Habib Bank Limited: Quarterly Report - 31 March 2020

Transcription

1. QUARTERLY report MARCH 31 , 2020
2. QUARTERLY REPORT - MARCH 2 0 2 0 TaBLE OF Contents Corporate Information 02 CONDENSED INTERIM CONSOLIDATED 03 FINANCIAL STATEMENTS Directors ’ Review - English 04 Directors’ Review - Urdu 08 Condensed Interim Consolidated 12 Statement of Financial Position Condensed Interim Consolidated Profit 13 and Loss Account Condensed Interim Consolidated 14 Statement of Comprehensive Income Condensed Interim Consolidated 15 Statement of Changes in Equity Condensed Interim Consolidated Cash 16 Flow Statement Notes to the Condensed Interim 17 Consolidated Financial Statements 47 CONDENSED INTERIM UNCONSOLIDATED FINANCIAL STATEMENTS 48 Directors’ Review - English 52 Directors’ Review - Urdu 56 Condensed Interim Unconsolidated Statement of Financial Position 57 Condensed Interim Unconsolidated Profit and Loss Account 58 Condensed Interim Unconsolidated Statement of Comprehensive Income 59 Condensed Interim Unconsolidated Statement of Changes in Equity 60 Condensed Interim Unconsolidated Cash Flow Statement 61 Notes to the Condensed Interim Unconsolidated Financial Statements 01
3. Q UA RTE RLY RE PORT - MARCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Corporate information Board of Directors Mr . Sultan Ali Allana Chairman Mr. Shaffiq Dharamshi Director Mr. Moez Ahamed Jamal Director Mr. Salim Raza Director Dr. Najeeb Samie Director Ms. Diane Elizabeth Moore Director Mr. Salim Yahya Chinoy Director Mr. Muhammad Aurangzeb President & CEO Chief Operating Officer Mr. Sagheer Mufti Chief Financial Officer Mr. Rayomond Kotwal Company Secretary Ms. Neelofar Hameed Legal Advisors Mandviwalla and Zafar Legal Consultants and Advocates Share Registrar CDC Share Registrar Services Limited CDC House, 99 – B, Block ‘B’, S.M.C.H.S., Main Shahra-e-Faisal Karachi – 74400, Pakistan Tel: Customer Support Services (Toll Free) 0800-CDCPL (23275) Fax: (92-21) 34326053 Email: info@cdcsrsl.com Website: www.cdcsrsl.com HBL Corporate Secretariat Phone: (92-21) 37137543 Fax: (92-21) 35148370 TABLE OF CONTENTS Condensed Interim Consolidated Financial STATEMENTS Head Office Habib Bank Limited Habib Bank Plaza I.I. Chundrigar Road, Karachi-75650, Pakistan Phone: (92-21) 32418000 [50 lines] Registered Office Habib Bank Limited 9th Floor, Habib Bank Tower, Jinnah Avenue, Blue Area, Islamabad, Pakistan. Phone:(92-51) 2270856, (92-51) 2821183 Fax: (92-51) 2872205 Corporate Website: www.hbl.com D I G I TA L LY YOURS Internet Banking: www.hblibank.com.pk Konnect: www.hbl.com/businesskonnect Auditors A.F. Ferguson & Co. Chartered Accountants 02 03
4. Q UA RTE R LY RE PORT - M A RCH 2020 Directors ’ Review On behalf of the Board of Directors, we are pleased to present the condensed interim consolidated financial statements for the quarter ended March 31, 2020. Macroeconomic Review By earlier this year Pakistan’s economy was showing some signs of recovery from the slowdown resulting from the stabilization program. While growth and economic activity remained depressed, the external account indicators were steadily improving. This was before the COVID-19 pandemic, which has forced lockdowns across the world, restricting economic activity across the board. The supply shock is likely to create a protracted demand shock owing to reduced business activity and consumer spending, thereby further exacerbating the weak economic growth. From earlier GDP growth forecasts of 2.9%, Pakistan’s GDP is now expected to contract by up to 1% in FY’20. Headline inflation in March 2020 receded to 10.2%, from 12.4% in the previous month, helped by lower fuel prices. Average inflation for 9MFY’20 is 11.5% compared to 6.3% for the same period last year. The SBP’s projection for average inflation for FY’20 remains at 11.0% – 12.0%. The trade deficit declined by 34% in 8MFY’20, mainly driven by efforts to curb imports, which declined by 18%; exports improved, but by a modest 3%. Remittances, till now, have continued to grow over FY’19, increasing by 5% in 9MFY’20. As a result, the current account deficit contracted by 71%, to USD 2.8 billion. The FX reserves position has strengthened from June 2019 levels, increasing to USD 17.3 billion at the end of March 2020; this was supported by increased FDI as well as strong foreign portfolio flows into government securities. However, since the pandemic outbreak, the investor search for safe havens has resulted in outflows in both equities and government securities. The Rupee, which had strengthened by 5% since its low in June 2019, quickly slid against the dollar and, at March 31, 2020 was 8% lower than December 2019 levels. In response to the growing concern over the economic impact of the pandemic, the federal government and the SBP quickly took a number of steps to bring financial stability and keep the economy moving. The government pledged fiscal support of PKR 1.13 trillion, targeting the export sector and low-income groups. In addition, it announced an incentive package for the construction industry to support the real estate sector and generate employment, especially for the daily wage earners who are most severely impacted by this crisis. The liquidity and cash flow constraints facing businesses presents another growing challenge. The government announced deferral of loan and interest payments for the export, SME and Agriculture sectors. Meanwhile, the SBP extended the relief package to other industries, whereby principal loan payment can be deferred for up to one year. The SBP also announced new initiatives to maintain the flow of credit, including refinance facilities for salary payments, for funding to hospitals and for setting up new industrial units. The SBP has also encouraged the banking sector to continue lending in this critical time through lowering capital requirements and allowing higher debt burden for consumer loans. The IMF has approved an assistance package of USD 1.4 billion for Pakistan under a Rapid Financing Instrument. The World Bank has already approved USD 200 million for Pakistan and could divert unutilized funds of USD 600 million to USD 2 billion for early disbursement. In addition, the ADB would provide USD 350 million immediately, while a request has been made for another USD 900 million disbursement by June. The equity market also turned bearish, owing to the economic effects of the pandemic, reduced growth forecasts and depressed investor sentiment the latter being mainly driven by the reversal of carry trades and global risk aversion. By March 31, 2020, the KSE 100 Index had fallen by 28% since the beginning of 2020; market wide circuit breakers were triggered six times in March and the Index lost more than 8,000 points in one month. Since then, there has been some recovery, especially after the recent rate cut, when the market hit the upper circuit breaker. In response to the crisis, the SBP cut rates rapidly, in three steps, by a total of 425 bps, with the Policy Rate now at 9%. The SBP also changed the shape of the corridor to make it symmetric around the Policy Rate. Effectively, this will compress margins going forward as the spread between the Policy Rate and the minimum rate payable on savings deposits has reduced by 50 bps. Banking sector advances rose marginally by 1% during the first quarter of 2020, while deposits grew by 3% since December’19. The growing impact of the pandemic on overall economic activity is expected to further slowdown private sector lending which, with a growth of only 2.6% in 8MFY’20, was already showing signs of deceleration. Banking spreads for the first two months of 2020 rose by 7bps over 2019. 04 QUARTERLY REPORT - MARCH 2 0 2 0 Financial Performance HBL’s Profit after Tax for the first quarter of 2020 is Rs 4.1 billion, an increase of 29% over the same period last year. Earnings per share for Q1’20 increased to Rs 2.79 compared to Rs 2.08 in Q1’19. However, profit before tax of Rs 7.1 billion is 15% lower than for the corresponding period last year as a result of the sharp devaluation of the Rupee. Excluding this impact, profit before tax is 10% higher than Q1’19. HBL continues to support businesses and customers, particularly in these challenging times, with net advances increasing by 1.1% over December 2019, and the ADR improving to 49.6%. Total deposits, at Rs 2.4 trillion, remain at a healthy level with strong current account and CASA ratios of 35.6% and 82.7% respectively. Average domestic deposits rose by Rs 155 billion (8.6%) over Q1’19 leading to a growth of 9.3% in the average domestic balance sheet. A growth of Rs 40 billion in average domestic current accounts supported a 52 bps improvement in net interest margins. As a result, domestic net interest income rose by 21% to Rs 25.8 billion. With an 8% growth in international net interest income, the Bank’s total net interest income for Q1’20 increased by 20% over Q1’19, to Rs 28.0 billion. Total non-fund income, excluding the rupee devaluation impact, grew by 19%. The Bank recorded a capital gain of Rs 2.3 billion, a positive swing of Rs 2.7 billion compared to Q1’19. The gain is primarily driven from opportunistic sales of fixed income instruments as well as significant unrealized gains on the trading portfolio at the end of March 2020. Core FX income improved by 57% to Rs 1.6 billion, driven from both the domestic and international businesses. Fees, however, declined by 11% to Rs 4.7 billion mainly due to lower Bancassurance and investment banking fees and as Q1’19 included some 1-off fee recoveries. Administrative expenses increased by Rs 4.2 billion over Q1’19. A significant portion of this was due to the acceleration of the New York branch closure, as costs originally expected later in the year have been recorded upfront; this will result in New York costs tapering off rapidly, going forward. There was also a significant impact of the costs associated with growth in activity drivers as well as the rupee devaluation on international expenses. Despite a steady recovery performance, in Q1’20 the Bank booked a provision charge of Rs 0.6 billion, including an impairment of Rs 0.2 billion on its equity portfolio. However, total NPLs have declined by Rs 1.2 billion over Dec’19, leading to a further improvement in asset quality to 6.4% as at end-March. The coverage also increased from 93.2% in December 2019 to 93.4% in March 2020. Movement of Reserves Rs million Unappropriated profit brought forward Profit attributable to equity holders of the Bank Reversal of deferred tax asset recognised on subsidiary Share of re-measurement gain on defined benefit obligations of associate – net Transferred from surplus on revaluation of assets – net of tax 114,550 4,096 (108) 3 12 4,003 Profit available for appropriations 118,553 Appropriations Transferred to statutory reserves Cash dividend – Final 2019 Unappropriated profit carried forward Earnings per share (Rs) (461) (1,834) (2,295) 116,258 2.79 05
5. Q UA RTE R LY RE PORT - M A RCH 2020 Capital Ratios In response to the current crisis , the SBP has supported the banking system by reducing the requirements of the Capital Conservation Buffer by 100 bps, from 2.5% to 1.5%. This has effectively lowered the capital requirements across all three tiers, i.e. Common Equity Tier 1 (CET1) CAR, Tier 1 CAR and Total CAR, by 1%. The devaluation impacted the Bank’s CAR in multiple ways, by a total of 37 bps. Consequently, the consolidated Tier 1 CAR reduced by 28 bps, from 12.45% at the end of 2019 to 12.17% in March 2020. The 100 bps lower CET 1 CAR requirement has resulted in the headroom over minimum levels increasing by 100 bps – consequently, 42 bps of Tier II capital has become eligible. The consolidated total CAR thus increased slightly from December 2019, to 15.39%. HBL’s capital and related ratios remain well above regulatory requirements. Future Outlook Policy makers across the world have announced massive monetary and fiscal stimulus measures to try to mitigate the impact of the global lockdown, expected to be the worst since the Great Depression. The IMF has called on countries to respond with “very massive” spending to avoid bankruptcies and emerging market debt defaults. The global economic slowdown is expected to have a profound impact on Pakistan’s economy. The lockdown related disruption of industrial activity and slowdown in aggregate demand would contract GDP growth, particularly during April-June 2020. Exports and remittances are expected to decline, pressuring the current account, but low oil prices could provide some fiscal space to the government. However, the long-term effects on economic activity will only be known once the pandemic peaks. QUARTERLY REPORT - MARCH 2 0 2 0 Lastly, but certainly not the least, we express our deepest appreciation and gratitude to our employees and their families, especially in customer facing units and at our 1400+ open branches, who have braved these hazardous conditions to ensure that our customers continue to be able to meet their critical needs in this time of crisis. They are our heroes and heroines and we salute them for their dedication and tireless efforts. On behalf of the Board Muhammad Aurangzeb President & Chief Executive Officer Moez Ahamed Jamal Director April 22, 2020 The Bank is keenly aware of its duty to support customers and the wider economy at this difficult time. The Bank continues to lend and provide liquidity to its customers; where additional flexibility is needed, HBL will look to assist them further. We plan to be at the forefront of using the liquidity and funding assistance being made available by the SBP to help our customers negotiate what is certain to be a difficult next few months. We intend to deliver for our clients in this respect while maintaining credit discipline in our balance sheet. Operating in the current circumstances will lead to some increased costs and a reduction in short-term profitability – but this is a worthwhile trade-off for the longer-term standing of our business and the broader well-being of our customers and the country. HBL has always been intrinsic to Pakistan’s socio-economic fabric and giving back to the country and the community is a core part of its strategic agenda. In these particularly difficult times, HBL has demonstrated leadership across a broad spectrum of areas. HBL is humbled and honoured to be a leading partner of the Ehsaas Kafalat programme, the largest social safety net initiative in Pakistan’s history, aimed at distributing Rs 90 billion to 7.5 million beneficiaries. The Bank is also distributing 12,000 ration bags across the length and breadth of the country to deserving individuals, mostly daily wage earners whose livelihood has been severely disrupted by the lockdown. HBL is also partnering with Serena Hotels to distribute 30,000 meal boxes to frontline doctors across seven cities where Serena is present. HBL will continue to step up in a variety of ways to support the country in this time of crisis. Dividend The Board of Directors, in its meeting held on April 22, 2020 has declared an interim cash dividend of Rs 1.25 per share (12.50%) for the quarter ended March 31, 2020. Appreciation and Acknowledgement On behalf of the Board and management, we would like to place on record our appreciation for the efforts of our regulators and the Government of Pakistan, in particular the State Bank of Pakistan, the Ministry of Finance and the Securities and Exchange Commission of Pakistan. In these unprecedented times, they have stepped up with policies and measures that are prudent, and balanced, protecting the economy, customers and the people of Pakistan, while also safeguarding the integrity and soundness of the banking and financial services industry. We are indebted to our customers, many of whom have banked with us for generations, and who continue to entrust us with their business and confidence. Our shareholders have provided steadfast support and to them and to all our stakeholders, we are deeply grateful. The Board and the management remain committed to maintaining the highest standards of governance and we assure our stakeholders that we will be industry leaders in this area. 06 07
6. ‫‪QUARTERLY REPORT - MARCH 2 0 2 0‬‬ ‫یٹ‬ ‫ڈارئ�رزاکاجزئہ‬ ‫پش‬ ‫یٹ‬ ‫ڈارئ�رزیکاجبنےس‪31‬امرچ‪2020‬ءوکمتخوہےنوایلیلہپہسامیہےکرصتخموبعریومجمیعام یلایتوگوشارے ی‬ ‫ہ ی‬ ‫�رکےتوہےئ‬ ‫�وبرڈآف‬ ‫رسمتوسحمسوہریہےہ۔‬ ‫ل‬ ‫ک �ی�ایتااصتقد ی�اتاکاجزئہ‬ ‫نت‬ ‫یش ت‬ ‫� ی‬ ‫عم ی‬ ‫م دنمی ےس احبیل ےک ھچک آاثر داھکیئ دے رےہ ےھت ہکبج رتیق اور اعمیش‬ ‫اپاتسکن یک‬ ‫م اس اسل ےک رشوع کت ااکحتسم رپورگام ےک ی ج‬ ‫وصرت احل ‪ COVID-19‬واب ےس ےلہپ یھت‪ ،‬ی ن‬ ‫ااہظر� ی‬ ‫ِ‬ ‫ل اس واب‬ ‫رسرگیم دبوتسر دابؤ اک اکشر ےہ ‪ ،‬اخریج اھکوتں ےک‬ ‫ی‬ ‫م لقتسم رتہبی آریہ یھت۔ �ی‬ ‫ف‬ ‫ن‬ ‫ن‬ ‫اصر� ےک ارخااجت ی‬ ‫رسرگموں اور ی‬ ‫ی‬ ‫ی‬ ‫م یمک یک وہج‬ ‫رسرگموں وک دحمود رکد ی�ا ےہ۔ َردس اک اکٹھج اکروابری‬ ‫د� وک الک ڈاؤن رپ وبجمراور ااصتقدی‬ ‫ےن وپری یا‬ ‫م زم�ی د ااضےف اک یھب۔اپاتسکن یک ‪ GDP‬ی‬ ‫دبت� وہےن اک ااکمن ےہ ‪ ،‬اور اس رطح زمکور اعمیش ومن ی‬ ‫ےس بلط ےک دور رس ےکٹھج ی‬ ‫م ی‬ ‫م ‪ 2.9%‬یک ومن‬ ‫ش‬ ‫�ت خ‬ ‫م زم�ی د ‪� 1%‬ف� یف وتمعق ےہ۔ امرچ ‪2020‬ء ی‬ ‫م امیل اسل ‪2020‬ء ی‬ ‫یک �پ�ی�� ی ن� وگیئ یک یئگ یھت سج ی‬ ‫م ہی‬ ‫��ڈ النئ ارفا ِط زر زگہتش امہ ‪ 12.4%‬ےس رگ‬ ‫پیٹ‬ ‫�رول یک ق�یم ت� ی‬ ‫رک ‪ 10.2%‬وہیئگ ےسج‬ ‫م یمک ےن اہسرا د ی�ا۔ امیل اسل ‪2020‬ء ےک ‪ 9‬شامہ ےک دوران اوطس ارفا ِط زر ‪ 11.5%‬ریہ وج زگہتش ربس ایس دمت‬ ‫�‬ ‫�‬ ‫ن‬ ‫ےک ی‬ ‫ل اوطس ارفا ِط زر یک رشح یک پ ی��ی� وگیئ ونہز ‪12.0%–11.0%‬ریہ۔‬ ‫ل ‪6.3%‬یھت۔‪ SBP‬یک امیل اسل ‪2020‬ء ےک ی‬ ‫ن‬ ‫�ادی وہج درآدمات یک وحہلص ینکش ےک ادقاامت ےھت نج ی‬ ‫م اجتریت اسخرے ی‬ ‫امیل اسل ‪2020‬ء ےک ‪ 8‬امہ ی‬ ‫م ‪ 18%‬یمک‬ ‫م ‪ 34%‬یمک آیئ سج یک ب ی‬ ‫م دبوتسر ااضہف وہا وج امیل اسل ‪2020‬ء ےک ‪ 9‬امہ ی‬ ‫م امیل اسل ‪ 2019‬ءےک انتبس ی‬ ‫رتسات ی‬ ‫ی‬ ‫م ‪ 3%‬یک ومعمیل رتہبی آیئ۔ ی‬ ‫م ‪5%‬‬ ‫آیئ‪ ،‬ربآدمات ن ت‬ ‫م اجری اھکوتں ےک اسخروں ی‬ ‫� ی‬ ‫ارم� ڈارل ےس ‪ 71%‬یمک واعق وہیئ ‪ FX ،‬ذاخرئ ی‬ ‫م‪ 2.8‬ارب ی‬ ‫‪2019‬ء یک حطس ےس‬ ‫م یھب وجن‬ ‫ڑبھ ی‬ ‫گا۔ اس ےک ی ج‬ ‫غ‬ ‫�زٹ‬ ‫ی ت‬ ‫ور� ی‬ ‫ارم� ڈارل وہےئگ‪ ،‬اےس ‪ FDI‬ی‬ ‫وقت� آیئ وج امرچ ےک ااتتخم کت ‪2020‬ء ی‬ ‫م ی‬ ‫م ااضےف ےک اسھت رساکری سک�ی� ی‬ ‫م ‪ 17.3‬ارب ی‬ ‫�ریکلم وپرٹ‬ ‫ٹ‬ ‫ی ٹ �ز‬ ‫ی‬ ‫و��زاور رساکری س ی‬ ‫ور�‪ ،‬دوونں ےک وحاےل ےس‬ ‫وفلو ےک اہبؤ ےس اہسرا الم۔ اتمہ واب ےنلیھپ ےک ابثع وفحمظ انپہ اگوہں ےک وخاشہ دنم ترسام�ی اکروں اک یا� ی ی‬ ‫ی �ز‬ ‫ب ی�روین اہبؤ راہ۔وجن ‪2019‬ءےس روےپ یک دقر ی‬ ‫م ی�ی ےس رگےت وہےئ ‪ 31‬امرچ ‪ 2020‬کت دربمس ‪ 2019‬یک حطس‬ ‫م ‪ 5%‬ااضہف ڈارل ےک اقمےلب‬ ‫گا۔‬ ‫ےس ‪ 8%‬مک رپ آ ی‬ ‫یش ت‬ ‫واب ےک اعمیش ارثات ےک وحاےل ےس ڑبےتھ وہےئ دخاشت ےک وجاب ی‬ ‫ل وافیق وکحتم اور‬ ‫عم ےک ےنہپ‪00‬وک رواں رےنھک ےک ی‬ ‫م امیل ااکحتسم اور‬ ‫ی ی‬ ‫کا۔ ہ�‬ ‫ز� دہف ‪ 1.13‬رھکب روےپ امیل ادماد اک دہع‬ ‫ک۔ وکحتم غےن ربآدمی ےبعش اور مک آدمین واےل رگووہں ےک ی رِ‬ ‫ن‪SBP‬ےن دنچ وفری تادقاامت ی‬ ‫ئ‬ ‫م رت�� ی ب�‬ ‫�رات ےک ےبعش ی‬ ‫ہی‬ ‫ی‬ ‫ی‬ ‫�ی‬ ‫ی‬ ‫ی‬ ‫و‬ ‫داد‬ ‫ل وج اس رحبان ےس‬ ‫ارجت واےل ےقبط ےک ی‬ ‫وم‬ ‫ابوصخلص‬ ‫ا‪،‬‬ ‫ک‬ ‫یھب‬ ‫االعن‬ ‫اک‬ ‫رفایمہ‬ ‫یک‬ ‫روزاگر‬ ‫اور‬ ‫جیکیپ‬ ‫ی‬ ‫اج�‬ ‫�‪ ،‬ہکلب‬ ‫چ ن‬ ‫ش‬ ‫ا� اور ڑباتھ ی ج‬ ‫ی‬ ‫ی‬ ‫ل�یک‬ ‫وہا� ےہ۔ وکحتم ےن ربآدمات‪SME ،‬‬ ‫م راکوٹ اکروابری ےبعش وک القح ی‬ ‫بس ےس ز ی�ادہ اتمرث وہا ےہ۔ �وڈئیٹ اور ک ئےک اہبؤ خ‬ ‫د�ر وتعنصں کت ر�یل� یف جیکیپ یک ی‬ ‫ی ی‬ ‫ک ےہ۔ ایس دوران ‪ SBP‬ےن ی‬ ‫م ی‬ ‫وتس رک دی ےہ‪،‬‬ ‫ات�ر اک االعن ی ا‬ ‫اور زریع وبعشں ےک ئی‬ ‫ل رقض اور انمعف یک ادا� خ‬ ‫ن‬ ‫ادا� ی‬ ‫�ادی رقض یک ی‬ ‫ا� اسل کت یک ی‬ ‫ل ادقاامت‪ ،‬ومشبل وخنتاوہں یک‬ ‫ات�ر یک اجیتکس ےہ۔‪ SBP‬ےن رک�ی �ڈٹ ےک اہبؤ ےک ااظتنم ےک ی‬ ‫م ی‬ ‫ہکبج ب ی‬ ‫ئ‬ ‫ق‬ ‫ک ےہ۔‪ SBP‬ےن اس ڑکے وتق ی‬ ‫ی‬ ‫ادا�‪ ،‬اتپسہولں یک ڈنفگن‪ ،‬اور ےئن یتعنص �ی ووٹنں ےک ی‬ ‫م رسامےئ یک‬ ‫ل ری انفسن یک وہستل اک یھب االعن ی ا‬ ‫�ام ےک ی‬ ‫ن‬ ‫رشاطئ ی‬ ‫ل ااضیف رقض ےک وبھج ےک ی‬ ‫ذر� �ب ی��ک�اری ےبعش یک رقہض اجت اک ہلسلس اجری رےنھک یک وحہلص ازفایئ یک ےہ۔‬ ‫م یمک اور اصریف رقہض اجت ےک ی‬ ‫�ن ن‬ ‫بن‬ ‫ر��ڈ انف س�گ ارٹسنوٹنم ےک تحت ‪1.4‬ارب ی‬ ‫اعیمل ی‬ ‫ل یپ‬ ‫� ےن ےلہپ یہ‬ ‫‪ IMF‬ےن اپاتسکن ےک ی‬ ‫ارم� ڈارل ےک ادمادی جیکیپ غیک وظنمری دے دی ےہ۔ ئ‬ ‫ن‬ ‫ن‬ ‫�ر اامعتسل دشہ ڈنف یک ےلہپ ی‬ ‫ل ہ ی� اور ‪ 600‬ی‬ ‫ل ‪ 200‬ی‬ ‫ارم� ڈارل ےک ی‬ ‫لم ےس ‪ 2‬ارب ی‬ ‫لم ی‬ ‫ادا� یک اجیتکس ےہ۔‬ ‫ارم� ڈارل وظنمر رک ی‬ ‫اپاتسکن ےک ی‬ ‫ئ‬ ‫ن‬ ‫ن‬ ‫ارم� ڈارل یک ی‬ ‫ارم� ڈارل رفامہ رکے اگ ہکبج وجن کت زم�ی د ‪ 900‬ی‬ ‫اس ےک اسھت اسھت ‪ ADB‬وفری ‪ 350‬ی‬ ‫لم ی‬ ‫لم ی‬ ‫ادا� یک دروخاتس یک اجیکچ ےہ۔‬ ‫‪08‬‬ ‫‪09‬‬ ‫‪Q UA RTE R LY RE PORT - M A RCH 2020‬‬ ‫ن‬ ‫یش ت‬ ‫ی یٹ ی ٹ‬ ‫عم رپ ارثات‪ ،‬ومن ےک ااکمانت ی‬ ‫امرک ی‬ ‫�ادی‬ ‫م یھب دنمی ریہ‪ ،‬سج یک وہج وابےک‬ ‫ا�و�‬ ‫م یمک اور رسام�ی اکروں یک دعم دیپسچل ریہ‪ ،‬سج یک ب ی‬ ‫گا‬ ‫وہج یکری رٹ�ی �ڈز یک وایسپ اور اعیمل حطس رپ رطخات ےک ابثع اچکچہٹہ یھت۔‪2020‬ء ےک آاغز ےس ‪ 31‬امرچ ‪2020‬ء کت ‪ KSE 100‬ااشر�ی ‪ 28%‬رگ ی‬ ‫ی ٹ‬ ‫ا� امہ ی‬ ‫ااشر� ی‬ ‫رب�ر امرچ ی‬ ‫امرک رپ مح�یط رسٹک ی‬ ‫م ‪ 8000‬وپاسٹنئ اک اصقنن وہا۔ بت ےس اب کت ھچک احبیل آیئ‬ ‫م ی‬ ‫م ھچ ابر رحتمک وہےئ اور‬ ‫؛‬ ‫ی‬ ‫ٹ‬ ‫احل رشح ی‬ ‫امرک ےن رسٹک ی‬ ‫م وٹکیت ےک وتق بج ی‬ ‫رب�ر یک اٰیلع حطس وک وھچا اھت۔‬ ‫ےہ وصخًاص ی‬ ‫ت‬ ‫ت �ز‬ ‫ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ل ‪ SBP‬ےن ی�ی ےس ی� رمولحں م رشح م ومجمیع وطر رپ ‪ 425‬یب یپ �اسی کت وٹکیت یک سج ےساپل یک رشح اب‬ ‫رحبان ےک دسِ ابب ےک ی‬ ‫‪ 9%‬ےہ۔‪ SBP‬ےن ی‬ ‫دبت� یک ےہ۔ �ی امرزنج ےک لبقتسم ی‬ ‫ل رادہاری یک استخ ی‬ ‫م یھب ی‬ ‫ل ومرث‬ ‫م ڑکساؤ ےک ی‬ ‫اپل یک رشح ےس مہ آیگنہ ےک ی‬ ‫وہاگ یکوہکن ی‬ ‫م رقہض اجت ی‬ ‫م ‪ 50‬یب یپ �اسی یمک آیئ ےہ۔�ب�ی�نک�اری ےبعش ی‬ ‫سوزگن ڈاپزسٹ رپ مک از مک وابج االدا رشح ےک ارپس�ی �ڈ ی‬ ‫اپل یک رشح اور ی‬ ‫م‬ ‫م ‪ 1%‬کت اخرط وخاہ ااضہف وہا ےہ‪ ،‬ہکبج دربمس ‪ 2019‬ےس ڈاپزٹ ی‬ ‫‪ 2020‬یک یلہپ ہس امیہ ی‬ ‫ی‬ ‫رسرگموں رپ ڑبےتھ وہےئ‬ ‫م ‪ 3%‬کت ااضہف وہا ےہ۔ امیل‬ ‫ن ن‬ ‫م زم�ی د یمک وتمعق ےہ وج ‪ 2020‬ےک ‪ 8‬امہ ی‬ ‫م رقہض اجت ی‬ ‫وابیئ ارثات ےس یجن ےبعش ی‬ ‫م ‪ 2.6%‬ومن ےک اسھت ےلہپ یہ تسس روی داھک ریہ یھت۔ ب ی�‬ ‫م ‪ 2020‬ادتبایئ دو امہ ی‬ ‫ارپس�ی �ڈ ی‬ ‫م ‪ 2019‬یک تبسن ‪ 7‬یب یپ �اسی ااضہف وہا۔‬ ‫ام یلایتاکررکدیگ‬ ‫ن‬ ‫دورا� ےس ‪ 29%‬ز ی�ادہ ےہ۔ اس اسل یک یلہپ‬ ‫ی‬ ‫‪ HBL‬اک امیل اسل ‪2020‬ء یک یلہپ ہس امیہ اک دعب از وصحمل انمعف ‪ 4.1‬ارب روےپ راہ وج زگہتش ربس ایس‬ ‫م ‪ 2.79‬روےپ ااضہف وہا وج ‪2019‬ء یک یلہپ ہس امیہ ی‬ ‫ہس امیہ یک یف صصح آدمن ی‬ ‫م ‪ 2.08‬روےپ یھت۔اتمہ لبق از وصحمل انمعف ‪ 7.1‬ارب روےپ راہ‬ ‫ت‬ ‫ن‬ ‫�ز‬ ‫دورا� ےس ‪ 15%‬مک ےہ ‪ ،‬سج یک وہج روےپ یک ی� ارزاین یھت۔ ان ارثات وک رظن ادناز رکےت وہےئ لبق از وصحمل انمعف ‪ 2019‬ء‬ ‫ی‬ ‫وج زگہتش ربس ایس‬ ‫یک یلہپ ہس امیہ ےک اقمےلب ی‬ ‫م ‪ 10%‬ز ی�ادہ ےہ۔‬ ‫ف‬ ‫ی ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫‪ HBL‬ےن اےنپ اصر� اور اکروابر یک اعموتن اجری ریھک وصخًاص اس ڑکے وتق م‪ ،‬اخصل رقہض اجت م دربمس ‪2019‬ء ےک اقمےلب م ‪1.1%‬‬ ‫ی‬ ‫ا� وبضمط حطس رپ ہ ی� ہکبج مکحتسم اجری اھکوتں اور ‪ CASA‬یک‬ ‫‪ADR‬م ‪ 49.6%‬رتہبی آیئ ےہ۔ ُک ڈاپزسٹ ‪ 2.4‬رھکب رپ‪ ،‬ی‬ ‫ااضےف ےک اسھت‬ ‫ت‬ ‫ی‬ ‫ی‬ ‫ابرتل� ‪35.6%‬اور ‪ 82.7%‬ےہ۔ اوطس یکلم ڈاپزسٹ م ‪2019‬ء یک یلہپ ہس امیہ ےک اقمےلب م ‪ 155‬ارب روےپ(‪ )8.6%‬ااضہف وہا سج‬ ‫یب‬ ‫رشح‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫وتزان یک رہفتس م ‪ 9.3%‬ومن وہیئ۔اوطس یکلم اجری اھکوتں م‪ 40‬ارب روےپ یک ومن ےس اخصل انموعفں ےک امرنج م ‪ 52‬یب یپ‬ ‫ےس اوطس یکلم ن ت‬ ‫ت‬ ‫ن‬ ‫�اسی رتہبی آیئ۔ ���ی� ج��اً یکلم اخصل انمعف اجیت آدمن ‪ 21%‬ااضےف ےس ‪ 25.8‬ارب روےپ وہیئگ۔ ب ی� االوقایم اخصل انمعف اجیت آدمن ی‬ ‫م ‪ 8%‬ااضےف‬ ‫بن‬ ‫ےس ی‬ ‫� یک اخصل انمعف اجیت آدمن ‪2020‬ء یک یلہپ ہس امیہ ےک ی‬ ‫ل ڑبھ رک ‪ 28.0‬ارب روےپ وہیئگ وج ‪2019‬ء یک یلہپ ہس امیہ ےس ‪ 20%‬ز ی�ادہ ےہ۔‬ ‫غ‬ ‫ن‬ ‫ی‬ ‫ُ‬ ‫ی‬ ‫� ےن ‪ 2.3‬ارب اک ی‬ ‫‪ 19‬ااضہف وہا۔ ب ی‬ ‫ک وج ‪2019‬ء یک‬ ‫ر�ارڈ رسام�ی احلص ی ا‬ ‫روےپ یک ارزاین ےک ارثات رظن ادناز رکےت وہےئ ک �ر ڈنف آدمن م ‪ %‬ن‬ ‫یلہپ ہس امیہ ےک ‪ 2.7‬ارب روےپ اقمےلب ی‬ ‫�ادی وہج ڈسکف امکن ارٹسنوٹنم یک ربوتق رفوتخ ےک اسھت امرچ ‪2020‬ء‬ ‫م ی‬ ‫ا� تبثم ڑچاھؤ راہ۔ اس عفن نیک ب ی‬ ‫ئ‬ ‫�ادی ‪ FX‬آدمن ی‬ ‫وفلو ی‬ ‫م امن ی�اںف ان ی‬ ‫ےک ااتتخم رپ اجتریت وپرٹ ی‬ ‫م ‪ 57%‬رتہبی آیئ وج ‪ 1.6‬ارب روےپ وہیئگ وج یکلمف اور‬ ‫ر�ازئڈ انمعف ناجت ہ ی�۔ ب ی‬ ‫ن‬ ‫ن‬ ‫بی ن‬ ‫�‬ ‫� االوقایم اکروابر ےس احلص وہیئ۔ اتمہ ی� ی‬ ‫سج یک امہ وہج �ب ی��ک�اوشرسن اور رسام�ی اکری �ب ی��ک�اری ی�‬ ‫م‪ 11%‬یع�ی ‪ 4.7‬ارب روےپیمک ئواعق وہیئ ت‬ ‫م یمک ےک العوہ �ی یھب یھت ہک ‪2019‬ء یک یلہپ ہس امیہ ی‬ ‫ی‬ ‫م ھچک ف�یس�وں یک �کی�ب�اریگ ادا��یگ�ی�اں یھب ی‬ ‫�۔‬ ‫ن‬ ‫ی ت �ز‬ ‫بن‬ ‫م ‪2019‬ء یک یلہپ ہس امیہ یک تبسن ‪ 4.2‬ارب روےپ ااضہف وہا۔ سج ی‬ ‫� ےک ارخااجت ی‬ ‫ی‬ ‫م ی‬ ‫م ی�ی‬ ‫� ی�ارک رباچن تیک دنبش‬ ‫ا� نامن ی�اں ہصح ی و‬ ‫�� ش ئ‬ ‫ی �ز‬ ‫یک وہج ےس اھت یکوہکن ادتبایئ وتمعق التگ‪ ،‬اوارخ اسل ی‬ ‫ادا� اثتب وہیئ ؛اس ےس لبقتسم ی‬ ‫م پ ی�گی ی‬ ‫� ی�ارک ےک ارخااجت م ی�ی ےس یمک آےئ‬ ‫م یو‬ ‫ی ن‬ ‫رحمک ےس ہکلسنم التگ اور ب ی ن‬ ‫� االوقایم ارخااجت رپ روےپ یک دقر ی‬ ‫یگ۔اس ی‬ ‫م یمک ےک ارثات اک یھب اہھت راہ ےہ۔ ی‬ ‫ی‬ ‫ر�وری یک مکحتسم‬ ‫رسرگموں ےک‬ ‫م‬ ‫ٹ‬ ‫ی بن‬ ‫وفلو ی‬ ‫� ےن ‪ 0.6‬ارب یک وبعری التگ ب� یک سج ی‬ ‫م اس ےک یا� یو� وپرٹ ی‬ ‫اکررکدیگ ےک ابووجد ‪ 2020 ،‬یک یلہپ ہس امیہ م ی‬ ‫م ‪ 0.2‬ارب یک‬ ‫ُ‬ ‫ی‬ ‫ی‬ ‫عمار م اوارخِ امرچ کت ‪6.4%‬‬ ‫ااضیف التگ اشلم ےہ۔ اتمہ دربمس ‪2019‬ء کت ُک ‪ NPL‬م ‪ 1.2‬ارب یک یمک واعق وہیئ سج ےس ااثہث اجت ےک ی‬ ‫یج‬ ‫آیئ۔وکر� یھب دربمس ‪2019‬ء یک ‪ 93.2%‬ےس ڑبھ رک امرچ ‪ 2020‬ی‬ ‫م ‪93.4%‬وہیئگ۔‬ ‫رتہبی‬ ‫‪08‬‬ ‫‪09‬‬
7. ‫‪Q UA RTE R LY RE PORT - M A RCH 2020‬‬ ‫‪QUARTERLY REPORT - MARCH 2 0 2 0‬‬ ‫ذاخرئ ی‬ ‫مااترڑچاھٔو‬ ‫غ �ت خ‬ ‫ی �‬ ‫� ص�یص دشہ انمعف‬ ‫ااتتفیح ر‬ ‫ئ‬ ‫ٹ‬ ‫ل اقِلب ی‬ ‫ب ین ی ی‬ ‫ادا� انمعف‬ ‫ےک ی‬ ‫� ا�و� ےک احلم ارفاد ٹ‬ ‫س� بس��ڈری رپ انشتخ رکدہ ومرخ ی� ااثہث اجت‬ ‫ی ٹ‬ ‫ی‬ ‫دار�ی وں یک واضتح دشہ تعفنم رپ انمعف ےک دوابرہ پ ی�اشئ اک ہّصح – اخصل‬ ‫ا�ویس ا� یک ذہم� ت ش� خ‬ ‫ااثہث اجت یک دوابرہ ��یص رپ رسسلپ ےس لقتنم دشہ – وصحمل اک اخصل‬ ‫ی ن‬ ‫لم روےپ‬ ‫‪114,550‬‬ ‫‪4,096‬‬ ‫(‪)108‬‬ ‫‪3‬‬ ‫‪12‬‬ ‫‪4,003‬‬ ‫ت‬ ‫دساب انمعف‬ ‫انمبس اکرروایئ ےک ی‬ ‫ل ی‬ ‫‪118,553‬‬ ‫فلتخم دموں ی‬ ‫م ریھک یئگ روقم‬ ‫اقونین ذاخرئ ی‬ ‫م لقتنم دشہ‬ ‫(‪)461‬‬ ‫دقن انمعف ہمسقنم – یمتح‬ ‫(‪)1,834‬‬ ‫(‪)2,295‬‬ ‫انمعفہمسقنم‬ ‫غ �ت خ‬ ‫ی �‬ ‫� ص�یص دشہ انمعف‬ ‫ااتتخیم ر‬ ‫‪116,258‬‬ ‫ش ئ‬ ‫یف صصح ی‬ ‫(�ر) آدمین (روےپ)‬ ‫یٹ‬ ‫ارپ� ‪ 2020‬وک دقعنم وہےن واےل االجس ی‬ ‫ڈارئ�رزےن‪ 22‬ی‬ ‫م ‪ 31‬امرچ ‪ 2020‬وک ااتتخم ی‬ ‫ےکل ‪ 1.25‬روےپ یف‬ ‫ی‬ ‫ذپ�ر وہےن وایل ہس امیہ‬ ‫وبرڈ آف‬ ‫صصح (‪ )12.50%‬ےک وبعری دقن انمعف ہمسقنم اک االعن ی‬ ‫کا۔‬ ‫‪2.79‬‬ ‫ااہظ ِررکشت‬ ‫رسامےئاکانتبس‬ ‫ک ی�� ٹ‬ ‫یش ن‬ ‫زنکرو� رفب (‪ )Capital Conservation Buffer‬یک رشاطئ ی‬ ‫م ‪ SBP‬ےن �ب�ی�نک�اری ےبعش یک اعموتن ی‬ ‫وموجدہ رحبان ےک وجاب ی‬ ‫م پ�‬ ‫م‬ ‫ل‬ ‫ن‬ ‫ت‬ ‫ن‬ ‫‪ 2.5%‬ےس ‪ 1.5%‬کت‪ 100 ،‬یب یپ �اسی یک یمک رک دی۔ اس ےس ی�وں ‪ � ،Tiers‬یع�ی‪Tier1CAR ،Common Equity Tier 1 )CET1( CAR‬‬ ‫اور ُک ‪ CAR‬ےک رسامےئ یک رشاطئ ی‬ ‫م ‪1%‬کت یمک آیئ۔‬ ‫ن ک ٹ‬ ‫ی ش‬ ‫�ن�ت�ی ت‬ ‫دقر ی‬ ‫م یمک یک وہج ےس ب ی‬ ‫ر� (‪ )CAR‬یئک زاو�ی وں ےس ‪ 37‬یب یپ �اسی اتمرث وہا۔ � ج��اً ومجمیع ‪ Tier 1 CAR، 28‬یب یپ �اسی ےس‬ ‫� اک ی��پ�ل ا�ی ی�ڈ�و� ی و‬ ‫م ‪ 12.45%‬ےس امرچ ‪2020‬ء ی‬ ‫مک وہ رک ‪2019‬ء ےک اوارخ ی‬ ‫� روم ی‬ ‫گا۔‪ CET 1 CAR‬ی‬ ‫م مک از مک‬ ‫م ‪ 100‬یب یپ �اسی یمک ےس ہ ی �ڈ‬ ‫م ‪ 12.17%‬رہ ی‬ ‫نت‬ ‫بن‬ ‫� ی‬ ‫گا۔ ی‬ ‫� اک ُک ومجمیع ‪ CAR‬اسل ‪2019‬ءےس ومعمیل‬ ‫م ‪ Tier II‬رسامےئ اک ‪ 42‬یب یپ �اسی الہ وہ ی‬ ‫یک حطس ےس ‪ 100‬یب یپ �اسی ااضہف وہا سج ےک ی ج‬ ‫ی یٹ‬ ‫گا ۔ ‪ HBL‬اک رسام�ی اور اس ےس ہقلعتم انتبس ر�ولری رضور ی�ات ےس ابالرت ےہ۔‬ ‫ااضےف ےک اسھت ‪ 15.39%‬وہ ی‬ ‫ِ‬ ‫وصرتاحل‬ ‫نلبقتسمیک‬ ‫ظ‬ ‫غ‬ ‫ی‬ ‫ی‬ ‫�‬ ‫�‬ ‫�‬ ‫ی‬ ‫د�ا رھب ی‬ ‫ی‬ ‫م اپل اسزوں ےن وس زری و ام ی‬ ‫لایت رت ب ی ادقاامت اک االعن ی‬ ‫ک اجےکس وج اس ع دابؤ‬ ‫کا ےہ اتہک اعیمل الک ڈاؤن ےک ارثات اک دسِ ابب ی ا‬ ‫ی‬ ‫ی ٹ‬ ‫ہ‬ ‫وال نپ ےس اچبؤ اور امرک ےک رقہض اجت یک انددنہہ وصراحتل ےک‬ ‫ےک ابثع زم�ی د دب رت وہ ےتکس ی�۔ ‪ IMF‬ےن اممکل ےس زگارش یک ےہ ہک وہ د�ی ی‬ ‫پش‬ ‫ش‬ ‫ت‬ ‫‘‘وس ی ن‬ ‫� رظن ی‬ ‫رک�۔اعیمل اعمیش تسس روی ےک اپاتسکن یک ی‬ ‫رت�’’ پ ی�اےن رپ رخچ ی‬ ‫عم رپ یھب رہگے ارثات وتمعق ہ ی�۔الک ڈاؤن ےس اتمرثہ یتعنص‬ ‫ی ِ‬ ‫رسرگموں اور ومجمیع بلط ی‬ ‫م تسس روی ےس ‪ GDP‬یک ومن‪ ،‬وصخًاص ی‬ ‫ی‬ ‫ارپ� ےس وجن ‪2020‬ء ےک دوران‪ ،‬مک وہاجےئ یگ۔ربآدمات اور ی‬ ‫رتسات‬ ‫ت‬ ‫ت‬ ‫اجری اھکوتں رپ دابؤ ڑبھ اجےئ اگ اتمہ ی� یک ق�یم� ی‬ ‫ی‬ ‫م یمک ےس وکحتم وک ھچک ام یلایت اجنگشئ لم یتکس ےہ۔انچہچن اعمیش‬ ‫م یھب یمک وتمعق ےہ سج ےس ت‬ ‫رسرگموں رپ ی‬ ‫ی‬ ‫وط� الم� یع�اد ارثات اک �ع� ی ن� واب ےک رعوج ےک دعب یہ ی‬ ‫کا اجاتکس ےہ۔‬ ‫‪10‬‬ ‫‪11‬‬ ‫ف‬ ‫ف‬ ‫ٹ‬ ‫بن‬ ‫یش ت‬ ‫بن‬ ‫ی ن‬ ‫ی ن‬ ‫ی‬ ‫ل‬ ‫ی‬ ‫� اس لکشم وتق ی‬ ‫ی‬ ‫�‬ ‫ک‬ ‫ی‬ ‫م اصر� اور وس رت عم ےک افمد م اےنپ رفاضئ ےس وخبیب آاگہ ےہ۔ ی‬ ‫ی‬ ‫� اےنپ اصر� وک رقہض اجت اور �وڈئ�‬ ‫ل‬ ‫ی‬ ‫�یک و�ی‬ ‫زم�ی‬ ‫اامعتسل‬ ‫یک رفایمہ م وکاشں ےہ اور اہجں ترضورت ےہ واہں ااضیف کچل ےک تاظمرہے ےک اسھت ڑبھ رک د اعموتن یھب رک راہ ےہ۔ مہ � �ڈیٹ ےک م ن‬ ‫� ی‬ ‫دسایب ی‬ ‫م ناےنپ اصرف یک ابت چ ی‬ ‫م اعموتن ےک ی‬ ‫ل آےگ رےنہ اک وصنمہب انب رےہ ہ ی� اتہک اےلگ لکشم ہ� ی���وں‬ ‫اور ‪ SBP‬یک اجبن ےس ڈنفگن یک ی‬ ‫ش‬ ‫�‬ ‫ٹ‬ ‫�‬ ‫� ی‬ ‫ی‬ ‫م وہستل رےہ۔ مہ اس وحاےل ےس اینپ ب یل�س ی‬ ‫م رک�ی �ڈٹ ےک اوصولں یک اپدساری ےک اسھت اےنپ اصرف یک دمد ےک وخادنمشہ ہ ی�۔ وموجدہ‬ ‫م ااضہف اور قل�یل الم� یع�اد تعفنم ی‬ ‫م اکم اجری رےنھک ےس ارخااجت ی‬ ‫م یمک آےئ یگ ‪ ،‬رگم �ی امہرے اکروابر ےک ی‬ ‫وط� الم� یع�اد ااکحتسم اور‬ ‫وصراحتل ی ف‬ ‫ی ن‬ ‫ا� اقِلب دقر اجترت ےہ۔‬ ‫ل ی‬ ‫اصر� اور یکلم اقب ےک ی‬ ‫امہرے‬ ‫ن‬ ‫ہ یش‬ ‫بن‬ ‫�ادی ہصح راہ ےہ اور امہرے کلم اور اعمرشے ےن وج ھچک د ی�ا ےہ اےس واسپ رکان ی‬ ‫‪HBL‬‬ ‫� یک تمکحِ‬ ‫� ےس اپاتسکن ےک امسیج و اعمیش اتےن ابےن اک ب ی‬ ‫ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫یلمع اور ی ج‬ ‫رکدار اک اظمرہہ ی‬ ‫ااسحس تافکتل‬ ‫کا ےہ۔ ‪HBL‬‬ ‫م ‪ HBL‬ےن اقدئاہن‬ ‫ا��ڈا اک ہصح ےہ۔‬ ‫وصخًاص آج ےک ڑکے وتق م وس رت وبعشں ی خ‬ ‫ت‬ ‫م‬ ‫ث‬ ‫س�‬ ‫ی ت‬ ‫ن‬ ‫ی ن‬ ‫لم حق�ی�‬ ‫دہف ‪7.5‬‬ ‫بس ےس ڑبا امسیج افحط اجل‬ ‫رش� یک ی‬ ‫ح ےس رخف وسحمس رکات ےہ ‪ ،‬وج اپاتسکن یک اتر� اکم ت‬ ‫رپورگام ےک امہ ی ت ق‬ ‫ےہ تسج اک ت ق‬ ‫س�‬ ‫�‬ ‫ن‬ ‫ن‬ ‫ح‬ ‫ق�‬ ‫ھ‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫یل‬ ‫م ‪ 90‬ارب روےپ � رکان ےہ۔ ب ی‬ ‫� کلم رھب ےک وطل و رعض رپ ےنسب واےل‬ ‫ی� م ‪ 12000‬رانش ےک � ے یھب � رک راہ ےہ نج م‬ ‫ین‬ ‫ہ‬ ‫ہ‬ ‫ارثک �ی ی‬ ‫رس�ا وہلٹ ےک ارتشاک ےس‪،‬‬ ‫۔‪،HBL‬‬ ‫وم ارجت واےل‬ ‫ارفاد ی� نج یک زدنیگ اور روزاگر اس الک ڈاؤن ےس بس ےس ز ی�ادہ اتمرث وہےئ ی� ت ق‬ ‫ن‬ ‫م ‪ 30,000‬اھکےن ےک ڈےب ی‬ ‫م وموجد ڈارٹکوں ی‬ ‫رس�ا وہلٹ وموجد ےہ واہں فصِ ا ّول ی‬ ‫نج است رہشوں ی‬ ‫م ی‬ ‫� رک راہ ےہ۔ ‪ HBL‬اس رحباین‬ ‫ق‬ ‫ن‬ ‫وصراحتل ی‬ ‫ل فلتخم ی‬ ‫م کلم و وقم وک اہسرا ی‬ ‫رط�وں ےس اانپ اعتون اجری رےھک اگ۔‬ ‫د� ےک ی‬ ‫سک� ی ٹ �ز ن‬ ‫ی ٹ‬ ‫ٹ ٹ بن‬ ‫ا��ڈ �اجنیچسکی ی ش ن‬ ‫ور� ی‬ ‫وزارت ام یلات اور ی‬ ‫وکحتم ِ اپاتسکن‪ ،‬ابوصخلص ی‬ ‫ِ‬ ‫اس ی‬ ‫مک ٓاف اپاتسکن یک اکووشں اک‬ ‫�‬ ‫اپاتسکن‪،‬‬ ‫ٓاف‬ ‫�‬ ‫مہ اےنپ‬ ‫ر� یولرز اور‬ ‫ی‬ ‫ئ‬ ‫غ‬ ‫ش‬ ‫یش ت‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ہ‬ ‫ہ‬ ‫ارتعاف رکےت ی�۔ اس ی‬ ‫�ر ومعمیل وتق م‪ ،‬اوھنں ےن ا� اپل�یس�ی�اں ی‬ ‫ک وج تحلصم ادن�‪ ،‬اور وتمازن ی�‪ ،‬عم‪ ،‬رمٹسکز اور‬ ‫انب� اور ادقاامت ی‬ ‫ن‬ ‫ن‬ ‫ت‬ ‫اپاتسکن ےک وعام یک افحتظ رکےت ہ ی�‪ ،‬ب ی‬ ‫اور� اور انفلشن رسوزس اڈنرٹسی یک اسلم� ی� اور رتہبی اک ظفحت یھب رکےت ہ ی�۔‬ ‫ف‬ ‫ن‬ ‫ہ‬ ‫ی‬ ‫ہ‬ ‫ی‬ ‫مہ اےنپ اصر� ےک ااسحن دنم ی� نج م ےس یئک ولسنں ےس امہرے اسھت کلسنم ی� اور اےنپ اکروابر اور اامتعد ےک ی‬ ‫ذر� اانپ رھبواس اجری رےھک‬ ‫ٹ‬ ‫ہ‬ ‫ی‬ ‫ااظتنم‬ ‫وہےئ ہ ی�۔ امہرے صصح ی�ااگتفن ےن اثتب دقیم ےس امہرا اسھت د یا� اور اس ےک اسھت امتم اس�� ی قک وہڈلرز ےک مہ ااہتنیئ رکش زگار ی� ۔وبرڈ اور‬ ‫ل رُپزعم ےہ اور مہ اےنپ اس�ٹ�یک وہڈلرز وک ی ی ن‬ ‫وگرسنن ےک اٰیلع ی ن‬ ‫� دالےت ہ ی� ہک اس ےطخ ی‬ ‫م مہ اینپ اکروابری تعنص‬ ‫عمارات ربرقار رےنھک ےک ی‬ ‫رت� ی‬ ‫ی‬ ‫م رعوج رپ وہں ےگ۔‬ ‫ی ن‬ ‫المزم اور اُن ےک الہِ اخہن‪ ،‬ابوصخلص رمٹسک اک اسانم رکےن واےل �ی وسٹن اور امہری ‪ 1400‬ےس زادئ اعفل رباوچنں ی‬ ‫آرخ ی‬ ‫م وموجد ےلمع‬ ‫م‪ ،‬مہ اےنپ امتم‬ ‫ن‬ ‫وتق ی‬ ‫ےک قرکشزگار ہ ی�‪ ،‬وھنجں ےن ان رطخانک احالت ی‬ ‫رحبان ےک اس ت‬ ‫�ادی رضور ی�ات اک وپرا‬ ‫م شامہرے رمٹسکز یک ب ی‬ ‫م اہبدری اک اظمرہہ رکےت وہےئ ن‬ ‫ی ن‬ ‫�‬ ‫وہان ی‬ ‫ل ی‬ ‫رخاج حس� ی ن� پ ی‬ ‫� انب ی�ا۔ �ی امہرے ہ ی‬ ‫�رو اور ہ ی‬ ‫� رکےت ہ ی�۔‬ ‫�رونئ ہ ی� اور مہ اُن ےک زعم اور اکھتن تنحم ےک ی‬ ‫ا� ِ‬ ‫اجنمبن وبرڈ‬ ‫ی‬ ‫ب‬ ‫اورزگن�‬ ‫دمحم‬ ‫ٹ ف‬ ‫ف‬ ‫� ی‬ ‫دصر اور چ ی‬ ‫‬ ‫�ز� ی ر‬ ‫آ�‬ ‫ا� ی و‬ ‫‪ 22‬ی‬ ‫ارپ� ‪2020‬ء‬ ‫مع�ی��ز ادمح امجل‬ ‫ٹ‬ ‫ی ر‬ ‫ڈارئ�‬ ‫‪10‬‬ ‫‪11‬‬
8. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Condensed Interim Consolidated Statement of Financial Position Habib Bank Limited Condensed Interim Consolidated Profit and Loss Account (Unaudited) Habib Bank Limited As at March 31, 2020 For the three months ended March 31, 2020 Condensed Interim Statement of Financial Position As at March 31,Consolidated 2020 Note Condensed Interim Consolidated ProfitMarch and Loss Account For the three months ended 31, 2020(Unaudited) (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets 5 6 7 8 9 10 11 17 12 264,550,907 43,339,998 49,932,898 1,437,623,173 1,179,349,348 79,777,594 9,224,713 128,066,633 3,191,865,264 367,593,717 41,248,554 45,303,199 1,379,607,379 1,166,956,994 80,462,410 9,089,345 136,870,799 3,227,132,397 30,259,530 375,312,863 2,377,632,071 22,358,000 9,844,018 140,739,571 2,956,146,053 29,681,108 382,206,306 2,437,597,169 22,360,000 6,189,687 124,346,615 3,002,380,885 235,719,211 224,751,512 Mark-up / return / profit / interest earned Mark-up / return / profit / interest expensed Net mark-up / return / profit / interest income 13 14 15 16 17 18 NET ASSETS 22 23 72,645,814 44,632,354 28,013,460 24 4,730,547 79,519 255,349 (1,193,768) (280,304) 2,279,970 (93,812) 5,777,501 Fee and commission income Dividend income Share of profit of associates and joint venture Foreign exchange (loss) / income (Loss) / income from derivatives Gain / (loss) on securities - net Other (loss) / income Total non mark-up / interest income 25 26 Total income Operating expenses Workers' Welfare Fund Other charges Total non mark-up / interest expenses 27 28 Profit before provisions and taxation Provisions / (reversals) and write offs - net 29 Profit before taxation 19 Total equity attributable to the equity holders of the Bank Non-controlling interest 14,668,525 69,874,478 30,518,819 116,257,901 14,668,525 66,260,511 24,875,383 114,550,097 231,319,723 220,354,516 4,399,488 4,396,996 5,332,333 100,811 891,248 465,879 184,516 (386,628) 58,507 6,646,666 33,790,961 30,004,454 25,639,193 161,519 232,198 26,032,910 21,440,799 161,195 50,652 21,652,646 7,758,051 8,351,808 Non mark-up / interest expenses REPRESENTED BY Shareholders' equity Share capital Reserves Surplus on revaluation of assets - net of tax Unappropriated profit 51,524,931 28,167,143 23,357,788 Non mark-up / interest income LIABILITIES Bills payable Borrowings Deposits and other accounts Liabilities against assets subject to finance lease Subordinated debt Deferred tax liabilities Other liabilities January 01 to January 01 to March 31, March 31, 2020 2019 (Rupees in '000) Taxation 30 Profit after taxation 625,273 (82,971) 7,132,778 8,434,779 3,024,676 5,257,226 4,108,102 3,177,553 4,096,145 11,957 4,108,102 3,054,234 123,319 3,177,553 Attributable to: Equity holders of the Bank Non-controlling interest --------------Rupees-------------- 235,719,211 CONTINGENCIES AND COMMITMENTS Basic and diluted earnings per share 224,751,512 31 2.79 2.08 The annexed notes 1 to 39 form an integral part of these condensed interim consolidated financial statements. 20 The annexed notes 1 to 39 form an integral part of these condensed interim consolidated financial statements. Muhammad President Aurangzeb and President and Chief Executive Officer Chief Executive Officer 12 Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Director Yahya Chinoy Director Dr. Najeeb Samie Director Director 1 Muhammad Aurangzeb President and President and ChiefExecutive Executive Officer Chief Officer Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 2 13
9. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Condensed Interim Consolidated Statement of Comprehensive Income Habib Bank Limited (Unaudited) Condensed Interim Consolidated Statement of Comprehensive Income (Unaudited) Condensed Interim Consolidated Statement of Changes In Equity Habib Bank Limited (Unaudited) Condensed Interim Consolidated Statement of Changes In Equity (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the three months ended March 31, 2020 January 01 to January 01 to March 31, March 31, 2020 2019 (Rupees in '000) Profit after taxation for the period attributable to: Equity holders of the Bank Non-controlling interest 4,096,145 11,957 4,108,102 Other comprehensive income / (loss) Share capital 3,054,234 123,319 3,177,553 (Decrease) / increase in share of exchange translation reserve of associates - net of tax Movement in surplus / deficit on revaluation of investments - net of tax, attributable to: Equity holders of the Bank Non-controlling interest Movement in surplus / deficit on revaluation of fixed assets - net of tax, attributable to: Equity holders of the Bank Non-controlling interest Movement in surplus / deficit on revaluation of fixed assets of associates - net of tax Total comprehensive income attributable to: Equity holders of the Bank Non-controlling interest Sub Total Noncontrolling interest Total (7,326,886) 21,858,529 195,241,731 4,010,480 199,252,211 - - - - - - 3,054,234 1,297,732 - - - - - - 38,956 - - - - - - - - 3,054,234 123,319 3,177,553 - - 1,297,732 41,360 1,339,092 - - 38,956 Share of remeasurement loss on defined benefit obligations of associates - net - - - - - - - Movement in surplus / deficit on revaluation of assets - net of tax - - - - - - - - - - - - 3,051,624 - - - (355,706) - - - - 13,365 - - - (1,833,565) - 1,336,688 Transferred to statutory reserves - - Transferred from surplus on revaluation of assets - net of tax - - 71,543 284,163 - - - - (2,610) - 2,258,581 (102,439) 2,156,142 - - (2,610) - 2,258,581 31,641 2,290,222 (105,237) 6,541,656 196,320 (105,237) 6,737,976 (2,798) (2,798) (13,215) - 38,956 (2,610) - - - 150 (150) - 14,668,525 26,342,282 1,079,531 32,241,603 547,115 (156,706) 6,073,812 102,482,038 - - (1,833,565) (5,170,744) 21,842,516 199,949,972 - (1,833,565) 4,206,650 204,156,622 - - - - - - - 12,278,558 - - 12,278,558 43,684 12,322,242 - - 4,854,181 127,501 4,981,682 - - 70,038 - 87,715 Other comprehensive income / (loss) Effect of translation of net investment in foreign branches, subsidiaries, joint venture and associates - net of tax - 4,854,181 - - - - - - Increase in share of exchange translation reserve of associates - net of tax - 70,038 - - - - - - Remeasurement gain on defined benefit obligations - net of tax - - - - - - 87,715 - - 5,255 70,038 92,970 Share of remeasurement gain on defined benefit obligations of associates - net - - - - - - - 501 Movement in surplus / deficit on revaluation of assets - net of tax - - - - - - - - - - - - - 12,366,774 - (1,381,938) - - - - - 6,073,812 - - - - - 414 (414) - 4,924,219 1,222,256 - 501 - 501 (93,422) 8,834,143 14,320 8,848,463 (226,671) 8,700,894 (2,986) (229,657) (96,408) 25,895,479 190,760 (229,657) 26,086,239 Transferred to statutory reserves - - - - Transferred to unappropriated profit - - - - - - Transferred from surplus on revaluation of assets - net of tax - - - - - - - 401,289 - Deferred tax asset recognised on subsidiary under liquidation - - - - - - - 108,817 - - 108,817 - 108,817 Exchange gain realised on closure of overseas branch - net of tax - - - - - - - - (99,471) - (99,471) (99,471) 159,682 8,927,565 (6,073,812) - (400,875) - 1st interim cash dividend - Rs 1.25 per share - - - - - - - (1,833,565) - - (1,833,565) - (1,833,565) 2nd interim cash dividend - Rs 1.25 per share - - - - - - - (1,833,565) - - (1,833,565) - (1,833,565) 3rd interim cash dividend - Rs 1.25 per share - - - - - - - (1,833,565) - - (1,833,565) - (1,833,565) - - - - - - - (5,500,695) - - (5,500,695) - (5,500,695) - 114,550,097 4,096,145 14,668,525 31,167,030 1,239,213 33,463,859 547,115 (156,706) 3,530,150 21,345,233 220,354,516 4,396,996 224,751,512 Comprehensive income for the three months ended March 31, 2020 6,737,976 12,840,631 2,633 12,843,264 (156,706) 6,073,812 101,606,320 - Balance as at December 31, 2019 - 12,843,264 Fixed / NonInvestments banking assets Transactions with owners, recorded directly in equity (2,798) - Movement in surplus / deficit on revaluation of non-banking assets - net of tax 547,115 - Movement in share of surplus / deficit on revaluation of assets of associates - net of tax - - 1,007,988 31,957,440 Increase in share of exchange translation reserve of associates - net of tax Profit after taxation for the nine months ended December 31, 2019 (2,610) - Unappropriated profit Comprehensive income for the nine months ended December 31, 2019 (102,439) 2,644 25,005,594 - Balance as at March 31, 2019 Items that are not to be reclassified to the profit and loss account in subsequent periods: Share of remeasurement gain / (loss) on defined benefit obligations of associates - net of tax Bank General reserve Other comprehensive income / (loss) Effect of translation of net investment in foreign branches, subsidiaries, joint venture and associates - net of tax Final cash dividend - Rs 1.25 per share declared subsequent to the year ended December 31, 2018 2,258,581 31,641 2,290,222 (93,583) Capital reserve Non-distribuon acquisition of table capital common control reserve entity Transactions with owners, recorded directly in equity 38,956 5,749,307 (21,101) 5,728,206 Movement in share of surplus / deficit on revaluation of investments of associates - net of tax Total comprehensive income 14,668,525 Profit after taxation for the three months ended March 31, 2019 1,297,732 41,360 1,339,092 (84,930) Joint venture and subsidiary Surplus / (deficit) on revaluation of Comprehensive income for the three months ended March 31, 2019 Movement in share of surplus / deficit on revaluation of assets of associates - net of tax 3,171,048 11,777 3,182,825 Exchange translation reserve -------------------------------------------------------------------------------------------------------------------------(Rupees in '000) ----------------------------------------------------------------------------------------------------------------------- Balance as at December 31, 2018 Items that may be reclassified to the profit and loss account in subsequent periods: Effect of translation of net investment in foreign branches, subsidiaries, joint venture and associates - net of tax, attributable to: Equity holders of the Bank Non-controlling interest Attributable to shareholders of the Bank Reserves Capital Revenue Statutory reserves Profit after taxation for the three months ended March 31, 2020 - Other comprehensive income / (loss) Effect of translation of net investment in foreign branches, subsidiaries, joint venture and associates - net of tax - Decrease in share of exchange translation reserve of associates - net of tax - - - - - - 3,171,048 - - - - - (84,930) - - - - - - - 4,096,145 11,957 4,108,102 - - - 3,171,048 11,777 3,182,825 - - - (84,930) Share of remeasurement gain on defined benefit obligations of associates - net - - - - - - - Movement in surplus / deficit on revaluation of assets - net of tax - - - - - - - - - - - - 4,098,789 (461,032) Movement in share of surplus / deficit on revaluation of assets of associates - net of tax 6,541,656 196,320 6,737,976 - - 3,086,118 - 61,254 399,778 2,644 - - - - 2,644 5,749,307 - 5,749,307 (21,101) 5,728,206 (93,583) 5,655,724 - (93,583) 12,840,631 2,633 (93,583) 12,843,264 Transferred to statutory reserves - - - - Exchange gain realised on capital reduction in subsidiary - net of tax - (1,084,380) - - - - - Exchange loss realised on closure of overseas branch - net of tax - 1,151,197 - - - - - Reversal of deferred tax asset recognised on subsidiary - - - - - - - (108,817) Transferred from surplus on revaluation of assets - net of tax - - - - - - - 12,429 - - - - - (1,833,565) - 116,257,901 - (84,930) - - - - - - (1,084,380) - (1,084,380) - - - 1,151,197 - 1,151,197 - - (108,817) - (108,817) (12,288) 141 - 2,644 (141) - - Transactions with owners, recorded directly in equity The annexed notes 1 to 39 form an integral part of these condensed interim consolidated financial statements. Final cash dividend - Rs 1.25 per share declared subsequent to the year ended December 31, 2019 Balance as at March 31, 2020 14,668,525 34,319,965 1,300,467 33,863,637 547,115 (156,706) - - (1,833,565) 9,185,874 21,332,945 231,319,723 - (1,833,565) 4,399,488 235,719,211 The annexed notes 1 to 39 form an integral part of these condensed interim consolidated financial statements. President and Muhammad Aurangzeb Chief Executive Officer President and Chief Executive Officer 14 Chief Financial Officer Rayomond Kotwal Chief Financial Officer Director Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Muhammad Aurangzeb Rayomond Kotwal President and Chief Financial President and Chief FinancialOfficer Officer Chief Executive Officer Chief Executive Officer Director 3 Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 4 15
10. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Habib Bank Limited Condensed Interim Consolidated Cash Flow Statement (Unaudited) For three months ended March 31, March 2020 Forthe the three months ended 31, 2020 Condensed Interim Consolidated Cash Flow Statement (Unaudited) HABIB BANK LIMITED Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 January 01 to January 01 to March 31, March 31, 2020 2019 (Rupees in '000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Dividend income Share of profit of associates and joint venture Adjustments: Depreciation Amortisation Depreciation on right-of-use assets Mark-up / return / profit / interest expensed on lease liability against right-of-use assets Provision for / (reversal of) diminution in value of investments Provision against loans and advances Provision against other assets Provision / (reversal) against off-balance sheet obligations Unrealised gain on held-for-trading securities Exchange gain on goodwill Exchange gain realised on reduction in capital of subsidiary - net of tax Exchange loss realised on closure of overseas branch - net of tax Gain on sale of fixed assets - net Workers' Welfare Fund (Increase) / decrease in operating assets Lendings to financial institutions Held-for-trading securities Advances Other assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Other liabilities Income tax paid Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investment in available-for-sale securities Net investment in held-to-maturity securities Net investment in associates Dividend received Investments in fixed assets Investments in intangible assets Proceeds from sale of fixed assets Effect of translation of net investment in foreign branches, subsidiaries, joint venture and associates - net of tax Net cash flows (used in) / generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Effect of translation of net investment by non-controlling interest in subsidiary Repayment of subordinated debt Payment of lease liability against right-of-use assets Dividend paid Net cash flows used in financing activities 7,132,778 8,434,779 (79,519) (255,349) (334,868) 6,797,910 (100,811) (891,248) (992,059) 7,442,720 1,458,898 174,541 859,401 485,313 281,990 434,913 32,186 15,629 (794,615) (24,262) (1,084,380) 1,151,197 (16,293) 161,519 3,136,037 9,933,947 1,214,395 109,975 704,330 315,225 (162,631) 177,283 32,177 (10,999) (14,306) (80,293) (5,743) 161,195 2,440,608 9,883,328 (4,629,699) (37,914,961) (12,827,267) 5,889,455 (49,482,472) (247,086,890) (47,292,724) (11,261,818) 342,346 (305,299,086) 578,422 (6,893,443) (59,965,098) 16,567,911 (49,712,208) (89,260,733) (1,169,659) (90,430,392) (13,991,423) (291,196,696) 28,363,978 34,928,505 (241,895,636) (537,311,394) (531,003) (537,842,397) (16,861,489) 7,211,511 (229,810) 57,666 (1,745,519) (285,647) 26,944 520,858,168 (14,133,043) 975,488 29,897 (1,671,504) (260,392) 13,069 3,086,118 (8,740,226) 1,336,688 507,148,371 11,777 (2,000) (1,342,556) (447,969) (1,780,748) 93,846 (2,000) (1,380,628) (327,655) (1,616,437) (100,951,366) (32,310,463) Cash and cash equivalents at the beginning of the period Effect of exchange rate changes on cash and cash equivalents 404,505,633 4,336,638 408,842,271 320,419,953 1,682,757 322,102,710 Cash and cash equivalents at the end of the period 307,890,905 289,792,247 Decrease in cash and cash equivalents during the period 1 The Group consists of: Holding company - Habib Bank Limited, Pakistan Subsidiaries - Habib Allied Holding Limited – 90.50% shareholding - HBL Bank UK Limited – 90.50% effective shareholding - Habib Finance International Limited – 100% shareholding - Habib Currency Exchange (Private) Limited – 100% shareholding - HBL Asset Management Limited – 100% shareholding - The First MicroFinanceBank Limited - 50.51% shareholding - Habib Bank Financial Services (Private) Limited – 100% shareholding Habib Bank Limited (the Bank) is incorporated in Pakistan and is engaged in commercial banking services in Pakistan and overseas. The Bank’s registered office is at Habib Bank Tower, 9th Floor, Jinnah Avenue, Islamabad and its principal office is at Habib Bank Plaza, I. I. Chundrigar Road, Karachi. The Bank's shares are listed on the Pakistan Stock Exchange. The Bank operates 1,668 (2019: 1,667) branches inside Pakistan including 48 (2019: 48) Islamic Banking Branches and 44 (2019: 45) branches outside the country including in the Karachi Export Processing Zone (KEPZ). The Aga Khan Fund for Economic Development S.A. (AKFED) is the parent company of the Bank and its registered office is in Geneva, Switzerland. 16 President and Chief Executive Officer Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director 1.1 Habib Finance International Limited has voluntarily surrendered its license and filed for voluntary liquidation. The company is in the process of completing the required formalities in this regard. During the period, as part of a capital reduction plan prior to final liquidation, capital amounting to Rs 3,021.200 million was repatriated to Pakistan. 1.2 The Bank had commenced an orderly winding down of its operations in Afghanistan and banking operations were ceased on June 10, 2019. The remaining formalities required for closure are now in progress. 2 BASIS OF PRESENTATION 2.1 STATEMENT OF COMPLIANCE These condensed interim consolidated financial statements have been prepared in accordance with accounting and reporting standards as applicable in Pakistan. These comprises of: - International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) as are notified under the Companies Act, 2017; - Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under the Companies Act, 2017; - Provisions of and directives issued under the Banking Companies Ordinance, 1962; - Provisions of and directives issued under the Companies Act, 2017; and - Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) from time to time. Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the SBP and the SECP differ with the requirements of IFRSs or IFAS, the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the said directives, shall prevail. The annexed notes 1 to 39 form an integral part of these condensed interim consolidated financial statements. Muhammad Aurangzeb President and Chief Executive Officer THE GROUP AND ITS OPERATIONS Dr. Najeeb Samie Director 2.2 The disclosures made in these condensed interim consolidated financial statements have been limited based on the format prescribed by the SBP vide BPRD Circular Letter No. 5 dated March 22, 2019 and IAS 34. These condensed interim consolidated financial statements do not include all the information and disclosures required for annual consolidated financial statements and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019. 2.3 Standards, interpretations of and amendments to existing accounting and reporting standards that have become effective in the current year. There are certain new standards and interpretations of and amendments to existing accounting and reporting standards that have become applicable to the Group for accounting periods beginning on or after January 1, 2020. These are considered either to not be relevant or not to have any significant impact on the Group's financial statements. Director 5 617
11. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 2.4 For thethree three months March For the months endedended March 31, 2020 31, 2020 Standards and amendments to existing accounting and reporting standards that are not yet effective. 4.2 IFRS 9 has been applicable in several overseas jurisdictions from January 1, 2018 and is progressively being adopted in others. The requirements of this standard are incorporated in the Bank’s financial statements for the jurisdictions where IFRS 9 has been adopted. As per the SBP's BPRD Circular Letter no. 4 dated October 23, 2019, the applicability of IFRS 9 to banks in Pakistan has been deferred to accounting periods beginning on or after January 1, 2021. The impact of the application of IFRS 9 in Pakistan on the Bank's financial statements is being assessed. 2.5 In view of the relaxation granted by SBP for deferral of principal and markup and rescheduling of loans there will be an impact on the maturity profile of the Bank. The Asset and Liability Committee (ALCO) of the Bank is continuously monitoring the liquidity position and the Bank is confident that the liquidity buffer currently maintained is sufficient to cater to any adverse movement in the cash flow maturity profile. 4.3 Critical accounting estimates and judgements SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies adopted in the preparation of these condensed interim consolidated financial statements are consistent with those followed in the preparation of the consolidated financial statements for the year ended December 31, 2019. 4 4.4 The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the consolidated financial statements for the year ended December 31, 2019. These risk management policies continue to remain robust and the Bank is reviewing its portfolio regularly and conducts rapid portfolio reviews in line with emerging risks. Business Continuity Plans (BCP) for respective areas are in place and tested. The Bank has significantly enhanced monitoring of cybersecurity risk during these times. The remote work capabilities were enabled for staff, where required, and related risk and control measures were assessed to ensure that the Bank’s information assets are protected from emerging cyber threats and comply with the regulatory protocols required under the circumstances. The Bank is communicating with its customers on how they can connect with the Bank through its full suite of channels including digital and online channels. The Bank has taken all measures to ensure that service levels are maintained, customer complaints are resolved and turnaround times are monitored and the Bank continues to meet the expectations of its employees and customers. The COVID – 19 pandemic has taken a toll on all economies and emerged as a contagion risk around the globe, including Pakistan. To reduce the impact on businesses and economies in general, regulators / governments across the globe have introduced a host of measures on both the fiscal and economic fronts. Reduction in the capital conservation buffer by 100 basis points to 1.5%; Increasing the regulatory limit on extension of credit to SMEs to Rs 180 million; Relaxing the debt burden ratio for consumer loans from 50% to 60%; Allowing banks to defer borrowers’ principal loan payments by one year; and Relaxing regulatory criteria for restructured/rescheduled loans for borrowers who require relief of principal repayment exceeding one year and / or mark-up. - Operational Risk Management The Bank is closely monitoring the situation and has invoked required actions to ensure the safety and security of Bank staff and uninterrupted service to customers. The senior management of the Bank is continuously monitoring the situation and is taking timely decisions to resolve any concerns. FINANCIAL RISK MANAGEMENT The State Bank of Pakistan (SBP) has also responded to the crisis by cutting the Policy Rate by 225 basis points to 11% in March 2020 and again by 200 basis points to 9% on April 16, 2020. Other regulatory measures to provide an impetus to economic activity include the following: Equity Risk Management The carrying value of the Bank's investment in listed equity securities classified as available-for-sale, amounts to Rs 4.789 billion as at March 31, 2020. During the current quarter, the Pakistan Stock Exchange fell by 28%, triggering an impairment of Rs 969.210 million. The Bank has only recorded an impairment of Rs 242.30 million in the condensed interim consolidated financial statements of the current period, and has deferred the recognition of the remaining impairment to be taken on a quarterly basis till December 31, 2020 as allowed by the SBP. The basis for accounting estimates adopted in the preparation of these condensed interim consolidated financial statements is the same as that applied in the preparation of the consolidated financial statements for the year ended December 31, 2019. 3 Liquidity Risk Management 4.5 Capital Adequacy Ratio (CAR) In order to encourage banks to continue lending despite anticipated pressure on profits and credit risk, the SBP has relaxed the Capital Conversion Buffer (CCB) requirements to 1.5%, resulting in a 1% decline in CAR requirements for all Tiers. COVID-19 will impact banks in Pakistan on a number of fronts including increase in overall credit risk pertaining to the loans and advances portfolio, reduced fee income due to overall slowdown in economic activity, continuity of business operations and managing cybersecurity threat as a significant number of the Bank’s staff is working from home and an ever increasing number of customers are being encouraged to use digital channels. 4.1 Credit Risk Management The Risk Management function of the Bank is regularly conducting assessments of the credit portfolio to identify borrowers most likely to get affected due to changes in the business and economic environment. The Bank has further strengthened its credit review procedures in the light of COVID-19. The Bank is continuously reviewing the portfolio, to identify accounts susceptible to higher risk, resulting from the COVID-19 outbreak. IFRS 9 is applicable to the overseas branches of the Bank and requires the estimation of Expected Credit Loss (ECL) based on current and forecast economic conditions. The Bank has reviewed the potential impact of the COVID-19 outbreak on the inputs and assumptions for IFRS 9 ECL measurement in light of available information. Overall, the COVID-19 situation remains fluid and is rapidly evolving at this point, which makes it challenging to reliably reflect impacts in ECL estimates. The Bank is assessing the situation as it develops and is in the process of accounting for the same in its ECL estimates. 7 18 8 19
12. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 5 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency Foreign currencies With State Bank of Pakistan in Local currency current accounts Foreign currency current accounts Foreign currency deposit accounts With other Central Banks in Foreign currency current accounts Foreign currency deposit accounts With National Bank of Pakistan in Local currency current accounts Local currency deposit account National Prize Bonds 6 For the three months ended March 31, 2020 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 49,435,749 6,979,779 56,415,528 32,439,852 4,494,979 36,934,831 101,760,312 6,882,079 20,465,975 129,108,366 124,839,494 6,497,792 19,321,075 150,658,361 Outside Pakistan In current accounts In deposit accounts Repurchase agreement lendings (reverse repo) Bai Muajjal receivables - with State Bank of Pakistan - with other financial institutions INVESTMENTS 8.1 Investments by type March 31, 2020 (Unaudited) Note December 31, 2019 (Audited) Provision Provision Cost / Cost / Surplus / Surplus / for Carrying value for Carrying value (deficit) (deficit) amortised cost amortised cost diminution diminution ------------------------------------------------------------------------------------ (Rupees in '000) -------------------------------------------------------------------------------- Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds Shares - Listed companies Foreign securities - Government debt securities 297,083,221 7,706,120 - 654,606 127,781 297,737,827 7,833,901 19,437 - (1,587) 17,850 106,932 304,915,710 - 13,815 794,615 120,747 305,710,325 99,386 267,084,340 254,388,566 12,596,388 - - (127,306) 33,166 254,261,260 12,629,554 - - 10,549 (83,591) 109,935 267,000,749 Available-for-sale (AFS) securities 36,299,912 6,852,106 43,152,018 62,151,099 16,988,678 79,139,777 35,497,559 243,811 35,741,370 99,821,234 451,515 100,272,749 133,625 587,999 264,550,907 367,593,717 Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds - Ijarah Sukuks - Government of Pakistan US Dollar Bonds Shares 349,341 1,746,839 2,096,180 190,077 2,907,156 3,097,233 25,070,057 16,173,761 41,243,818 19,623,240 18,528,081 38,151,321 43,339,998 41,248,554 4,850,000 300,000 24,805,360 24,514,015 391,433,981 416,684,280 6,680,195 6,208,524 (165,200) 3,691,622 15,894,904 87,555 (735,834) 395,125,603 432,579,184 6,767,750 5,307,490 350,848,825 449,714,794 4,667,551 4,813,973 (138,672) 82,500 3,837,538 (46,478) 307,929 350,931,325 453,552,332 4,621,073 4,983,230 - Listed companies - Unlisted companies Non-Government debt securities 9,991,285 4,820,042 (4,340,286) (82,274) (861,770) - 4,789,229 4,737,768 9,626,801 4,820,042 (4,198,407) (82,274) 1,225,135 - 6,653,529 4,737,768 - Listed - Unlisted Foreign securities 1,750,000 2,886,134 (270,877) (24,011) - 1,725,989 2,615,257 1,750,000 2,286,134 (270,877) (27,251) - 1,722,749 2,015,257 38,241,177 (193,340) (2,253,033) 35,794,804 33,895,775 (186,259) 346,033 34,055,549 16,863,480 353,122 6,178 11,113 55,000 44,400 896,028,911 (760,651) (815) (5,813,443) (370,020) (1,361) 19,534 (3,900) 15,443,686 15,732,809 350,946 6,178 30,647 51,100 44,400 905,659,154 16,245,897 348,686 5,912 11,113 55,000 44,400 879,134,903 (620,914) (1,713) (5,499,116) 74,576 2,411 31,691 7,450 5,841,534 15,699,559 349,384 5,912 42,804 62,450 44,400 879,477,321 - Government debt securities - Non-Government debt securities - Listed - Unlisted - Equity securities - Unlisted National Investment Trust units Real Estate Investment Trust units Preference shares Held-to-maturity (HTM) securities 8.2 Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds - Other Federal Government securities Non-Government debt securities - Listed - Unlisted Foreign Securities LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings 8 Held-for-trading (HFT) securities BALANCES WITH OTHER BANKS In Pakistan In current accounts In deposit accounts 7 Notes to three the Condensed Financial Statements (Unaudited) For the months Interim endedConsolidated March 31, 2020 - Government debt securities - Non-Government debt securities - Listed - Unlisted Investments in associates and joint venture 5,257,577 15,019,961 20,277,538 20,489,184 20,489,184 49,932,898 45,303,199 Total Investments 261,661 141,501,897 10,794,000 - - 261,661 141,501,897 10,794,000 274,477 157,029,540 10,794,000 - - 274,477 157,029,540 10,794,000 5,428,532 19,671,126 - - 5,428,532 19,671,126 5,799,373 19,705,186 - - 5,799,373 19,705,186 16,137,814 (2,536) - 16,135,278 7,373,574 (2,459) - 7,371,115 1,345,929 420,630 195,561,589 (3,440) (5,976) - 1,345,929 417,190 195,555,613 1,280,682 516,268 202,773,100 (3,335) (5,794) - 1,280,682 512,933 202,767,306 30,852,557 1,427,358,767 (5,819,419) (154,476) 30,698,081 30,363,064 16,083,825 1,437,623,173 1,379,355,407 8.1.1 Investments given as collateral (5,504,910) (1,061) 30,362,003 5,756,882 1,379,607,379 (Unaudited) March 31, 2020 (Audited) December 31, 2019 104,972,315 50,130,258 128,024,805 71,061,088 2,216,652 157,319,225 199,085,893 (Rupees in '000) The market value of investments given as collateral against borrowings is as follows: Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds Foreign securities -Government debt securities 9 20 10 21
13. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the three months ended March 31, 2020 8.2 8.3 8.4 The market value of investments classified as held-to-maturity amounted to Rs 193,655.540 million as at March 31, 2020 (December 31, 2019: Rs 194,167.529 million). (Unaudited) March 31, 2020 (Audited) December 31, 2019 Opening balance Exchange adjustments Charge / (reversals) Charge for the period / year Reversal for the period / year Reversal on disposal during the period / year Net charge 5,504,910 32,519 4,866,232 85,592 Closing balance 5,819,419 Particulars of provision held against diminution in the value of investments ADVANCES Loans, cash credits, running finances, etc. Islamic financing and related assets Bills discounted and purchased Note 832,264 737,758 826,324 599,126 1,103,141 1,008,635 1,097,201 870,003 Provision against advances - Specific - General Advances - net of provision Particulars of advances (Gross) In local currency In foreign currencies Non - performing Charge for the period / year Reversal for the period / year Net charge against advances Charged off during the period / year agriculture financing Written off during the period / year Other movements Closing balance Total (Unaudited) March 31, (Audited) December 31, (Unaudited) March 31, (Audited) December 31, (Unaudited) March 31, (Audited) December 31, 2020 2019 2020 2019 2020 2019 36.3 9.3 954,615,708 122,175,590 97,260,629 924,157,670 153,061,117 84,198,315 75,365,177 257,904 5,121,434 76,667,738 258,381 4,979,731 1,029,980,885 122,433,494 102,382,063 1,000,825,408 153,319,498 89,178,046 1,174,051,927 1,161,417,102 80,744,515 81,905,850 1,254,796,442 1,243,322,952 (71,186,230) (71,186,230) (72,634,967) (72,634,967) 9,558,285 9,270,883 (4,260,864) (4,260,864) 1,169,791,063 (3,730,991) (3,730,991) 1,157,686,111 (71,186,230) (4,260,864) (75,447,094) 1,179,349,348 297,580,817 259,040,924 1,254,796,442 1,243,322,952 11 576,601 944,565 42,625,135 44,146,301 70,601 21,207 48,676 23,643 148,179 140,579 3,363,356 28,355,807 32,078,522 80,744,515 57,184 46,020 1,908,746 25,588,261 27,621,418 71,186,230 215,921 1,719,141 755,391 30,235,746 32,974,875 81,905,850 101,186 483,043 343,117 27,537,677 28,488,666 72,634,967 9.5 March 31, 2020 (Unaudited) December 31, 2019 (Audited) Specific General Total Specific General Total ---------------------------------------------------- (Rupees in '000) --------------------------------------------------72,634,967 1,803,636 1,532,773 (1,501,814) 30,959 3,730,991 125,919 468,484 (64,530) 403,954 76,365,958 1,929,555 2,001,257 (1,566,344) 434,913 68,465,249 3,108,243 7,524,537 (4,256,484) 3,268,053 3,528,347 183,081 528,694 (420,648) 108,046 71,993,596 3,291,324 8,053,231 (4,677,132) 3,376,099 (213,277) (3,070,055) 71,186,230 4,260,864 (213,277) (3,070,055) 75,447,094 (604,496) (1,602,082) 72,634,967 (88,483) 3,730,991 (604,496) (1,602,082) (88,483) 76,365,958 9.5 These represent non-performing advances for agriculture finance which have been classified as loss, are fully provided and are in default for more than 3 years. These non-performing advances have been charged off by extinguishing them against the provision held, in accordance with the SBP's Prudential Regulations for Agriculture Financing. This charge off does not, in any way, prejudice the Bank's right of recovery from these customers. Note 10 984,282,028 934,211 2,409,093 1,894,866 43,692,805 48,930,975 General provision includes provision amounting to Rs 1,920.024 million (December 31, 2019: Rs 1,879.055 million) against consumer finance portfolio and Rs 318.122 million (December 31, 2019: Rs 306.257 million) against advances to microenterprises as required by the Prudential Regulations. General provision also includes Rs 2,022.718 million (December 31, 2019: Rs 1,545.679 million) pertaining to overseas advances to meet the requirements of the regulatory authorities of the respective countries in which the Group operates. (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 957,215,625 513,210 933,729 42,117,873 43,564,812 9.4 (72,634,967) (3,730,991) (76,365,958) 1,166,956,994 1,218,621 2,169,233 1,878,582 43,399,557 48,665,993 Particulars of provision against advances Opening balance Exchange adjustment --------------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------- Advances - gross 22 9.3 In addition to the above, overseas branches hold a general provision of Rs 388.224 million (December 31, 2019: Rs 354.226 million) against investments in accordance with the requirements of IFRS 9. Performing 9.1 Total Note Overseas Not past due but impaired 9 Overseas Not past due but impaired Overdue by: Upto 90 days 91 to 180 days 181 to 365 days ˃ 365 days 5,504,910 (Audited) December 31, 2019 NonProvision performing advances -------------------------------- (Rupees in '000) -------------------------------- Other assets especially mentioned Substandard Doubtful Loss Particulars of provision against debt securities Domestic Loss (Unaudited) March 31, 2020 NonProvision performing advances Domestic 2,986,488 (64,476) (2,368,926) 553,086 March 31, 2020 (Unaudited) December 31, 2019 (Audited) Non Non Provision Provision Performing Performing Investments Investments ------------------------------------ (Rupees in '000) ----------------------------------270,877 270,877 270,877 270,877 Advances include Rs 80,744.515 million (December 31, 2019: Rs 81,905.850 million) which have been placed under nonperforming status as detailed below: Category of classification (Rupees in '000) 382,414 (100,424) 281,990 Category of classification 8.4.1 9.2 FIXED ASSETS Capital work-in-progress Property and equipment 10.1 10.2 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 2,310,852 77,466,742 79,777,594 1,921,589 78,540,821 80,462,410 12 23
14. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to three the Condensed Financial Statements (Unaudited) For the months Interim ended Consolidated March 31, 2020 For the three months ended March 31, 2020 10.1 Capital work-in-progress Civil works Equipment Advances to suppliers and contractors 10.2 Additions to fixed assets (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 891,516 23,194 1,396,142 2,310,852 12 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) Property and equipment Leasehold land Building on leasehold land Machinery Leasehold improvements Furniture and fixtures Electrical, office and computer equipment Vehicles Right-of-use assets - net 10.3 Disposal of fixed assets 389,263 100,161 464,070 292 17,089 282,635 148,196 447,206 13,057 1,372,545 17,071 20,302 292,407 183,699 980,556 30,726 1,524,761 103,225 95,057 1,865,033 1,719,979 Provision held against other assets Surplus on revaluation of non-banking assets acquired in satisfaction of claims Other assets - total 12.1 Derecognition of right-of-use assets on closure of a foreign branch 11 INTANGIBLE ASSETS Capital work-in-progress - computer software Intangible assets 11.1 Additions to intangible assets 174 963 9,482 32 10,651 2,689 699 3,477 461 7,326 398,169 - 408,820 7,326 24 Opening balance Exchange adjustment (821,996) 127,902,329 136,706,495 164,304 164,304 128,066,633 136,870,799 7,008 470,548 347,962 65,410 890,928 7,023 450,086 323,759 41,128 821,996 821,996 24,491 923,201 34,901 181,397 80,015 261,412 13 32,626 (440) 32,186 139,759 (49,540) 90,219 Written off during the period / year Other movement (10,445) 22,700 (224,820) (1,505) Closing balance 890,928 821,996 29,022,744 1,236,786 30,259,530 28,425,034 1,256,074 29,681,108 Charge for the period / year Reversal for the period / year Net charge 1,074,544 8,014,801 9,089,345 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 55,880 227,709 283,589 19 (890,928) 12.1.1 Movement in provision against other assets The following additions have been made to intangible assets during the period: Capital work-in-progress Computer software 12.1 51,719,277 3,002,765 2,307,470 28,059,796 5,246,000 90,271 720,819 1,547,851 6,707,335 54,454 468,719 24,419 23,750,896 12,636,565 450,086 741,768 137,528,491 Provision held against other assets Non-banking assets acquired in satisfaction of claims Claims against fraud and forgeries Suit filed cases Others (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 1,130,424 8,094,289 9,224,713 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 40,031,102 4,003,671 2,827,396 25,598,201 5,275,994 135,331 410,194 1,670,911 15,731,831 77,133 468,704 1,974,731 24,419 25,630,145 3,205,868 327,368 470,548 929,710 128,793,257 Other assets - net of provision The net book value of fixed assets disposed off during the period is as follows: Property and equipment Leasehold improvements Furniture and fixtures Electrical, office and computer equipment Vehicles Note Mark-up / return / profit / interest accrued in local currency Mark-up / return / profit / interest accrued in foreign currency Advances, deposits, advance rent and other prepayments Advance taxation Advance for subscription of securities Stationery and stamps on hand Accrued fees and commissions Due from Government of Pakistan / SBP Mark to market gain on forward foreign exchange contracts Mark to market gain on derivative instruments Non-banking assets acquired in satisfaction of claims Branch adjustment account Receivable from defined benefit plan Acceptances Clearing and settlement accounts Dividend receivable Claims against fraud and forgeries Others 865,266 30,571 1,025,752 1,921,589 The following additions have been made to fixed assets during the period: Capital work-in-progress OTHER ASSETS 13 BILLS PAYABLE In Pakistan Outside Pakistan 14 25
15. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the monthsInterim ended March 31,Financial 2020 Statements (Unaudited) Notes to three the Condensed Consolidated 14 Note BORROWINGS Secured Borrowings from the SBP under - Export refinance scheme - Long term financing facility - Financing facility for renewable energy power plants - Refinance facility for modernization of Small and Medium Enterprises (SMEs) - Refinance and Credit Guarantee Scheme for Women Entrepreneurs - Financing facility for storage of agricultural produce - Refinance facility for working capital of SMEs Repurchase agreement borrowings Unsecured - Call money borrowings - Overdrawn nostro accounts - Borrowings of overseas branches and subsidiaries - Other long-term borrowings 14.1 14.1 Notes tothree the Condensed Financial Statements (Unaudited) For the months Interim ended Consolidated March 31, 2020 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 52,392,791 21,106,685 837,609 22,921 25,615 116,231 17,375 74,519,227 42,762,668 18,474,945 831,448 28,743 2,400 104,167 62,204,371 162,007,743 236,526,970 197,503,793 259,708,164 325,000 1,081,961 61,754,332 75,624,600 138,785,893 375,312,863 4,900,000 171,982 54,588,086 62,838,074 122,498,142 382,206,306 Note 16 Tier II Term Finance Certificates Additional Tier I Term Finance Certificates 16.1 Security Profit payment frequency Redemption Mark-up This includes the following: Call option Lock-in clause 14.1.2 A loan from the China Development Bank amounting to US$ 180 million (December 31, 2019: US$ 180 million). The principal amount is payable in six half yearly installments from December 2017 to June 2020. Interest at LIBOR + 2.45% is payable semi annually. Loss absorbency clause 14.1.3 HBL has entered into a long-term financing facility arrangement of US$ 300 million with China Development Bank, to be utilized for on-lending to projects of the Bank’s customers. Under this facility, US$ 109.250 million has been utilized by the Bank with the initial drawdown having occurred on January 31, 2019. Further drawdowns are permitted up to 4 years from the date of initial drawdown. The entire drawn amount is payable in semi-annual installments over a period of 10 years starting from January 31, 2023. Interest is being charged at a fixed spread over LIBOR and is payable semi-annually. 16.2 DEPOSITS AND OTHER ACCOUNTS Profit payment frequency Redemption Mark-up March 31, 2020 (Unaudited) December 31, 2019 (Audited) In local In foreign In local In foreign Total Total currency currencies currency currencies ---------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------- Financial institutions Current deposits Savings deposits Term deposits 26 153,210,329 101,984,678 141,096,267 396,291,274 839,103,736 973,600,289 406,339,562 2,219,043,587 721,389,866 913,501,109 272,716,595 1,907,607,570 150,213,474 92,981,084 144,891,926 388,086,484 871,603,340 1,006,482,193 417,608,521 2,295,694,054 5,439,440 146,478,757 3,926,221 155,844,418 2,524,146 14,912 205,008 2,744,066 7,963,586 146,493,669 4,131,229 158,588,484 4,737,653 129,386,923 4,796,630 138,921,206 2,051,645 18,008 912,256 2,981,909 6,789,298 129,404,931 5,708,886 141,903,115 1,978,596,731 399,035,340 2,377,632,071 2,046,528,776 391,068,393 2,437,597,169 9,986,000 12,374,000 22,360,000 February 19, 2016 Rs 10 billion AAA (Triple A) [December 31, 2019: AAA (Triple A)] 10 years from the Issue Date Unsecured and subordinated to all other indebtedness of the Bank including depositors and general creditors but not including the Bank's Additional Tier I TFCs. Semi-annually in arrears The instrument has been structured to redeem 0.02% of the issue amount semi-annually during the first 108 months after the issue and 99.64% of the issue amount in two equal semi-annual installments in the 114th and 120th months. Floating rate of return at Base Rate + 0.50%. The Base Rate is defined as the average “Ask Side” rate of the six months Karachi Interbank Offered Rate (KIBOR). The Bank may call the TFCs, with the prior written approval of the SBP, on any profit payment date falling on or after the fifth anniversary of the Issue Date, subject to at least 60 days prior notice being given to the investors through the Trustee. The call option, once announced, will be irrevocable. Neither profit nor principal can be paid (even at maturity) if such payments will result in a shortfall in the Bank's Minimum Capital Requirements (MCR) or Capital Adequacy Ratio (CAR) or increase any existing shortfall in MCR or CAR. The TFCs will be subject to a loss absorbency clause as stipulated under the SBP's "Instructions for Basel III Implementation in Pakistan". The Bank has issued listed, fully paid up, rated, privately placed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of redeemable capital under Section 66 of the Companies Act, 2017 which qualify as Additional Tier 1 Capital (AT 1) as outlined by the State Bank of Pakistan (SBP) under BPRD Circular No. 6 dated August 15, 2013. Issue Date Issue amount Rating Tenor Security 14.1.5 A loan from Pakistan Mortgage Refinance Company Limited to First MicrofinanceBank Limited amounting to Rs 400 million (December 31, 2019: Nil). The principal amount is payable in twenty quarterly installments from June 2020 to March 2025. Interest at 7.14% is payable quarterly from March 2020. 685,893,407 871,615,611 265,243,295 1,822,752,313 9,984,000 12,374,000 22,358,000 The key features of the issue are as follows: 14.1.4 A loan from Allied Bank Limited to HBL Asset Management Limited amounting to Rs 2 billion (December 31, 2019: Rs 2 billion). The principal amount is payable in ten equal half yearly installments from June 2020 to December 2024. Interest at KIBOR + 0.75% is payable semi annually. Customers Current deposits Savings deposits Term deposits 16.1 16.2 The Bank has issued Over The Counter (OTC) listed Term Finance Certificates (TFCs) as instruments of redeemable capital under Section 66 of the Companies Act, 2017 and the Basel III Guidelines set by the SBP. The key features of the issue are as follows: Issue Date Issue amount Rating Tenor 14.1.1 A loan from the International Finance Corporation amounting to US$ 150 million (December 31, 2019:US$ 150 million). The principal amount is payable in six equal half yearly installments from June 2022 to December 2024. Interest at LIBOR + 5.00% is payable semi annually. 15 SUBORDINATED DEBT (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Call option Lock-in clause Loss absorbency clause 15 September 26, 2019 Rs 12.374 billion AA+ (Double A plus) [December 31, 2019: AA+ (Double A plus)] Perpetual Unsecured and subordinated to all other indebtedness of the Bank including depositors, general creditors and holders of the Tier II TFCs. However, they shall rank superior to the claims of ordinary shareholders. Quarterly in arrears Perpetual, hence not applicable. Floating rate of return at Base Rate + 1.60%. The Base Rate is defined as the average “Ask Side” rate of the three months Karachi Interbank Offered Rate (KIBOR). The Bank may, at its sole discretion, call the TFCs any time after five years from the Issue Date and subject to the following: (a) Prior approval of the SBP has been obtained; and (b) The Bank replaces the TFCs with capital of the same or better quality and the capital position of the Bank is above the minimum capital requirement after the Call Option is exercised. Mark-up will only be paid from the current year’s earnings and only if the Bank is in compliance with regulatory capital and liquidity requirements. The TFCs will be subject to a loss absorbency clause as stipulated under the SBP's "Instructions for Basel III Implementation in Pakistan". 16 27
16. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to three the Condensed Financial Statements (Unaudited) For the months Interim endedConsolidated March 31, 2020 For the monthsInterim endedConsolidated March 31,Financial 2020 Statements (Unaudited) Notes to three the Condensed For the three months ended March 31, 2020 17 DEFERRED TAX LIABILITIES Note Deductible temporary differences on 445,141 1,616,500 4,354,960 1,670,344 50,989 163,960 414 150,674 108,817 8,561,799 (1,802,330) (1,167,695) (56,392) (6,189,321) (182,725) (5,942,585) (3,299,721) (671) (18,641,440) (9,844,018) (2,011,063) (1,175,641) (56,392) (2,291,153) (182,914) (6,049,041) (2,982,429) (2,853) (14,751,486) (6,189,687) 24,653,640 4,163,495 1,180,914 15,475,742 10,889,045 2,163,846 657,021 1,535,005 3,942,681 2,601,119 460,013 25,630,145 1,117,316 612,270 5,431,249 4,429,682 338,923 3,440,474 787,079 1,349,936 4,348,640 1,022,067 199,702 500,000 10,930 15,185,443 698,778 7,914,416 140,739,571 12,184,119 3,039,180 1,138,813 15,435,270 8,140,461 1,708,824 405,966 400,464 3,872,768 2,644,978 437,795 23,750,896 188,410 1,051,518 577,964 5,269,726 3,777,028 338,923 7,510,391 656,671 1,249,725 7,883,792 2,037,252 158,202 500,000 10,375 15,996,664 670,374 3,310,066 124,346,615 Opening balance Exchange adjustment 437,795 6,589 479,510 7,518 Charge for the period / year Reversal for the year period / year Net charge / (reversal) 74,709 (59,080) 15,629 53,677 (102,910) (49,233) Closing balance 460,013 437,795 Taxable temporary differences on - Accelerated tax depreciation - Surplus on revaluation of fixed assets - Surplus on revaluation of fixed assets of associates - Surplus / deficit on revaluation of investments - Management rights and goodwill - Share of profit of associates - Exchange translation reserve - Others 19 19 Net deferred tax liabilities 28 19 18.1 SURPLUS ON REVALUATION OF ASSETS - NET OF TAX Note March 31, 2020 (Unaudited) December 31, 2019 (Audited) Attributable to Attributable to NonNonTotal Total Equity Equity controlling controlling holders holders interest interest ------------------------------------------------------- (Rupees in '000) ------------------------------------------------------ Surplus / (deficit) arising on revaluation of assets, on - Fixed assets - Fixed assets of associates - Available-for-sale securities - Available-for-sale securities held by associates - Non-banking assets acquired in satisfaction of claims 8.1 8.1 22,246,921 144,596 15,459,997 3,120 (16,311) (154,476) - 22,250,041 144,596 15,443,686 (154,476) 22,267,064 144,596 5,843,347 (1,061) 3,352 (1,813) - 22,270,416 144,596 5,841,534 (1,061) 164,304 37,861,342 (13,191) 164,304 37,848,151 164,304 28,418,250 1,539 164,304 28,419,789 1,166,484 56,392 6,179,893 1,211 9,428 1,167,695 56,392 6,189,321 1,174,339 56,392 2,312,550 1,302 2,825 1,175,641 56,392 2,315,375 Tax on surplus / (deficit) arising on revaluation of: - Fixed assets - Fixed assets of associates - Available-for-sale securities - Available-for-sale securities held by associates - Non-banking assets acquired in satisfaction of claims OTHER LIABILITIES Mark-up / return / profit / interest payable in local currency Mark-up / return / profit / interest payable in foreign currency Security deposits Accrued expenses Mark to market loss on forward foreign exchange contracts Mark to market loss on derivative instruments Unclaimed dividends Dividends payable Provision for post retirement medical benefits Provision for employees' compensated absences Provision against off-balance sheet obligations Acceptances Branch adjustment account Provision for staff retirement benefits Payable to defined benefit plans Provision for Workers' Welfare Fund Unearned income Qarz-e-Hasna Fund Levies and taxes payable Insurance payable Provision for rewards program expenses Liability against trading of securities Clearing and settlement accounts Payable to HBL Foundation Contingent consideration payable Charity fund Lease liability against right-of-use asset Unclaimed deposits Others 18.1 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 449,596 1,670,893 4,464,379 1,774,985 50,989 163,960 60,246 162,374 8,797,422 - Tax losses of subsidiary - Provision against investments - Provision against doubtful debts and off-balance sheet obligations - Liabilities written back under section 34(5) of the Income Tax Ordinance (ITO) 2001 - Provision against other assets - Deficit on revaluation of fixed assets - Deficit on revaluation of investments of associates -Ijarah financing - Recognised on subsidiary under liquidation 18 For the three months ended March 31, 2020 Surplus on revaluation of assets - net of tax 20 (60,246) - (414) 7,353,162 3,542,867 4,127 3,546,994 30,518,819 (23,830) 30,494,989 24,875,383 (2,588) 24,872,795 Note CONTINGENCIES AND COMMITMENTS 20.1 20.2 20.3 194,364,385 757,731,153 23,599,788 975,695,326 152,908,830 849,362,191 23,527,781 1,025,798,802 66,155,998 114,803,605 13,404,782 194,364,385 36,061,515 108,406,776 8,440,539 152,908,830 111,078,285 112,023,350 553,863,145 52,785,935 32,162,200 6,002,395 644,813,675 591,509,497 107,869,401 29,437,457 7,098,062 735,914,417 995,007 844,186 1,839,193 661,877 762,547 1,424,424 757,731,153 849,362,191 329,706,693 224,156,452 553,863,145 343,848,106 247,661,391 591,509,497 Commitments: Commitments for acquisition of: - fixed assets - intangible assets 20.2.1 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Guarantees: Trade-related contingent liabilities Commitments in respect of: - forward foreign exchange contracts - forward Government securities transactions - derivatives - forward lending Provision against off-balance sheet obligations (414) 10,639 Financial guarantees Performance guarantees Other guarantees 20.2 - 7,342,523 - Guarantees - Commitments - Other contingent liabilities 20.1 (60,246) 20.2.1 20.2.2 20.2.3 20.2.4 Commitments in respect of forward foreign exchange contracts Purchase Sale 18 17 29
17. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to three the Condensed For the monthsInterim endedConsolidated March 31,Financial 2020 Statements (Unaudited) For thethree threemonths months ended March 31, 2020 For the ended March 31, 2020 For the three months ended March 31, 2020 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 20.2.2 Commitments in respect of forward Government securities transactions Purchase Sale 20.2.3 Commitments in respect of derivatives Cross Currency swaps Purchase Sale Interest rate swaps Purchase Sale 20.2.4 Commitments in respect of forward lending Undrawn formal standby facilities, credit lines and other commitments to extend credit 45,611,277 7,174,658 52,785,935 45,771,399 62,098,002 107,869,401 10,620,923 12,835,774 23,456,697 9,525,572 10,882,712 20,408,284 8,705,503 8,705,503 9,029,173 9,029,173 6,002,395 7,098,062 22 23 23,599,788 23,527,781 24 These mainly represent counter claims by borrowers for damages, claims filed by former employees of the Group and other relief and other claims relating to banking transactions. Based on legal advice and / or internal assessments, management is confident that the matters will be decided in the Group’s favour and the possibility of any adverse outcome is remote. Accordingly, no provision has been made in these condensed interim consolidated financial statements. Pursuant to the terms of the August 24, 2017 Surrender Order between NYSDFS, HBL, and HBLNY, NYSDFS’s acceptance on March 4, 2020 of HBL’s license surrender automatically suspended the remaining terms of the September 7, 2017 Consent Order between the parties, which Consent Order was disclosed in Note 21.3.2 to the Financial Statements for the year ended December 31, 2019 and in similar notes for the 2017 and 2018 financial statements. The only Consent Order term that had remained in effect post-license surrender was the term governing completion of the lookback review by an independent party, and that lookback review concluded on March 31, 2020. Accordingly, all terms of the September 7, 2017 Consent Order have been satisfied or suspended as of March 31, 2020. At this point, HBL does not expect any further actions or proceedings from NYSDFS or FRBNY. 21 DERIVATIVE INSTRUMENTS Product Analysis Hedging Market Making Hedging Market Making 30 23,456,697 Mark to market loss (1,943,585) Notional principal 8,705,503 22,628,562 2,695,504 2,075,013 241,894 210,945 315,225 28,167,143 1,158,520 320,413 1,039,978 325,945 320,572 768,964 181,899 122,293 123,936 78,325 154,261 537,624 203,297 5,336,027 1,036,455 254,807 1,372,063 338,140 682,071 646,525 166,523 104,152 638,254 136,570 197,534 411,140 72,599 6,056,833 4,730,547 25 Mark to market loss (724,500) 5,332,333 GAIN / (LOSS) ON SECURITIES - NET Realised Unrealised - held-for-trading March 31, 2020 (Unaudited) Cross currency swaps Interest rate Swaps Notional principal 34,831,775 4,498,463 1,792,293 818,656 2,205,854 485,313 44,632,354 (605,480) Less: Sales tax / Federal Excise Duty on fee and commission income As stated in the above-mentioned Note 21.3.2, the US Attorney’s Office for the Eastern District of New York, a component of the U.S. Department of Justice (DOJ), had sought documents in relation to HBLNY’s compliance with anti-money laundering laws and the Bank Secrecy Act. To date, the DOJ inquiry has not resulted in any findings, and its final resolution cannot be determined at this stage, including any possible impact on the Bank. 27,816,992 18,969,048 4,441,110 297,781 51,524,931 FEE AND COMMISSION INCOME Branch banking customer fees Consumer finance related fees Card related fees (debit and credit cards) Credit related fees Investment banking fees Commission on trade related products and guarantees Commission on cash management Commission on remittances including home remittances Commission on bancassurance Commission on G2P payments Management fee Merchant discount and interchange fees Others 20.3.2 On March 4, 2020, by agreement with the New York State Department of Financial Services (NYSDFS) and the Federal Reserve Bank of New York (FRBNY), HBL surrendered to NYSDFS its New York State foreign bank branch license to operate HBL’s New York branch office (HBLNY). As of March 31, 2020, HBL had completed the voluntary liquidation of HBLNY under Section 605 of the New York Banking Law. The branch is now closed and formalities required to fully wind up HBL’s presence in NY are underway. 35,008,922 35,543,090 1,838,724 255,078 72,645,814 MARK-UP / RETURN / PROFIT / INTEREST EXPENSED On: Deposits Securities sold under repurchase agreement borrowings Borrowings Subordinated debt Cost of foreign currency swaps against foreign currency deposits / borrowings Lease liability against right-of-use assets Other contingent liabilities 20.3.1 Claims against the Group not acknowledged as debts Note On: Loans and advances Investments Lendings to financial institutions Balances with banks These represent commitments that are irrevocable because they can not be withdrawn at the discretion of the Group without the risk of incurring a significant penalty or expense. 20.3 MARK-UP / RETURN / PROFIT / INTEREST EARNED (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 25.1 8.1 1,485,355 794,615 2,279,970 (400,934) 14,306 (386,628) (143,128) December 31, 2019 (Audited) Cross currency swaps Interest rate Swaps Notional Mark to market Notional Mark to market loss loss principal principal 20,408,284 (1,232,477) 9,029,173 (421,893) 20 19 31
18. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Financial Statements (Unaudited) For the three monthsInterim endedConsolidated March 31, 2020 For the three months ended March 31, 2020 25.1 Gain / (loss) on securities - realised On: Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds - Ijarah Sukuks Shares Non-Government debt securities Foreign securities 26 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 301,717 1,344,330 (148,619) 35,891 (47,964) 1,485,355 Note 28 105,392 (13,592) (8,855) (450,091) (28,408) (5,380) (400,934) 55,560 1,702,954 (1,887,208) 16,293 18,589 (93,812) 29 30 Property expense Rent and taxes Insurance Utilities cost Security (including guards) Repair and maintenance (including janitorial charges) Depreciation on owned fixed assets Depreciation on right-of-use assets Information technology expenses Software maintenance Hardware maintenance Depreciation Amortisation Network charges Consultancy charges Other operating expenses Legal and professional charges Outsourced services costs Travelling and conveyance Insurance Remittance charges Security charges Repairs and maintenance Depreciation Training and development Postage and courier charges Communication Stationery and printing Marketing, advertisement and publicity Donations Auditors' remuneration Brokerage and commission Subscription Documentation and processing charges Entertainment Consultancy charges Deposit insurance premium expense Others 8,220,176 588,096 24,396 439,665 504,061 568,375 776,536 859,401 3,760,530 238,130 30,562 398,863 437,071 482,584 701,817 704,330 2,993,357 788,235 191,648 466,985 174,541 324,904 168,639 2,114,952 617,804 111,341 329,443 109,975 327,000 101,941 1,597,504 986,267 414,739 241,702 193,085 151,943 391,354 197,712 215,377 102,919 194,503 194,896 438,500 1,955,625 128,450 61,838 134,035 60,774 684,145 88,289 1,931,930 559,191 284,893 9,612,167 1,234,676 359,787 209,750 191,965 152,153 301,225 143,137 183,135 122,186 127,677 157,346 386,756 1,369,799 34,136 62,734 182,056 40,628 443,049 86,696 2,197,612 522,608 120,651 8,629,762 25,639,193 21,440,799 231,633 565 232,198 50,023 629 50,652 8.3 9.3 12.1.1 18.1 281,990 434,913 32,186 15,629 (96,832) (42,613) 625,273 (162,631) 177,283 32,177 (10,999) (87,407) (31,394) (82,971) TAXATION - Current - Prior years - Deferred 31 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) PROVISIONS / (REVERSALS) AND WRITE OFFS - NET Provision for / (reversal of) diminution in value of investments Provision against loans and advances Provision against other assets Provision / (reversal) against off-balance sheet obligations Recoveries against written off / charged off bad debts Recoveries against other assets written off 35,053 5,743 17,711 58,507 10,151,544 OTHER CHARGES Penalties imposed by the State Bank of Pakistan Penalties imposed by other regulatory bodies OPERATING EXPENSES Total compensation expense 32 For thethree three months ended March 31, 2020 For the months ended March 31, 2020 OTHER (LOSS) / INCOME Incidental charges Exchange gain realised on reduction in capital of subsidiary Exchange loss realised on closure of overseas branch Gain on sale of fixed assets - net Rent on properties 27 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) 3,631,254 (606,578) 3,024,676 3,208,064 1,933,029 116,133 5,257,226 4,096,145 3,054,234 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period attributable to equity holders of the Bank (Number) Weighted average number of ordinary shares 1,466,852,508 1,466,852,508 (Rupees) Basic and diluted earnings per share 2.79 2.08 31.1 Diluted earnings per share has not been presented separately as the Bank does not have any convertible instruments in issue. 32 FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of traded investments are based on quoted market prices. The fair values of unquoted equity investments are estimated using the break-up value of the investee company. The fair value of unquoted debt securities, fixed term advances, other assets and other liabilities cannot be calculated with sufficient reliability due to the absence of a current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments. In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since they are either short-term in nature or, in the case of customer advances, deposits and certain long term borrowings, are frequently repriced. 22 21 33
19. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to to thethe Condensed Interim Consolidated Financial Statements (Unaudited) Notes Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 Notes to three the Condensed Consolidated For the monthsInterim ended March 31,Financial 2020 Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 As at March 31, 2020 (Unaudited) All assets and liabilities for which fair value is measured or disclosed in these consolidated financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Notional value Federal Government securities Non-Government debt securities Commitments - Forward foreign exchange contracts - 4,842,786 - 4,842,786 - Forward Government securities transactions 52,785,935 - 5,509 - 5,509 - Derivative instruments 32,162,200 - Investment in non-Government debt securities denominated in Rupees are valued on the basis of rates announced by the Mutual Funds Association of Pakistan (MUFAP). Investments in non-Government debt securities denominated in other currencies are valued on the basis of rates taken from Bloomberg / Reuters. The fair values of overseas Government securities are determined on the basis of rates taken from Bloomberg / Reuters. Units of mutual funds The fair values of investments in units of mutual funds are determined based on their net asset values as published at the close of each business day. On balance sheet financial instruments Investments - Federal Government securities - Non-Government debt securities - Listed - Unlisted - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted As at March 31, 2020 (Unaudited) Level 2 Level 3 Investments - Federal Government securities - Non-Government debt securities - Listed - Unlisted - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted 34 15,699,559 349,384 42,804 62,450 1,139,674,733 Level 2 Level 3 Total 6,653,529 62,450 6,715,979 1,080,978,774 1,722,749 - 1,080,978,774 6,653,529 1,722,749 34,165,484 - 34,165,484 15,699,559 349,384 42,804 1,132,958,754 - 15,699,559 349,384 42,804 62,450 1,139,674,733 168,098,017 - 159,201,649 - 159,201,649 5,799,373 19,705,186 - 5,839,857 19,705,185 - 5,839,857 19,705,185 7,371,115 - 7,615,906 - 7,615,906 1,288,664 516,268 194,167,529 1,327,126,283 - 1,288,664 516,268 194,167,529 1,333,842,262 1,280,682 512,933 202,767,306 1,342,442,039 6,715,979 As at December 31, 2019 (Unaudited) Notional value Financial assets - measured at fair value Financial assets - disclosed but not measured at fair value Level 1 34,165,484 Total -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- Investments - Federal Government securities - Shares - listed companies - Non-Government debt securities - listed - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - National Investment Trust units - Real Estate Investment Trust units 1,080,978,774 6,653,529 1,722,749 Financial assets - disclosed but not measured at fair value The following table provides the fair value measurement hierarchy of those of the Group’s financial assets that are recognised or disclosed at fair value in these condensed interim consolidated financial statements: On balance sheet financial instruments (2,086,713) -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- Investments - Federal Government securities - Shares - listed companies - Non-Government debt securities - listed - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - National Investment Trust units - Real Estate Investment Trust units Fair value of financial assets Level 1 - Financial assets - measured at fair value The Group enters into derivatives contracts with various counterparties. Derivatives that are valued using valuation techniques based on market observable inputs are mainly interest rate swaps, cross currency swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. Carrying value (2,086,713) As at December 31, 2019 (Audited) Carrying value Fixed assets and non-banking assets Land, buildings and non-banking assets acquired in satisfaction of claims are revalued on a periodic basis acquired in satisfaction of claims using professional valuers. The valuation is based on their assessment of the market value of the assets. The effect of changes in the unobservable inputs used in the valuations cannot be determined with certainty. Accordingly, a qualitative disclosure of sensitivity has not been presented in these condensed iterim consolidated financial statements. 32.1 Total 553,863,145 The fair values of Federal Government securities are determined on the basis of rates / prices sourced from Reuters. Foreign Government debt securities Derivatives Level 3 Off-balance sheet financial instruments - measured at fair value Level 2 - Fair value measurements using inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices). Valuation techniques used in determination of fair values within level 2 and level 3 Level 2 -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- Level 1 - Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 3 - Fair value measurements using inputs that are not based on observable market data. Level 1 Level 1 Level 2 Level 3 Total -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- Off-balance sheet financial instruments - measured at fair value 1,145,351,755 4,807,079 1,725,989 35,915,551 4,807,079 - 1,145,351,755 1,725,989 - 1,145,351,755 4,807,079 1,725,989 35,915,551 - 35,915,551 15,732,809 350,946 30,647 51,100 51,100 15,732,809 350,946 30,647 - - 15,732,809 350,946 30,647 51,100 1,203,965,876 4,858,179 1,199,107,697 - 1,203,965,876 152,557,558 - 150,349,330 - 150,349,330 5,428,532 19,671,126 - 5,473,240 19,663,269 - 5,473,240 19,663,269 16,135,278 1,345,929 417,190 195,555,613 1,399,521,489 4,858,179 16,408,019 - 16,408,019 1,344,492 417,190 193,655,540 1,392,763,237 - 1,344,492 417,190 193,655,540 1,397,621,416 Commitments - Forward foreign exchange contracts 591,509,497 - - Forward Government securities transactions 107,869,401 - 29,437,457 - - Derivative instruments 32.2 Fair value of non-financial assets (1,433,126) - 25,258 - (1,654,370) - (1,433,126) 25,258 (1,654,370) As at March 31, 2020 (Unaudited) Carrying value Level 1 Level 3 Level 2 Total -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- - Fixed assets - Non-banking assets acquired in satisfaction of claims 45,540,690 - - 45,540,690 45,540,690 626,000 46,166,690 - - 626,000 46,166,690 626,000 46,166,690 As at December 31, 2019 (Audited) Carrying value Level 1 Level 2 Level 3 Total -------------------------------------------------------- (Rupees in '000) ------------------------------------------------------- - Fixed assets - Non-banking assets acquired in satisfaction of claims 45,145,063 - - 45,145,063 45,145,063 626,000 45,771,063 - - 626,000 45,771,063 626,000 45,771,063 24 23 35
20. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For thethree three months ended 31, 2020 For the months ended MarchMarch 31, 2020 33 For the three months ended March 31, 2020 For the three months ended March 31, 2020 As at December 31, 2019 (Audited) SEGMENT INFORMATION 33.1 Segment details with respect to Business Activities Branch banking For the three months ended March 31, 2020 (Unaudited) Branch banking Profit and loss account Consumer banking Corporate banking International and correspondent banking Treasury Statement of financial position Asset management Head office / others Total --------------------------------------------------------------------------------------- (Rupees in million) --------------------------------------------------------------------------------------- Net mark-up / return / profit / interest income Inter segment revenue / (expense) - net Non mark-up / interest income Total Income (16,438) 38,968 1,174 23,704 3,564 (1,475) 1,750 3,839 13,243 (10,896) 853 3,200 27,169 (30,304) 3,109 (26) 646 1,779 1,391 3,816 (76) 126 50 (95) 1,928 (2,625) (792) 28,013 5,778 33,791 Segment direct expenses Inter segment expense allocation Total expenses 7,019 4,507 11,526 1,640 362 2,002 558 377 935 180 65 245 7,893 1,629 9,522 80 80 8,663 (6,940) 1,723 26,033 26,033 13 110 (674) 142 659 12,165 1,727 2,939 (413) (6,365) Provisions - charge / (reversal) Profit / (loss) before tax (30) 375 625 (2,890) 7,133 Branch banking Statement of financial position Consumer banking Corporate banking International and correspondent banking Treasury Head office / others 34 --------------------------------------------------------------------------------------- (Rupees in million) --------------------------------------------------------------------------------------- Cash and bank balances Lendings to financial institutions Inter segment lending Investments Advances - performing Advances - non-performing Others Total assets 149,857 24,928 1,295,726 34,532 274,916 2,001 26,597 1,808,557 59,937 212 755 60,904 975 15,392 559,759 2,394 35,135 613,655 64,180 25,005 1,278,360 28,165 1,395,710 88,083 159,989 78,095 229,700 4,457 15,124 575,448 1 332 2,985 3,318 4,795 112,174 30,912 45,479 494 108,308 302,162 307,891 49,933 1,567,889 1,437,623 1,169,791 9,558 217,069 4,759,754 Borrowings Subordinated debt Deposits and other accounts Inter segment borrowing Others Total liabilities 25,369 1,725,938 39,256 1,790,563 480 56,868 3,556 60,904 79,157 203,767 306,797 23,934 613,655 161,128 22 1,204,224 17,728 1,383,102 107,259 406,330 19,587 533,176 2,000 440 2,440 400 22,358 41,095 76,342 140,195 375,313 22,358 2,377,632 1,567,889 180,843 4,524,035 12,608 42,272 878 161,967 235,719 Equity Total equity and liabilities Contingencies and commitments 17,994 1,808,557 34,448 - - 60,904 613,655 1,395,710 575,448 3,318 302,162 4,759,754 - 245,425 575,184 95,920 - 24,718 975,695 For the three months ended March 31, 2019 (Unaudited) Branch banking Profit and loss account Consumer banking Corporate banking International and correspondent banking Treasury Asset management Head office / others Total --------------------------------------------------------------------------------------- (Rupees in million) --------------------------------------------------------------------------------------- Net mark-up / return / profit / interest income Inter segment revenue / (expense) - net Non mark-up / interest income Total Income (10,908) 27,760 1,786 18,638 2,900 (962) 1,597 3,535 11,381 (9,289) 1,052 3,144 17,751 (19,048) 470 (827) 1,977 249 857 3,083 (65) 211 146 322 1,290 674 2,286 23,358 6,647 30,005 Segment direct expenses Inter segment expense allocation Total expenses 6,626 3,791 10,417 1,063 317 1,380 414 290 704 157 57 214 6,003 1,371 7,374 86 86 7,304 (5,826) 1,478 21,653 21,653 Provisions - charge / (reversal) Profit / (loss) before tax 317 45 (335) (252) (4) 7,904 2,110 2,775 (789) (4,287) - 146 (83) 60 662 8,435 25 36 Asset management Head office / others Total --------------------------------------------------------------------------------------- (Rupees in million) --------------------------------------------------------------------------------------- 57,908 149 1,661 59,718 619 15,447 528,385 2,094 35,905 582,450 121,382 24,814 1,232,686 30,134 1,409,016 118,353 179,225 66,680 205,023 4,486 15,508 589,275 11 283 3,012 3,306 6,508 96,160 31,718 43,121 735 108,195 286,437 408,842 45,303 1,541,365 1,379,607 1,157,686 9,271 226,424 4,768,498 Borrowings Subordinated debt Deposits and other accounts Inter segment borrowing Others Total liabilities 23,776 1,773,863 23,950 1,821,589 3,528 51,520 4,670 59,718 68,801 188,176 303,408 22,065 582,450 200,003 20 1,186,437 19,384 1,405,844 87,626 431,269 19,486 538,381 2,000 397 2,397 22,360 40,741 70,266 133,367 382,206 22,360 2,437,597 1,541,365 160,218 4,543,746 3,172 50,894 909 153,070 224,752 16,707 1,838,296 Contingencies and commitments Total International and correspondent banking Treasury 161,969 20,489 1,265,980 32,793 323,249 1,807 32,009 1,838,296 Total equity and liabilities Asset management Corporate banking Cash and bank balances Lendings to financial institutions Inter segment lending Investments Advances - performing Advances - non-performing Others Total assets Equity As at March 31, 2020 (Unaudited) Consumer banking 31,090 - - 59,718 582,450 1,409,016 589,275 3,306 286,437 4,768,498 - 217,213 674,728 78,221 - 24,547 1,025,799 RELATED PARTY TRANSACTIONS The Group has related party relationships with various parties including its Directors, Key Management Personnel, Group entities, associated companies, joint venture and employee benefit schemes of the Group. Transactions with related parties, other than those under the terms of employment, are executed on an arm's length basis i.e. do not involve more than normal risk and are substantially on the same terms, including mark-up rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties. Contributions to and accruals in respect of staff retirement and other benefit schemes are made in accordance with the actuarial valuations / terms of the schemes. Details of transactions and balances with related parties as at the period / year end, other than those disclosed elsewhere in these condensed interim consolidated financial statements, are as follows: As at March 31, 2020 (Unaudited) Directors Statement of financial position Key Management Personnel Group Entities Associates Joint venture Other related parties ------------------------------------------------ (Rupees in '000) ------------------------------------------------ Balances with other banks In current accounts - - Investments Opening balance Investment made during the period Share of profit Equity method related adjustments Investment redeemed / disposed off during the period Dividend received during the period Closing balance - - - Provision for diminution in value of investments - - - Advances Opening balance Addition during the period Repaid during the period Transfer in - net Closing balance - Provision held against advances - 293,212 18,028 (22,836) 477 288,881 - 13,961 3,853,355 4,224,524 (4,044,262) 4,033,617 - 25,464,030 1,202,501 (29,955) 399,096 (1,063,276) (314,343) 25,658,053 1,375,000 1,375,000 - 960 4,897,973 285,304 93,187 (236,436) 5,040,028 - 4,775,603 (12,158) 4,763,445 - - 7,924,625 2,680,347 (15,212) 10,589,760 - (1,726,437) 26 37
21. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to to thethe Condensed Interim Consolidated Financial Statements (Unaudited) Notes Condensed Interim Consolidated Financial Statements (Unaudited) Notes Condensed Interim Consolidated Financial Statements (Unaudited) Notes to to thethe Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For thethree three months ended For the months ended MarchMarch 31, 202031, 2020 For the three months ended March 31, 2020 As at March 31, 2020 (Unaudited) Directors Other assets Interest / mark-up accrued Receivable from staff retirement fund Other receivable Borrowings Opening balance Borrowings during the period Settled during the period Closing balance Deposits and other accounts Opening balance Received during the period Withdrawn during the period Transfer in - net Closing balance Other liabilities Interest / mark-up payable Payable to staff retirement fund Other payables Contingencies and commitments Letter of credit Letter of guarantee Forward purchase of Government securities Forward sale of Government securities Interest rate swaps Others Capital work-in-progress Securities held as custodian Key Management Personnel Group Entities Associates Joint venture Other related parties ----------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------- 837 837 - - 97,816 159,766 (172,847) 4,757 89,492 1,192 1,192 - 166,208 805,843 (662,527) 23,495 333,019 3,106 3,106 15,735 30,339 30,339 47,574 196,111 243,685 2,787,405 2,555,456 (2,000,664) 3,342,197 929,086 1,007,336 (936,200) 1,000,222 10,999,321 64,208,007 (64,589,384) 10,617,944 11,245,398 83,735,621 (83,713,452) 11,267,567 1,548,476 1,678,895 (1,560,334) 1,667,037 6,710 6,710 460,657 24,419 27,628 512,704 3,136,756 16,001,142 (16,555,305) 2,582,593 191,599 40,344 231,943 37,363 71,929 109,292 12,813 612,270 199,702 824,785 302,221 129,559 29,951 1,080,503 1,542,234 1,375,000 1,375,000 - 3,543,206 3,185,301 446,338 7,174,845 10,214 6,506,575 36,068,565 - 8,825,455 For the three months ended March 31, 2020 (Unaudited) Directors Profit and loss account Income Mark-up / return / profit / interest earned Fee and commission income Share of profit / (loss) Dividend income Loss from derivatives Expenses Mark-up / return / profit / interest expensed Operating expenses Total compensation expense Non-Executive Directors' fees Insurance premium expense Advertisement and publicity Travelling Subscription Donations Other Expenses Others Purchase of Government securities Sale of Government securities Purchase of foreign currencies Sale of foreign currencies Insurance claims settled Key Management Personnel Group Entities Associates Joint venture Other related parties ----------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------- - 6,011 - 86,016 30,934 (16,233) 82,624 220,298 (29,955) (17,457) 85 285,304 - 248,241 26,821 35,653 - 1,611 2,246 239,180 173,924 12,955 27,667 19,800 - 358,557 - 87,750 6,486 76,950 424 307,378 - - 267,328 16,117 41,500 54,588 4,864 - 14,895 70,278 - 32,169,380 35,050,146 390,182 877,862 - 6,813,099 11,139,353 3,728 17,100 37,799 - 886,411 1,729,810 2,533,949 - 27 38 Statement of financial position As at December 31, 2019 (Audited) Key Other related Directors Group Entities Associates Joint venture Management parties Personnel ----------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------- Balances with other banks In current accounts - - 215 Investments Opening balance Investment made during the year Share of profit Equity method related adjustments Investment redeemed / disposed off during the year Transfer (out) - net Closing balance - - - Provision for diminution in value of investments - - - Advances Opening balance Addition during the year Repaid during the year - 234,012 112,263 (48,840) 3,536,393 5,302,656 (4,985,694) 1,500,000 (125,000) - 13,376,499 350,666,752 (347,323,286) Transfer (out) - net Closing balance - (4,223) 293,212 3,853,355 1,375,000 - (8,795,340) 7,924,625 Provision held against advances - - (1,726,437) Other assets Interest / mark-up accrued Receivable from staff retirement fund Other receivable Borrowings Opening balance Borrowings during the year Settled during the year Closing balance Deposits and other accounts Opening balance Received during the year Withdrawn during the year Transfer in / (out) - net Closing balance Other liabilities Interest / mark-up payable Payable to staff retirement fund Other payables Contingencies and Commitments Letter of credit Letter of guarantee Forward purchase of Government securities Forward sale of Government securities Interest rate swaps Others Securities held as custodian - 148,728 2,253,960 (2,301,166) (3,706) 97,816 1,373 1,373 - - 665 3,195 3,860 - 23,517 1,500,913 (1,359,961) 1,739 166,208 863 863 8,730 - 49,194 10,617 59,811 - 25,741,115 1,875,925 2,711,851 442,535 (5,307,396) 25,464,030 - - 44,448 277,865 322,313 2,621,585 10,646,717 (10,480,897) 2,787,405 2,499,514 2,754,171 (4,324,599) 929,086 12,066,522 334,234,988 (335,302,189) 10,999,321 4,524,664 383,502,207 (376,781,473) 11,245,398 2,569 3,777,862 771,742 348,369 4,897,973 - 1,388,619 4,750,143 (4,590,286) 1,548,476 - 7,076 7,076 - 4,004,502 1,095,511 (158,960) (165,450) 4,775,603 - 224,553 24,419 1,852 250,824 - 778,919 135,483,687 (133,085,422) (40,428) 3,136,756 171,567 71,914 243,481 40,441 126,626 167,067 11,602 577,964 160,974 750,540 502,087 142,888 1,154,173 1,799,148 1,375,000 1,375,000 - 2,655,788 386,193 3,041,981 7,195,675 28,665,515 - 8,526,920 28 39
22. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to to thethe Condensed Interim Consolidated Financial Statements (Unaudited) Notes Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Profit and loss account Income Mark-up / return / profit / interest earned Fee and commission income Share of profit Dividend income Loss from derivatives 35 For threemonths months ended March 31, 2020 For the the three ended March 31, 2020 For the three months ended March 31, 2019 (Unaudited) Key Other related Directors Group Entities Associates Joint venture Management parties Personnel ----------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------- 6,141 - 76,190 1 (91,590) 37,840 633,584 713,405 (142,046) 77 177,843 - 335,423 202 32,672 - 13,514 9,992 Expense Mark-up / return / profit / interest expensed Operating expenses Total compensation expense Non-Executive Directors' fees Insurance premium expense Advertisement and publicity Travelling Subscription Donations Brokerage and Commission Other Expenses Provision for diminution in value of investments 2,332 836 213,291 82,036 11,600 - 352,766 - 8,470 15,195 508 - 294,074 - - 254,547 759,873 5,186 34,136 899 3,929 Others Purchase of Government securities Sale of Government securities Purchase of foreign currencies Sale of foreign currencies Insurance claims settled 15,863 - 7,996 - 34,312,314 50,469,440 498,325 576,238 - 6,436,859 9,254,045 2,763 19,500 117,516 - 27,763,285 34,138,131 3,597 1,671,885 - CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS Minimum Capital Requirement (MCR): Paid-up capital (net of losses) (Unaudited) (Audited) March 31, December 31, 2020 2019 Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus any other buffer requirement) of which: capital conservation buffer requirement of which: countercyclical buffer requirement of which: D-SIB or G-SIB buffer requirement CET1 available to meet buffers (as a percentage of risk weighted assets) National minimum capital requirements prescribed by the SBP CET1 minimum ratio (%) Tier 1 minimum ratio (%) Total capital minimum ratio (%) Capital Adequacy Ratio (CAR): Eligible Common Equity Tier 1 (CET 1) Capital Eligible Additional Tier 1 (ADT 1) Capital Total Eligible Tier 1 Capital 147,154,475 12,448,559 159,603,034 145,776,218 12,645,453 158,421,671 Eligible Tier 2 Capital Total Eligible Capital (Tier 1 + Tier 2) 42,190,938 201,793,972 36,890,259 195,311,930 1,004,306,484 128,050,625 178,963,586 1,311,320,695 959,412,841 133,614,588 178,963,586 1,271,991,015 Common Equity Tier 1 Capital Adequacy ratio 11.22% 11.46% Tier 1 Capital Adequacy Ratio 12.17% 12.45% Total Capital Adequacy Ratio 15.39% 15.35% 9.50% 10.50% 1.50% 2.00% 2.50% 2.00% 5.22% 5.46% 9.50% 11.00% 13.50% 10.50% 12.00% 14.50% 159,603,034 3,589,235,941 4.45% 158,421,671 3,587,065,060 4.42% 3.00% 3.00% Leverage Ratio (LR) Eligible Tier-1 Capital Total Exposures Leverage Ratio (%) Minimum Requirement (%) Liquidity Coverage Ratio (LCR) 14,668,525 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Other information: (Rupees in '000) 14,668,525 Risk Weighted Assets (RWAs): Credit Risk Market Risk Operational Risk Total Note Average High Quality Liquid Assets Average Net Cash Outflow Average Liquidity Coverage Ratio (%) Minimum Requirement (%) Net Stable Funding Ratio (NSFR) Total Available Stable Funding Total Required Stable Funding Net Stable Funding Ratio (%) Minimum Requirement (%) Total Adjusted Value (Rupees in '000) 1,149,525,536 481,566,532 238.71% 906,731,376 585,290,046 154.92% 100.00% 100.00% Total Weighted Value (Rupees in '000) 2,306,952,666 1,398,263,034 164.99% 2,354,284,645 1,337,084,320 176.08% 100.00% 100.00% 29 30 40 41
23. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For thethree three months March For the months endedended March 31, 2020 31, 2020 36 For thethree three months March For the months endedended March 31, 2020 31, 2020 ISLAMIC BANKING BUSINESS (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) The Bank operates 48 (December 31, 2019: 48) Islamic Banking branches and 493 (December 31, 2019: 493) Islamic Banking windows. STATEMENT OF FINANCIAL POSITION Note ASSETS Cash and balances with treasury banks Balances with other banks Due from financial institutions Investments Islamic financing and related assets - net Fixed assets Intangible assets Due from Head Office Deferred tax assets Other assets LIABILITIES Bills payable Due to financial institutions Deposits and other accounts Due to Head Office Subordinated debt Deferred tax liabilities Other liabilities 36.1 36.2 36.3 36.4 36.5 NET ASSETS REPRESENTED BY Islamic Banking Fund Reserves Surplus / (deficit) on revaluation of investments - net of tax Unappropriated profit 36.6 Contingencies and commitments 36.7 PROFIT AND LOSS ACCOUNT Profit / return earned Profit / return expensed Net profit / return Other (loss) / income Fee and commission income Dividend income Foreign exchange (loss) / gain Income from derivatives Loss on securities- net Others Total other (loss) / income 36.8 36.9 36.1 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 34,065,676 24,927,626 35,933,326 122,154,358 822,018 8,016,015 10,576,158 236,495,177 17,113,303 20,489,184 33,594,111 153,117,099 862,149 40,224,245 18,126 10,709,190 276,127,407 8,699 13,099,035 197,233,673 34,147 8,125,976 218,501,530 18,048 10,780,192 242,548,177 6,073,627 259,420,044 17,993,647 16,707,363 250,000 53,409 17,690,238 17,993,647 250,000 (28,352) 16,485,715 16,707,363 146,255 (24,984) (168,467) 2,218 (44,978) Cost / amortised cost Federal Government securities -Ijarah Sukuks - Bai Muajjal with Government of Pakistan Non-Government debt securities -Listed -Unlisted Total Investments 36.3 2,687,359 2,212,395 Other expenses Operating expenses Workers' Welfare Fund Other charges Total other expenses Profit before provisions Provisions and write offs - net Profit before taxation Taxation Profit after taxation 595,333 40,301 220 635,854 2,051,505 76,737 1,974,768 770,245 1,204,523 503,269 34,137 537,406 1,674,989 2,284 1,672,705 652,355 1,020,350 Provision for diminution Surplus / (deficit) December 31, 2019 (Audited) Carrying value Cost / amortised cost Provision for diminution Surplus / (deficit) Carrying value ------------------------------------------------------------------------ (Rupees in '000) ------------------------------------------------------------------------------- 6,680,195 - 87,555 6,767,750 4,667,551 - (46,478) 4,621,073 10,794,000 17,474,195 - 87,555 10,794,000 17,561,750 10,794,000 15,461,551 - (46,478) 10,794,000 15,415,073 3,248,637 15,122,939 18,371,576 - - 3,248,637 15,122,939 18,371,576 3,564,480 14,614,558 18,179,038 - - 3,564,480 14,614,558 18,179,038 35,845,771 - 87,555 35,933,326 33,640,589 - (46,478) 33,594,111 Islamic financing and related assets - net Ijarah Murabaha Diminishing Musharakah Wakalah Istisna Tijarah Islamic Home Financing Running Musharakah Advance for Ijarah Advance for Murabaha Advance for Diminishing Musharakah Advance for Istisna Advance for Salam Inventories against Tijarah Inventories against Murabaha Inventories against Istisna Inventories against Salam Islamic financing and related assets - gross Provision against Islamic financing and related assets -Specific -General Islamic financing and related assets - net of provision 36.4 20,489,184 20,489,184 Investments by segments March 31, 2020 (Unaudited) 152,288 6,503 (9,767) 1,971 150,995 31 42 36.2 3,915,761 1,854,361 2,061,400 Total income 4,650,000 5,257,577 15,020,049 24,927,626 Unsecured Bai Muajjal Receivable from State Bank of Pakistan Bai Muajjal Receivable from other financial institutions (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) (Restated) 5,827,951 3,095,614 2,732,337 Due from Financial Institutions (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 2,070,920 977,805 47,181,826 10,000,000 749,570 15,000 860,035 18,501,408 196,916 4,864,182 6,878,222 27,780,837 599,216 473,647 227,135 556,775 500,000 122,433,494 2,171,508 1,095,324 83,342,719 10,000,000 770,666 16,085,686 276,530 973,239 6,295,175 26,191,522 400,000 293,209 3,808,372 1,615,548 153,319,498 (257,904) (21,232) (279,136) 122,154,358 (183,056) (19,343) (202,399) 153,117,099 9,395,273 3,703,762 13,099,035 2,500,000 5,409,205 2,870,987 10,780,192 Due to financial institutions Unsecured acceptance of funds Acceptances from the SBP under Islamic Export Refinance Scheme Acceptances from the SBP under Islamic Long Term Financing Facility 32 43
24. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) For thethree three months March For the months endedended March 31, 2020 31, 2020 36.5 Deposits and other accounts Note Customers Current deposits Savings deposits Term deposits Financial Institutions Current deposits Savings deposits Term deposits 36.6 36.7 Islamic Banking business unappropriated profit Opening Balance Add: Islamic Banking profit for the period / year Less: Taxation Closing Balance 36.7.1 36.7.2 56,046,388 94,584,248 12,443,538 163,074,174 53,090,383 108,120,718 14,648,767 175,859,868 347,437 33,760,016 52,046 34,159,499 197,233,673 302,467 65,183,796 1,202,046 66,688,309 242,548,177 16,485,715 1,974,768 (770,245) 17,690,238 11,091,387 8,845,722 (3,451,394) 16,485,715 1,145,366 31,991,304 33,136,670 593,721 17,180,683 17,774,404 Guarantees Financial Guarantees Performance guarantees Other guarantees 36.7.2 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Contingencies and commitments - Guarantees - Commitments 36.7.1 For thethree three months March For the months endedended March 31, 2020 31, 2020 107,121 372,282 665,963 1,145,366 308,988 284,733 593,721 4,068,841 27,922,463 31,991,304 3,456,851 13,723,832 17,180,683 14,835,019 13,087,444 27,922,463 7,721,565 6,002,267 13,723,832 37 NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE 37.1 The Board of Directors in its meeting held on April 22, 2020 has declared a cash dividend of Rs 1.25 per share in respect of the quarter ended March 31, 2020 (March 31, 2019: Rs 1.25 per share). These condensed interim consolidated financial statements do not include the effect of this appropriation which will be accounted for subsequent to the period end. 38 DATE OF AUTHORISATION FOR ISSUE These condensed interim consolidated financial statements were authorised for issue in the Board of Directors meeting held on April 22, 2020. 39 GENERAL 39.1 These condensed interim consolidated financial statements have been prepared in accordance with the revised format for financial statements of Banks issued by the SBP through BPRD Circular Letter No. 5 dated March 22, 2019 and related clarifications / modifications. 39.2 The comparative figures have been re-arranged and reclassified for comparison purposes. Muhammad Aurangzeb President and Chief Executive Officer Rayomond Kotwal Chief Financial Officer President and Chief Executive Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director Commitments Trade-related contingent liabilities Commitments in respect of forward foreign exchange contracts 36.7.2.1 36.7.2.1 Commitments in respect of forward foreign exchange contracts Purchase Sale 36.8 Profit / return earned On: Financing Investments Placements 36.9 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) (Restated) 3,737,797 1,252,191 837,963 5,827,951 2,372,516 1,173,051 370,194 3,915,761 2,988,557 60,540 21,534 24,983 3,095,614 1,482,584 341,243 15,380 15,154 1,854,361 Profit / return expensed On: Deposits and other accounts Due to financial institutions Cost against foreign currency deposits for Wa’ad based transactions Lease liability against right-of-use assets 34 44 45
25. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Condensed Interim UNConsolidated Financial STATEMENTS D I G I TA L LY YOURS 46 47
26. Q UA RTE R LY RE PORT - M A RCH 2020 Directors ’ Review On behalf of the Board of Directors, we are pleased to present the condensed interim unconsolidated financial statements for the quarter ended March 31, 2020. Macroeconomic Review By earlier this year Pakistan’s economy was showing some signs of recovery from the slowdown resulting from the stabilization program. While growth and economic activity remained depressed, the external account indicators were steadily improving. This was before the COVID-19 pandemic, which has forced lockdowns across the world, restricting economic activity across the board. The supply shock is likely to create a protracted demand shock owing to reduced business activity and consumer spending, thereby further exacerbating the weak economic growth. From earlier GDP growth forecasts of 2.9%, Pakistan’s GDP is now expected to contract by up to 1% in FY’20. Headline inflation in March 2020 receded to 10.2%, from 12.4% in the previous month, helped by lower fuel prices. Average inflation for 9MFY’20 is 11.5% compared to 6.3% for the same period last year. The SBP’s projection for average inflation for FY’20 remains at 11.0% – 12.0%. The trade deficit declined by 34% in 8MFY’20, mainly driven by efforts to curb imports, which declined by 18%; exports improved, but by a modest 3%. Remittances, till now, have continued to grow over FY’19, increasing by 5% in 9MFY’20. As a result, the current account deficit contracted by 71%, to USD 2.8 billion. The FX reserves position has strengthened from June 2019 levels, increasing to USD 17.3 billion at the end of March 2020; this was supported by increased FDI as well as strong foreign portfolio flows into government securities. However, since the pandemic outbreak, the investor search for safe havens has resulted in outflows in both equities and government securities. The Rupee, which had strengthened by 5% since its low in June 2019, quickly slid against the dollar and, at March 31, 2020 was 8% lower than December 2019 levels. In response to the growing concern over the economic impact of the pandemic, the federal government and the SBP quickly took a number of steps to bring financial stability and keep the economy moving. The government pledged fiscal support of PKR 1.13 trillion, targeting the export sector and low-income groups. In addition, it announced an incentive package for the construction industry to support the real estate sector and generate employment, especially for the daily wage earners who are most severely impacted by this crisis. The liquidity and cash flow constraints facing businesses presents another growing challenge. The government announced deferral of loan and interest payments for the export, SME and Agriculture sectors. Meanwhile, the SBP extended the relief package to other industries, whereby principal loan payment can be deferred for up to one year. The SBP also announced new initiatives to maintain the flow of credit, including refinance facilities for salary payments, for funding to hospitals and for setting up new industrial units. The SBP has also encouraged the banking sector to continue lending in this critical time through lowering capital requirements and allowing higher debt burden for consumer loans. The IMF has approved an assistance package of USD 1.4 billion for Pakistan under a Rapid Financing Instrument. The World Bank has already approved USD 200 million for Pakistan and could divert unutilized funds of USD 600 million to USD 2 billion for early disbursement. In addition, the ADB would provide USD 350 million immediately, while a request has been made for another USD 900 million disbursement by June. The equity market also turned bearish, owing to the economic effects of the pandemic, reduced growth forecasts and depressed investor sentiment the latter being mainly driven by the reversal of carry trades and global risk aversion. By March 31, 2020, the KSE 100 Index had fallen by 28% since the beginning of 2020; market wide circuit breakers were triggered six times in March and the Index lost more than 8,000 points in one month. Since then, there has been some recovery, especially after the recent rate cut, when the market hit the upper circuit breaker. QUARTERLY REPORT - MARCH 2 0 2 0 Financial Performance HBL’s Profit after Tax for the first quarter of 2020 is Rs 4.0 billion, an increase of 41% over the same period last year. Earnings per share for Q1’20 increased to Rs 2.73 compared to Rs 1.94 in Q1’19. However, profit before tax of Rs 7.0 billion is 10% lower than for the corresponding period last year as a result of the sharp devaluation of the Rupee. Excluding this impact, profit before tax is 17% higher than Q1’19. HBL continues to support businesses and customers, particularly in these challenging times, with net advances increasing by 1.0% over December 2019, and the ADR improving to 48.1%. Total deposits, at Rs 2.3 trillion, remain at a healthy level with strong current account and CASA ratios of 35.3% and 83.8% respectively. Average domestic deposits rose by Rs 146 billion (8.2%) over Q1’19 leading to a growth of 9.0% in the average domestic balance sheet. A growth of Rs 40 billion in average domestic current accounts supported a 53 bps improvement in net interest margins. As a result, domestic net interest income rose by 21% to Rs 24.5 billion. With a 13% growth in international net interest income, the Bank’s total net interest income for Q1’20 increased by 21% over Q1’19, to Rs 26.2 billion. Total non-fund income, excluding the rupee devaluation impact, grew by 20%. The Bank recorded a capital gain of Rs 2.2 billion compared to Rs 0.1 billion in Q1’19. The gain is primarily driven from opportunistic sales of fixed income instruments as well as significant unrealized gains on the trading portfolio at the end of March 2020. Core FX income improved by 26% to Rs 1.1 billion mainly driven from the domestic business. Fees, however, declined by 14% to Rs 4.1 billion mainly due to lower Bancassurance and investment banking fees and as Q1’19 included some 1-off fee recoveries. Administrative expenses increased by Rs 3.8 billion over Q1’19. A significant portion of this was due to the acceleration of the New York branch closure, as costs originally expected later in the year have been recorded upfront; this will result in New York costs tapering off rapidly, going forward. There was also a significant impact of the costs associated with growth in activity drivers as well as the rupee devaluation on international expenses. Total NPLs have increased by Rs 1.9 billion entirely as a result of the impact of rupee devaluation on overseas NPLs. Consequently, the infection ratio increased slightly, to 6.4%, while the coverage ratio remains strong at 96.1%. Movement of Reserves Rs million Unappropriated profit brought forward Profit after tax Transferred from surplus on revaluation of assets – net of tax 104,668 3,998 11 4,009 Profit available for appropriations 108,677 Appropriations Transferred to statutory reserves Cash dividend – Final 2019 Unappropriated profit carried forward Earnings per share (Rs) (400) (1,834) (2,233) 106,444 2.73 In response to the crisis, the SBP cut rates rapidly, in three steps, by a total of 425 bps, with the Policy Rate now at 9%. The SBP also changed the shape of the corridor to make it symmetric around the Policy Rate. Effectively, this will compress margins going forward as the spread between the Policy Rate and the minimum rate payable on savings deposits has reduced by 50 bps. Banking sector advances rose marginally by 1% during the first quarter of 2020, while deposits grew by 3% since December’19. The growing impact of the pandemic on overall economic activity is expected to further slowdown private sector lending which, with a growth of only 2.6% in 8MFY’20, was already showing signs of deceleration. Banking spreads for the first two months of 2020 rose by 7bps over 2019. 48 49
27. Q UA RTE R LY RE PORT - M A RCH 2020 Capital Ratios In response to the current crisis , the SBP has supported the banking system by reducing the requirements of the Capital Conservation Buffer by 100 bps, from 2.5% to 1.5%. This has effectively lowered the capital requirements across all three tiers, i.e. Common Equity Tier 1 (CET1) CAR, Tier 1 CAR and Total CAR, by 1%. The devaluation impacted the Bank’s CAR in multiple ways, by a total of 39 bps. Consequently, the unconsolidated Tier 1 CAR reduced by 19 bps, from 13.69% at the end of 2019 to 13.50% in March 2020. The 100 bps lower CET 1 CAR requirement has resulted in the headroom over minimum levels increasing by 100 bps – consequently, 42 bps of Tier II capital has become eligible. The unconsolidated total CAR thus increased by 17bps from December 2019, to 17.24%. HBL’s capital and related ratios remain well above regulatory requirements. Future Outlook Policy makers across the world have announced massive monetary and fiscal stimulus measures to try to mitigate the impact of the global lockdown, expected to be the worst since the Great Depression. The IMF has called on countries to respond with “very massive” spending to avoid bankruptcies and emerging market debt defaults. The global economic slowdown is expected to have a profound impact on Pakistan’s economy. The lockdown related disruption of industrial activity and slowdown in aggregate demand would contract GDP growth, particularly during April-June 2020. Exports and remittances are expected to decline, pressuring the current account, but low oil prices could provide some fiscal space to the government. However, the long-term effects on economic activity will only be known once the pandemic peaks. QUARTERLY REPORT - MARCH 2 0 2 0 Lastly, but certainly not the least, we express our deepest appreciation and gratitude to our employees and their families, especially in customer facing units and at our 1400+ open branches, who have braved these hazardous conditions to ensure that our customers continue to be able to meet their critical needs in this time of crisis. They are our heroes and heroines and we salute them for their dedication and tireless efforts. On behalf of the Board Muhammad Aurangzeb President & Chief Executive Officer Moez Ahamed Jamal Director April 22, 2020 The Bank is keenly aware of its duty to support customers and the wider economy at this difficult time. The Bank continues to lend and provide liquidity to its customers; where additional flexibility is needed, HBL will look to assist them further. We plan to be at the forefront of using the liquidity and funding assistance being made available by the SBP to help our customers negotiate what is certain to be a difficult next few months. We intend to deliver for our clients in this respect while maintaining credit discipline in our balance sheet. Operating in the current circumstances will lead to some increased costs and a reduction in short-term profitability – but this is a worthwhile trade-off for the longer-term standing of our business and the broader well-being of our customers and the country. HBL has always been intrinsic to Pakistan’s socio-economic fabric and giving back to the country and the community is a core part of its strategic agenda. In these particularly difficult times, HBL has demonstrated leadership across a broad spectrum of areas. HBL is humbled and honoured to be a leading partner of the Ehsaas Kafalat programme, the largest social safety net initiative in Pakistan’s history, aimed at distributing Rs 90 billion to 7.5 million beneficiaries. The Bank is also distributing 12,000 ration bags across the length and breadth of the country to deserving individuals, mostly daily wage earners whose livelihood has been severely disrupted by the lockdown. HBL is also partnering with Serena Hotels to distribute 30,000 meal boxes to frontline doctors across seven cities where Serena is present. HBL will continue to step up in a variety of ways to support the country in this time of crisis. Dividend The Board of Directors, in its meeting held on April 22, 2020 has declared an interim cash dividend of Rs 1.25 per share (12.50%) for the quarter ended March 31, 2020. Appreciation and Acknowledgement On behalf of the Board and management, we would like to place on record our appreciation for the efforts of our regulators and the Government of Pakistan, in particular the State Bank of Pakistan, the Ministry of Finance and the Securities and Exchange Commission of Pakistan. In these unprecedented times, they have stepped up with policies and measures that are prudent, and balanced, protecting the economy, customers and the people of Pakistan, while also safeguarding the integrity and soundness of the banking and financial services industry. We are indebted to our customers, many of whom have banked with us for generations, and who continue to entrust us with their business and confidence. Our shareholders have provided steadfast support and to them and to all our stakeholders, we are deeply grateful. The Board and the management remain committed to maintaining the highest standards of governance and we assure our stakeholders that we will be industry leaders in this area. 50 51
28. ‫‪QUARTERLY REPORT - MARCH 2 0 2 0‬‬ ‫یٹ‬ ‫ڈارئ�رزاکاجزئہ‬ ‫غ‬ ‫پش‬ ‫یٹ‬ ‫ی‬ ‫ی‬ ‫ہ ی‬ ‫� ومجمیع ام یلایت وگوشارے � رکےت‬ ‫ڈارئ�رز یک اجبن ےس‪ 31‬امرچ ‪2020‬ء وک متخ وہےن وایل یلہپ ہس امیہ ےک رصتخموبعری ر‬ ‫� وبرڈ آف‬ ‫وہےئرسمتوسحمسوہریہےہ۔‬ ‫ل‬ ‫ک �ی�ایتااصتقد ی�اتاکاجزئہ‬ ‫نت‬ ‫یش ت‬ ‫� ی‬ ‫عم ی‬ ‫م دنمی ےس احبیل ےک ھچک آاثر داھکیئ دے رےہ ےھت ہکبج رتیق اور اعمیش‬ ‫اپاتسکن یک‬ ‫م اس اسل ےک رشوع کت ااکحتسم رپورگام ےک ی ج‬ ‫وصرت احل ‪ COVID-19‬واب ےس ےلہپ یھت‪ ،‬ی ن‬ ‫ااہظر� ی‬ ‫ِ‬ ‫ل اس واب‬ ‫رسرگیم دبوتسر دابؤ اک اکشر ےہ ‪ ،‬اخریج اھکوتں ےک‬ ‫ی‬ ‫م لقتسم رتہبی آریہ یھت۔ �ی‬ ‫ف‬ ‫ن‬ ‫ن‬ ‫اصر� ےک ارخااجت ی‬ ‫رسرگموں اور ی‬ ‫ی‬ ‫ی‬ ‫م یمک یک وہج‬ ‫رسرگموں وک دحمود رکد ی�ا ےہ۔ َردس اک اکٹھج اکروابری‬ ‫د� وک الک ڈاؤن رپ وبجمراور ااصتقدی‬ ‫ےن وپری یا‬ ‫م زم�ی د ااضےف اک یھب۔اپاتسکن یک ‪ GDP‬ی‬ ‫دبت� وہےن اک ااکمن ےہ ‪ ،‬اور اس رطح زمکور اعمیش ومن ی‬ ‫ےس بلط ےک دور رس ےکٹھج ی‬ ‫م ی‬ ‫م ‪ 2.9%‬یک ومن‬ ‫ش‬ ‫�ت خ‬ ‫م زم�ی د ‪� 1%‬ف� یف وتمعق ےہ۔ امرچ ‪2020‬ء ی‬ ‫م امیل اسل ‪2020‬ء ی‬ ‫یک �پ�ی�� ی ن� وگیئ یک یئگ یھت سج ی‬ ‫م ہی‬ ‫��ڈ النئ ارفا ِط زر زگہتش امہ ‪ 12.4%‬ےس رگ‬ ‫پیٹ‬ ‫�رول یک ق�یم ت� ی‬ ‫رک ‪ 10.2%‬وہیئگ ےسج‬ ‫م یمک ےن اہسرا د ی�ا۔ امیل اسل ‪2020‬ء ےک ‪ 9‬شامہ ےک دوران اوطس ارفا ِط زر ‪ 11.5%‬ریہ وج زگہتش ربس ایس دمت‬ ‫�‬ ‫�‬ ‫ن‬ ‫ےک ی‬ ‫ل اوطس ارفا ِط زر یک رشح یک پ ی��ی� وگیئ ونہز ‪12.0%–11.0%‬ریہ۔‬ ‫ل ‪6.3%‬یھت۔‪ SBP‬یک امیل اسل ‪2020‬ء ےک ی‬ ‫ن‬ ‫�ادی وہج درآدمات یک وحہلص ینکش ےک ادقاامت ےھت نج ی‬ ‫م اجتریت اسخرے ی‬ ‫امیل اسل ‪2020‬ء ےک ‪ 8‬امہ ی‬ ‫م ‪ 18%‬یمک‬ ‫م ‪ 34%‬یمک آیئ سج یک ب ی‬ ‫م دبوتسر ااضہف وہا وج امیل اسل ‪2020‬ء ےک ‪ 9‬امہ ی‬ ‫م امیل اسل ‪ 2019‬ءےک انتبس ی‬ ‫رتسات ی‬ ‫ی‬ ‫م ‪ 3%‬یک ومعمیل رتہبی آیئ۔ ی‬ ‫م ‪5%‬‬ ‫آیئ‪ ،‬ربآدمات ن ت‬ ‫م اجری اھکوتں ےک اسخروں ی‬ ‫� ی‬ ‫ارم� ڈارل ےس ‪ 71%‬یمک واعق وہیئ ‪ FX ،‬ذاخرئ ی‬ ‫م‪ 2.8‬ارب ی‬ ‫‪2019‬ء یک حطس ےس‬ ‫م یھب وجن‬ ‫ڑبھ ی‬ ‫گا۔ اس ےک ی ج‬ ‫غ‬ ‫�زٹ‬ ‫ی ت‬ ‫ور� ی‬ ‫ارم� ڈارل وہےئگ‪ ،‬اےس ‪ FDI‬ی‬ ‫وقت� آیئ وج امرچ ےک ااتتخم کت ‪2020‬ء ی‬ ‫م ی‬ ‫م ااضےف ےک اسھت رساکری سک�ی� ی‬ ‫م ‪ 17.3‬ارب ی‬ ‫�ریکلم وپرٹ‬ ‫� ن‬ ‫ٹ‬ ‫ی ٹ �ز‬ ‫ی‬ ‫و��زاور رساکری س ی‬ ‫ور�‪ ،‬دوونں ےک وحاےل ےس‬ ‫وفلو ےک اہبؤ ےس اہسرا الم۔ اتمہ واب پھ�یل�ے ےک ابثع وفحمظ انپہ اگوہں ےک وخاشہ دنم ترسام�ی اکروں اک یا� ی ی‬ ‫ی �ز‬ ‫ب ی�روین اہبؤ راہ۔وجن ‪2019‬ءےس روےپ یک دقر ی‬ ‫م ی�ی ےس رگےت وہےئ ‪ 31‬امرچ ‪ 2020‬کت دربمس ‪ 2019‬یک حطس‬ ‫م ‪ 5%‬ااضہف ڈارل ےک اقمےلب‬ ‫گا۔‬ ‫ےس ‪ 8%‬مک رپ آ ی‬ ‫یش ت‬ ‫واب ےک اعمیش ارثات ےک وحاےل ےس ڑبےتھ وہےئ دخاشت ےک وجاب ی‬ ‫ل وافیق وکحتم اور‬ ‫عم ےک ےنہپ‪00‬وک رواں رےنھک ےک ی‬ ‫م امیل ااکحتسم اور‬ ‫ی ی‬ ‫کا۔ ہ�‬ ‫ز� دہف ‪ 1.13‬رھکب روےپ امیل ادماد اک دہع‬ ‫ک۔ وکحتم غےن ربآدمی ےبعش اور مک آدمین واےل رگووہں ےک ی رِ‬ ‫ن‪SBP‬ےن دنچ وفری تادقاامت ی‬ ‫ئ‬ ‫م رت�� ی ب�‬ ‫�رات ےک ےبعش ی‬ ‫ہی‬ ‫ی‬ ‫ی‬ ‫�ی‬ ‫ی‬ ‫ی‬ ‫و‬ ‫داد‬ ‫ل وج اس رحبان ےس‬ ‫ارجت واےل ےقبط ےک ی‬ ‫وم‬ ‫ابوصخلص‬ ‫ا‪،‬‬ ‫ک‬ ‫یھب‬ ‫االعن‬ ‫اک‬ ‫رفایمہ‬ ‫یک‬ ‫روزاگر‬ ‫اور‬ ‫جیکیپ‬ ‫ی‬ ‫اج�‬ ‫�‪ ،‬ہکلب‬ ‫چ ن‬ ‫ش‬ ‫ا� اور ڑباتھ ی ج‬ ‫بس ےس ز ی�ادہ اتمرث وہا ےہ۔ل�یک�وڈئیٹ اور یک ےک اہبؤ ی‬ ‫وہا� ےہ۔ وکحتم ےن ربآدمات‪SME ،‬‬ ‫م راکوٹ اکروابری ےبعش وک القح ی‬ ‫ئ‬ ‫خ‬ ‫د�ر وتعنصں کت ر�یل� یف �پ� ی یک� ج� یک ی‬ ‫ادا� ی‬ ‫ک ےہ۔ ایس دوران ‪ SBP‬ےن ی‬ ‫ل رقض اور انمعف یک ی‬ ‫م ی‬ ‫وتس رک دی ےہ‪،‬‬ ‫ات�ر اک االعن ی ا‬ ‫اور زریع وبعشں ےک ئی‬ ‫خ‬ ‫ن‬ ‫ادا� ی‬ ‫�ادی رقض یک ی‬ ‫ا� اسل کت یک ی‬ ‫ل ادقاامت‪ ،‬ومشبل وخنتاوہں یک‬ ‫ات�ر یک اجیتکس ےہ۔‪ SBP‬ےن رک�ی �ڈٹ ےک اہبؤ ےک ااظتنم ےک ی‬ ‫م ی‬ ‫ہکبج ب ی‬ ‫ئ‬ ‫ق‬ ‫ک ےہ۔‪ SBP‬ےن اس ڑکے وتق ی‬ ‫ی‬ ‫ادا�‪ ،‬اتپسہولں یک ڈنفگن‪ ،‬اور ےئن یتعنص �ی ووٹنں ےک ی‬ ‫م رسامےئ یک‬ ‫ل ری انفسن یک وہستل اک یھب االعن ی ا‬ ‫�ام ےک ی‬ ‫ن‬ ‫رشاطئ ی‬ ‫ل ااضیف رقض ےک وبھج ےک ی‬ ‫ذر� �ب ی��ک�اری ےبعش یک رقہض اجت اک ہلسلس اجری رےنھک یک وحہلص ازفایئ یک ےہ۔‬ ‫م یمک اور اصریف رقہض اجت ےک ی‬ ‫�ن ن‬ ‫بن‬ ‫�پ� ی یک�‬ ‫ج‬ ‫ر��ڈ انف س�گ ارٹسنوٹنم ےک تحت ‪1.4‬ارب ی‬ ‫اعیمل ی‬ ‫ل یپ‬ ‫� ےن ےلہپ یہ‬ ‫‪ IMF‬ےن اپاتسکن ےک ی‬ ‫ارم� ڈارل ےک ادمادی � غیک وظنمری دے دی ےہ۔ ئ‬ ‫ن‬ ‫ن‬ ‫�ر اامعتسل دشہ ڈنف یک ےلہپ ی‬ ‫ل ہ ی� اور ‪ 600‬ی‬ ‫ل ‪ 200‬ی‬ ‫ارم� ڈارل ےک ی‬ ‫لم ےس ‪ 2‬ارب ی‬ ‫لم ی‬ ‫ادا� یک اجیتکس ےہ۔‬ ‫ارم� ڈارل وظنمر رک ی‬ ‫اپاتسکن ےک ی‬ ‫ئ‬ ‫ن‬ ‫ن‬ ‫ارم� ڈارل یک ی‬ ‫ارم� ڈارل رفامہ رکے اگ ہکبج وجن کت زم�ی د ‪ 900‬ی‬ ‫اس ےک اسھت اسھت ‪ ADB‬وفری ‪ 350‬ی‬ ‫لم ی‬ ‫لم ی‬ ‫ادا� یک دروخاتس یک اجیکچ ےہ۔‬ ‫‪53‬‬ ‫‪52‬‬ ‫‪Q UA RTE R LY RE PORT - M A RCH 2020‬‬ ‫ن‬ ‫یش ت‬ ‫ی یٹ ی ٹ‬ ‫عم رپ ارثات‪ ،‬ومن ےک ااکمانت ی‬ ‫امرک ی‬ ‫�ادی‬ ‫م یھب دنمی ریہ‪ ،‬سج یک وہج وابےک‬ ‫ا�و�‬ ‫م یمک اور رسام�ی اکروں یک دعم دیپسچل ریہ‪ ،‬سج یک ب ی‬ ‫گا‬ ‫وہج یکری رٹ�ی �ڈز یک وایسپ اور اعیمل حطس رپ رطخات ےک ابثع اچکچہٹہ یھت۔‪2020‬ء ےک آاغز ےس ‪ 31‬امرچ ‪2020‬ء کت ‪ KSE 100‬ااشر�ی ‪ 28%‬رگ ی‬ ‫ی ٹ‬ ‫ا� امہ ی‬ ‫ااشر� ی‬ ‫رب�ر امرچ ی‬ ‫امرک رپ مح�یط رسٹک ی‬ ‫م ‪ 8000‬وپاسٹنئ اک اصقنن وہا۔ بت ےس اب کت ھچک احبیل آیئ‬ ‫م ی‬ ‫م ھچ ابر رحتمک وہےئ اور‬ ‫؛‬ ‫ی‬ ‫ٹ‬ ‫احل رشح ی‬ ‫امرک ےن رسٹک ی‬ ‫م وٹکیت ےک وتق بج ی‬ ‫رب�ر یک اٰیلع حطس وک وھچا اھت۔‬ ‫ےہ وصخًاص ی‬ ‫ت‬ ‫ت �ز‬ ‫ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ل ‪ SBP‬ےن ی�ی ےس ی� رمولحں م رشح م ومجمیع وطر رپ ‪ 425‬یب یپ �اسی کت وٹکیت یک سج ےساپل یک رشح اب‬ ‫رحبان ےک دسِ ابب ےک ی‬ ‫‪ 9%‬ےہ۔‪ SBP‬ےن ی‬ ‫دبت� یک ےہ۔ �ی امرزنج ےک لبقتسم ی‬ ‫ل رادہاری یک استخ ی‬ ‫م یھب ی‬ ‫ل ومرث‬ ‫م ڑکساؤ ےک ی‬ ‫اپل یک رشح ےس مہ آیگنہ ےک ی‬ ‫وہاگ یکوہکن ی‬ ‫م رقہض اجت ی‬ ‫م ‪ 50‬یب یپ �اسی یمک آیئ ےہ۔�ب�ی�نک�اری ےبعش ی‬ ‫سوزگن ڈاپزسٹ رپ مک از مک وابج االدا رشح ےک ارپس�ی �ڈ ی‬ ‫اپل یک رشح اور ی‬ ‫م‬ ‫م ‪ 1%‬کت اخرط وخاہ ااضہف وہا ےہ‪ ،‬ہکبج دربمس ‪ 2019‬ےس ڈاپزٹ ی‬ ‫‪ 2020‬یک یلہپ ہس امیہ ی‬ ‫ی‬ ‫رسرگموں رپ ڑبےتھ وہےئ‬ ‫م ‪ 3%‬کت ااضہف وہا ےہ۔ امیل‬ ‫ن ن‬ ‫م زم�ی د یمک وتمعق ےہ وج ‪ 2020‬ےک ‪ 8‬امہ ی‬ ‫م رقہض اجت ی‬ ‫وابیئ ارثات ےس یجن ےبعش ی‬ ‫م ‪ 2.6%‬ومن ےک اسھت ےلہپ یہ تسس روی داھک ریہ یھت۔ ب ی�‬ ‫م ‪ 2020‬ادتبایئ دو امہ ی‬ ‫ارپس�ی �ڈ ی‬ ‫م ‪ 2019‬یک تبسن ‪ 7‬یب یپ �اسی ااضہف وہا۔‬ ‫ام یلایتاکررکدیگ‬ ‫ن‬ ‫دورا� ےس ‪ 41%‬ز ی�ادہ ےہ۔ اس اسل یک یلہپ‬ ‫ی‬ ‫‪ HBL‬اک امیل اسل ‪2020‬ء یک یلہپ ہس امیہ اک دعب از وصحمل انمعف ‪ 4.0‬ارب روےپ راہ وج زگہتش ربس ایس‬ ‫م ‪ 2.73‬روےپ ااضہف وہا وج ‪2019‬ء یک یلہپ ہس امیہ ی‬ ‫ہس امیہ یک یف صصح آدمن ی‬ ‫م ‪ 1.94‬روےپ یھت۔اتمہ لبق از وصحمل انمعف ‪ 7.0‬ارب روےپ راہ‬ ‫ت‬ ‫ن‬ ‫�ز‬ ‫ی‬ ‫وج زگہتش ربس ایس‬ ‫دورا� ےس‪ 10%‬مک ےہ ‪ ،‬سج یک وہج روےپ یک ی� ارزاین یھت۔ ان ارثات وک رظن ادناز رکےت وہےئ لبق از وصحمل انمعف ‪ 2019‬ء‬ ‫یک یلہپ ہس امیہ ےک اقمےلب ی‬ ‫م ‪ 17%‬ز ی�ادہ ےہ۔‬ ‫ف‬ ‫ی ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫‪ HBL‬ےن اےنپ اصر� اور اکروابر یک اعموتن اجری ریھک وصخًاص اس ڑکے وتق م‪ ،‬اخصل رقہض اجت م دربمس ‪2019‬ء ےک اقمےلب م ‪1.0%‬‬ ‫ی‬ ‫ااضےف ےک اسھت‬ ‫ا� وبضمط حطس رپ ہ ی� ہکبج مکحتسم اجری اھکوتں اور ‪ CASA‬یک‬ ‫‪ADR‬م ‪ 48.1%‬رتہبی آیئ ےہ۔ ُک ڈاپزسٹ ‪ 2.3‬رھکب رپ‪ ،‬ی‬ ‫ت‬ ‫م ‪2019‬ء یک یلہپ ہس امیہ ےک اقمےلب ی‬ ‫ابرتل� ‪35.3%‬اور ‪ 83.8%‬ےہ۔ اوطس یکلم ڈاپزسٹ ی‬ ‫یب‬ ‫رشح‬ ‫م ‪ 146‬ارب روےپ(‪ )8.2%‬ااضہف وہا سج‬ ‫ےس اوطس یکلم وتزان یک رہفتس ی‬ ‫م‪ 40‬ارب روےپ یک ومن ےس اخصل انموعفں ےک امرنج ی‬ ‫م ‪ 9.0%‬ومن وہیئ۔اوطس یکلم اجری اھکوتں ی‬ ‫م ‪ 53‬یب یپ �اسی‬ ‫نت‬ ‫رتہبی آیئ۔ ���ی� ج�ت�اً یکلم اخصل انمعف اجیت آدمن ‪ 21%‬ااضےف ےس ‪ 24.5‬ارب روےپ وہیئگ۔ ب ی ن‬ ‫� االوقایم اخصل انمعف اجیت آدمن ی‬ ‫م ‪ 13%‬ااضےف‬ ‫بن‬ ‫ےس ی‬ ‫� یک اخصل انمعف اجیت آدمن ‪2020‬ء یک یلہپ ہس امیہ ےک ی‬ ‫ل ڑبھ رک ‪ 26.2‬ارب روےپ وہیئگ وج ‪2019‬ء یک یلہپ ہس امیہ ےس ‪ 21%‬ز ی�ادہ ےہ۔‬ ‫غ‬ ‫ن‬ ‫ی‬ ‫ی‬ ‫ب‬ ‫� ےن ‪ 2.2‬ارب اک ی‬ ‫� ڈنف آدمن م ‪ 20%‬ااضہف وہا۔ ی‬ ‫روےپ یک ارزاین ےک ارثات رظن ادناز رکےت وہےئ ُک ر‬ ‫ک وج ‪2019‬ء یک‬ ‫ر�ارڈ رسام�ی احلص ی ا‬ ‫ن‬ ‫یلہپ ہس امیہ ےک ‪ 0.1‬ارب روےپ اقمےلب ی‬ ‫�ادی وہج ڈسکف امکن ارٹسنوٹنم یک ربوتق رفوتخ ےک اسھت امرچ ‪2020‬ء‬ ‫م ی‬ ‫ا� تبثم ڑچاھؤ راہ۔ اس عفن نیک ب ی‬ ‫ئ‬ ‫�ادی ‪ FX‬آدمن ی‬ ‫وفلو ی‬ ‫م امن ی�اں ان ی‬ ‫ےک ااتتخم رپ اجتریت وپرٹ ی‬ ‫م ‪ 26%‬رتہبی آیئ وج ‪ 1.1‬ارب روےپ وہیئگ وج یکلمف اور‬ ‫ر�ازئڈ انمعف ناجت ہ ی�۔ ب ی‬ ‫ف‬ ‫ن‬ ‫ن‬ ‫بی ن‬ ‫� یع�‬ ‫� االوقایم اکروابر ےس احلص وہیئ۔ اتمہ ی� ی‬ ‫سج یک امہ وہج �ب�ی�ک�اوشرسن اور رسام�ی اکری �ب�ی�ک�اری ی�‬ ‫م‪ 14%‬ی ‪ 4.1‬ارب روےپیمک ئواعق وہیئ ت‬ ‫م یمک ےک العوہ �ی یھب یھت ہک ‪2019‬ء یک یلہپ ہس امیہ ی‬ ‫ی‬ ‫م ھچک ف�یس�وں یک �کی�ب�اریگ ادا��یگ�ی�اں یھب ی‬ ‫�۔‬ ‫ن‬ ‫ی ت �ز‬ ‫بن‬ ‫م ‪2019‬ء یک یلہپ ہس امیہ یک تبسن ‪ 3.8‬ارب روےپ ااضہف وہا۔ سج ی‬ ‫� ےک ارخااجت ی‬ ‫ی‬ ‫م ی‬ ‫م ی�ی‬ ‫� ی�ارک رباچن تیک دنبش‬ ‫ا� امن ی�اں ہصح ی و‬ ‫�� ش ئ‬ ‫ن‬ ‫ی �ز‬ ‫یک وہج ےس اھت یکوہکن ادتبایئ وتمعق التگ‪ ،‬اوارخ اسل ی‬ ‫ادا� اثتب وہیئ ؛اس ےس لبقتسم ی‬ ‫م پ ی�گی ی‬ ‫� ی�ارک ےک ارخااجت م ی�ی ےس یمک آےئ‬ ‫م یو‬ ‫ی ن‬ ‫رحمک ےس ہکلسنم التگ اور ب ی ن‬ ‫� االوقایم ارخااجت رپ روےپ یک دقر ی‬ ‫یگ۔اس ی‬ ‫ی‬ ‫ارثات اک یھب اہھت راہ ےہ۔ دنمسراپر ‪NPLs‬‬ ‫یمک‬ ‫م‬ ‫رسرگموں ےک‬ ‫م‬ ‫ت‬ ‫ےک �نف�ک ش‬ ‫ن‬ ‫ت ی ن‬ ‫رپ روےپ یک دقر ی‬ ‫م یمک ےک ارثات ےک ابثع ومجمیع ‪ NPLs‬ڑبھ رک ‪ 1.9‬ارب روےپ کت چنہپ ےئگ۔ ���ی� ج��اً‪ ،‬ا �� اک انتبس ومعمیل ااضےف ےک اسھت‬ ‫گا‪ ،‬ہکبج ی ج‬ ‫وکر� اک انتبس ‪ 96.1%‬رپ مکحتسم راہ۔‬ ‫‪ 6.4%‬وہ ی‬ ‫‪53‬‬ ‫‪52‬‬
29. ‫‪Q UA RTE R LY RE PORT - M A RCH 2020‬‬ ‫‪QUARTERLY REPORT - MARCH 2 0 2 0‬‬ ‫ذاخرئ ی‬ ‫مااترڑچاھٔو‬ ‫غ �ت خ‬ ‫ی �‬ ‫� ص�یص دشہ انمعف‬ ‫ااتتفیح ر‬ ‫انمعف دعب از وصحمل� ت ش� خ‬ ‫ااثہث اجت یک دوابرہ ��یص رپ رسسلپ ےس لقتنم دشہ – وصحمل اک اخصل‬ ‫ی ن‬ ‫لم روےپ‬ ‫‪104,668‬‬ ‫‪3,998‬‬ ‫‪11‬‬ ‫‪4,009‬‬ ‫ت‬ ‫دساب انمعف‬ ‫انمبس اکرروایئ ےک ی‬ ‫ل ی‬ ‫‪108,677‬‬ ‫فلتخم دموں ی‬ ‫م ریھک یئگ روقم‬ ‫اقونین ذاخرئ ی‬ ‫م لقتنم دشہ‬ ‫(‪)400‬‬ ‫دقن انمعف ہمسقنم – یمتح ‪2019‬ء‬ ‫(‪)1,834‬‬ ‫(‪)2,233‬‬ ‫غ �ت خ‬ ‫ی �‬ ‫ص‬ ‫�‬ ‫� یص دشہ انمعف‬ ‫ااتتخیم ر‬ ‫‪106,444‬‬ ‫ش ئ‬ ‫یف صصح ی‬ ‫(�ر) آدمین (روےپ)‬ ‫‪2.73‬‬ ‫رسامےئاکانتبس‬ ‫ک ی�� ٹ‬ ‫یش ن‬ ‫زنکرو� رفب (‪ )Capital Conservation Buffer‬یک رشاطئ ی‬ ‫م ‪ SBP‬ےن �ب ی��نک�اری ےبعش یک اعموتن ی‬ ‫وموجدہ رحبان ےک وجاب ی‬ ‫م پ�‬ ‫م‬ ‫ل‬ ‫ن‬ ‫ت‬ ‫ن‬ ‫‪ 2.5%‬ےس ‪ 1.5%‬کت‪ 100 ،‬یب یپ یا� یک یمک رک دی۔ اس ےس ی�وں ‪ � ،Tiers‬یع�ی ‪Tier1CAR ، Common Equity Tier 1 )CET1( CAR‬‬ ‫اور ُک ‪ CAR‬ےک رسامےئ یک رشاطئ ی‬ ‫م ‪1%‬کت یمک آیئ۔‬ ‫نت ت غ‬ ‫ن ک ٹ‬ ‫ی ش‬ ‫ی‬ ‫دقر ی‬ ‫ی‬ ‫م یمک یک وہج ےس ب ی‬ ‫ر� (‪ )CAR‬یئک زاو�ی وں ےس ‪ 39‬یب یپ یا� اتمرث وہا۔ ���ی� ج��اً �ر ومجمیع ‪ Tie r 1 CAR، 19‬یب یپ ا�‬ ‫� اک ی��پ�ل ا�ی ی�ڈ�و� ی و‬ ‫م ‪ 13.69%‬ےس امرچ ‪2020‬ء ی‬ ‫ےس مک وہرک ‪2019‬ء ےک اوارخ ی‬ ‫��ڈ روم ی‬ ‫گا۔‪ CET 1 CAR‬ی‬ ‫م ‪ 100‬غیب یپ یا� یمک ےس ہ ی‬ ‫م مک‬ ‫م ‪ 13.50%‬رہ ی‬ ‫نت‬ ‫بن‬ ‫� ی‬ ‫گا۔ ی‬ ‫� ومجمیع ‪ CAR‬دربمس ‪2019‬ء‬ ‫� اک ُک ی ر‬ ‫م ‪ Tier II‬رسامےئ اک ‪ 42‬یب یپ یا� الہ وہ ی‬ ‫از مک یک حطس ےس ‪ 100‬یب یپ یا� ااضہف وہا سج ےک ی ج‬ ‫ی ٹ‬ ‫گا ۔ ‪ HBL‬اک رسام�ی اور اس ےس ہقلعتم انتبس‬ ‫ر� یولری رضور ی�ات ےس ابالرت ےہ۔‬ ‫ےک ‪ 17‬یب یپ یا� ےس ومعمیل ااضےف ےک اسھت ‪ 17.24%‬وہ ی‬ ‫‪T‬‬ ‫ِ‬ ‫وصرتاحل‬ ‫نلبقتسمیک‬ ‫ظ‬ ‫غ‬ ‫ی‬ ‫ی‬ ‫�‬ ‫�‬ ‫�‬ ‫د�ا رھب ی‬ ‫ک اجےکس وج اس ی‬ ‫م اپل اسزوں ےن وس زری و ام ی‬ ‫لایت رت ی ب ی ادقاامت اک االعن ی‬ ‫ع دابؤ‬ ‫کا ےہ اتہک اعیمل الک ڈاؤن ےک ارثات اک دسِ ابب ی ا‬ ‫ی‬ ‫ی ٹ‬ ‫ہ‬ ‫وال نپ ےس اچبؤ اور امرک ےک رقہض اجت یک انددنہہ وصراحتل ےک‬ ‫ےک ابثع زم�ی د دب رت وہ ےتکس ی�۔ ‪ IMF‬ےن اممکل ےس زگارش یک ےہ ہک وہ د�ی ی‬ ‫پش‬ ‫ش‬ ‫ت‬ ‫’’وس ی ن‬ ‫� رظن ی‬ ‫رک�۔اعیمل اعمیش تسس روی ےک اپاتسکن یک ی‬ ‫رت�‘‘ پ ی�اےن رپ رخچ ی‬ ‫عم رپ یھب رہگے ارثات وتمعق ہ ی�۔الک ڈاؤن ےس اتمرثہ یتعنص‬ ‫ی ِ‬ ‫رسرگموں اور ومجمیع بلط ی‬ ‫م تسس روی ےس ‪ GDP‬یک ومن‪ ،‬وصخًاص ی‬ ‫ی‬ ‫ارپ� ےس وجن ‪2020‬ء ےک دوران‪ ،‬مک وہاجےئ یگ۔ربآدمات اور ی‬ ‫رتسات‬ ‫ت‬ ‫اجری اھکوتں رپ دابؤ ڑبھ اجےئ اگ اتمہ ی� یک ق�یم ت� ی‬ ‫ی‬ ‫م یمک ےس وکحتم وک ھچک ام یلایت اجنگشئ لم یتکس ےہ۔انچہچن اعمیش‬ ‫م یھب یمک وتمعق ےہ سج ےس ت‬ ‫رسرگموں رپ ی‬ ‫ی‬ ‫وط� الم� یع�اد ارثات اک �ع� ی ن� واب ےک رعوج ےک دعب یہ ی‬ ‫کا اجاتکس ےہ۔‬ ‫ےک‬ ‫یتعنص‬ ‫ت‬ ‫یش‬ ‫‪54‬‬ ‫‪55‬‬ ‫ف‬ ‫ف‬ ‫ٹ‬ ‫بن‬ ‫یش ت‬ ‫بن‬ ‫ی ن‬ ‫ی ن‬ ‫ی‬ ‫ل‬ ‫ی‬ ‫� اس لکشم وتق ی‬ ‫ی‬ ‫�‬ ‫ک‬ ‫ی‬ ‫م اصر� اور وس رت عم ےک افمد م اےنپ رفاضئ ےس وخبیب آاگہ ےہ۔ ی‬ ‫ی‬ ‫� اےنپ اصر� وک رقہض اجت اور �وڈئ�‬ ‫ل‬ ‫ی‬ ‫�یک و�ی‬ ‫زم�ی‬ ‫اامعتسل‬ ‫یک رفایمہ م وکاشں ےہ اور اہجں ترضورت ےہ واہں ااضیف کچل ےک تاظمرہے ےک اسھت ڑبھ رک د اعموتن یھب رک راہ ےہ۔ مہ � �ڈیٹ ےک م ن‬ ‫� ی‬ ‫دسایب ی‬ ‫م ناےنپ اصرف یک ابت چ ی‬ ‫ل آےگ رےنہ اک وصنمہب انب رےہ ہ ی� اتہک اےلگ لکشم ہ� ی���وں‬ ‫م اعموتن ےک ی‬ ‫اور ‪ SBP‬یک اجبن ےس ڈنفگن یک ی‬ ‫ش‬ ‫�‬ ‫ٹ‬ ‫� ی‬ ‫ی‬ ‫م وہستل رےہ۔ مہ اس وحاےل ےس اینپ ب�یل�س ی‬ ‫م رک�ی �ڈٹ ےک اوصولں یک اپدساری ےک اسھت اےنپ اصرف یک دمد ےک وخادنمشہ ہ ی�۔ وموجدہ‬ ‫م اکم اجری رےنھک ےس ارخااجت ی‬ ‫م ااضہف اور قل�یل الم� یع�اد تعفنم ی‬ ‫م یمک آےئ یگ ‪ ،‬رگم �ی امہرے اکروابر ےک ی‬ ‫وط� الم� یع�اد ااکحتسم اور‬ ‫وصراحتل ی ف‬ ‫ی ن‬ ‫ا� اقِلب دقر اجترت ےہ۔‬ ‫ل ی‬ ‫اصر� اور یکلم اقب ےک ی‬ ‫امہرے‬ ‫ن‬ ‫ہ یش‬ ‫بن‬ ‫�ادی ہصح راہ ےہ اور امہرے کلم اور اعمرشے ےن وج ھچک د یا� ےہ اےس واسپ رکان ی‬ ‫‪HBL‬‬ ‫� یک تمکحِ‬ ‫� ےس اپاتسکن ےک امسیج و اعمیش اتےن ابےن اک ب ی‬ ‫ن‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫یلمع اور ی ج‬ ‫ااسحس تافکتل‬ ‫ک ےہ۔ ‪HBL‬‬ ‫رکدار اک اظمرہہ ی ا‬ ‫م ‪ HBL‬ےن اقدئاہن‬ ‫ا��ڈا اک ہصح ےہ۔‬ ‫وصخًاص آج ےک ڑکے وتق م وس رت وبعشں ی خ‬ ‫ت‬ ‫م‬ ‫ث‬ ‫س�‬ ‫ت‬ ‫ن‬ ‫ی ن‬ ‫لم حق�ی�‬ ‫دہف ‪7.5‬‬ ‫بس ےس ڑبا امسیج افحط اجل‬ ‫رش� یک ی ی‬ ‫ح ےس رخف وسحمس رکات ےہ ‪ ،‬وج اپاتسکن یک اتر� اکم ت‬ ‫رپورگام ےک امہ ی ت ق‬ ‫ےہ تسج اک ت ق‬ ‫س�‬ ‫�‬ ‫ن‬ ‫ن‬ ‫م ‪ 90‬ارب روےپ ی‬ ‫م ‪ 12000‬رانش ےک ھ�یلے یھب ی‬ ‫ی‬ ‫� کلم رھب ےک وطل و رعض رپ ےنسب واےل حق�ی� ی‬ ‫� رک راہ ےہ نج ی‬ ‫� رکان ےہ۔ ب ی‬ ‫م‬ ‫ین‬ ‫ہ‬ ‫ہ‬ ‫ارثک �ی ی‬ ‫رس�ا وہلٹ ےک ارتشاک ےس‪،‬‬ ‫۔‪،HBL‬‬ ‫وم ارجت واےل‬ ‫ارفاد ی� نج یک زدنیگ اور روزاگر اس الک ڈاؤن ےس بس ےس ز ی�ادہ اتمرث وہےئ ی� ت ق‬ ‫ن‬ ‫م ‪ 30,000‬اھکےن ےک ڈےب ی‬ ‫م وموجد ڈارٹکوں ی‬ ‫رس�ا وہلٹ وموجد ےہ واہں فصِ ا ّول ی‬ ‫نج است رہشوں ی‬ ‫م ی‬ ‫� رک راہ ےہ۔ ‪ HBL‬اس رحباین‬ ‫ق‬ ‫ن‬ ‫وصراحتل ی‬ ‫ل فلتخم ی‬ ‫م کلم و وقم وک اہسرا ی‬ ‫رط�وں ےس اانپ اعتون اجری رےھک اگ۔‬ ‫د� ےک ی‬ ‫انمعفہمسقنم‬ ‫یٹ‬ ‫ارپ� ‪ 2020‬وک دقعنم وہےن واےل االجس ی‬ ‫ڈارئ�رزےن‪ 22‬ی‬ ‫م ‪ 31‬امرچ ‪2020‬ء وک ااتتخم ی‬ ‫ےکل ‪ 1.25‬روےپ یف‬ ‫ی‬ ‫ذپ�ر وہےن وایل ہس امیہ‬ ‫وبرڈ آف‬ ‫صصح (‪ )12.50%‬ےک وبعری دقن انمعف ہمسقنم اک االعن ی‬ ‫کا۔‬ ‫ااہظ ِررکشت‬ ‫ٹ �ز ن �کیس�چ� ی ن� ش‬ ‫ٹ‬ ‫ٹ‬ ‫ن‬ ‫ن‬ ‫ٹ‬ ‫ی‬ ‫ا� ا ج� ی‬ ‫مہ اےنپ ی‬ ‫وکحتم ِ اپاتسکن‪ ،‬ابوصخلص ی‬ ‫ِ‬ ‫اس ب ی‬ ‫مک ٓاف اپاتسکن یک اکووشں اک‬ ‫اپاتسکن‪،‬‬ ‫ور� ی �ڈ‬ ‫ر� یولرز اور‬ ‫وزارت ام یلات اور سک�ی� ی‬ ‫� ٓاف ئ‬ ‫غ‬ ‫ش‬ ‫ش‬ ‫ی ت‬ ‫ک وج تحلصم ی‬ ‫�ر ومعمیل وتق ی‬ ‫ارتعاف رکےت ہ ی�۔ اس ی‬ ‫م‪ ،‬اوھنں ےن یا� اپل�یس�ی�اں ی‬ ‫عم‪ ،‬رمٹسکز اور‬ ‫انب� اور ادقاامت ی‬ ‫ادن�‪ ،‬اور وتمازن ہ ی�‪،‬‬ ‫بن ن‬ ‫ت‬ ‫اپاتسکن ےک وعام یک افحتظ رکےت ہ ی�‪ ،‬ی‬ ‫اور� اور انفلشن رسوزس اڈنرٹسی یک اسلم� ی� اور رتہبی اک ظفحت یھب رکےت ہ ی�۔‬ ‫ف‬ ‫ن‬ ‫ہ‬ ‫ی‬ ‫ہ‬ ‫ی‬ ‫مہ اےنپ اصر� ےک ااسحن دنم ی� نج م ےس یئک ولسنں ےس امہرے اسھت کلسنم ی� اور اےنپ اکروابر اور اامتعد ےک ی‬ ‫ذر� اانپ رھبواس اجری رےھک‬ ‫ٹ‬ ‫ہ‬ ‫ی‬ ‫ااظتنم‬ ‫وہےئ ہ ی�۔ امہرے صصح ی�ااگتفن ےن اثتب دقیم ےس امہرا اسھت د یا� اور اس ےک اسھت امتم اس�� ی قک وہڈلرز ےک مہ ااہتنیئ رکش زگار ی� ۔وبرڈ اور‬ ‫ل رُپزعم ےہ اور مہ اےنپ اس�ٹ�یک وہڈلرز وک ی ی ن‬ ‫وگرسنن ےک اٰیلع ی ن‬ ‫� دالےت ہ ی� ہک اس ےطخ ی‬ ‫م مہ اینپ اکروابری تعنص‬ ‫عمارات ربرقار رےنھک ےک ی‬ ‫رت� ی‬ ‫ی‬ ‫م رعوج رپ وہں ےگ۔‬ ‫ی ن‬ ‫المزم اور اُن ےک الہِ اخہن‪ ،‬ابوصخلص رمٹسک اک اسانم رکےن واےل �ی وسٹن اور امہری ‪ 1400‬ےس زادئ اعفل رباوچنں ی‬ ‫آرخ ی‬ ‫م وموجد ےلمع‬ ‫م‪ ،‬مہ اےنپ امتم‬ ‫ن‬ ‫وتق ی‬ ‫ےک قرکشزگار ہ ی�‪ ،‬وھنجں ےن ان رطخانک احالت ی‬ ‫رحبان ےک اس ت‬ ‫�ادی رضور ی�ات اک وپرا‬ ‫م شامہرے رمٹسکز یک ب ی‬ ‫م اہبدری اک اظمرہہ رکےت وہےئ ن‬ ‫ی ن‬ ‫�‬ ‫ن‬ ‫پ‬ ‫حس�‬ ‫ہ‬ ‫ہ‬ ‫ہ‬ ‫ہ‬ ‫وہان ی‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫ی‬ ‫رخاج � � رکےت ی�۔‬ ‫� انب ی�ا۔ �ی امہرے �رو اور �رونئ ی� اور مہ اُن ےک زعم اور اکھتن تنحم ےک ی‬ ‫ل ا� ِ‬ ‫اجنمبن وبرڈ‬ ‫ی‬ ‫ب‬ ‫اورزگن�‬ ‫دمحم‬ ‫ٹ ف‬ ‫ف‬ ‫� ی‬ ‫دصر اور چ ی‬ ‫‬ ‫�ز� ی ر‬ ‫آ�‬ ‫ا� ی و‬ ‫‪ 22‬ی‬ ‫ارپ� ‪2020‬ء‬ ‫مع�ی��ز ادمح امجل‬ ‫ٹ‬ ‫ی ر‬ ‫ڈارئ�‬ ‫‪54‬‬ ‫‪55‬‬
30. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Condensed Interim Unconsolidated Statement of Financial Position Condensed Interim Unconsolidated Profit and Loss Account (Unaudited) Habib Bank Limited Habib Bank Limited As at March 31,Unconsolidated 2020 Condensed Interim Statement of Financial Position As at March 31, 2020 Condensed Interimmonths Unconsolidated and Loss For the three endedProfit March 31, Account 2020 (Unaudited) For the three months ended March 31, 2020 Note (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Fixed assets Intangible assets Deferred tax assets Other assets 5 6 7 8 9 10 11 12 13 249,095,201 28,857,452 49,932,898 1,408,950,971 1,083,291,098 74,990,889 3,642,054 124,319,855 3,023,080,418 337,241,623 32,139,733 45,303,199 1,351,961,513 1,073,018,669 75,541,769 3,528,218 1,898,828 133,100,201 3,053,733,753 14 15 16 30,108,944 371,334,728 2,250,372,528 22,358,000 2,179,230 133,517,287 2,809,870,717 29,534,303 382,071,512 2,301,899,086 22,360,000 116,446,906 2,852,311,807 213,209,701 201,421,946 Mark-up / return / profit / interest earned Mark-up / return / profit / interest expensed Net mark-up / return / profit / interest income Non mark-up / interest income Fee and commission income Dividend income Foreign exchange (loss) / income (Loss) / income from derivatives Gain on securities - net Other (loss) / income Total non mark-up / interest income LIABILITIES Bills payable Borrowings Deposits and other accounts Liabilities against assets subject to finance lease Subordinated debt Deferred tax liabilities Other liabilities 17 12 18 NET ASSETS 22 23 69,822,447 43,620,056 26,202,391 48,923,894 27,210,625 21,713,269 24 4,134,800 628,361 (1,678,725) (280,304) 2,245,639 (422,060) 4,627,711 4,820,107 100,811 330,273 184,516 102,008 66,509 5,604,224 30,830,102 27,317,493 23,253,870 160,170 232,198 23,646,238 19,457,297 160,639 50,652 19,668,588 7,183,864 7,648,905 25 26 Total income Non mark-up / interest expenses Operating expenses Workers' Welfare Fund Other charges Total non mark-up / interest expenses 27 28 Profit before provisions and taxation Provisions / (reversals) and write offs - net REPRESENTED BY 29 Profit before taxation Shareholders' equity Share capital Reserves Surplus on revaluation of assets - net of tax Unappropriated profit 19 CONTINGENCIES AND COMMITMENTS 14,668,525 61,259,701 30,837,689 106,443,786 14,668,525 57,274,159 24,810,855 104,668,407 213,209,701 201,421,946 January 01 to January 01 to March 31, March 31, 2020 2019 (Rupees in '000) Taxation 30 Profit after taxation 141,329 (188,276) 7,042,535 7,837,181 3,044,756 4,995,551 3,997,779 2,841,630 --------------Rupees-------------Basic and diluted earnings per share 20 31 2.73 1.94 The annexed notes 1 to 39 form an integral part of these condensed interim unconsolidated financial statements. The annexed notes 1 to 39 form an integral part of these condensed interim unconsolidated financial statements. Muhammad Aurangzeb President and President and Officer Chief Executive Chief Executive Officer 56 Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 1 Muhammad Aurangzeb Presidentand and President ChiefExecutive Executive Officer Chief Officer Rayomond Kotwal Chief FinancialOfficer Officer Chief Financial Salim Raza DirectorDirector Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 2 57
31. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Condensed Interim Unconsolidated Statement of Comprehensive Habib Bank Limited Income (Unaudited) Condensed Interim Unconsolidated Statement of Comprehensive Income (Unaudited) Condensed Interim Unconsolidated Statement of Changes In Equity Habib Bank Limited (Unaudited) Condensed Interim Unconsolidated Statement of Changes In Equity (Unaudited) For the months ended March 31,March 2020 For thethree three months ended 31, 2020 For the three ended For the three monthsmonths ended March 31, 2020March 31, 2020 Reserves Surplus / (deficit) on revaluation of Capital Revenue Share Exchange Non Total Statutory Fixed / Noncapital translation distributable General Unappropriareserve Investments banking reserve capital reserve ted profit assets reserve -------------------------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------------------ January 01 to January 01 to March 31, March 31, 2020 2019 (Rupees in '000) 14,668,525 Balance as at December 31, 2018 3,997,779 Profit after taxation for the period 2,841,630 Other comprehensive income Items that may be reclassified to the profit and loss account in subsequent periods Comprehensive income for the three months ended March 31, 2019 Profit after taxation for the three months ended March 31, 2019 - Other comprehensive income / (loss) Effect of translation of net investment in foreign branches - net of tax - 677,159 - 677,159 - Movement in surplus / deficit on revaluation of assets - net of tax Effect of translation of net investment in foreign branches - net of tax 2,434,567 677,159 Movement in surplus / deficit on revaluation of investments - net of tax 6,037,777 1,957,425 Transferred to statutory reserve Transferred from surplus on revaluation of assets - net of tax - 31,957,440 547,115 6,073,812 - - - - - - - - 284,163 - 91,882,814 (7,175,543) 2,841,630 2,841,630 (284,163) 11,782 21,738,008 179,049,056 - - 2,841,630 - - 677,159 1,957,425 5,476,214 - 1,957,425 1,957,425 - (11,782) Transactions with owners, recorded directly in equity Final cash dividend - Rs 1.25 per share declared subsequent to the year ended December 31, 2018 Items that are not to be reclassified to the profit and loss account in subsequent periods 14,668,525 Balance as at March 31, 2019 20,034,044 32,241,603 547,115 6,073,812 (1,833,565) 92,618,498 (5,218,118) 21,726,226 (1,833,565) 182,691,705 Comprehensive income for the nine months ended December 31, 2019 Movement in surplus / deficit on revaluation of fixed assets - net of tax - - Profit after taxation for the nine months ended December 31, 2019 Movement in surplus / deficit on revaluation of non-banking assets - net of tax - - Other comprehensive income / (loss) Effect of translation of net investment in foreign branches - net of tax 12,470,123 Total comprehensive income 19,356,885 Remeasurement gain on defined benefit obligations - net of tax Movement in surplus / deficit on revaluation of assets - net of tax 5,476,214 Transferred to statutory reserve Transferred to unappropriated profit Transferred from surplus on revaluation of assets - net of tax Exchange gain realised on closure of overseas branch - net of tax The annexed notes 1 to 39 form an integral part of these condensed interim unconsolidated financial statements. - - - 3,328,612 - - 3,328,612 (99,471) - - - 12,222,559 - - 12,222,559 - - - 79,561 - - 3,328,612 79,561 8,699,675 24,330,407 (99,471) 1,222,256 - - (6,073,812) - 12,302,120 (1,222,256) 6,073,812 396,928 - 8,791,473 8,791,473 - (91,798) (91,798) (396,928) - Transactions with owners, recorded directly in equity - 1st interim cash dividend - Rs 1.25 per share 2nd interim cash dividend - Rs 1.25 per share 3rd interim cash dividend - Rs 1.25 per share Balance as at December 31, 2019 14,668,525 23,263,185 33,463,859 547,115 - (1,833,565) (1,833,565) (1,833,565) - (5,500,695) - 104,668,407 3,997,779 3,573,355 21,237,500 (1,833,565) (1,833,565) (1,833,565) (5,500,695) 201,421,946 Comprehensive income for the three months ended March 31, 2020 Profit after taxation for the three months ended March 31, 2020 - - - - - - - - - - - - - - - - - - 3,997,779 - - 2,434,567 Other comprehensive income Effect of translation of net investment in foreign branches - net of tax - Movement in surplus / deficit on revaluation of assets - net of tax - Transferred to statutory reserve - Exchange loss realised on closure of Bank's overseas branch - net of tax - Transferred from surplus on revaluation of assets - net of tax - - 2,434,567 2,434,567 - - 6,037,777 6,037,777 - 12,470,123 - - - - - - - - - - - - - - 10,943 - (10,943) - - - - (1,833,565) - - - 106,443,786 1,151,197 399,778 3,997,779 6,037,777 (399,778) 1,151,197 - Transactions with owners, recorded directly in equity Final cash dividend - Rs 1.25 per share declared subsequent to the year ended December 31, 2019 Balance as at March 31, 2020 14,668,525 26,848,949 33,863,637 547,115 9,611,132 21,226,557 (1,833,565) 213,209,701 The annexed notes 1 to 39 form an integral part of these condensed interim unconsolidated financial statements. President and Muhammad Aurangzeb Chief Executive Officer President and Chief Executive Officer 58 Chief Financial Officer Rayomond Kotwal Chief Financial Officer Director Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director 3 Muhammad Aurangzeb President and Chief Executive Officer President and Chief Executive Officer Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 59 4
32. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements Habib Bank Limited (Unaudited) Habib Bank Limited Condensed Interim Unconsolidated Cash Flow Statement (Unaudited) Condensed Interim Unconsolidated Cash Flow Statement (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 January 01 to January 01 to March 31, March 31, 2019 2020 (Rupees in '000) CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Dividend income 7,042,535 (628,361) 6,414,174 7,837,181 (100,811) 7,736,370 1,339,416 162,047 722,428 429,406 152,648 80,311 32,186 15,629 (794,615) 1,151,197 (1,372,357) (15,444) 160,170 2,063,022 8,477,196 1,116,574 99,946 597,072 242,575 (162,631) 65,126 32,177 (10,999) (14,306) (7,349) 160,639 2,118,824 9,855,194 (4,629,699) (38,454,857) (10,352,740) 7,459,412 (45,977,884) (247,086,890) (47,292,724) (2,663,133) 2,165,094 (294,877,653) Income tax refund / (paid) Net cash flows used in operating activities 574,641 (10,736,784) (51,526,558) 15,073,848 (46,614,853) (84,115,541) (1,210,800) (85,326,341) (14,011,315) (290,283,913) 30,879,313 32,639,196 (240,776,719) (525,799,178) (349,179) (526,148,357) CASH FLOWS FROM INVESTING ACTIVITIES Net investment in available-for-sale securities Net investment in held-to-maturity securities Net investment in associates Dividend received Investments in fixed assets Investments in intangible assets Proceeds realised on reduction in capital of subsidiary Proceeds from sale of fixed assets Effect of translation of net investment in foreign branches - net of tax Net cash flows (used in) / generated from investing activities (16,203,611) 7,317,965 300,993 (1,187,642) (275,883) 3,021,200 25,967 2,434,567 (4,566,444) 518,876,455 (17,684,605) 891,156 29,897 (1,600,546) (225,977) 11,972 677,159 500,975,511 (2,000) (1,085,949) (447,969) (1,535,918) (2,000) (1,245,624) (327,655) (1,575,279) Decrease in cash and cash equivalents during the period (91,428,703) (26,748,125) Cash and cash equivalents at the beginning of the period Effect of exchange rate changes on cash and cash equivalents 363,985,741 5,395,615 369,381,356 291,550,913 1,154,673 292,705,586 Cash and cash equivalents at the end of the period 277,952,653 265,957,461 Adjustments: Depreciation Amortisation Depreciation on right-of-use assets Mark-up / return / profit / interest expensed on lease liability against right-of-use assets Provision for / (reversal of) of diminution in value of investments Provision against loans and advances Provision against other assets Provision / (reversal) against off-balance sheet obligations Unrealised gain on held-for-trading securities Exchange loss realised on closure of Bank's overseas branch - net of tax Exchange gain realised on reduction in capital of subsidiary Gain on sale of fixed assets - net Workers' Welfare Fund (Increase) / decrease in operating assets Lendings to financial institutions Held-for-trading securities Advances Other assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Other liabilities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of subordinated debt Payment of lease liability against right-of-use assets Dividend paid Net cash flows used in financing activities 1 Habib Bank Limited (the Bank) is incorporated in Pakistan and is engaged in commercial banking services in Pakistan and overseas. The Bank’s registered office is at Habib Bank Tower, 9th Floor, Jinnah Avenue, Islamabad and its principal office is at Habib Bank Plaza, I. I. Chundrigar Road, Karachi. The Bank's shares are listed on the Pakistan Stock Exchange. The Bank operates 1,668 (2019: 1,667) branches inside Pakistan including 48 (2019: 48) Islamic Banking Branches and 44 (2019: 45) branches outside the country including in the Karachi Export Processing Zone (KEPZ). The Aga Khan Fund for Economic Development S.A. (AKFED) is the parent company of the Bank and its registered office is in Geneva, Switzerland. 60 President and Chief Executive Officer Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director 1.1 Habib Finance International Limited has voluntarily surrendered its license and filed for voluntary liquidation. The company is in the process of completing the required formalities in this regard. During the period, as part of a capital reduction plan prior to final liquidation, capital amounting to Rs 3,021.200 million was repatriated to Pakistan. 1.2 The Bank had commenced an orderly winding down of its operations in Afghanistan and banking operations were ceased on June 10, 2019. The remaining formalities required for closure are now in progress. 2 BASIS OF PRESENTATION 2.1 STATEMENT OF COMPLIANCE These condensed interim unconsolidated financial statements have been prepared in accordance with accounting and reporting standards as applicable in Pakistan. These comprises of: - International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) as are notified under the Companies Act, 2017; Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under the Companies Act, 2017; Provisions of and directives issued under the Banking Companies Ordinance, 1962; Provisions of and directives issued under the Companies Act, 2017; and Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) from time to time. Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the SBP and the SECP differ with the requirements of IFRSs or IFAS, the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the said directives, shall prevail. 2.2 The disclosures made in these condensed interim unconsolidated financial statements have been limited based on the format prescribed by the SBP vide BPRD Circular Letter No. 5 dated March 22, 2019 and IAS 34. These condensed interim unconsolidated financial statements do not include all the information and disclosures required for annual unconsolidated financial statements and should be read in conjunction with the unconsolidated financial statements for the year ended December 31, 2019. 2.3 Standards, interpretations of and amendments to existing accounting and reporting standards that have become effective in the current year. There are certain new standards and interpretations of and amendments to existing accounting and reporting standards that have become applicable to the Bank for accounting periods beginning on or after January 1, 2020. These are considered either to not be relevant or not to have any significant impact on the Bank's financial statements. 2.4 Standards and amendments to existing accounting and reporting standards that are not yet effective. IFRS 9 has been applicable in several overseas jurisdictions from January 1, 2018 and is progressively being adopted in others. The requirements of this standard are incorporated in the Bank’s financial statements for the jurisdictions where IFRS 9 has been adopted. As per the SBP's BPRD Circular Letter no. 4 dated October 23, 2019, the applicability of IFRS 9 to banks in Pakistan has been deferred to accounting periods beginning on or after January 1, 2021. The impact of the application of IFRS 9 in Pakistan on the Bank's financial statements is being assessed. The annexed notes 1 to 39 form an integral part of these condensed interim unconsolidated financial statements. Muhammad Aurangzeb President and Chief Executive Officer STATUS AND NATURE OF BUSINESS Dr. Najeeb Samie Director Director 5 61
33. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 2.5 For thethree three months ended For the months ended MarchMarch 31, 202031, 2020 Critical accounting estimates and judgements 4.2 The basis for accounting estimates adopted in the preparation of these condensed interim unconsolidated financial statements is the same as that applied in the preparation of the unconsolidated financial statements for the year ended December 31, 2019. 3 In view of the relaxation granted by SBP for deferral of principal and markup and rescheduling of loans there will be an impact on the maturity profile of the Bank. The Asset and Liability Committee (ALCO) of the Bank is continuously monitoring the liquidity position and the Bank is confident that the liquidity buffer currently maintained is sufficient to cater to any adverse movement in the cash flow maturity profile. SIGNIFICANT ACCOUNTING POLICIES 4.3 The significant accounting policies adopted in the preparation of these condensed interim unconsolidated financial statements are consistent with those followed in the preparation of the unconsolidated financial statements for the year ended December 31, 2019. 4 The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the unconsolidated financial statements for the year ended December 31, 2019. These risk management policies continue to remain robust and the Bank is reviewing its portfolio regularly and conducts rapid portfolio reviews in line with emerging risks. 4.4 Operational Risk Management The Bank is closely monitoring the situation and has invoked required actions to ensure the safety and security of Bank staff and uninterrupted service to customers. The senior management of the Bank is continuously monitoring the situation and is taking timely decisions to resolve any concerns. The COVID – 19 pandemic has taken a toll on all economies and emerged as a contagion risk around the globe, including Pakistan. To reduce the impact on businesses and economies in general, regulators / governments across the globe have introduced a host of measures on both the fiscal and economic fronts. Business Continuity Plans (BCP) for respective areas are in place and tested. The Bank has significantly enhanced monitoring of cybersecurity risk during these times. The remote work capabilities were enabled for staff, where required, and related risk and control measures were assessed to ensure that the Bank’s information assets are protected from emerging cyber threats and comply with the regulatory protocols required under the circumstances. The Bank is communicating with its customers on how they can connect with the Bank through its full suite of channels including digital and online channels. The Bank has taken all measures to ensure that service levels are maintained, customer complaints are resolved and turnaround times are monitored and the Bank continues to meet the expectations of its employees and customers. The State Bank of Pakistan (SBP) has also responded to the crisis by cutting the Policy Rate by 225 basis points to 11% in March 2020 and again by 200 basis points to 9% on April 16, 2020. Other regulatory measures to provide an impetus to economic activity include the following: Reduction in the capital conservation buffer by 100 basis points to 1.5%; Increasing the regulatory limit on extension of credit to SMEs to Rs 180 million; Relaxing the debt burden ratio for consumer loans from 50% to 60%; Allowing banks to defer borrowers’ principal loan payments by one year; and Relaxing regulatory criteria for restructured/rescheduled loans for borrowers who require relief of principal repayment exceeding one year and / or mark-up. 4.5 COVID-19 will impact banks in Pakistan on a number of fronts including increase in overall credit risk pertaining to the loans and advances portfolio, reduced fee income due to overall slowdown in economic activity, continuity of business operations and managing cybersecurity threat as a significant number of the Bank’s staff is working from home and an ever increasing number of customers are being encouraged to use digital channels. 4.1 Equity Risk Management The carrying value of the Bank's investment in listed equity securities amounts to Rs 4.789 billion as at March 31, 2020. During the current quarter the Pakistan Stock Exchange fell by 28%, triggering an impairment of Rs 969.210 million. The Bank has only recorded an impairment of Rs 242.30 million in the condensed interim unconsolidated financial statements of the current period, and has deferred the recognition of the remaining impairment to be taken on a quarterly basis till December 31, 2020 as allowed by the SBP. FINANCIAL RISK MANAGEMENT - Liquidity Risk Management Capital Adequacy Ratio (CAR) In order to encourage Banks to continue lending despite anticipated pressure on profits and credit risk, the SBP has relaxed the Capital Conversion Buffer (CCB) requirements to 1.5%, resulting in a 1% decline in CAR requirements for all Tiers. Credit Risk Management The Risk Management function of the Bank is regularly conducting assessments of the credit portfolio to identify borrowers most likely to get affected due to changes in the business and economic environment. The Bank has further strengthened its credit review procedures in the light of COVID-19. The Bank is continuously reviewing the portfolio, to identify accounts susceptible to higher risk, resulting from the COVID-19 outbreak. IFRS 9 is applicable to the overseas branches of the Bank and requires the estimation of Expected Credit Loss (ECL) based on current and forecast economic conditions. The Bank has reviewed the potential impact of the COVID-19 outbreak on the inputs and assumptions for IFRS 9 ECL measurement in light of available information. Overall, the COVID-19 situation remains fluid and is rapidly evolving at this point, which makes it challenging to reliably reflect impacts in ECL estimates. The Bank is assessing the situation as it develops and is in the process of accounting for the same in its ECL estimates. 62 63 7 8
34. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated For the three months ended March 31, Financial 2020 Statements (Unaudited) Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 5 CASH AND BALANCES WITH TREASURY BANKS In hand Local currency Foreign currencies With State Bank of Pakistan in Local currency current accounts Foreign currency current accounts Foreign currency deposit accounts With other Central Banks in Foreign currency current accounts Foreign currency deposit accounts With National Bank of Pakistan in local currency current accounts National Prize Bonds 6 Outside Pakistan In current accounts In deposit accounts 8.1 Repurchase agreement lendings (reverse repo) Bai Muajjal receivables - with State Bank of Pakistan - with other financial institutions Note March 31, 2020 (Unaudited) December 31, 2019 (Audited) Provision Provision Surplus / Carrying Cost / Surplus / Carrying value for for amortised cost (deficit) value (deficit) diminution diminution ---------------------------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------------------ Investments by type Held-for-trading (HFT) securities 48,274,528 6,623,126 54,897,654 Federal Government securities 31,165,412 3,878,652 35,044,064 - Market Treasury Bills - Pakistan Investment Bonds - Listed companies Foreign securities 100,442,501 6,882,079 20,465,975 127,790,555 123,468,479 6,497,792 19,321,075 149,287,346 23,923,702 6,852,106 30,775,808 35,512,302 16,988,678 52,500,980 35,497,559 99,821,234 133,625 587,999 249,095,201 337,241,623 185,737 297,083,221 7,706,120 - 654,606 127,781 297,737,827 7,833,901 19,437 - (1,587) 17,850 106,932 304,915,710 - 13,815 794,615 120,747 305,710,325 387,794,355 416,684,280 6,680,195 - 3,658,228 15,894,904 87,555 253,848,450 12,596,388 - (127,086) 33,166 - Government debt securities - - 99,386 266,544,224 - 10,549 (83,371) 109,935 266,460,853 391,452,583 432,579,184 6,767,750 348,638,371 449,714,794 4,667,551 - 83,133 3,837,538 (46,478) 348,721,504 453,552,332 4,621,073 - - Available-for-sale (AFS) securities Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds - Ijarah Sukuks - Government of Pakistan US Dollar Bonds Shares 5,405,119 (165,200) (689,309) 4,550,610 4,116,230 (138,672) 294,334 4,271,892 - Listed companies - Unlisted companies Non-Government debt securities 9,991,285 4,820,042 (4,340,286) (82,274) (861,770) - 4,789,229 4,737,768 9,626,801 4,820,042 (4,198,407) (82,274) 1,225,135 - 6,653,529 4,737,768 - Listed - Unlisted Foreign securities 1,750,000 2,886,134 (270,877) (24,011) - 1,725,989 2,615,257 1,750,000 2,286,134 (270,877) (27,251) - 1,722,749 2,015,257 33,252,146 (193,340) (2,219,423) 30,839,383 27,279,426 (186,259) 341,939 27,435,106 3,349,129 353,122 6,178 11,113 55,000 44,400 873,082,498 (22,893) (104,493) (815) (1,361) 19,534 (3,900) (5,075,685) 15,755,954 3,221,743 350,946 6,178 30,647 51,100 44,400 883,762,767 3,112,280 348,686 5,912 11,113 55,000 44,400 856,476,740 (21,788) (1,713) (4,899,990) 108,057 2,411 31,691 7,450 5,857,959 3,198,549 349,384 5,912 42,804 62,450 44,400 857,434,709 - Government debt securities - Non-Government debt securities - Listed - Unlisted - Equity securities - Unlisted National Investment Trust units Real Estate Investment Trust units Preference shares Held-to-maturity (HTM) securities 81,517 8.2 Federal Government securities 17,165,571 11,506,144 28,671,715 16,208,323 15,849,893 32,058,216 - Pakistan Investment Bonds - Government of Pakistan US Dollar Bonds - Other Federal Government securities Non-Government debt securities 28,857,452 32,139,733 - Listed - Unlisted Foreign securities 4,850,000 300,000 24,805,360 24,514,015 5,257,577 15,019,961 20,277,538 20,489,184 20,489,184 49,932,898 45,303,199 - Government debt securities - Non-Government debt securities - Listed - Unlisted Investment in associates and joint venture Investment in subsidiary companies Total Investments 8.1.1 8.2 141,401,032 - - 141,401,032 156,928,486 - - 156,928,486 10,794,000 - - 10,794,000 10,794,000 - - 10,794,000 5,428,532 18,055,139 - - 5,428,532 18,055,139 5,799,373 18,146,759 - - 5,799,373 18,146,759 16,137,814 (2,536) - 16,135,278 7,373,574 (2,459) - 7,371,115 513,890 420,630 192,751,037 (3,440) (5,976) - 513,890 417,190 192,745,061 510,542 516,268 200,069,002 (3,335) (5,794) - 510,542 512,933 200,063,208 - - 9,412,113 17,320,705 1,397,482,063 (5,081,661) 16,550,569 9,412,113 9,412,113 17,320,705 1,408,950,971 18,590,630 1,351,092,709 Investments given as collateral The market value of investments given as collateral against borrowings is as follows: Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds Foreign securities Government debt securities (4,905,784) 5,774,588 9 9,412,113 18,590,630 1,351,961,513 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 104,972,315 50,130,258 2,216,652 157,319,225 64 253,721,364 12,629,554 Shares LENDINGS TO FINANCIAL INSTITUTIONS Call money lendings INVESTMENTS Cost / amortised cost BALANCES WITH OTHER BANKS In Pakistan In current accounts 7 8 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 128,024,805 71,061,088 199,085,893 65 10
35. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated For the three months ended March 31, Financial 2020 Statements (Unaudited) 8.2 Notes to the Condensed Interim Unconsolidated For the three months ended March 31, Financial 2020 Statements (Unaudited) 9.2 The market value of investment classified as held-to-maturity and investment in listed associates and joint venture is as follows: March 31, 2020 (Unaudited) December 31, 2019 (Audited) Book value Market value Book value Market value ------------------------------- (Rupees in '000) -----------------------------192,745,061 9,155,882 - Investment classified as held-to-maturity - Investment in listed associates and joint venture 8.3 190,807,420 31,449,845 Particulars of provision held against diminution in the value of investments 191,461,438 30,712,471 4,905,784 23,229 4,488,683 19,001 253,072 (100,424) 152,648 5,081,661 2,831,502 (64,476) (2,368,926) 398,100 4,905,784 Overseas Not past due but impaired Overdue by: Total Category of classification Note Provision ------------------------------- (Rupees in '000) ------------------------------ Domestic Loss 270,877 270,877 270,877 270,877 8.4.1 In addition to the above, certain overseas branches hold a general provision of Rs 388.224 million (December 31, 2019: Rs 354.226 million) against investment in accordance with the requirements of IFRS 9. Performing (Unaudited) (Audited) 9 ADVANCES Note March 31, 2020 December 31, 2019 Non - performing 66,459,144 1,624,250 Charge for the period / year Reversal for the period / year Net charge against advances 918,818 (1,230,596) (311,778) Charged off during the period / yearagriculture financing Total (Audited) (Unaudited) (Audited) March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Non performing advances Provision 1,137,596 2,068,188 1,218,979 43,249,535 47,674,298 489,929 609,489 41,968,844 43,068,262 580,891 2,164,790 1,509,387 43,569,902 47,824,970 516,168 754,694 42,504,212 43,775,074 70,601 21,207 48,676 23,643 148,179 124,063 1,937,678 24,322,523 26,603,044 74,277,342 57,184 46,021 1,632,664 22,721,190 24,478,266 67,546,528 215,921 278,341 755,391 23,285,027 24,583,356 72,408,326 101,186 209,604 343,117 22,006,520 22,684,070 66,459,144 March 31, 2020 (Unaudited) December 31, 2019 (Audited) Specific General Total Specific General Total -------------------------------------------------------- (Rupees in '000) -------------------------------------------------------- Opening balance Exchange adjustment Written off during the period / year (Unaudited) Provision Particulars of provision against advances March 31, 2020 (Unaudited) December 31, 2019 (Audited) NonPerforming Investments (Audited) December 31, 2019 ------------------------------- (Rupees in '000) ------------------------------ Domestic Other assets especially mentioned Substandard Doubtful Loss 9.3 Provision Non performing advances Upto 90 days 91 to 180 days 181 to 365 days ˃ 365 days Particulars of provision against debt securities NonPerforming Investments (Unaudited) March 31, 2020 Category of Classification (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Opening balance Exchange adjustment Charge / (reversals) Charge for the period / year Reversal for the period / year Reversal on disposal during the period / year Net charge Closing balance 8.4 200,063,208 9,155,882 Advances include Rs 74,277.342 million (December 31, 2019: Rs 72,408.326 million) which have been placed under nonperforming status as detailed below: Other movements Closing balance 9.5 3,292,615 124,595 426,529 (34,440) 392,089 69,751,759 1,748,845 63,193,300 2,394,415 1,345,347 (1,265,036) 80,311 6,297,991 (3,729,878) 2,568,113 3,083,530 158,049 421,194 (281,675) 139,519 66,276,830 2,552,464 6,719,185 (4,011,553) 2,707,632 (213,277) - (213,277) (604,496) - (604,496) (11,811) - (11,811) (1,092,188) - (1,092,188) - - - 67,546,528 3,809,299 71,355,827 66,459,144 (88,483) 3,292,615 (88,483) 69,751,759 --------------------------------------------------------------- (Rupees in '000) -------------------------------------------------------------Loans, cash credits, running finances, etc. Islamic financing and related assets Bills discounted and purchased 36.3 Advances - gross Provision against advances - Specific - General Advances - net of provision 9.1 Particulars of advances (Gross) In local currency In foreign currencies 66 9.3 886,207,783 122,175,590 71,986,210 860,334,857 153,061,117 56,966,128 68,898,004 257,904 5,121,434 67,170,214 258,381 4,979,731 955,105,787 122,433,494 77,107,644 927,505,071 153,319,498 61,945,859 1,080,369,583 1,070,362,102 74,277,342 72,408,326 1,154,646,925 1,142,770,428 (67,546,528) (67,546,528) (66,459,144) (66,459,144) 6,730,814 5,949,182 (3,809,299) (3,809,299) 1,076,560,284 (3,292,615) (3,292,615) 1,067,069,487 (67,546,528) (3,809,299) (71,355,827) 1,083,291,098 (66,459,144) (3,292,615) (69,751,759) 1,073,018,669 9.4 General provision includes provision amounting to Rs 1,920.024 million (December 31, 2019: Rs 1,879.055 million) against consumer finance portfolio. General provision also includes Rs 1,889.275 million (December 31, 2019: Rs 1,413.560 million) pertaining to overseas advances to meet the requirements of the regulatory authorities of the respective countries in which the Bank operates. 9.5 These represent non-performing advances for agriculture financing which have been classified as loss, are fully provided and are in default for more than 3 years. These non-performing advances have been charged off by extinguishing them against the provision held, in accordance with the SBP's Prudential Regulations for Agriculture Financing. This charge off does not, in any way, prejudice the Bank's right of recovery from these customers. (Unaudited) (Audited) March 31, December 2020 31, 2019 (Rupees in '000) 924,278,508 952,668,278 230,368,417 1,154,646,925 190,102,150 1,142,770,428 11 12 67
36. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated For the three months ended March 31, Financial 2020 Statements (Unaudited) Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) Note 10 FIXED ASSETS Capital work-in-progress Property and equipment 10.1 Capital work-in-progress Civil works Equipment Advances to suppliers and contractors 10.2 Additions to fixed assets The following additions have been made to fixed assets during the period: Capital work-in-progress Property and equipment Leasehold land Building on leasehold land Machinery Leasehold improvements Furniture and fixtures Electrical, office and computer equipment Vehicles Right-of-use assets - net 10.3 Disposals of fixed assets 10.1 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 2,203,822 72,787,067 74,990,889 1,819,077 73,722,692 75,541,769 815,095 13,768 1,374,959 2,203,822 782,903 19,959 1,016,215 1,819,077 12 Deductible temporary differences on - Provision against investments - Provision against doubtful debts and off-balance sheet obligations - Liabilities written back under section 34(5) of the Income Tax Ordinance 2001 - Provision against other assets - Deficit on revaluation of fixed assets - Ijarah financing Taxable temporary differences on - Accelerated tax depreciation - Surplus on revaluation of fixed assets - Surplus on revaluation of investments - Exchange translation reserve (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 384,744 224,854 464,070 292 17,089 265,211 112,119 405,801 13,003 1,277,585 17,071 20,302 213,675 166,783 901,893 20,429 1,340,153 98,030 45,440 1,760,359 1,610,447 128 915 9,471 9 10,523 1,239 166 2,756 461 4,622 Derecognition of right-of-use assets on closure of a foreign branch 398,169 408,692 4,622 11 INTANGIBLE ASSETS Capital work-in-progress - computer software Intangible assets 13 11.1 Additions to intangibles assets The following additions have been made to intangible assets during the period: Capital work-in-progress Computer software 68 Provision held against other assets Other assets- net of provision Surplus on revaluation of non-banking assets acquired in satisfaction of claims Other assets - total 13.1 1,016,808 2,511,410 3,528,218 50,746 223,268 274,014 1,672,331 4,228,458 1,773,846 50,989 163,960 162,374 8,051,958 1,616,995 4,158,485 1,671,011 50,989 163,960 150,674 7,812,114 (1,913,301) (1,154,944) (6,144,822) (1,018,121) (10,231,188) (2,092,012) (1,161,940) (2,284,604) (374,730) (5,913,286) (2,179,230) 1,898,828 37,594,166 3,430,053 2,363,308 25,815,675 5,275,994 114,571 389,378 1,551,991 15,272,925 77,133 468,704 24,419 2,776,581 25,245,052 3,205,868 327,368 470,548 642,745 125,046,479 49,739,889 2,364,455 1,882,477 28,075,183 5,246,000 77,106 689,984 1,444,977 6,548,555 54,454 468,719 24,419 789,446 22,771,310 12,636,565 450,086 494,268 133,757,893 13.1 (890,928) 124,155,551 (821,996) 132,935,897 19 164,304 124,319,855 164,304 133,100,201 7,008 470,548 347,962 65,410 890,928 7,023 450,086 323,759 41,128 821,996 Provision held against other assets Non-banking assets acquired in satisfaction of claims Claims against fraud and forgeries Suit filed cases Others (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) OTHER ASSETS Mark-up / return / profit / interest accrued in local currency Mark-up / return / profit / interest accrued in foreign currency Advances, deposits, advance rent and other prepayments Advance taxation Advances against subscription of securities Stationery and stamps on hand Accrued fees and commissions Due from Government of Pakistan / SBP Mark to market gain on forward foreign exchange contracts Mark to market gain on derivative instruments Non-banking assets acquired in satisfaction of claims Receivable from defined benefit plan Branch adjustment account Acceptances Clearing and settlement accounts Dividend receivable Claims against fraud and forgeries Others (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 1,067,554 2,574,500 3,642,054 19 Net deferred tax (liability) / asset. The net book value of fixed assets disposed off during the period is as follows: Property and equipment Leasehold improvements Furniture and fixtures Electrical, office and computer equipment Vehicles DEFERRED TAX ASSETS Note 177,302 50,376 227,678 13 14 69
37. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 For the three months ended March 31, 2020Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial 13.1.1 Note Movement in provision against other assets 821,996 24,491 Opening balance Exchange adjustment Written off during the period / year Other movement (10,445) 22,700 (224,820) (1,505) Closing balance 890,928 821,996 17 28,932,490 1,176,454 30,108,944 17.1 28,344,335 1,189,968 29,534,303 BORROWINGS Repurchase agreement borrowings Unsecured - Call money borrowings - Overdrawn nostro accounts - Borrowings of overseas branches - Other long-term borrowings 15.1 52,392,791 21,106,685 837,609 22,921 25,615 116,231 17,375 74,519,227 42,762,668 18,474,945 831,448 28,743 2,400 104,167 62,204,371 162,007,743 236,526,970 197,503,793 259,708,164 325,000 1,029,806 60,228,352 73,224,600 134,807,758 4,900,000 100,623 56,524,651 60,838,074 122,363,348 371,334,728 382,071,512 15.1 This includes the following: 15.1.1 A loan from the International Finance Corporation amounting to US$ 150 million (December 31, 2019:US$ 150 million). The principal amount is payable in six equal half yearly installments from June 2022 to December 2024. Interest at LIBOR + 5.00% is payable semi annually. 15.1.2 A loan from the China Development Bank amounting to US$ 180 million (December 31, 2019: US$ 180 million). The principal amount is payable in six half yearly installments from December 2017 to June 2020. Interest at LIBOR + 2.45% is payable semi annually. 15.1.3 HBL has entered into a long-term financing facility arrangement of US$ 300 million with China Development Bank, to be utilized for on-lendings to projects of the Bank’s customers. Under this facility, US$ 109.250 million has been utilized by the Bank with the initial drawdown having occurred on January 31, 2019. Further drawdowns are permitted up to 4 years from the date of initial drawdown. The entire drawn amount is payable in semi-annual installments over a period of 10 years starting from January 31, 2023. Interest is being charged at a fixed spread over LIBOR and is payable semi-annually. 16 DEPOSITS AND OTHER ACCOUNTS Customers Current deposits Savings deposits Term deposits Financial institutions Current deposits Savings deposits Term deposits 102,389,384 90,947,316 114,521,943 307,858,643 785,835,064 953,540,976 363,785,802 2,103,161,842 718,531,993 904,288,563 255,854,893 1,878,675,449 101,140,482 84,593,001 104,894,494 290,627,977 819,672,475 988,881,564 360,749,387 2,169,303,426 6,414,453 138,763,322 357,350 145,535,125 1,940,838,324 1,455,641 14,912 205,008 1,675,561 309,534,204 7,870,094 138,778,234 562,358 147,210,686 2,250,372,528 4,726,555 123,858,010 2,001,790 130,586,355 2,009,261,804 1,079,041 18,008 912,256 2,009,305 292,637,282 5,805,596 123,876,018 2,914,046 132,595,660 2,301,899,086 SUBORDINATED DEBT 9,984,000 12,374,000 22,358,000 9,986,000 12,374,000 22,360,000 Issue date February 19, 2016 Issue amount Rs 10 billion Rating AAA (Triple A) [December 31, 2019: AAA (Triple A)] Tenor 10 years from the Issue Date Security Unsecured and subordinated to all other indebtedness of the Bank including depositors and general creditors but not including the Bank's Additional Tier I TFCs. Semi-annually in arrears Redemption The instrument has been structured to redeem 0.02% of the issue amount semiannually during the first 108 months after the issue and 99.64% of the issue amount in two equal semi-annual installments in the 114th and 120th months. Mark-up Floating rate of return at Base Rate + 0.50%. The Base Rate is defined as the average “Ask Side” rate of the six months Karachi Interbank Offered Rate (KIBOR). Call option The Bank may call the TFCs, with the prior written approval of the SBP, on any profit payment date falling on or after the fifth anniversary of the Issue Date, subject to at least 60 days prior notice being given to the investors through the Trustee. The call option, once announced, will be irrevocable. Neither profit nor principal can be paid (even at maturity) if such payments will result in a shortfall in the Bank's Minimum Capital Requirements (MCR) or Capital Adequacy Ratio (CAR) or increase any existing shortfall in MCR or CAR. The TFCs will be subject to a loss absorbency clause as stipulated under the SBP's "Instructions for Basel III Implementation in Pakistan". Lock-in clause Loss absorbency clause 17.2 17.1 17.2 The Bank has issued Over The Counter (OTC) listed Term Finance Certificates (TFCs) as instruments of redeemable capital under Section 66 of the Companies Act, 2017 and the Basel III Guidelines set by the SBP. The key features of the issue are as follows: Profit payment frequency The Bank has issued listed fully paid up, rated, privately placed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of redeemable capital under Section 66 of the Companies Act, 2017 which qualify as Additional Tier 1 Capital (AT 1) as outlined by the State Bank of Pakistan (SBP) under BPRD Circular No. 6 dated August 15, 2013. The key features of the issue are as follows: March 31, 2020 (Unaudited) December 31, 2019 (Audited) In local In foreign In local In foreign Total Total currency currencies currency currencies ---------------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------683,445,680 862,593,660 249,263,859 1,795,303,199 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Tier II Term Finance Certificates Additional Tier I Term Finance Certificates BILLS PAYABLE Secured Borrowings from the SBP under - Export refinance scheme - Long term financing facility - Financing facility for renewable energy power plants - Refinance facility for modernization of Small and Medium Enterprises (SMEs) - Refinance and Credit Guarantee Scheme for Women Entrepreneurs - Financing facility for storage of agricultural produce - Financing facility for working capital of SMEs 70 923,201 34,901 139,759 (49,540) 90,219 In Pakistan Outside Pakistan 15 (Audited) December 31, 2019 32,626 (440) 32,186 Charge for the period / year Reversal for the period / year Net charge 14 (Unaudited) March 31, 2020 For the three months ended March 31, 2020Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Issue date September 26, 2019 Issue amount Rs 12.374 billion Rating AA+ (Double A plus) [December 31, 2019: AA+ (Double A plus)] Tenor Perpetual Security Unsecured and subordinated to all other indebtedness of the Bank including depositors, general creditors and holders of the Tier II TFCs. However, they shall rank superior to the claims of ordinary shareholders. Profit payment frequency Quarterly in arrears Redemption Perpetual, hence not applicable. Mark-up Floating rate of return at Base Rate + 1.60%. The Base Rate is defined as the average “Ask Side” rate of the three months Karachi Interbank Offered Rate (KIBOR) The Bank may, at its sole discretion, call the TFCs any time after five years from the Issue Date and subject to the following: (a) Prior approval of the SBP has been obtained; and (b) The Bank replaces the TFCs with capital of the same or better quality and the capital position of the Bank is above the minimum capital requirement after the Call Option is exercised. Call option 15 Lock-in clause Mark-up will only be paid from the current year’s earnings and only if the Bank is in compliance with regulatory capital and liquidity requirements. Loss absorbency clause The TFCs will be subject to a loss absorbency clause as stipulated under the SBP's "Instructions for Basel III Implementation in Pakistan". 71 16
38. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) 18 OTHER LIABILITIES Note (Unaudited) March 31, 2020 For the three months ended March 31,Financial 2020 Statements (Unaudited) Notes to the Condensed Interim Unconsolidated (Audited) December 31, 2019 20 CONTINGENCIES AND COMMITMENTS Note (Rupees in '000) Mark-up / return / profit / interest payable in local currency Mark-up / return / profit / interest payable in foreign currency 1,180,914 1,138,813 14,585,462 Mark to market loss on forward foreign exchange contracts 10,374,823 7,924,799 Mark to market loss on derivative instruments Unclaimed dividends 2,163,846 1,708,824 657,021 405,966 Dividends payable 1,535,005 400,464 Provision for post retirement medical benefits 3,942,681 3,872,768 Provision for employees' compensated absences 2,601,119 2,644,978 460,013 437,795 25,245,052 22,771,310 1,118,302 1,063,338 612,270 577,964 18.1 Acceptances Provision for staff retirement benefits Payable to defined benefit plans Provision for Workers' Welfare Fund Unearned income Qarz-e-Hasna Fund Levies and taxes payable Insurance payable Provision for rewards program expenses Liability against trading of securities Clearing and settlement accounts Payable to HBL Foundation Contingent consideration payable Charity fund Lease liability against right-of-use assets Unclaimed deposits Others 5,380,466 5,220,295 4,429,682 3,777,028 338,923 338,923 3,358,914 7,347,626 774,955 645,817 1,349,936 1,249,725 4,348,640 7,883,792 1,021,427 2,037,252 199,702 158,202 500,000 500,000 10,930 10,375 12,084,956 12,861,471 698,778 670,374 6,995,517 2,422,100 133,517,287 116,446,906 20.1 437,795 Exchange adjustment Charge for the period / year 20.2 Reversal for the period / year Net charge / (reversal) Closing balance 6,589 7,518 53,677 (59,080) (102,910) 15,629 (49,233) 460,013 437,795 Deferred tax on surplus / (deficit) on revaluation of: - Fixed assets - Available-for-sale securities - Non-banking assets acquired in satisfaction of claims Surplus on revaluation of assets - net of tax 8.1 22,217,197 15,755,954 164,304 38,137,455 22,235,136 5,857,959 164,304 28,257,399 1,154,944 6,144,822 7,299,766 30,837,689 1,161,940 2,284,604 3,446,544 24,810,855 191,783,131 151,961,169 721,296,101 822,473,567 - Other contingent liabilities 20.3 23,294,859 936,374,091 23,458,521 997,893,257 63,716,929 114,661,420 13,404,782 191,783,131 35,102,960 108,417,670 8,440,539 151,961,169 109,317,807 110,535,832 522,000,871 52,785,935 32,162,200 3,190,095 610,139,101 569,780,600 107,869,401 29,437,457 3,425,853 710,513,311 995,007 844,186 1,839,193 721,296,101 661,877 762,547 1,424,424 822,473,567 313,806,380 208,194,491 522,000,871 333,012,340 236,768,260 569,780,600 45,611,277 7,174,658 52,785,935 45,771,399 62,098,002 107,869,401 10,620,923 12,835,774 23,456,697 9,525,572 10,882,712 20,408,284 8,705,503 8,705,503 9,029,173 9,029,173 3,190,095 3,425,853 Guarantees: Commitments: 20.2.1 20.2.2 20.2.3 20.2.4 Commitments for acquisition of: - fixed assets - intangible assets 20.2.1 Commitments in respect of forward foreign exchange contracts Purchase Sale 20.2.2 Commitments in respect of forward Government securities transactions Purchase Sale 20.2.3 Commitments in respect of derivatives Cross Currency swaps Purchase Sale Interest rate swaps Purchase Sale SURPLUS ON REVALUATION OF ASSETS - NET OF TAX Surplus / (deficit) arising on revaluation of assets, on: - Fixed assets - Available-for-sale securities - Non-banking assets acquired in satisfaction of claims 20.1 20.2 Trade-related contingent liabilities Commitments in respect of: - forward foreign exchange contracts - forward Government securities transactions - derivatives - forward lending 479,510 74,709 - Guarantees - Commitments Financial guarantees Performance guarantees Other guarantees Provision against off-balance sheet obligations Opening balance 72 2,537,607 14,639,064 Provision against off-balance sheet obligations 19 11,253,838 3,848,003 Accrued expenses Security deposits 18.1 23,646,348 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 20.2.4 Commitments in respect of forward lending Undrawn formal standby facilities, credit lines and other commitments to extend credit These represent commitments that are irrevocable because they can not be withdrawn at the discretion of the Bank without the risk of incurring a significant penalty or expense. 17 73 18
39. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes Condensed Interim Unconsolidated Financial Notes to to the the Condensed Interim Unconsolidated Financial Statements (Unaudited)Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 (Unaudited) March 31, 2020 For thethree three months March For the months endedended March 31, 2020 31, 2020 (Audited) December 31, 2019 Note (Rupees in '000) 20.3 23 Other contingent liabilities 20.3.1 Claims against the Bank not acknowledged as debts 23,294,859 On: Deposits Securities sold under repurchase agreement borrowings Borrowings Subordinated debt Cost of foreign currency swaps against foreign currency deposits / borrowings Lease liability against right-of-use assets 23,458,521 These mainly represent counter claims by borrowers for damages, claims filed by former employees of the Bank and other relief and other claims relating to banking transactions. Based on legal advice and / or internal assessments, management is confident that the matters will be decided in the Bank’s favour and the possibility of any adverse outcome is remote. Accordingly, no provision has been made in these condensed interim unconsolidated financial statements. 20.3.2 On March 4, 2020, by agreement with the New York State Department of Financial Services (NYSDFS) and the Federal Reserve Bank of New York (FRBNY), HBL surrendered to NYSDFS its New York State foreign bank branch license to operate HBL’s New York branch office (HBLNY). As of March 31, 2020, HBL had completed the voluntary liquidation of HBLNY under Section 605 of the New York Banking Law. The branch is now closed and formalities required to fully wind up HBL’s presence in NY are underway. 24 Pursuant to the terms of the August 24, 2017 Surrender Order between NYSDFS, HBL, and HBLNY, NYSDFS’s acceptance on March 4, 2020 of HBL’s license surrender automatically suspended the remaining terms of the September 7, 2017 Consent Order between the parties, which Consent Order was disclosed in Note 21.3.2 to the Financial Statements for the year ended December 31, 2019 and in similar notes for the 2017 and 2018 financial statements. The only Consent Order term that had remained in effect post-license surrender was the term governing completion of the lookback review by an independent party, and that lookback review concluded on March 31, 2020. Accordingly, all terms of the September 7, 2017 Consent Order have been satisfied or suspended as of March 31, 2020. At this point, HBL does not expect any further actions or proceedings from NYSDFS or FRBNY. As stated in the above-mentioned Note 21.3.2, the US Attorney’s Office for the Eastern District of New York, a component of the U.S. Department of Justice (DOJ), had sought documents in relation to HBLNY’s compliance with anti-money laundering laws and the Bank Secrecy Act. To date, the DOJ inquiry has not resulted in any findings, and its final resolution cannot be determined at this stage, including any possible impact on the Bank. 21 25 DERIVATIVE INSTRUMENTS March 31, 2020 (Unaudited) Cross currency swaps Interest rate swaps Mark to market loss Mark to market loss Notional principal 25.1 -------------------------------------- (Rupees in '000) -------------------------------------Hedging Market Making 23,456,697 (1,943,585) 8,705,503 Notional principal (143,128) Interest rate swaps Mark to market loss Mark to market loss Notional principal -------------------------------------- (Rupees in '000) -------------------------------------Hedging Market Making 22 MARK-UP / RETURN / PROFIT / INTEREST EARNED On: Loans and advances Investments Lendings to financial institutions Balances with banks 74 20,408,284 (1,232,477) 9,029,173 - 26 (421,893) Branch banking customer fees Consumer finance related fees Card related fees (debit and credit cards) Credit related fees Investment banking fees Commission on trade related products and guarantees Commission on cash management Commission on remittances (including home remittances) Commission on bancassurance Commission on G2P payments Merchant discount and interchange fees Others 1,114,063 320,413 1,005,841 132,417 320,572 716,476 181,899 122,293 123,808 78,325 537,624 86,549 4,740,280 985,852 254,807 1,354,095 189,519 682,071 597,609 166,523 104,152 637,996 136,570 411,140 24,273 5,544,607 Less: Sales tax / Federal Excise Duty on fee and commission income (605,480) 4,134,800 (724,500) 4,820,107 1,451,024 794,615 2,245,639 87,702 14,306 102,008 301,717 1,344,329 (148,619) 58,185 (14,905) (89,683) 1,451,024 105,392 (13,592) (8,855) (450,091) (28,408) 483,256 87,702 49,457 1,372,357 (1,887,208) 15,444 27,890 (422,060) 32,005 7,349 27,155 66,509 FEE AND COMMISSION INCOME GAIN / (LOSS) ON SECURITIES - NET 25.1 8.1 Gain / (loss) on securities - realised OTHER (LOSS) / INCOME Incidental charges (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 32,050,300 35,359,176 1,829,213 583,758 69,822,447 21,891,199 2,681,647 1,942,365 241,894 210,945 242,575 27,210,625 On: Federal Government securities - Market Treasury Bills - Pakistan Investment Bonds - Ijarah Sukuks Shares Non-Government debt securities Foreign securities Associates December 31, 2019 (Audited) Cross currency swaps 33,488,130 4,498,463 2,176,562 818,656 2,208,839 429,406 43,620,056 Realised Unrealised - held-for-trading Product Analysis Notional principal MARK-UP / RETURN / PROFIT / INTEREST EXPENSED (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) Exchange gain realised on reduction in capital of subsidiary Exchange loss realised on closure of overseas branch Gain on sale of fixed assets - net Rent on properties 25,582,667 18,673,101 4,441,110 227,016 48,923,894 19 7520
40. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to Condensed the Condensed Interim Unconsolidated Notes to the Interim Unconsolidated Financial StatementsFinancial (Unaudited) Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated For the three months ended March 31, Financial 2020 Statements (Unaudited) For the months ended ended March 31, 2020 31, 2020 For thethree three months March 27 OPERATING EXPENSES Total compensation expense Property expense Rent and taxes Insurance Utilities cost Security (including guards) Repair and maintenance (including janitorial charges) Depreciation on owned fixed assets Depreciation on right-of-use assets Information technology expenses Software maintenance Hardware maintenance Depreciation Amortisation Network charges Consultancy charges Other operating expenses Legal and professional charges Outsourced services costs Travelling and conveyance Insurance Remittance charges Security charges Repairs and maintenance Depreciation Training and development Postage and courier charges Communication Stationery and printing Marketing, advertisement and publicity Donations Auditors' remuneration Brokerage and commission Subscription Documentation and processing charges Entertainment Consultancy charges Deposits insurance premium expense Others For the three months ended March 31, 2020 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 8,764,262 28 220,961 15,404 363,490 395,126 456,638 657,521 597,072 2,706,212 722,156 180,414 436,367 162,047 296,575 168,639 1,966,198 562,367 98,947 305,220 99,946 307,332 101,941 1,475,753 945,288 414,739 172,183 128,785 120,072 379,947 197,712 180,496 86,832 175,886 180,055 402,647 1,999,781 128,450 34,095 134,035 37,099 659,908 68,986 1,881,505 559,191 233,853 9,121,545 23,253,870 1,192,405 359,787 149,315 158,015 127,125 294,428 143,137 153,833 106,443 107,902 141,906 353,121 1,370,493 34,136 39,349 182,056 26,067 427,625 71,772 2,142,413 522,608 83,755 8,187,691 19,457,297 Note Penalties imposed by the State Bank of Pakistan Penalties imposed by other regulatory bodies 7,087,641 559,888 15,730 395,928 444,582 540,756 722,553 722,428 3,401,865 OTHER CHARGES (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) 29 8.3 9.3 13.1.1 18.1 152,648 80,311 32,186 15,629 (96,832) (42,613) 141,329 (162,631) 65,126 32,177 (10,999) (80,555) (31,394) (188,276) 3,470,308 (425,552) 3,044,756 3,073,421 1,933,029 (10,899) 4,995,551 3,997,779 2,841,630 TAXATION - Current - Prior years - Deferred 31 50,023 629 50,652 PROVISIONS / (REVERSALS) AND WRITE OFFS - NET Provision for diminution in value of investments Provision against loans and advances Provision against other assets Provision / (reversal) against off-balance sheet obligations Recoveries against written off / charged off bad debts Recoveries against other assets written off 30 231,633 565 232,198 BASIC AND DILUTED EARNINGS PER SHARE Profit for the period (Number) Weighted average number of ordinary shares 1,466,852,508 1,466,852,508 (Rupees) Basic and diluted earnings per share 2.73 1.94 31.1 Diluted earnings per share has not been presented separately as the Bank does not have any convertible instruments in issue. 32 FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of traded investments are based on quoted market prices. The fair values of unquoted equity investments, are estimated using the break-up value of the investee company. The fair value of unquoted debt securities, fixed term advances, other assets and other liabilities cannot be calculated with sufficient reliability due to the absence of a current and active market for such assets and liabilities and reliable data regarding market rates for similar instruments. In the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since they are either short-term in nature or, in the case of customer advances, deposits and certain long term borrowings, are frequently repriced. All assets and liabilities for which fair value is measured or disclosed in these unconsolidated financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Level 1 - Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Fair value measurements using inputs, other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 - Fair value measurements using inputs that are not based on observable market data. 76 22 21 77
41. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) As at December 31, 2019 (Audited) Carrying Level 1 Level 2 Level 3 Total value ------------------------------------------- (Rupees in '000) ------------------------------------------- Valuation techniques used in determination of fair values within level 2 and level 3 Federal Government securities Non-Government debt securities The fair values of Federal Government securities are determined on the basis of rates / prices sourced from Reuters. On balance sheet financial instruments Financial assets - measured at fair value Investments - Federal Government securities - Shares - listed companies - Non-Government debt securities - Listed - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - National Investment Trust units - Real Estate Investment Trust units Investment in non-Government debt securities denominated in Rupees are valued on the basis of rates announced by the Mutual Funds Association of Pakistan (MUFAP). Investments in non-Government debt securities denominated in other currencies are valued on the basis of rates taken from Bloomberg / Reuters. Foreign Government debt securities The fair values of Foreign Government securities are determined on the basis of rates taken from Bloomberg / Reuters. Units of mutual funds The fair values of investments in units of mutual funds are determined based on their net asset values as published at the close of each business day. Derivatives The Bank enters into derivatives contracts with various counterparties. Derivatives that are valued using valuation techniques based on market observable inputs are mainly interest rate swaps, cross currency swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. 1,077,517,719 6,653,529 1,722,749 27,545,041 3,198,549 349,384 42,804 62,450 1,117,092,225 Financial assets - disclosed but not measured at fair value Investments - Federal Government securities - Non-Government debt securities - Listed - Unlisted Fixed assets and non-banking assets acquired in Land, buildings and non-banking assets acquired in satisfaction of claims are revalued on a periodic basis using professional valuers. The valuation is based on their assessment of satisfaction of claims the market value of the assets. The effect of changes in the unobservable inputs used in the valuations cannot be determined with certainty. Accordingly, a qualitative disclosure of sensitivity has not been presented in these condensed interim unconsolidated financial statements. - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - Associates and Joint venture 32.1 Fair value of financial assets The following table provides the fair value measurement hierarchy of those of the Bank’s financial assets that are recognised or disclosed at fair value in these condensed interim unconsolidated financial statements: As at March 31, 2020 (Unaudited) Carrying value On balance sheet financial instruments Financial assets - measured at fair value Investments - Federal Government securities - Shares - listed companies - Non-Government debt securities - Listed - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - National Investment Trust units - Real Estate Investment Trust units Financial assets - disclosed but not measured at fair value Investments - Federal Government securities - Non-Government debt securities - Listed - Unlisted - Foreign securities Government debt securities Non-Government debt securities - Listed - Unlisted - Associates and Joint venture Level 1 Level 2 Level 3 ----------------------------------------------- (Rupees in '000) ----------------------------------------------- 30,960,130 3,221,743 350,946 30,647 51,100 1,182,051,639 4,789,229 51,100 4,840,329 1,140,921,855 1,725,989 - 1,140,921,855 4,789,229 1,725,989 30,960,130 - 30,960,130 3,221,743 350,946 30,647 1,177,211,310 - 3,221,743 350,946 30,647 51,100 1,182,051,639 152,195,032 - 149,984,650 - 149,984,650 5,428,532 18,055,139 - 5,428,532 18,055,139 - 5,428,532 18,055,139 16,135,278 - 16,408,019 - 16,408,019 513,890 417,190 2,673,639 193,481,059 1,370,692,369 - 513,890 417,190 31,449,845 222,257,265 1,404,308,904 513,890 417,190 9,155,882 201,900,943 1,383,952,582 28,776,206 28,776,206 33,616,535 As at March 31, 2020 (Unaudited) Notional Value Level 1 Level 2 Level 3 Total ----------------------------------------------- (Rupees in '000) ----------------------------------------------Off-balance sheet financial instruments - measured at fair value Commitments - Forward foreign exchange contracts - Forward Government securities transactions - Derivative instruments 78 - Forward Government securities transactions - Derivative instruments 1,140,921,855 4,789,229 1,725,989 522,000,871 52,785,935 32,162,200 - 4,898,102 5,509 (2,086,713) - 4,898,102 5,509 (2,086,713) 23 32.2 62,450 6,715,979 1,077,517,719 1,722,749 - 1,077,517,719 6,653,529 1,722,749 27,545,041 - 27,545,041 3,198,549 349,384 42,804 1,110,376,246 - 3,198,549 349,384 42,804 62,450 1,117,092,225 167,722,486 - 158,832,106 - 158,832,106 5,799,373 18,146,759 - 5,839,857 18,146,759 - 5,839,857 18,146,759 7,371,115 - 7,615,906 - 7,615,906 510,542 512,933 9,155,882 209,219,090 27,439,998 27,439,998 510,542 516,268 3,272,473 194,733,911 - 510,542 516,268 30,712,471 222,173,909 1,326,311,315 34,155,977 1,305,110,157 - 1,339,266,134 Notional Level 1 Level 2 Level 3 Total Value ------------------------------------------- (Rupees in '000) ------------------------------------------- Off-balance sheet financial instruments - measured at fair value Commitments - Forward foreign exchange contracts Total 6,653,529 Fair value of non-financial assets 569,780,600 - 107,869,401 - 29,437,457 - (1,376,244) - 25,258 - (1,654,370) - (1,376,244) 25,258 (1,654,370) As at March 31, 2020 Carrying Level 1 Level 2 Level 3 Total value ------------------------------------------- (Rupees in '000) ------------------------------------------45,342,592 626,000 45,968,592 Fixed assets Non-banking assets acquired in satisfaction of claims - - 45,342,592 626,000 45,968,592 45,342,592 626,000 45,968,592 As at December 31, 2019 Carrying value Level 1 Level 2 Level 3 Total ------------------------------------------- (Rupees in '000) ------------------------------------------44,947,377 44,947,377 44,947,377 626,000 626,000 626,000 45,573,377 45,573,377 45,573,377 Fixed assets Non-banking assets acquired in satisfaction of claims 33 SEGMENT INFORMATION 33.1 Segment Details with respect to Business Activities For the three months ended March 31, 2020 (Unaudited) International Head and Office / Total correspondent Others banking ------------------------------------------------------------- (Rupees in million) -----------------------------------------------------------Branch banking Profit and loss account Net mark-up / return / profit / interest income Inter segment revenue / (expense) - net Non mark-up / interest income Total income Segment direct expenses Inter segment expense allocation Total expenses Provisions - charge / (reversal) Profit / (loss) before tax Consumer banking (16,438) 38,968 1,174 23,704 3,564 (1,475) 1,750 3,839 7,019 4,507 11,526 13 12,165 1,640 362 2,002 110 1,727 Corporate banking Treasury 13,243 (10,896) 853 3,200 27,169 (30,304) 3,109 (26) 558 377 935 (674) 2,939 180 65 245 142 (413) 142 1,779 760 2,681 (1,478) 1,928 (3,018) (2,568) 26,202 4,628 30,830 6,767 1,629 8,396 571 (6,286) 7,482 (6,940) 542 (21) (3,089) 23,646 23,646 141 7,043 24 79
42. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes toto thethe Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the months endedended March 31, 2020 31, 2020 For thethree three months March Notesthe to the Condensed Interim Unconsolidated For three months ended March 31,Financial 2020 Statements (Unaudited) For the three months ended March 31, 2020 As at March 31, 2020 (Unaudited) Branch banking Statement of financial position Cash and bank balances Lendings to financial institutions Inter segment lending Investments Advances - performing Advances - non-performing Others Total assets Borrowings Subordinated debt Deposits and other accounts Inter segment borrowing Others Total liabilities Equity Total equity and liabilities Contingencies and commitments Consumer banking Corporate banking Treasury International and correspondent banking 34 Head Office / Others The Bank has related party relationships with various parties including its Directors, Key Management Personnel, Group entities subsidiaries, associated companies, joint venture, and employee benefit schemes of the Bank. Total Transactions with related parties, other than those under terms of employment, are executed on an arm's length basis i.e. do not involve more than normal risk and are substantially on the same terms, including mark-up rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties. ------------------------------------------------------------- (Rupees in million) ------------------------------------------------------------ 149,857 24,928 1,295,726 34,532 274,916 2,001 26,597 1,808,557 25,369 1,725,938 39,256 1,790,563 17,994 1,808,557 34,448 59,937 212 755 60,904 975 15,392 559,759 2,394 35,135 613,655 64,180 25,005 1,278,360 28,165 1,395,710 62,941 159,953 64,040 168,097 2,124 11,089 468,244 112,210 16,627 13,851 101,212 243,900 277,953 49,933 1,567,889 1,408,951 1,076,560 6,731 202,953 4,590,970 480 56,868 3,556 60,904 60,904 79,157 203,767 306,797 23,934 613,655 613,655 161,128 22 1,204,224 17,728 1,383,102 12,608 1,395,710 105,681 316,818 15,481 437,980 30,264 468,244 22,358 3,348 65,850 91,556 152,344 243,900 371,335 22,358 2,250,373 1,567,889 165,805 4,377,760 213,210 4,590,970 - 245,425 575,184 56,582 24,735 936,374 Contributions to and accruals in respect of staff retirement and other benefit schemes are made in accordance with the actuarial valuations / terms of the schemes. Details of transactions and balances with related parties as at the period / year end, other than those disclosed elsewhere in these unconsolidated financial statements, are as follows: As at March 31, 2020 (Unaudited) Directors Statement of financial position Balances with other banks In current accounts Branch banking Profit and loss account Net mark-up / return / profit / interest income Inter segment revenue / (expense) - net Non mark-up / interest income Total income Segment direct expenses Inter segment expense allocation Total expenses Provisions - charge / (reversal) Profit / (loss) before tax Consumer banking Corporate banking Treasury Head Office / Others Total ------------------------------------------------------------- (Rupees in million) ------------------------------------------------------------ (10,909) 27,760 1,786 18,637 2,900 (962) 1,597 3,535 11,381 (9,289) 1,052 3,144 17,751 (19,048) 470 (827) 6,626 3,791 10,417 317 7,903 1,063 317 1,380 45 2,110 414 290 704 (335) 2,775 157 57 214 (252) (789) 1,514 249 667 2,430 (924) 1,290 32 398 21,713 5,604 27,317 5,098 1,371 6,469 2 (4,041) 6,310 (5,826) 484 35 (121) 19,668 19,668 (188) 7,837 Branch banking Statement of financial position Cash and bank balances Lendings to financial institutions Inter segment lending Investments Advances - performing Advances - non-performing Others Total assets Borrowings Subordinated debt Deposits and other accounts Inter segment borrowing Others Total liabilities Equity Total equity and liabilities Contingencies and commitments 80 Consumer banking Corporate banking Treasury International and correspondent banking Head Office / Others ------------------------------------------------------------- (Rupees in million) ------------------------------------------------------------ 161,969 20,489 1,265,980 32,793 323,249 1,807 32,009 1,838,296 23,776 1,773,863 23,950 1,821,589 16,707 1,838,296 31,112 57,908 149 1,661 59,718 619 15,447 528,385 2,094 35,905 582,450 121,382 24,814 1,232,686 30,134 1,409,016 85,411 179,243 50,723 144,608 1,899 11,142 473,026 96,142 20,313 12,919 103,218 232,592 369,381 45,303 1,541,365 1,351,962 1,067,069 5,949 214,069 4,595,098 3,528 51,520 4,670 59,718 59,718 68,801 188,176 303,408 22,065 582,450 582,450 200,002 20 1,186,437 19,384 1,405,843 3,173 1,409,016 89,493 332,828 14,907 437,228 35,798 473,026 22,360 3,484 61,004 86,848 145,744 232,592 382,072 22,360 2,301,899 1,541,365 145,980 4,393,676 201,422 4,595,098 - 217,213 674,728 50,293 24,547 997,893 Subsidiary companies - - - 18,590,630 - - - - (1,625,607) 265,682 Closing balance - - - 17,230,705 Provision for diminution in value of investments - - - Advances Opening balance Addition during the period Repaid during the period Transfer in - net Closing balance - Provision held against advances - - - 837 837 - - 293,212 5,740 (22,837) 477 276,592 Deposits and other accounts Opening balance Received during the period Withdrawn during the period Transfer in - net Closing balance 26,259 70,121 (51,971) 4,757 49,166 Other liabilities Interest / mark-up payable Payable to staff retirement fund Other payables - Contingencies and Commitments Letter of credit Letter of guarantee Forward purchase of Government securities Forward sale of Government securities Interest rate swaps Others Securities held as custodians Associates Joint venture Other related parties --------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------ 13,961 Borrowings Opening balance Borrowings during the period Settled during the period Closing balance Total Group Entities - Other Assets Interest / mark-up accrued Receivable from staff retirement fund Other receivable As at December 31, 2019 (Audited) Key Management Personnel - Investments Opening balance Investment made during the period Investment redeemed / disposed off during the period Exchange translation impact For the three months ended March 31, 2019 (Unaudited) International and correspondent banking RELATED PARTY TRANSACTIONS 5 5 165,374 794,480 (662,541) 23,495 320,808 3,094 3,094 3,853,355 4,224,524 (4,044,262) 4,033,617 30,339 30,339 374,812 52,035 67,138 (49,069) 70,104 104,717 62 104,779 9,276,448 9,276,448 1,375,000 1,375,000 47,574 147,771 195,345 2,475,576 1,921,916 (1,560,334) 2,837,158 4,187,854 2,071,973 (5,259,105) 1,000,722 929,086 1,007,336 (936,200) 1,000,222 7,803,875 56,346,679 (56,503,312) 7,647,242 1,076,088 50,451,124 (49,989,259) 1,537,953 11,245,324 83,710,620 (83,713,452) 11,242,492 62,312 39,894 102,206 6,806 9,780 16,586 34,779 67,989 102,768 960 135,665 135,665 - 4,775,603 (12,158) 4,763,445 - - 7,924,625 2,680,347 (15,212) 10,589,760 - (1,726,437) 1,548,476 1,678,895 (1,560,334) 1,667,037 6,710 6,710 460,657 24,419 1,241 486,317 670,531 15,849,314 (15,884,729) 635,116 1,648 612,270 199,702 813,620 - - 302,221 129,559 29,951 1,080,503 1,542,234 12,475 12,475 1,375,000 1,375,000 - 3,543,206 3,185,301 446,338 7,174,845 - 15,735 6,506,575 - 36,068,565 - 8,825,455 26 25 81
43. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) Directors Profit and loss account Income Mark-up / return / profit / interest earned Fee and commission income Dividend income Loss from derivatives Gain on sale of securities - net Rent on properties Other income Expense Mark-up / return / profit / interest expensed Operating expenses Total compensation expense Non-Executive Directors' fees Insurance premium expense Advertisement and publicity Travelling Subscription Donation Other expenses Others Purchase of Government securities Sale of Government securities Purchase of foreign currencies Sale of foreign currencies Insurance claims settled For the three months ended March 31, 2020 (Unaudited) Key Group Subsidiary Joint Management Associates companies Entities venture Personnel Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) - 5,999 - 86,016 30,934 (16,233) - 127,079 6,648 (34,201) 9,301 1,214 82,624 220,298 314,344 (17,457) - 85 236,436 - 248,241 26,821 35,653 - 19,800 - 2,246 337,751 - 135,846 87,750 6,347 76,950 - 20,860 - 173,207 283,442 - 12,955 - 13,402 228,785 11,728 41,500 54,588 - 14,895 - 32,169,380 35,050,146 390,182 877,862 - 677,669 2,722,327 937,351 - 6,813,099 11,139,353 3,728 17,100 37,737 51 Directors Balances with other banks In current accounts Group Entities - - Subsidiary companies - - 215 - - Provision for diminution in value of investments - - - Advances Opening balance Addition during the year Repaid during the year Transfer (out) - net Closing balance - Provision held against advances - - - - 665 3,195 3,860 49,194 49,194 - 234,012 112,263 (48,840) (4,223) 293,212 - 3,536,393 5,302,656 (4,985,694) 3,853,355 2,290,315 8,423,723 (8,238,462) 2,475,576 350,881 18,111,059 479,571 18,590,630 - 40,806 56,271 (45,042) 52,035 - 56,948 57,079 114,027 10,370,969 (6,183,115) 4,187,854 Deposits and other accounts Opening balance Received during the year Withdrawn during the year Transfer in / (out) - net Closing balance Other liabilities Interest / mark-up payable Payable to staff retirement fund Other payables Contingencies and Commitments Letter of credit Letter of guarantee Forward purchase of Government securities Forward sale of Government securities Interest rate swaps Others Securities held as custodians 886,411 1,729,810 2,532,942 - Key Management Personnel Group Entities Subsidiary companies Associates Joint venture Other related parties --------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------72,451 475,433 (517,919) (3,706) 26,259 14,188 1,500,913 (1,351,466) 1,739 165,374 - 863 863 - Directors 7,181,954 291,153,125 (290,531,204) 7,803,875 1,366,812 215,020,749 (215,311,473) 1,076,088 4,499,559 383,397,316 (376,651,551) 11,245,324 - 45,717 69,334 115,051 7,169 35,669 42,838 40,441 123,558 163,999 - 502,087 142,888 1,154,173 1,799,148 12,921 181,610 194,531 1,375,000 1,375,000 - 2,655,788 386,193 3,041,981 8,730 7,195,675 28,665,515 - 8,526,920 - 7,076 7,076 778,919 133,112,658 (133,180,618) (40,428) 670,531 For the three months ended March 31, 2019 (Unaudited) Key Group Subsidiary Joint Management Associates Entities companies venture Personnel 1,258 577,964 158,202 737,424 Other related parties --------------------------------------------------------------- (Rupees in '000) -----------------------------------------------------------------Profit and loss account Associates Joint venture Other related parties --------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------ - Borrowings Opening balance Borrowings during the year Settled during the year Closing balance 82 Key Management Personnel Investments Opening balance Investment made during the year Investment redeemed / disposed off during the year Exchange translation impact Transfer (out) - net Closing balance Other Assets Interest / mark-up accrued Receivable from staff retirement fund Other receivable Directors --------------------------------------------------------------- (Rupees in '000) ------------------------------------------------------------------ As at December 31, 2019 (Audited) Statement of financial position As at December 31, 2019 (Audited) Other related parties - 11,523,187 (2,246,739) 9,276,448 - 1,500,000 (125,000) 1,375,000 - 44,448 277,475 321,923 2,499,514 2,754,171 (4,324,599) 929,086 2,569 135,665 135,665 - - 4,004,502 1,095,511 (158,960) (165,450) 4,775,603 - - 13,376,499 350,666,752 (347,323,286) (8,795,340) 7,924,625 - (1,726,437) - 1,388,619 4,750,143 (4,590,286) 1,548,476 224,553 24,419 1,852 250,824 - 27 Income Mark-up / return / profit / interest earned - 6,141 Fee and commission income - - Dividend income - - Foreign exchange loss - Loss from derivatives - Gain on sale of securities - net 76,190 75,274 37,840 1 14,561 633,326 - 335,423 77 202 - - 141 - 32,672 - - (42,709) - (91,590) - (142,046) - - - - - - - 483,256 - - Rent on properties - - - 9,444 - - - Other income - - - 1,955 - - - Mark-up / return / profit / interest expensed 686 836 98,523 6,775 81,589 5,815 9,992 Operating expenses - - - - - - - - - - - - Expense - Non-Executive Directors' fees 11,600 - - - Insurance premium expense - - - - Advertisement and publicity - - 8,470 - - - Travelling - - 15,085 - - - - Subscription - - - - - - 5,186 - - - - - - 34,136 - - - 277 - - - 3,929 Donation Other expenses Provision for diminution in value of investments 285,612 - Total compensation expense 273,357 - 223,071 759,873 Others Purchase of Government securities - - 34,312,314 - 6,436,859 - 27,763,285 Sale of Government securities - 7,996 50,469,440 - 9,254,045 - 34,138,131 Purchase of foreign currencies 15,863 - 498,325 1,804,431 2,763 - 3,597 Sale of foreign currencies - - 576,238 945,127 19,500 - 1,671,885 Insurance claims settled - - 117,516 - - - - 28 83
44. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 35 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS Minimum Capital Requirement (MCR): Paid-up capital (net of losses) Capital Adequacy Ratio (CAR): Eligible Common Equity Tier 1 (CET 1) Capital Eligible Additional Tier 1 (ADT 1) Capital Total Eligible Tier 1 Capital Eligible Tier 2 Capital Total Eligible Capital (Tier 1 + Tier 2) Risk Weighted Assets (RWAs): Credit Risk Market Risk Operational Risk Total Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 14,668,525 14,668,525 146,757,741 12,040,634 158,798,375 43,995,057 202,793,432 142,980,287 12,270,890 155,251,177 38,318,243 193,569,420 902,935,629 105,284,374 168,054,363 1,176,274,366 866,844,689 98,801,011 168,054,363 1,133,700,063 12.61% 13.69% 17.07% Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus any other buffer requirement) 9.50% 10.50% of which: capital conservation buffer requirement of which: countercyclical buffer requirement of which: D-SIB buffer requirement CET1 available to meet buffers (as a percentage of risk weighted assets) 1.50% 2.00% 6.48% 2.50% 2.00% 6.61% Other information: National minimum capital requirements prescribed by the SBP CET1 minimum ratio (%) Tier 1 minimum ratio (%) Total capital minimum ratio (%) 9.50% 11.00% 13.50% 10.50% 12.00% 14.50% Leverage Ratio (LR) Eligible Tier-1 Capital Total Exposures Leverage Ratio (%) Minimum Requirement (%) Liquidity Coverage Ratio (LCR) Average High Quality Liquid Assets Average Net Cash Outflow Liquidity Coverage Ratio (%) Minimum Requirement (%) Net Stable Funding Ratio (NSFR) Total Available Stable Funding Total Required Stable Funding Net Stable Funding Ratio (%) Minimum Requirement (%) The Bank operates 48 (December 31, 2019: 48) Islamic Banking branches and 493 (December 31, 2019: 493) Islamic Banking windows. STATEMENT OF FINANCIAL POSITION Note Cash and balances with treasury banks Balances with other banks Due from financial institutions Investments Islamic financing and related assets - net Fixed assets Intangible assets Due from Head Office Deferred tax assets Other assets LIABILITIES Bills payable Due to financial institutions Deposits and other accounts Due to Head Office Subordinated debt Deferred tax liabilities Other liabilities 36.1 36.2 36.3 36.4 36.5 NET ASSETS REPRESENTED BY Islamic Banking Fund Reserves Surplus / (deficit) on revaluation of investments - net of tax Unappropriated profit 36.6 Contingencies and commitments 36.7 PROFIT AND LOSS ACCOUNT 158,798,375 3,425,324,547 4.64% 155,251,177 3,417,160,879 4.54% 3.00% 3.00% Total Adjusted Value (Rupees in '000) 1,149,525,536 481,566,532 238.71% 906,731,376 585,290,046 154.92% 100.00% 100.00% Total Weighted Value (Rupees in '000) 2,306,952,666 1,398,263,034 164.99% 2,354,284,645 1,337,084,320 176.08% 100.00% 100.00% 29 84 ISLAMIC BANKING BUSINESS ASSETS 12.48% 13.50% 17.24% Common Equity Tier 1 Capital Adequacy ratio Tier 1 Capital Adequacy Ratio Total Capital Adequacy Ratio 36 Profit / return earned Profit / return expensed Net profit / return Other (loss) / income Fee and commission income Dividend income Foreign exchange (loss) / income Income from derivatives Loss on securities- net Others Total other (loss) / income 36.8 36.9 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 34,065,676 24,927,626 35,933,326 122,154,358 822,018 8,016,015 10,576,158 236,495,177 17,113,303 20,489,184 33,594,111 153,117,099 862,149 40,224,245 18,126 10,709,190 276,127,407 8,699 13,099,035 197,233,673 34,147 8,125,976 218,501,530 18,048 10,780,192 242,548,177 6,073,627 259,420,044 17,993,647 16,707,363 250,000 53,409 17,690,238 17,993,647 250,000 (28,352) 16,485,715 16,707,363 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) (Restated) 5,827,951 3,095,614 2,732,337 146,255 (24,984) (168,467) 2,218 (44,978) 3,915,761 1,854,361 2,061,400 152,288 6,503 (9,767) 1,971 150,995 Total income 2,687,359 2,212,395 Other expenses Operating expenses Workers' Welfare Fund Other charges Total other expenses Profit before provisions Provisions and write offs - net Profit before taxation Taxation Profit after taxation 595,333 40,301 220 635,854 2,051,505 76,737 1,974,768 770,245 1,204,523 503,269 34,137 537,406 1,674,989 2,284 1,672,705 652,355 1,020,350 30 85
45. Q UA RTE R LY RE PORT - M A RCH 2020 QUARTERLY REPORT - MARCH 2 0 2 0 Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) Notes to the Condensed Interim Unconsolidated Financial Statements (Unaudited) For the three months ended March 31, 2020 For the three months ended March 31, 2020 Notesthe to the Condensed Interim Unconsolidated For three months ended March 31,Financial 2020 Statements (Unaudited) 36.1 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Due from Financial Institutions 4,650,000 5,257,577 15,020,049 24,927,626 Unsecured Bai Muajjal Receivable from State Bank of Pakistan Bai Muajjal Receivable from other financial institutions 36.2 Cost / amortised cost Federal Government securities -Ijarah Sukuks - Bai Muajjal with Government of Pakistan Non-Government debt securities -Listed -Unlisted Total Investments Provision for diminution Surplus / (deficit) Carrying value 20,489,184 20,489,184 Provision for diminution Surplus / (deficit) Financial Institutions Current deposits Savings deposits Term deposits Carrying value 6,680,195 - 87,555 6,767,750 4,667,551 - (46,478) 4,621,073 10,794,000 17,474,195 - 87,555 10,794,000 17,561,750 10,794,000 15,461,551 - (46,478) 10,794,000 15,415,073 3,248,637 15,122,939 18,371,576 - - 3,248,637 15,122,939 18,371,576 3,564,480 14,614,558 18,179,038 - - 3,564,480 14,614,558 18,179,038 35,845,771 - 87,555 35,933,326 33,640,589 - (46,478) 33,594,111 Islamic financing and related assets - net (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) 2,070,920 977,805 47,181,826 10,000,000 749,570 15,000 860,035 18,501,408 196,916 4,864,182 6,878,222 27,780,837 599,216 473,647 227,135 556,775 500,000 122,433,494 2,171,508 1,095,324 83,342,719 10,000,000 770,666 16,085,686 276,530 973,239 6,295,175 26,191,522 400,000 293,209 3,808,372 1,615,548 153,319,498 (257,904) (21,232) (279,136) 122,154,358 (183,056) (19,343) (202,399) 153,117,099 9,395,273 3,703,762 13,099,035 2,500,000 5,409,205 2,870,987 10,780,192 36.6 36.7 Islamic Banking business unappropriated profit Opening Balance Add: Islamic Banking profit for the period / year Less: Taxation Closing Balance - Guarantees - Commitments 36.7.1 36.7.1 36.7.2 56,046,388 94,584,248 12,443,538 163,074,174 53,090,383 108,120,718 14,648,767 175,859,868 347,437 33,760,016 52,046 34,159,499 197,233,673 302,467 65,183,796 1,202,046 66,688,309 242,548,177 16,485,715 1,974,768 (770,245) 17,690,238 11,091,387 8,845,722 (3,451,394) 16,485,715 1,145,366 31,991,304 33,136,670 593,721 17,180,683 17,774,404 107,121 372,282 665,963 1,145,366 308,988 284,733 593,721 4,068,841 27,922,463 31,991,304 3,456,851 13,723,832 17,180,683 14,835,019 13,087,444 27,922,463 7,721,565 6,002,267 13,723,832 Guarantees Financial Guarantees Performance guarantees Other guarantees 36.7.2 (Unaudited) (Audited) March 31, December 31, 2020 2019 (Rupees in '000) Contingencies and commitments Commitments Trade-related contingent liabilities Commitments in respect of forward foreign exchange contracts 36.7.2.1 36.7.2.1 Commitments in respect of forward foreign exchange contracts Purchase Sale 36.8 Profit / return earned On: Financing Investments Placements Due to financial institutions Unsecured acceptance of funds Acceptances from the SBP under Islamic Export Refinance Scheme Acceptances from the SBP under Islamic Long Term Financing Facility Note Current deposits Savings deposits Term deposits ------------------------------------------------------------------------ (Rupees in '000) ------------------------------------------------------------------------------- Islamic financing and related assets - net of provision 86 Cost / amortised cost Deposits and other accounts Customers December 31, 2019 (Audited) Ijarah Murabaha Diminishing Musharakah Wakalah Istisna Tijarah Islamic Home Financing Running Musharakah Advance for Ijarah Advance for Murabaha Advance for Diminishing Musharakah Advance for Istisna Advance for Salam Inventories against Tijarah Inventories against Murabaha Inventories against Istisna Inventories against Salam Islamic financing and related assets - gross Provision against Islamic financing and related assets -Specific -General 36.4 36.5 Investments by segments March 31, 2020 (Unaudited) 36.3 Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) 36.9 3,737,797 1,252,191 837,963 5,827,951 2,372,516 1,173,051 370,194 3,915,761 2,988,557 60,540 21,534 24,983 3,095,614 1,482,584 341,243 15,380 15,154 1,854,361 Profit / return expensed On: Deposits and other accounts Due to financial institutions Cost against foreign currency deposits for Wa’ad based transactions Lease liability against right-of-use assets 31 (Unaudited) For the three months ended March 31, March 31, 2020 2019 (Rupees in '000) (Restated) 32 87
46. Q UA RTE R LY RE PORT - M A RCH 2020 Notes thethe Condensed Interim Unconsolidated Financial Statements (Unaudited) Notestoto Unconsolidated Financial Statements Notes to the Condensed Interim Unconsolidated For the three months ended March 31,Financial 2020 Statements (Unaudited) For the year ended December 31, 2019 For the three months ended March 31, 2020 37 NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE 37.1 The Board of Directors in its meeting held on April 22, 2020 has declared a cash dividend of Rs 1.25 per share in respect of the quarter ended March 31, 2020 (March 31, 2019: Rs 1.25 per share). These condensed interim unconsolidated financial statements do not include the effect of this appropriation which will be accounted for subsequent to the period end. 38 DATE OF AUTHORISATION FOR ISSUE These condensed interim unconsolidated financial statements were authorised for issue in the Board of Directors meeting held on April 22, 2020. 39 GENERAL 39.1 These condensed interim unconsolidated financial statements have been prepared in accordance with the revised format for financial statements of Banks issued by the SBP through BPRD Circular Letter No. 5 dated March 22, 2019 and related clarifications / modifications. 39.2 The comparative figures have been re-arranged and reclassified for comparison purposes. Muhammad Aurangzeb President and Chief Executive Officer President and Chief Executive Officer 88 Rayomond Kotwal Chief Financial Officer Chief Financial Officer Salim Raza Director Director Salim Yahya Chinoy Director Director Dr. Najeeb Samie Director Director 33
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