due to classifica�on of assets and losses due to actual write-off of any facility have been considered expenses of the pool.
All types of administra�ve expenses are shared with the depositors. However, equity holders have the op�on to absorb all or part of administra�ve expenses.
Profit Equaliza�on Reserve of Rs. 42.141 million (December 31, 2018:Rs. 44.855 million) is not available for the distribu�on of cash and stock dividend to the shareholders.
All earning assets of Islamic banking group are jointly financed by unrestricted investments/PLS deposits account holders and the Bank. Detail of jointly financed earning assets is:
---------- Rupees in '000 ----------
The Bank of Khyber
115
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2019
A N N U A L R E P O R T 2 0 1 9
Annexure - III
Quality of available for sale securi�es - Ordinary shares
Listed Companies
Automobile parts and accessories -
-
-
-
Cement 6,211
5,785
-
-
Chemical 6
72
231
184
Commercial Banks 15,478
14,935
-
-
Fer�lizer 8,243
8,445
-
-
Food and personal care products 5
131
5
131
Insurance 5,000
-
5,627
618
Investment banks / Investment Companies /
Investment Security Companies 274,685
111,021
274,685
98,893
Oil and gas marke�ng companies 63,526
61,179
-
-
Paper and board -
99
-
53
Pharmaceu�cals 64,082
52,847
55,924
56,486
Tex�le composite 9,502
182
9,502
178
Tex�le spinning 23
228
23
276
Tex�le weaving -
79
-
122
Vanaspa� and allied industries -
17
-
17
446,761
255,020
345,997
156,958
Un-Listed Companies
Dawood Family Takaful 112,500
56,526
112,500
56,526
Saudi Pak Leasing - Preference Shares 195,000
-
195,000
-
Mohib Tex�le Mills Limited 25,000
-
25,000
-
Mohib Exports Limited 487
-
487
-
Asian Housing Finance Limited 5,000
-
5,000
-
Syed Match Company Limited 7
7
7
7
Total 337,994
56,533
337,994
56,533
* Break-up values are not given as the same are not available.
Breakup
valueCost
Breakup
value
---------------------------------- Rupees in '000 -----------------------------
----------------------------- Rupees in '000 --------------------------------
Cost
2019 2018
2019 2018
CostMarket
valueCost
Market
value
The Bank of KhyberThe Bank of Khyber
Pa�ern of ShareholdingAs On 31/12/2019
NO. OF SHAREHOLDERS From To SHARES HELD PERCENTAGE
<---- HAVING SHARES ---->
116
Company Total 100037116728442 100.0000
A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberThe Bank of Khyber
Category of Shareholders
As of 31.12.2019
No of shareholders Shares Held Percentage
Shareholding of Directors, CEO & Children
Maqsood Ismail Ahmad
12,156
Asad Muhammad Iqbal
18,234
Javed Akhtar
18,234
Shareholding of Banks, DFI & NBFI
Pakistan Industrial & Commercial Leasing Ltd.
2,431
Prudential Discount & Guarantee House Ltd.
22,792
Soneri Bank Limited
15,279
Pakistan Industrial
&
Comm. Leasing Ltd.
21,881
Escorts Investment Bank Limited
11,234
Shareholding of Insurance Companies
T PL
Direct Insurance Limited
15,195
The Pakistan General Ins.
Co. Ltd
3,039
Major Shareholders
Government of Khyber Pakhtunkhwa 702,208,233
Ismail Industries Ltd. 244,339,031
117 A N N U A L R E P O R T 2 0 1 9
Directors, CEO & Children 4 58,624 0.00
Associated Companies 1 244,339,031 24.42
Banks, DFI & NBFI
5
73,617
0.00
Insurance Companies
2
18,234
0.00
General Public (Local)
28,344
45,215,924
4.52
General Public (Foreign)
47
149,314
0.02
Others
37
7,438,190
0.74
Government of Khyber Pakhtunkhwa
1
702,208,233
70.20
Foreign Companies 1 870,000 0.09
TOTAL 28,442 1,000,371,167 100.00
10,000
Rashid Ali Khan
The Bank of Khyber
Complete List of Branches as on 31-12-2019
The Bank of Khyber
118 A N N U A L R E P O R T 2 0 1 9
1 Abbo�abad, Jinnah Road
2 Abbo�abad, Mansehra Road
3 Bannu Branch
4 Batagram
5 Batkhela Branch
6 Charsadda Branch
7 Chitral Ataliq Bazar
8 Chitral Chew Bazar,
9 D. I. Khan Circular Road
10 D. I. Khan, Tank Adda
11 Dargai Branch
12 Hangu Branch
13 Haripur Branch
0113 Islamic 0992-341444, 341431
0043 Conven�onal 0992-331913, 331914
0103 Islamic 0928-613394, 612202
0134 Islamic 0997-310154-5
0108 Islamic 0932-414851 & 3
0111 Islamic 091-9220100-1
0011 Conven�onal 0943-412473
0137 Islamic 0943-414571-2
0004 Conven�onal 0966-719017
0129 Islamic 0966-850724-5
0136 Islamic 0932-331447-8
0107 Islamic 0925-620744
0019 Conven�onal 0995-616800,610728, 612292
0992-341430 Yes
0992-331916 Yes
0928-620039 Yes
0997-310156
0932-414853 Yes
091-9220102 Yes
0943-412220 Yes
0943-414573 Yes
0966-718099 Yes
0966-850727 Yes
0936-331449 Yes
0925-623744 Yes
0995-611285 Yes
Jinnah Road, Abbo�abad
934-A, Mansehra Road, Abbo�abad
Old GTS Chowk, Gowshala Road Bannu.
Khasra No.3149/971, Haji Nazir Plaza, Shahrah-e-Qaraqurum, Batagram
Near Government High School, Main Bazar, Bathkhela
Main Bazar Charsadda Mardan Road, Charsadda
Ataliq Bazar, Chitral.
Shop No.1-4, Qazafi Market, Chew Bazar, Chitral
Circular Road, D.I.Khan
Shop No.01-10, Block 13, Tank Adda, Dera Ismail Khan
Amin Plaza, Main Bazar, Dargai.
Opposite DCO Office, Main Bazar, Kohat Road Hangu
Shahrah-e-Hazara, Haripur.
14 Ha�ar Branch
15 Havelian, Bank Square
16 Kumber, Lower Dir
17 Karak Branch
18 Khwaza Khela, Swat
19 Kohat, Bannu Road
20 Kohat, Main Bazaar
21 Mansehra, Abbo�abad Road
22 Mansehra, Shahrah-e-Resham
23 Mardan, Khwaja Gunj Bazaar
24 Mardan, Chamber House
25 Mingora, Main Bazar
0014 Conven�onal 0995-617231
0040 Conven�onal 0992-810732-3
0144 Islamic 0945-885322
0049 Conven�onal 0927-211810 & 2
0143 Islamic 0946-744661-64
0003 Conven�onal 0922-9260146
0138 Islamic 0922-522013-4
0117 Islamic 0997-920181 & 4
0122 Islamic 0997-303271, 303273
0139 Islamic 0937-870823-4
0007 Conven�onal 0937-9230505 &7, 874899
0132 Islamic 0946-9240460,62
0995-617631 Yes
0992-810736 Yes
0945-886322 Yes
0997-211813 Yes
0946-744662 Yes
0922-9260156 Yes
0922-522015 Yes
0997-920182 Yes
0997-303272 Yes
0937-870825 Yes
0937-9230606 Yes
0946-9240461
26 Mingora, Saidu Sharif Road
27 Nowshera Branch
28 Peshawar, Asamai Gate (LHR)
29 Peshawar, Ashraf Road
30 Peshawar, Civil Secretariat
31 Peshawar, G. T. Road
32 Peshawar, Hayat Abad Chowk
33 Peshawar, High Court Branch
34 Peshawar, Kharkhano Market Hayat Abad
35 Peshawar, Khyber Bazar
36 Peshawar, KTH Branch
37 Peshawar, Main Corporate Branch
38 Peshawar, Saddar Road
39 Peshawar, University Road
40 Peshawar, Warsak Road
41 Serai Naurang Branch
42 Shabqadar
43 Swabi Branch
44 Swari Branch (Buner)
45 Tank Branch
46 Thall, Main Bazar
47 Timergara Branch
48 Topi Branch
49 Upper Dir
50 Peshawar, Shami Road
0012 Conven�onal
0104 Islamic
0119 Islamic
0025 Conven�onal
0015 Conven�onal
0010 Conven�onal
0128 Islamic
0048 Conven�onal
0101 Islamic
0016 Conven�onal
0121 Islamic
0001 Conven�onal
0013 Conven�onal
0002 Conven�onal
0066 Conven�onal
0127 Islamic
0145 Islamic
0118 Islamic
0131 Islamic
0106 Islamic
0130 Islamic
0105 Islamic
0135 Islamic
0126 Islamic
0068 Conven�onal
0946-9240045 & 7 0946-9240046 Yes
0923-9220035 & 38 0923-9220035 Yes
091-2561511 091-2561512 Yes
091-2593262, 2553007 091-2552497 Yes
091-9211710 091-9212680 Yes
091-2263409 091-2263410 Yes
091-5853283-4 091-5853285 Yes
091-5274368,5274168 091-5274168 Yes
091-5824927, 5825430 091-5815194 Yes
091-2593705, 2568782 091-2211170 Yes
091-9218016 091-9218016
091-5271758,5278284 091-5279791 Yes
091-5273912, 5276485 091-5277278
Yes091-5700227, 9216951 091-9216959 Yes
091-5201301-2 091-5201341 Yes
0969-352963 0969-352964 Yes
091-6281101-2 091-6289333 Yes
0938-222513, 223423 0938-222512 Yes
0939-555289, 555279 0939-555229 Yes
0963-510068 0963-510400 Yes
0925-510740, 511741 0925-511741 Yes
0945-9250232, 822090 0945-822690 Yes
0938271546-8 0938-271547 Yes
0944-890021 0944-890022 Yes
091-5270270-71 091-5613913 Yes
Industrial Estate Ha�ar, Haripur
Property # 4242, Bank Square Havelian
City Market, Main Road, Kambur, Lower Dir
Khasra No. 1327/1364, Mian Muqadess Gul Market, Main Bazar, Karak
Irfan Plaza, Main Bazaar, Khwaza Khela, Swat
Cantonment Plaza Bannu Road, Kohat
Shop No.T-147, T-148, Main Bazaar, Kohat
Main Bazar, Opposite GTS Stand Mansehra.
Opposite Grid Sta�on, Near Pakhwal Chowk, Shahra-e-Resham, Mansehra.Property No.26/591-592, 27593-628, Haji Khan Gul Trunk House, Khwaja Gunj Bazaar, Mardan
Grund floor, Chamber House, Aiwan-e-Sanat-o-Tijarat Road, Collage Chowk, Mardan.
Shop No. 01, Bank Square, Main Bazar, Mingora, Swat.
Basement & Ground Floor, Yousaf Plaza, Khasra No.318, Makan Bagh, Saidu Sharif Road, Mingora, Swat.
Saad Plaza, Saddar Road, Nowshera Can�.
Tariq Sultan Building, Asamai Gate, Lady Reading Hospital Road Peshawar
New Rampura Gate, Ashraf Road, Peshawar.
Civil Secretariat , Peshawar
Ground floor, Afandi Tower, Bilal Town, G.T. Road, Peshawar
Saif Shopping Mall, Hayatabad Chowk, Jamrud Road, Peshawar
High Court Branch Peshawar
Royal Plaza, Hayatabad Kharkhano Market, Jamrud Road, Peshawar
Abbasin Hotel, Khyber Bazar, Peshawar
Khyber Teaching Hospital (University Road) Peshawar
Shop No. 1 to 6 (Ground Floor) and Office No. 1 to 3 (First Floor),
Olympic Plaza, Qayyum Stadium, Bara Road, Peshawar Can�.
Shop No.9,10 & 11, at Super Market, Adjacent State Bank of Pakistan Peshawar,
Ghaffar Plaza, Adjacent to Sheraz Restaurant, University Road, Peshawar
Khasra No.6184/2893, Shop No.1, Sabir Business Center, Warsak Road, Peshawar
Khasra No 438, Sahibzada Kabir Plaza GT Road , Serai Naurang, Lakki Marwat
Khasra No.4244/159-162, Oppoisite Shabqadar Fort Gate, Shabqadar
Jamil Khan Market, Mardan Road, Swabi
Nisar Market, Pir Paba Road, Swari, Buner
Gillani Market, Main Bazar Opposite DHQ Hospital, Tank.
Al-Murtaza Market, Bannu Chowk, Main Bazar Thall District Hangu
Shaheed Plaza, Alam Zeb Shaheed Chowk, Timergara
Sher Khan Market, Main Bazar, Tarbela Road, Topi, Dis� Swabi.
Shop No.1 to 6 Shafi Plaza, Saleem Market Main Bazar Upper Dir.
Shop No.6-10, Garrison Park, Shami Road, Peshawar
Khasra No.169&183, Main Bazar, Moza Saleh Khana, Tehsil Pubbi, Nowshera 0147 Islamic Yes51 Saleh Khan (Pubbi)
S.No Branch Name Complete Address of Branches Br. Code Branch Mode Phone Number Fax Number ATM Onsite
Khyber Pakhtunkhwa (106 Branches)
The Bank of Khyber
52 Peshawar, Chowk Nasir Khan
53 Peshawar, Dalazak Road
54 Chakdara
55 Peshawar, Garhi Qamar Din
56 Jehangira
57 Takht Bhai
58 Pabbi, G.T.Road
59 GulBahar Branch, Peshawar.
60 Tangi Branch, Charsadda.
61 Barikot Swat
62 Shangla
63 Wari Dir
64 Charsadda Road Branch, Peshawar.
65 Manki Sharif Branch, Nowshera.
66 Torghar
67 Achini Payan Branch, Peshawar.
68 D.I.Khan Road Branch, Bannu.
69 Ma�a Branch
70 Sheva Adda Swabi
71 Umarzai Branch, Charsadda.
72 Sheikh Maltoon, Mardan
0154 Islamic
0073 Conven�onal
0149 Islamic
0155 Islamic
0151 Islamic
0150 Islamic
0159 Islamic
0156 Islamic
0158 Islamic
0157 Islamic
0160 Islamic
0161 Islamic
0074 Conven�onal
0162 Islamic
0165 Islamic
0166 Islamic
0075 Conven�onal
0164 Islamic
0168 Islamic
0078 Conven�onal
0079 Conven�onal
0170 Islamic
091-2592014 Yes
091-2608215-17 091-2608218 Yes
0945-762532-33 0945-762534 Yes
091-2322815 Yes
0923-510057 0923-510054 Yes
0937-553683 Yes
0931-527075 Yes091-2606394 Yes
(091)6555530. Yes
0946-751781-2 0946-751783 Yes
0996-850140-1 0996-850142 Yes
0944-841511 0944-841611
0944-841711 (Fax) Yes
091-2246684-5 091-2246683 (Fax) Yes0923-6260710923-6260720923-626074
0923-626073 (Fax) Yes
0997-2097050997-209706
Yes
091-5622545 Yes
0928-611172-5 0928-611174 (Fax) Yes
0946-7908400946-790841 0946790842 (Fax) Yes
0938-3107030938-310704
0938-310705 (Fax) Yes
091-952506-07 091-952531 (Fax) Yes
0937-8431110937-843222
0937-843225 (Fax) Yes
0946-7554710946-755473
0946-755472 (Fax) Yes
88 Tordher, Swabi.
89 Darosh, Chitral.
90 Sheikh Yousaf Adda, D.I.Khan.
91 Rashakai, Nowshera
92 Charbagh, Swat
93 Kohat Road, Peshawar
94 Rustam, Mardan
0077 Conven�onal 0938-4600280938-4600470945-8303450945-830346
0937-8204340937-820435
0937-576005
091-5284214
0085 Conven�onal 0938-537116-118
0086 Conven�onal 0943-480261-62-63
0087 Conven�onal 0966-740316-317
0182 Islamic 0937-8803690937-881369
0181 Islamic 0946-730493-94
0092 Conven�onal 091-2323635091-2323695
0183 Islamic 0937-801909
0938-460029 (Fax) Yes
0938-537119 Yes
0943-480264 Yes
0966-740318
Yes
0946-730495 (Fax) Yes
091-2323696 (Fax) Yes
Yes
95 Barawal Bandi, Swat
97 Lundkhwar, Mardan
98 Sardheri, Charsadda
99 Judicial Complex Haripur
100 Nasir Baghh Branch Peshawar
101 HMC Branch, Peshawar.
Al-Rehmat Plaza, Property No. CB/637/2027/755 & CB/637/2028/754/F-1 F-2, Ground Floor, Peepal Mandi, ChowkNawaz Plaza, Taxa�on No. 4988 to 5008, Ground Floor, Dalazak Road, Peshawar.
Shop No.1 to 10, Zaman Market, Adjacent UBL & NBP, Main Bazar, Chakdara (Lower Dir)
Khata Khatoni No.418/ 915 to 937, Khasra No.Qata (41), Ground Floor, Arbab Maket, Garhi Qamar Din, Near Mujaddad CNG sta�on, North side Ring Road, Peshawar.Ground & 1st Floor, Behram Khan Centre, G.T. Road, Jehangira (Nowshera)Khasra No.785, Shaukat Mansion, Ground & 1st Floor, Opposite Takht Bhai Mega Market, Takht Bhai, MardanAjun Market, G.T.Road, Pabbi (District Nowshera)Plot # 4-A & 4-B, Sameer Square, Anam Sanam Chowk, Gulbahar Road, Hussainabad, PeshawarKhasra No. 1633, Malak Plaza, Sabqadar Road, Tangi,(District Charsadda)Khasra No. 1333, Iqbal Khan Plaza, Pir Baba Road, Barikot SwatIslamic Banking Branch at Khasra No.1283, 84 & 86, Munir Plaza, Adjacent MCB, Basement & Ground Floor, Besham Road, Alpuri District Shangla.I�ehad Plaza, Lower basement and Ground floor,Wari Bazaar, Dir Chitral Road, Upper Dir.Khasra No. 1615/832, Adjacent Khayali CNG Sta�on, Shero Jhangi, Charsadda Road, Peshawar.Malak Jammen Market, Soorya Khel, Manki Sharif, Tehsil & District Nowshera.
Quarter No.1, District Head Quarter Torghar Judba, District Torghar, KPK
Muhammad Arcade, Achini Payan, Ring Road near Hayatabad Peshawar.University Plaza, D.I.Khan Road, Bannu.
Malak Tahir Market, Mouza Main Bazar, Ma�a, Mingora, Swat.
Office No. 1, Ground Floor, Sardar Khan Malak Plaza, Mardan Swabi Road, Sheva Adda, Swabi.
Khasra No. 4011/3485 & 4012/3486, Major Saeed Khan Market, Main Bazar, Umarzai.
Shop No. 25,26,27,28,29 & 31, Commercial Plaza Sector-E, Sheilk Maltoon Town, Mardan.
73 Kabal, Swat Khasra No. 2271, Ground Floor, Wahab Market, Kabal, Mingora Road, Swat.
74 Yar Hussain Branch Akbar Building, in�qal No. 3422, Main Bazar, Yar Hussain, Swabi.
75 Munda, Lower Dir 0169 Islamic 0945-530347 (Fax) YesGroud Floor, Habib Jan Market, Adjacent Tehsildar Office Munda, Munda Lower Dir.
76 Shergarh, Mardan 0080 Conven�onal 0937-820437 (Fax) YesGroud floor, Asghar Khan Market, Main Bazar, Shergarh, Mardan.
77 Katlang, Mardan 0081 Conven�onal 0937-576006
0937-576004 (Fax) YesInteqal No. 5038, Imam Shah Market, Main Bazar, Tehsil Katlang, District Mardan
0969-51005978 Puran, Shangla 0174 Islamic 0996-853026 YesKhasra No.227, Aluch Bazar, Tehsil Puran, Distruct Shangla.
79 Lakki Marwat 0173 Islamic 0969-510359 0969-511059 (Fax) YesShop No.1, Haji Jan Khan Market, Lakki City, Lakki Marwat.
80 Mall Road Branch, Peshawar 0172 Islamic 091-5284212 091-5284213 (Fax) YesOffice No.1, Ground Floor, Khanis Plaza, The Mall Road, Peshawar Can�.
81 Hayatabad Phase-V, Peshawar. 0083 Conven�onal 091-5814820 YesGround Floor. Plot No. 28, Sector B-1, Phase- V, Hayatabad Peshawar
0922-58066683 Sherkot, Kohat. 0082 Conven�onal 0922-580888 YesKhasra No. 315, Mujahid & Brothers Market, Sherkot Tehsil & District
Kohat.
84 Chamkani, Peshawar. 0084 Conven�onal YesKhasra No.156 & 157, Honey Market, Hidayatabad Chamkani, Peshawar.
85 Sakhakot Branch 0176 Islamic
0932-311410
0932-3114110932-311412
0932-311413 (Fax) YesNoor Market, Main Malakand Road, Sakhakot, District Malakand.
86 Tehkal Payan, Peshawar. 0178 Islamic 091-5621220 091-5621222 (Fax) YesHaji Nazar Mohammad Building, Tehkal Payan, University Road, Peshawar.
87 Sugar Mill Bypass Road, Mardan 0179 Islamic 0937-845696-97-98 0937-845699 (Fax) YesSharif Khan Plaza, New Charsadda Chowk, Railway Patak, Sugar Mill Bypass Road, Mardan
Khasra No.1751, Main Swabi Jehangira Road, Matani Changan Tordher, Swabi.
Main Darosh Bazaar, Zero Point, Chitral
Khasra No.1007/529, Sheikh Yousaf Adda, OppositePunjab Collage, Bannu Road D.I.Khan.
Main Bazar Rashakai, Nowshera
Saad Tower, Main Bazar Charbagh, Tehsil & District Swat
Marjan Hotel, Mauza Kotla Mohsin Khan, Kohat Road, Peshawar
Main Bazar Rustam, Mardan
Al-Madina Market Shahi Road, Main Bazar Barawal Bandi, Upper Dir
Ramora Lundkhwar, Tehsil Takht Bhai, District Mardan
Maroof Khel, Sardheri Bazar, Tehsil & District Charsadda
Judicial Complex Haripur
Nasir Bagh Road, Near Police Colony peshawar
Hayatabad Medical Complex, Phase 4 Hayatabad, Peshawar
0184 Islamic 0944-830019-20 0944-830021
0089 Conven�onal 0937-850131-32 0937-850134
0088 Conven�onal 091-6644001-02 091-6644003
0097 Conven�onal 0995-321196-97
0096 Conven�onal 091-5710677-78
0185 Islamic 091-5811941-43 091-5811946
96 Kuza Bandai, Swat Hamas Khan Market, Ma�a Road, Kuza Bandai, Tehsil Kabal, District, Swat
0093 Conven�onal 0946-880411 0946-880445 Yes
Yes
Yes
Yes
091-22592014-15
091-2325225-3
0937-553682-4
0931-527071-3
091-2606391-3
091-6555527-8-30
S.no Branch Name Complete Address of Branches Br. Code Branch Mode Phone Number Fax Number ATM Onsite
119 A N N U A L R E P O R T 2 0 1 9
The Bank of KhyberThe Bank of Khyber
Jamrud Road Branch
Torkham
Parachinar
Dara Adam Khel Branch
Khar Bajaur
Sadda, Kurram Agency
Adjacent Caltex Petrol Pump, Jamrud Bazar, Jamrud (Khyber Agency)
Groud Floor, Masoom Building, near PTDC and Tehsildar Office, Peshawar Torkham Road, Torkham.
Shop No. 1 to 5 Ground Floor, Haji Safdar Market, School Road, Parachinar.
Ground floor, Nawab Shah Plaza Dara Bazaar Mohammad Zarghar Dara Adam Khel.
Abid City Centre, Ground Floor, Lt.Sajjad Khan Shaheed Bypass Road Khar Bazaar, Bajaur Agency
Bangash Market, Main Bazar Sadda Tehsil Lower Kurram, District Kurram Agency
0125 Islamic 091-5602013,5830147-8 091-5830149 Yes
0167 Islamic0924-2400440924-2400450924-240046
0924-240047 (Fax)
0076 Conven�onal 0926-3122720926-3122730926- 312374 0926-312275 (Fax) Yes
0175 Islamic 0922-811222 0922-811333 Yes
0163 Islamic 0942-221263-4
0091 Conven�onal 0926-520424-25 0926-520426 (Fax) Yes
102
103
104
105
106
107
Miran Shah
WANA
Ghalani
103
104
105
106 Kalaya
Syed Gul Market, Main Bannu-Miran Shah Road, Miran Shah, District North Waziristan
South Waziristan Scouts Camp Wana, District South Waziristan
Opposite Civil Colony Ghalani, District Mohmand
Sub Divisional Head Quarters Compound, Kalaya, District Orakzai
0141
0152
0153
0171
Islamic
Islamic
Islamic
Islamic
0300-5839362
(0965) 210006
(0924) 290280
(0925) 650009, 650010
S.no Branch Name Complete Address of Branches Br. Code Branch Mode Phone Number Fax Number ATM Onsite
Province Sindh (12 Branches)
102 Hyderabad Branch
103 Karachi, Bahadurabad
104 Karachi, Cli�on Branch
105 Karachi, DHA, Phase-II
106 Karachi, Metroville
107 Karachi, Shahrah-e-Faisal
108 Karachi, Shireen Jinnah Colony
109 Karachi, SITE
110 Karachi, Sohrab Goth
111 Karachi, Stock Exchange Branch
112 Sukkur
113 Karachi, Napier Road
Plot No.41/444,445,446,447,448 & 449, Main Bohri Bazar, Near Blair Hospital, Saddar Can�., Hyderabad.
Shop No.4 & Flat No.2, Survery No.SNCC/30, Qazi Court, Karachi Coopera�ve Housing Society, Bahadarabad, Karachi
Shop No.7,8 & 9 Plot # G-10, Garnet Centre, Block-8, Main Road, KDA Scheme # 5, Cli�on Cantonment, Karachi
Plot No.69-C, 11th Commercial Building, DHA, Phase II, Karachi
KDA Scheme, Project No.1, Metroville, SITE, Karachi.
Ebrahim Alibhai Tower, Shop No.02, Plot No.03, Block-7/8 Modern Coopera�ve Housing Society (MCHS), Shahrah-e-Faisal, Karachi
Block-1, Cli�on, Shireen Jinnah Colony Karachi
B-78, Allied Plaza Estate Avenue, S.I.T.E , Karachi
Shops No.A-7/A, A-7/B, A-8/A, A-8/B, Ground Floor, Block “A” Plot No.1-B-2, Sub Plot No.1-A, A1 Azam Plaza Scheme 33, Sohrab Goth, Super Market, Main Super Highway Karachi
1st Floor, Karachi Stock Exchange, Karachi
Property No.D-986, D-987, D-971, Hussaini Road, Sukkur
Shop No.07 & Office No.117, Yousuf Trader Centre, Plot No.26, SR-7, Ground & 1st Floor, Napier Road, Karachi
0047 Conven�onal 022-2731200, 2731209-10 022-2731211
0067 Conven�onal 021-34946751-2-4-5 021-34946753
0046 Conven�onal 021-35296291-98 021-35296291
0063 Conven�onal 021-35890171-4 021-35890175
0123 Islamic 0213-6754233-4 021-36754236
0024 Conven�onal 0213-4389037-8 021-34389039
0034 Conven�onal 0213-5873264-5 021-35873267
0109 Islamic 0213-2565102 & 4 021-32565105
0110 Islamic 021-36830070 & 2 021-36830067
0036 Conven�onal 021-32465804 & 7 021-32465805
0058 Conven�onal 071-5617057-8-9 071-5617056
0072 Conven�onal 021-32601371-72-74-75
021-32601373
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Province Punjab (34 Branches)
114 A�ock City
115 Bahawalpur
116 Chiniot
117 D.G. Khan
118 Faisalabad, Kotwali Road
119 Faisalabad, Sosaan Road
120 Gujar Khan
121 Gujranwala, G.T. Road
122 Gujrat, G. T. Road
123 Jhelum
124 Khanewal
125 Lahore, New Gardan Town.
126 Lahore, DHA
127 Lahore, Faysal Town
128 Lahore, Johar Town
129 Lahore, M.M. Alam Road
130
131
Lahore, Shah Alam Gate
132
Mian Channu
133
Multan, Abdali Road
134
Multan, Vehari Road
135
Okara, Jinnah Road
136
Rahim Yar Khan
137
Rawalpindi, City Saddar Road
138
Rawalpindi, Saddar Adam Jee Road
Plot No.178, Block-Y, DHA, Lahore Can�.
Plot No.811, Block C, Faysal Town, Lahore
Block -R-1, M.A. Johar Town, Lahore
Gulberg-III, M.M. Alam Road, Lahore
Property No.82-84, Amarpak Building, Main Ravi Road, Lahore
Shop #E/36, Alamgir Market, Inside Shah Alam Gate, Lahore.
Property No.17/24, Shadab Market, G.T. Road, Mian Channu, District Khanewal
Lower Ground, Khan Centre, Main Market, Abdali Road Multan Can�.Plot No.12-B & 13-B, Haq Nawaz Plaza, Main Gate Shah Shams Colony, Vehari Road, MultanGround Floor & 1st Floor, I�ikhar Children Hospital, M.A. Jinnah Road, OkaraPlot No.15, Opposite Town Hall, Model Town, Rahim Yar Khan
No.A/308- Jinnah Road (City Saddar Road) Rawalpindi
Adam Jee Road, Saddar, Rawalapindi
Shop No.10, Masood Plaza, Bank Road, Sadiqabad
272/B-2 High Street, Sahiwal.
63/5/2/1 VIP Complex, Niazi Square, Club Road, Sargodha
Plot No.119, Auto Market, Badami Bagh, Lahore
Khata No. 710, Yousaf Shah Building, Ground Floor, Kachary Road , Jhang
Property No.8.9.90, Ground & 1st Floor, Bank Road, Daska, Sialkot
Khasra No.80, Adjacent Singer Branch, Sargodha Road, Sheikhupura
Khasra No.781, Geo Madina Tower, Main G.T. Road, Tarnol
Gudwaal Plaza, Khewat No. 599,Khatooni No. 906-913, Ground & 1st Floor,Main Bazaar, Taxila.
Ballo Khel Road, Mianwali City, Punjab
Shop No.10, Masood Plaza, Bank Road, Sadiqabad
0065 057-2602378-9 057-2701378
0050 062-2887533, 2887532
062-2887532
0044 047-6333394-6 047-6333397
0056 0642-470871-4 0642-470875
0116 041-2412116-7-8 041-2412120
0038 041-8556200-1-2 041-8556203
0062 051-3511822-3 051-3511824
0039 055-3730917-8 055-3730918
0037053-3525555, 3530380
0533-520370, 530390
0042 0544-9270164 & 6 0544-9270165
0060 065-2556431-2 065-2556433
0114042-36304873, 36367407 042-36307079
0052 042-35741073 & 5 042-35741077
0057 042- 35160472, 35160474-8 042-35160473
0031 042-35316744-5 042-35316746
0023042-35872013, 35752038 042-35872013
0124 042-37641834 & 6 042-37641837
0061 065-2661871-2 065-2661870
0033 061-4545139-40 061-4545143
0142 061-6241251-3 061-6241254
0140 0442-511079-80 0442-511081
0051 068-5870182-3 068-5870185
0030051-5540420 & 2, 5540486
051-5540482
0115 051-5120194-7 051-5120198
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
139
Sadiqabad
140
Sahiwal Branch
141
Sargodha
Sialkot Branch
Shop No.10, Masood Plaza, Bank Road, Sadiqabad
272/B-2 High Street, Sahiwal.
63/5/2/1 VIP Complex, Niazi Square, Club Road, Sargodha
Industrial Area, Shahabpura, Ugoki Road, Near Masjid Mohajirin, Sialkot
0059 068-5801261-2-3 068-5801264
0045040-4222404, 4222448 040-4222403
0041 048-3740892-3 0483-7408912
0032 052-3559225 & 7 052-3559224
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Islamic
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Islamic
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Islamic
Conven�onal
Conven�onal
Islamic
Islamic
Conven�onal
Conven�onal
Islamic
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Yes
Yes
Yes
Yes
120 A N N U A L R E P O R T 2 0 1 9
142 Sialkot Branch
143 Lahore, Badami Bagh
144 Jhang
145 Daska
146
147
Tarnol
Mianwali
Industrial Area, Shahabpura, Ugoki Road, Near Masjid Mohajirin, Sialkot
Plot No.119, Auto Market, Badami Bagh, Lahore
Khata No. 710, Yousaf Shah Building, Ground Floor, Kachary Road , Jhang
Property No.8.9.90, Ground & 1st Floor, Bank Road, Daska, Sialkot
Khasra No.781, Geo Madina Tower, Main G.T. Road, Tarnol
Ballo Khel Road, Mianwali City, Punjab
0032 052-3559225 & 7 052-3559224
0069 042-37731631-2-3 042-37731634
0070 047-7622180-1, 7622183 047-7622182
0071 052-6612324-6 052-6612327
0146 051-2226781-2 051-2226783
0090
Conven�onal
Conven�onal
Conven�onal
Conven�onal
Islamic
Conven�onal 045-9230091-93 045-9230094
Yes
Yes
Yes
Yes
Yes
Yes
The Bank of KhyberThe Bank of Khyber
Capital Territory Area (4 Branches)
154 Islamabad, Blue area
155 Islamabad, F-10 Markaz
156 Islamabad, PWD Society
157 Bhara Kahu Branch, Islamabad.
Zahoor Plaza, Blue Area, Islamabad.
Plot No.8. F-10 Markaz, Islamabad
Plot No.786-G, Block-C, PWD Society, Islamabad
Malak Shafait Plaza, Mauza Mahal Kot, Hathial Main Murree Road, Bhara Kahu, Islamabad
0022 Conven�onal 051-2824691, 2826111
051-2271139
0133 Islamic 051-2222994-5 051-222997
0055 Conven�onal 051-5170901-2 & 4 051-5170903
0180 Islamic 051-2303782-83-87 051-2303789
Gilgit Bal�stan (1 Branch)
158 Gilgit, Ju�al Can�. Shop No.1 to 6, ZS Plaza, Opposite Radio Pakistan, Shahrah-e-Quaid-e-Azam, Ju�al Can�. Gilgit 0053 Conven�onal 05811-922082-3 05811-922084 Yes
Azad Jammu Kashmir (3 Branches)
159 Kotli (AJ&K)
160 Mirpur Branch (AJ&K)
161 Muzaffar Abad (AJ&K)
Commercial Property, Khasra No.579, Bank Road, Kotli
Plot No.3, Sector B/3, Allama Iqbal Road, Mirpur, Azad Jammu Kashmir
Secretariat Road, Muzaffarabad, Azad Jammu & Kashmir
0064 Conven�onal 05826-448673-4-5 05826-448679 Yes
0035 Conven�onal 05827-447686-8 05827-447685 Yes
0027 Conven�onal 05822-920492 05822-920499 Yes
SUB-BRANCHES (3 Branches)
1 North West Hospital (Sub-Branch of University Road Peshawar)
2 Provincial Assembly (Sub-Branch of High Court Peshawar Branch)
3 Lady Reading Hospital Peshawar (Sub-Branch of Khyber Bazar Peshawar Branch)
North West Hospital Phase-V Hayatabad Peshawar
Provincial Assembly KPK
Lady Reading Hospital Rest House Opposite FC Block Lady Reading Hospital Peshawar
Conven�onal Yes
Conven�onal Yes
Conven�onal Yes
121 A N N U A L R E P O R T 2 0 1 9
S.no Branch Name Complete Address of Branches Br. Code Branch Mode Phone Number Fax Number ATM Onsite
Province Balochistan (6 Branches)
148 Chaman Branch
149 Que�a, Jinnah Road
150 Que�a, Shahrah-e-Iqbal
151 Que�a, Sirki Road
152 Zhob Branch
153 Gwadar
Khasra No.451, Old Mahal 404, Abdali Bazar, Chaman
Jinnah Road, Que�a.
Shop No.2-7/35, Khyber Plaza, Shahra-e-Iqbal (Qandhari Bazar) Que�a
Khasra No.1807/16, Kaasi Building,Ground & 1st Floor, Sirki Road, Que�a.
Shop No. C84-85, Main bazar, Thana Road Que�a, Zhob.
Main Bazar Airport Road. Adjacent to Sshil hotel Gwadar
0120 Islamic 0826-614012, 614027
0826-614012
0102 Islamic 081-2843203, 2822141
081-2829469
0054 Conven�onal 081-2834950-55 081-2834952
0148 Islamic 081-2443637, 2447377 081-2447388
0177 Islamic 0822-412335
0095 Conven�onal0864210301-0302-303-304
Yes
Yes
Yes
Yes
The Bank of Khyber
Foreign Correspondent Banks
122 A N N U A L R E P O R T 2 0 1 9
COMMERZBANK AG
INDUSTRIAL AND COMMERCIAL BANK OF CHINAZHEJIANG TAILONG COMMERCIAL BANK CO. LTDZHEJIANG XIAOSHAN RURAL COOPERATIVE BANK
JIANGSU JIANGNAN RURAL COMMERC-IAL BANK CO.,LTD.(FORMALY JIANGSUWUJIN RURAL BANK)
MIZUHO BANK (CHINA),LTD. (only when Applicant/Bene is customer of Mizuho Bank)
MUFG BANK (CHINA), LTD.
NANXUN BANK
QILU BANK CO., LTD.
RURAL COMMERCIAL BANK OF ZHANG-JIAGANG
SHENGJING BANK CO.,LTD
THE BANK OF NEW YORK MELLON, SHANGHAI BRANCH
UNICREDIT SPA-SHANGHAI BRANCH
WELLS FARGO BANK, NA, SHANGHAI BRANCH
WOORI BANK (CHINA) LIMITED
YANTAI BANK CO., LTD.Zhejiang Nanxun Rural Comercial Bank CO LTD
Sr# Country Name of Bank
ALUBAF ARAB INTERNATIONAL BANK B.S.C. (C)
Sr# Country Name of Bank
1 AFGHANISTAN HABIB BANK LIMITED
NATIONAL BANK OF PAKISTAN, KABUL BRANCH
2 AMERICAN SAMOA ANZ AMERIKA SAMOA BANK
3 ARGENTINA MUFG BANK, LTD. BUENOS AIRES BRANCH
4 AUSTRALIA AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
5 BAHRAIN AL BARAKA ISLAMIC BANK B.S.C CLOSED
ARAB INVESTMENT COMPANY, THE
ASKARI BANK LIMITED, BAHRAIN BRANCH
BANK AL HABIB LIMITED
HABIB BANK LTD.JS BANK LIMITED
MUFG BANK, LTD. BAHRAIN BRANCH
UNITED BANK LIMITED
WOORI BANK, MANAMA
6 BANGLADESH HABIB BANK LTD.
NATIONAL BANK OF PAKISTAN
SOCIAL ISLAMI BANK LIMITED
WOORI BANK, DHAKA
7 BELGIUM COMMERZBANK AG,THE,BRUSSELS BRANCH
HABIB BANK LTD.
KBC BANK NV
THE BANK OF NEW YORK MELLON SA/NV
8 CANADA HABIB CANADIAN BANK
9 CAYMAN ISLANDS COMMERZBANK AG,CAYMAN ISLANDS BRANCH
10 CHILE MUFG BANK, LTD., SANTIAGO BRANCH
12 CHINA AGRICULTURAL DEVELOPMENT BANK OF CHINA
AUSTRALIA AND NEW ZEALAND BANK (CHINA)COMPANY LIMITED
BANK OF CHINA (only when Applicant/Bene is customer of Bank of China)
BANK OF JIANGSU CO LTD
BANK OF SHANGHAI CO LTD
CHINA CITIC BANK
13 COOK ISLANDS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
14 CZECH REPUBLIC COMMERZBANK AG
15 DENMARK DANSKE BANK A/S (ONLY WHEN APPLICANT/
BENE IS CUSTOMER OF DANSKE BANK)
EGYPT
ETHIOPIA
FIJI
FINLAND
FRANCE
16
17
18
19
20
MASHREQBANK PSC
DASHEN BANK SC
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
DANSKE BANK PLC (ONLY WHEN APPLICANT/BENE ISCUSTOMER OF DANSKE BANK
COMMERZBANK AGCREDIT MUTUEL ARKEANATIONAL BANK OF PAKISTANUNION DE BANQUES ARABES ET FRANCAISES (U.B.A.F)
21 GERMANY AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDCOMDIRECT BANK AGCOMMERZBANK AGCOMMERZBANK AGCOMMERZBANK AGCOMMERZBANK AGCOMMERZBANK AGEUROPEAN BANK FOR FINANCIAL SERVICES GMBH (EBASE)NATIONAL BANK OF PAKISTANSPARKASSE WESTMUNSTERLANDTHE BANK OF NEW YORK MELLONCOMMERZBANK AG (DANSKE BANK A/S (ONLY WHEN APPLICANT/BENE
IS CUSTOMER OF DANSKE BANK
The Bank of Khyber
123 A N N U A L R E P O R T 2 0 1 9
Sr# Country Name of Bank Sr# Country Name of Bank
22 GIBRALTAR
GREECE
HONG KONG
BANK J SAFRA SARASIN (GIBRALTAR) LTD
ATTICA BANK SA
ABN AMRO BANK NVBANK OF AMERICA NACOMMERZBANK AGMASHREQBANK PSCNATIONAL BANK OF PAKISTANTHE BANK OF NEW YORK MELLONWELLS FARGO BANK NA
23
24
HUNGARY24 COMMERZBANK ZRT
INDIA25 AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITEDMASHREQBANK PSCSHINHAN BANKMIZUHO BANK LTD (ONLY WHEN
APPLICANT/BENE IS CUSTOMER OF MIZUHO BANK
MUFG BANK (FORMERLY: THE BANK OF TOKYO
MITSUBISHI UFJ LTD)
MUFG BANK (FORMERLY: THE BANK OF TOKYO
MITSUBISHI UFJ LTD)
SHINHAN BANK
INDONESIA26 PT BANK ANZ INDONESIAPT BANK WOORI INDONESIAPT PAN INDONESIA BANK TBKMUFG BANK (FORMERLY: THE BANK OF TOKYO
MITSUBISHI UFJ LTD)
IRELAND26 DANSKE BANK A/S (ONLY WHEN APPLICANT/BENE IS
CUSTOMER OF DANSKE BANK)
ITALY BANCO DI DESIO E DELLA BRIANZA SPACOMMERZBANK AGMIZUHO BANK LTD (ONLY WHEN APPLICANT/BENE IS
CUSTOMER OF MIZUHO BANK)
MUFG BANK (Formerly: The Bank of Tokyo Mitsubishi UFJ
Ltd)
The Bank of New York Mellon (Luxembourg) SA
27
JAPAN COMMERZBANK AG TOKYO
MIZUHO BANK, LTD. (only when Applicant/Bene is customer of Mizuho Bank) MUFG BANK, LTD.
NATIONAL BANK OF PAKISTAN
THE BANK OF NEW YORK MELLON, TOKYO BRANCH
U.B.A.F. - UNION DE BANQUES ARABES ET FRANCAISES TOKYO BRANCHWELLS FARGO BANK, N.A., TOKYO BRANCH WOORI BANK, TOKYO
KUWAIT MASHREQBANK PSC.
KYRGYZSTAN NATIONAL BANK OF PAKISTAN BISHKEKBRANCH
LEBANON HABIB BANK LIMITED
LUXEMBOURG COMMERZBANK AGDANSKE BANK INTERNATIONAL S.A. (only when Applicant/Bene is customer of Danske Bank)THE BANK OF NEW YORK MELLON (LUXEMBOURG) SA, LUXEMBOURG
MACAO BANCO COMMERCIAL PORTUGUES
MALAYSIA BANK AL HABIB LIMITED
CITIBANK BERHAD
MIZUHO BANK (MALAYSIA) BERHAD(only when Applicant/Bene is customer of Mizuho Bank)
MUFG BANK (MALAYSIA) BERHAD
MAURITIUS BANK OF BARODA
28
29
30
31
32
33
34
35
38 NEW ZEALAND ANZ BANK NEW ZEALAND LIMITED
39 NORWAY DANSKE BANK A/S (only when Applicant/Bene is customer of Danske Bank)
40 OMAN BANK SOHAR S.A.O.G
HABIB BANK OMAN
41 PAKISTAN ALBARAKA BANK (PAKISTAN)LIMITED
ALLIED BANK LIMITED
ASKARIBANK LIMITED
BANK AL HABIB LIMITED
BANK ALFALAH LIMITED
BANKISLAMI PAKISTAN LIMITED
DEUTSCHE BANK AG, KARACHI BRANCH
FAYSAL BANK LIMITED
HABIB BANK LIMITED
HABIB METROPOLITAN BANK LIMITED
INDUSTRIAL AND COMMERCIAL BANK OF CHINA, KARACHI BRANCH
JS BANK LIMITED
MCB BANK LIMITED
MCB ISLAMIC BANK LIMITED
MEEZAN BANK LIMITED
NATIONAL BANK OF PAKISTAN
SILKBANK LIMITED
SINDH BANK LIMITED
SONERI BANK LIMITED
SUMMIT BANK LTD
THE BANK OF PUNJAB
UNITED BANK LIMITED
36 MONACO BANQUE J. SAFRA SARASIN (MONACO) SA
37 NETHERLANDS COMMERZBANK AG KANTOOR AMSTERDAM
HABIB BANK LTD.
ING BANK N.V.
INTESA SANPAOLO BANK LUXEM-BOURG
The Bank of Khyber
Sr# Country Name of Bank Sr# Country Name of Bank
42 PAPUA NEWGUINEA
AUSTRALIA AND NEW ZEALAND BANKING GROUP (PNG) LTD.
43 PHILIPPINES AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
MIZUHO BANK, LTD., MANILA BRANCH (only when Applicant/Bene is customer ofMizuho Bank)
MUFG BANK, LTD., MANILA BRANCH
44 POLAND DANSKE BANK A/S S.A. ODZIAL W POLSCE (only when Applicant/Bene is customer ofDanske Bank)
45 QATAR DOHA BANK
MASHREQ BANKUNITED BANK LIMITED, DOHA
46 REPUBLIC OF KOREA AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
BUSAN BANK
INDUSTRIAL BANK OF KOREA
KEB HANA BANK
KOOKMIN BANK
MIZUHO BANK, LTD., SEOUL BRANCH (onlywhen Applicant/Bene is customer of Mizuho Bank)MUFG BANK, LTD., SEOUL BRANCH
NATIONAL BANK OF PAKISTAN, SEOUL BRANCH KOREA
SHINHAN BANK
SUHYUP BANK
THE BANK OF NEW YORK MELLON, SEOULBRANCHU.B.A.F.-UNION DE BANQUES ARABES ETFRANCAISES
WELLS FARGO BANK, N.A., SEOUL BRANCH
WOORI BANK, SEOUL
47 RUSSIAN FEDERATION AO WOORI BANK
COMMERZBANK (EURASIJA) AODANSKE BANK RUSSIA (only when Applicant/Bene is customer of Danske Bank)
48 SAMOA ANZ BANK (SAMOA) LTD
49 SAUDI ARABIA BANK AL-JAZIRA
NATIONAL BANK OF PAKISTAN
NATIONAL COMMERCIAL BANK, THE
RIYAD BANK
50 SEYCHELLES BANK AL HABIB LIMITED
51 SINGAPORE ABN AMRO BANK N.V. SINGAPOREBRANCH
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
BANK MANDIRI (PERSERO)TBK. PT
COMMERZBANK AG, SINGAPORE BRANCH
HSH NORDBANK AG
MIZUHO BANK, LTD. SINGAPORE BRANCH (only when Applicant/Bene is customer of Mizuho Bank)
MUFG BANK, LTD.
THE BANK OF NEW YORK MELLON, SINGAP-ORE BRANCH
TORONTO DOMINION BANK
124 A N N U A L R E P O R T 2 0 1 9
52 SLOVAKIA COMMERZBANK AG
53 SOLOMON ISLANDS AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
54 SOUTH AFRICA HBZ BANK LIMITED
55 SPAIN ABANCA CORPORACION BANCARIA, S.A.
COMMERZBANK AG
56 SRI LANKA HABIB BANK LTD.
HATTON NATIONAL BANK PLC
SAMPATH BANK PLC
57 SWEDEN DANSKE BANK (only when Applicant/Bene is customer of Danske Bank)
58 SWITZERLAND HABIB BANK AG ZURICH
UBL (SWITZERLAND) AG
ZUERCHER KANTONALBANK
59 TAIWAN ANZ BANK (TAIWAN) LIMITED
MIZUHO BANK, LTD.,TAIPEI BRANCH
MUFG BANK, LTD., TAIPEI BRANCH
THE BANK OF NEW YORK MELLON, TAIPEI BRANCH
WELLS FARGO BANK, N.A., TAIPEI BRANCH
60 THAILAND BANK OF AYUDHYA PUBLIC COMPANY LIMITED, BANGKOK OFFICE
U.B.A.F. - UNION DE BANQUES ARABES ET FRANCAISES
WELLS FARGO BANK, NA
WOORI BANK, SINGAPORE
MIZUHO BANK, LTD., BANGKOK BRANCH (only when Applicant/Bene is customer of Mizuho Bank)
61 TIMOR-LESTE AUSTRALIA AND NEW ZEALAND BANKINGGROUP LTD
62 TONGA ANZ BANKING GROUP LIMITED
The Bank of Khyber
Sr# Country Name of Bank
63 TURKEY AKBANK T.A.S.
AKTIF YATIRIM BANKASI A.S.
HABIB BANK LTD.
64 UAE ABU DHABI COMMERCIAL BANK
HABIB BANK AG ZURICH
HABIB BANK LIMITED
MASHREQBANK PSC.
MCB BANK LIMITED
UNITED BANK LTD.
65 UK AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
BANK J. SAFRA SARASIN (GIBRALTAR) LTDCOMMERZBANK AG
DANSKE BANK (only when Applicant/Bene is customer of Danske Bank)
HABIB BANK UK
HABIB BANK ZURICH PLCLLOYDS BANK PLC
MASHREQ BANK PSC
MIZUHO BANK, LTD. LONDON BRANCH (only whenApplicant/Bene is customer of Mizuho Bank)
NORTHERN BANK LIMITED (TRADING AS DANSKE BANK)
SHINHAN BANK LONDON BRANCH
THE BANK OF NEW YORK MELLON
WELLS FARGO BANK, N.A., LONDON BRANCH
WOORI BANK, LONDON
USA AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD.BRANCH BANKING AND TRUST COMPANY
COMMERZBANK AG
DEUTSCHE BANK AG
DEUTSCHE BANK TRUST COMPANY AMERICAS
FIRST TENNESSEE BANK N.A.
GOLDEN BANK, N.A.
HABIB AMERICAN BANKHABIB BANK LIMITED
MASHREQBANK PSC., NEW YORK BRANCH
MIZUHO BANK, LTD. NEW YORK BRANCH (only when Applicant/Bene is customer of Mizuho Bank)
NATIONAL BANK OF PAKISTANSHINHAN BANK
SHINHAN BANK AMERICA
THE BANK OF NEW YORK MELLON
WELLS FARGO ADVISORS, LLC
WELLS FARGO BANK, N.A.
WOORI AMERICA BANK, NEW YORK
WOORI BANK, LOS ANGELES
WOORI BANK, NEW YORK
67 VANUATU ANZ BANK (VANUATU) LTD
68 VIET NAM ANZ BANK(VIETNAM) LIMITED
MIZUHO BANK, LTD. (only when Applicant/Bene is customer of Mizuho Bank)
SHINHAN BANK VIETNAM LIMITED
WOORI BANK VIETNAM LIMITED
Sr# Country Name of Bank
125 A N N U A L R E P O R T 2 0 1 9
66
The Bank of Khyber
Form of proxy
Folio No.___________ CDC Par�cipant Iden�ty card No. ________________________CDC A/C No._________
I/We ______________________________________ of ____________________________________a member/
members of The Bank of khyber, and holder of ________________________________________shares do hereby
appoint-______________________________________ of ___________________________________ or failing him /
her ______________________________________ of ____________________________________________who is also
a member of the company, vide Registered Folio No. ________________________________as my/ our proxy to a�end,
speak and vote for me /us and on my/our behalf at the 29th Annual General Mee�ng of the Bank to be held on Friday
March 27, 2020 at 10:00 a.m at Pearl Con�nental Hotel, Peshawar Can�.
As witness my/our hand this ______ ___________day of ____________________________2020.
Dated
Place:
NotesA. General
1. A member en�tled to a�end and vote at a General Mee�ng is en�tled to appoint a proxy to a�end and vote instead him/her. No person shall act as a proxy, who is not a member of the bank except that Government of Pakistan /Provincial Government/State Bank of Pakistan/Corpora�on may appoint a person who is not a member.
2. The instrument appoin�ng a proxy should be signed by the member of his/ her a�orney duly authorized in wri�ng. If the member is a corpora�on(other that Government of Pakistan and State Bank of Pakistan), its common seal should be affixed on the instrument.
3. The instrument appoin�ng a proxy, together with the Power of A�orney, if any, under which it is signed or a na�onally cer�fied copy thereof, should be deposited, with our Registrar/Transfer Agents, Messrs THK Associates (Pvt) Ltd. 1st Floor, 40-C, Block-6, P.E.C.H.S.Karachi-75400 Pakistan, not less than 48 hours before the �me of holding mee�ng.
4. If a member appoints more than one proxy, and more than one instrument of proxy are deposited by a member with the Bank, all such instruments of proxy shall be rendered invalid.
B. For CDC Account Holders1. The proxy form shall be witnessed by two persons whose names, addresses and CNIC number shall be men�ons on the form.2. A�ested copies of CNIC or the passport of the beneficial owners and proxy shall be furnished with the proxy form.3. The proxy shall produce his/her original CNIC or original passport at the �me of the mee�ng.4. In case of Government of Pakistan /Provincial Goverment / State Bank of Pakistan/Corporate entry, the Board of Director’s
resolu�on/power of a�orney with specimen signature shall be submi�ed along with proxy to the Bank.
The Signature shouldagree with the
Specimen registeredwith the Bank
SignatureFive-Rupees
Revenue Stamp
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