Soneri Bank: Third Quarterly Report - September 2019 (Un-audited)

Transcription

1. STROKE OF THE HUMAN ELEMENT THIRD QUARTERLY REPORT SEPTEMBER 2019 (UN-AUDITED)
2. Third Quarterly Report September 2019 (Un-audited)
3. CONTENTS Corporate Information ...................................................................................... 04 Condensed Interim Statement of Changes in Equity..................................13 Directors’ Review............................................................................................... 05 Condensed Interim Cash Flow Statement .................................................... 14 Condensed Interim Statement of Financial Position ................................. 10 Notes to the Condensed Interim Financial Statements .............................15 Condensed Interim Profit & Loss Account..................................................... 11 List of Branches.................................................................................................. 45 Condensed Interim Statement of Comprehensive Income .......................12
4. CORPORATE INFORMATION CHAIRMAN MR . ALAUDDIN FEERASTA CHIEF EXECUTIVE OFFICER MR. MOHAMMAD AFTAB MANZOOR DIRECTORS MR. NOORUDDIN FEERASTA MR. AMIN A. FEERASTA (EXECUTIVE DIRECTOR) MR. MUHAMMAD RASHID ZAHIR MR. MANZOOR AHMED (NIT NOMINEE) MR. INAM ELAHI MR. JAMIL HASSAN HAMDANI CHIEF FINANCIAL OFFICER MR. MIRZA ZAFAR BAIG COMPANY SECRETARY MR. MUHAMMAD ALTAF BUTT AUDITORS KPMG TASEER HADI & CO. CHARTERED ACCOUNTANTS SHARI’AH BOARD MUFTI EHSAN WAQUAR AHMAD (CHAIRMAN) MUFTI MUHAMMAD ZAHID (RESIDENT MEMBER) MUFTI BILAL AHMED QAZI (MEMBER) LEGAL ADVISORS MANAN ASSOCIATES, ADVOCATES DIRECTORS’ REVIEW REGISTERED OFFICE RUPALI HOUSE, 241-242, UPPER MALL SCHEME, ANAND ROAD, LAHORE - 54000 CENTRAL OFFICE 10TH FLOOR, PNSC BUILDING, M.T. KHAN ROAD, KARACHI-74000 REGISTRAR AND SHARE TRANSFER AGENT THK ASSOCIATES (PRIVATE) LTD., 1ST FLOOR, 40-C, BLOCK-6, P.E.C.H.S., KARACHI - 75400 UAN: (021) 111-000-322 FAX: (021) 34168271 On behalf of the Board of Directors, we are pleased to present the Directors’ Review of Soneri Bank Limited (“the Bank”), along with the unaudited condensed interim financial statements for the nine months’ period ended 30 September 2019. Economy Recent macro developments, including stabilization of the USD-PKR parity, reserve accumulation, and narrowing current account deficit, all point to a gradual stabilization of the economy. The rebalancing of the economy driven by PKR devaluation, higher interest rates, cuts in subsidies and development spending, and increases in tax revenues resulted in a sharp slowdown in demand growth. A higher than expected primary deficit in FY19 will necessitate further fiscal contraction to meet the IMF target for FY19/20. This can be expected to lead to a weaker than budgeted public sector investment. Although further interest rate hikes and FX devaluation are unlikely, growth is likely to be slow going forward, as fiscal consolidation and FX reserve accumulation continues. Amidst this backdrop, a GDP growth of around 2-4 percent can be expected over the next two years. Having narrowed 32 percent YoY to USD 13.5bn (4.7 percent of GDP) in FY19, the adjustment to the Current Account Deficit (CAD) has continued in FY20. In real terms, the CAD has narrowed to 2.8 percent of GDP in 2MFY20 vs. 5.5 percent a year ago, bringing the overall balance closer to more sustainable levels. The quality of the adjustment remains heavily skewed towards import contraction of 19 percent YoY– in reflection of demand compression, as opposed to nearly flat exports and 8 percent YoY contraction in remittances. Whilst remittances are likely driven by seasonality and can be expected to resume growth in the next few months, the continued weak performance of exports remains an element of serious concern. Exports have been on a declining trend for the six years running up to FY17, as the country lost its competitiveness due to appreciation of the PKR and absence of policy support to exporters. Exports have yet to show any material gains from the USD/PKR depreciation. Poor pricing dynamics globally, amidst weak market conditions, are weighing on the country’s dollar receipts. A gradual pick-up in exports over the next one to two years can be expected as the sector regains competitiveness and starts to re-invest in its productive capacity. The gradual recovery will be dictated by the intensifying competitive landscape, as well as challenging global macro conditions. Despite revenue shortfalls, the fiscal trajectory is gradually being shifted towards a more sustainable position. The fiscal performance in the first three months of FY20 has been largely encouraging, with FBR collections up 14 percent YoY. The IMF sent a reassuring message in its first assessment of the programme, citing significant improvement in tax revenue collections, while downplaying the negative impact of the worse than expected FY19 numbers, saying that they should not jeopardize the ambitious fiscal targets for FY20. Citing an ambitious strategy to reduce fiscal imbalances, the government has embarked on a decisive strategy to offload public assets and privatization. Inflation continued to accelerate in September, reaching 12.5 percent YoY from 11.6 percent in August, hitting a seven-year high as the impact of the macro adjustment measures continues to filter through consumer prices. It can be said that inflation has largely peaked, considering recent currency stability, largely stable oil prices and the fact that most fiscal measures have been already implemented. The country’s foreign relations have improved over the tenure of the current government. China remains committed to the BRI (Belt Road Initiative), of which CPEC is a major part, and the GCC continues to promise financial support. The relations with the US have also improved. However, tensions with neighboring India remain a source of market volatility, potentially hampering foreign flow, and the Persian Gulf tensions could drive unfavorable oil price spikes. The KSE 100 is down 36 percent in PKR terms from its 2017 peak. However, the Stock Market came out of a 7 month long run of negative monthly closings, with benchmark KSE-100 index posting an 8 percent return in September 2019, reducing losses for the year, with the YTD return now standing at -13 percent for 2019. Since the beginning of 2018, the SBP raised the benchmark interest rates by 750bps, setting the platform for a strong recovery in spreads and profitability metrics for the Banks. However, potential asset quality threats have remained, and losses on equity portfolios have had an impact on bottom line profitability. Quicker deposit re-pricing on short tenors has weighed on spread improvement over the past few quarters, but asset yields should outpace funding cost increases with interest rate stability. Secondary market yields underwent a major correction in the current quarter, most visible in the 10-year PIB yields, which corrected from a peak of 13.9 percent to 11.9 percent as the market entered an inverted yield curve phase, which continued to invert sharply as the quarter progressed. The Bank shall continue to follow a risk-based and cautious approach towards its business and lending, taking into account factors that continue to shape the competitive landscape. 4 SONERI BANK LIMITED SONERI BANK LIMITED 5
5. DIRECTORS ’ REVIEW The Bank’s Performance and Operating Results The summarized financial position and operating results of the Bank for the nine months’ period ended 30 September 2019 are as follows: As at As at 30 September 31 December 2019 2018 -------(Rupees in ‘000)------ FINANCIAL POSITON Advances – net Investments – net Total Assets Total Deposits Shareholders’ Equity FINANCIAL PERFORMANCE Net Interest Income Non Mark-up Income Total Income Non Mark-up Expenses Reversals Profit before tax Profit after tax Earnings per share (Rupees) 199,274,964 210,957,425 464,344,932 280,562,683 18,564,697 186,475,183 146,645,533 382,497,788 262,378,761 17,988,874 Period ended Period ended 30 September 30 September 2019 2018 -------(Rupees in ‘000)-----5,967,139 1,721,770 7,688,909 6,118,352 (495,094) 2,065,651 1,211,090 1.0985 5,000,867 2,333,501 7,334,368 5,482,344 (315,245) 2,167,269 1,293,608 1.1734 The Bank posted Profit before tax (PBT) of Rs. 2,065.651 million and Profit after tax (PAT) of Rs. 1,211.090 million for the nine months’ period ended September 2019, as compared to Rs. 2,167.269 million and Rs. 1,293.608 million respectively in the comparative prior period. The adoption of IFRS 16 during the current period has impacted the profitability, with PBT appearing lower by Rs. 155.318 million. The Bank’s EPS for the period amounted to Rs. 1.0985 as against Rs. 1.1734 for the same period last year. The EPS for the current period was Rs. 0.0916 per share lower, as a result of the adoption of IFRS 16. Despite the negative impact of capital market losses (as against gains tapped in the prior comparative period) arising as a result of continuous weakening of the Stock Market over the course of the year, the Bank has been able to maintain and deliver sustainable earnings over the nine months’ period ended 30 September 2019. It is important to note that the Bank’s Net mark-up income increased by Rs. 966.272 million as compared to the same period last year, indicating an increase of 19.32 percent. Core Fee and Commission income also improved by 17.05 percent, rising to Rs. 1,366.984 million at 30 September 2019. Exchange earnings improved by 5.99 percent to Rs. 749.338 million, whereas, capital losses (net of dividends) of Rs. 421.883 million were booked in the current reporting period, as against net gains of Rs. 426.004 materialized in the corresponding period last year. This swing alone, negatively impacted year on year profitability by Rs. 847.887 million. As a result, non mark-up income of the Bank for the nine months ended 30 September 2019 stood lower by Rs. 611.731 million as against the corresponding period last year, ending at Rs. 1,721.770 million. Nonetheless, the positive growth recorded in net mark-up income outpaced the decline in non mark-up income, and resultantly, the overall revenue of the Bank increased to Rs. 7,688.909 million at 30 September 2019 from Rs. 7,334.368 million recorded in the corresponding period last year, improving by 4.83 percent. Net Investments witnessed a significant volumetric increase of Rs. 64,311.892 million or 43.86 percent from the year-end balance of Rs. 146,645.533 million ending at Rs. 210,957.425 million as at 30 September 2019. The Bank continued its gradual and cautious built up of its position in government securities, after taking a fair view on the interest rates. This enhanced deployment led to an improvement to the overall investment yields while the overall interest margins also improved. Additional liquidity requirement was met through enhanced Borrowings, which represent an increase of Rs. 60,829.171 million from the year end position. As at 30 September 2019, total deposits were reported at Rs. 280,562.683 million, registering a growth of Rs. 18,183.922 million or 6.93 percent as against the year end 2018 position. Out of the total increase, current deposits increased by Rs. 5,578.497 million, or 8.43 percent as compared to the year-end position. Overall net provision reversals reflect an improvement of Rs. 179.849 million year on year, positively impacting the bottom line. The retrospective imposition of super tax on 2017 earnings led to an increase in the Bank’s effective tax rate in the current period. At 30 September 2019, the Bank’s CAR stood at 15.17 percent (December 2018: 14.70 percent), while the Bank’s LCR and NSFR ratios figured at 108.79 percent and 114.36 percent respectively. The Board remains confident that the Bank would continue to achieve its desired KPIs and meet the expectations of our shareholders. We continue to monitor progress regularly, with focus on sustainable revenue generation options and adherence to a stringent cost control discipline. Credit Rating The Pakistan Credit Rating Agency (PACRA) maintained the Bank’s credit rating of AA- for long term and A1+ for short term with a stable outlook. PACRA has maintained the credit rating of unsecured, subordinated and listed Term Finance Certificates (TFC – 2) issue of worth PKR 3,000 million at A+ (Single A plus) with a stable outlook, and the rating of the Bank’s unsecured, subordinated, rated, listed, perpetual, non-cumulative and contingent convertible Term Finance Certificates (ADT – 1) issue of worth PKR 4,000 million at A (Single A) with Stable Outlook. The ratings were re-affirmed in June 2019. Acknowledgment We take this opportunity to thank the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan, and the Ministry of Finance for their support throughout. We would also like to thank our valued customers for their continued patronage, and appreciate our employees for their dedication, hard work and commitment. On behalf of the Board of Directors, MOHAMMAD AFTAB MANZOOR President & Chief Executive Officer ALAUDDIN FEERASTA Chairman Karachi: 24 October 2019 Non mark-up expenses increased by 11.60 percent to Rs. 6,118.352 million for the nine months ended 30 September 2019. Key contributors to the increase include full impact of branches opened last year, staff related costs, technology driven costs, additional premium under SBP’s Depositor Protection Scheme, and additional depreciation over and above rental costs resulting from the implementation of IFRS 16 during the current period. On the balance sheet, net advances portfolio grew by 6.86 percent, or Rs. 12,799.781 million to Rs. 199,274.964 million as at 30 September 2019 when compared to Rs. 186,475.183 million at 31 December 2018. Non-performing loans stood at Rs. 10,662.893 million, showing an improvement of 6.11 percent from the year end 2018 position. With the reduction in NPLs and increase in provisioning charge considered in the current quarter, the Bank’s specific provision coverage, which had reduced to 69.83 percent as at 30 June 2019, improved to 71.90 percent as at 30 September 2019. At the same time, the Bank’s infection ratio improved to 5.15 percent (December 2018: 5.83 percent). 6 SONERI BANK LIMITED SONERI BANK LIMITED 7
6. ---------- ‘000 ---------- 69.83 ---------- 8 SONERI BANK LIMITED ‘000 ---------- SONERI BANK LIMITED 9
7. CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED) AS AT 30 SEPTEMBER 2019 FOR THE QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2019 For the quarter ended For the nine months ended 30 September 30 September 30 September 30 September Note 2019 2018 2019 2018 (Restated) (Restated) ------------------------------(Rupees in '000)------------------------------ (Un-audited) (Audited) 30 September 31 December 2019 2018 Note ---------(Rupees in ‘000)--------ASSETS Cash and balances with treasury banks 6 24,527,882 26,019,679 Balances with other banks 7 1,693,211 1,179,612 Lendings to financial and other institutions 8 4,503,031 3,921,270 Investments 9 210,957,425 146,645,533 Advances 10 199,274,964 186,475,183 Fixed assets 11 8,258,656 6,238,673 Intangible assets 12 377,118 454,536 - - 14,752,645 11,563,302 464,344,932 382,497,788 Deferred tax assets Other assets 13 LIABILITIES Bills payable 15 3,520,817 3,993,525 Borrowings 16 142,792,088 81,962,917 Deposits and other accounts 17 280,562,683 262,378,761 - - 6,995,200 6,996,400 Liabilities against assets subject to finance lease Subordinated debt 18 Deferred tax liabilities 19 347,599 120,054 Other liabilities 20 11,561,848 9,057,257 445,780,235 364,508,914 18,564,697 17,988,874 NET ASSETS Mark-up / return / interest earned Mark-up / return / interest expensed 23 11,531,366 5,642,045 26,985,559 15,114,013 24 9,459,771 3,939,837 21,018,420 10,113,146 2,071,595 1,702,208 5,967,139 5,000,867 461,560 389,277 1,366,984 1,167,838 67,261 61,913 206,628 152,973 223,400 238,037 749,338 706,993 273,031 Net mark-up / interest income Non mark-up / interest income Fee and commission income 25 Dividend income Foreign exchange income (Loss) / gain on securities - net 26 (133,904) (24,079) (628,511) Other income 27 10,963 17,412 27,331 32,666 629,280 682,560 1,721,770 2,333,501 2,700,875 2,384,768 7,688,909 7,334,368 2,084,811 1,911,391 6,172,658 5,416,289 9,310 11,999 (113,694) 49,508 37 3 59,388 16,547 2,094,158 1,923,393 6,118,352 5,482,344 606,717 461,375 1,570,557 1,852,024 173,762 (81,629) (495,094) (315,245) - - - 432,955 543,004 2,065,651 2,167,269 196,864 225,378 854,561 873,661 236,091 317,626 1,211,090 1,293,608 Total non-markup / interest income Total income Non mark-up / interest expenses 28 Operating expenses 28.3 Workers' welfare fund 29 Other charges Total non mark-up / interest expenses Profit before provisions Provision /(reversals) and write offs - net 30 - Extraordinary / unusual items Profit before taxation 31 Taxation REPRESENTED BY Share capital Reserves 21 Surplus on revaluation of assets Unappropriated profit 11,024,636 11,024,636 2,351,445 2,109,227 954,323 542,637 4,234,293 4,312,374 18,564,697 17,988,874 22 CONTINGENCIES AND COMMITMENTS 10 Alauddin Feerasta Chairman SONERI BANK LIMITED Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director -------------------------------------(Rupees)---------------------------------Basic earnings per share 32 0.2141 0.2881 1.0985 1.1734 Diluted earnings per share 33 0.2141 0.2881 1.0985 1.1734 The annexed notes 1 to 42 form an integral part of these condensed interim financial statements. The annexed notes 1 to 42 form an integral part of these condensed interim financial statements. Mirza Zafar Baig Chief Financial Officer Profit after taxation Manzoor Ahmed Director Mirza Zafar Baig Chief Financial Officer Alauddin Feerasta Chairman Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director Manzoor Ahmed Director SONERI BANK LIMITED 11
8. CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED) CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDITED) FOR THE QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2019 FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019 For the quarter ended 30 September 30 September 2019 2018 For the nine months ended 30 September 30 September 2019 2018 Surplus / (deficit) on UnapproShare Statutory priated revaluation of capital reserve profit Fixed (a) Investments assets (b) ---------------------------(Rupees in '000)-------------------------- ---------------------------Rupees in '000--------------------------Profit after taxation for the period 236,091 317,626 1,211,090 1,293,608 Balance as at 01 January 2018 11,024,636 1,752,494 Other comprehensive income Comprehensive income for the period Profit after taxation for the nine months ended 30 September 2018 Items that may be reclassified to profit and loss account in subsequent periods: Other comprehensive income / (loss) Movement in deficit on revaluation of investments - net of tax Remeasurement gain on defined benefit obligations - net of tax Movement in surplus / (deficit) on revaluation of investments - net of tax 517,786 (349,573) 467,196 Remeasurement gain on defined benefit obligations - net of tax Total comprehensive income / (loss) 753,877 1,631 (30,316) 1,678,286 4,892 494,685 1,952,127 3,632,370 18,504,599 - - - 1,293,608 1,293,608 - - (803,815) (803,815) - 4,892 1,298,500 (803,815) 4,892 494,685 Transfer to statutory reserve - 258,722 - - (258,722) - Transfer from surplus on revaluation of assets to unappropriated profit - net of tax - - - (47,567) 47,567 - - - - - (826,848) (826,848) 11,024,636 2,011,216 (660,843) 1,904,560 Transactions with owners recorded directly in equity Final cash dividend for the year ended 31 December 2017 at Re. 0.75 per share Balance as at 30 September 2018 Comprehensive income for the period Profit after taxation for the quarter ended 31 December 2018 The annexed notes 1 to 42 form an integral part of these condensed interim financial statements. 142,972 - (803,815) Items that will not be reclassified to profit and loss account in subsequent periods: Total 3,892,867 18,172,436 - - - - 490,056 490,056 - - (685,893) (685,893) - 12,275 502,331 (685,893) 12,275 (183,562) Transfer to statutory reserve - 98,011 - - (98,011) - Transfer from surplus on revaluation of assets to unappropriated profit - net of tax - - - (15,187) 15,187 - 11,024,636 2,109,227 (1,346,736) 1,889,373 Other comprehensive income / (loss) Movement in deficit on revaluation of investments - net of tax Remeasurement gain on defined benefit obligations - net of tax Balance as at 01 January 2019 Comprehensive income for the period Profit after taxation for the nine months ended 30 September 2019 4,312,374 17,988,874 - - - - 1,211,090 1,211,090 - - 467,196 467,196 - 1,211,090 467,196 1,678,286 Transfer to statutory reserve - 242,218 - - (242,218) - Transfer from surplus on revaluation of assets to unappropriated profit - net of tax - - - (55,510) 55,510 - Transactions with owners recorded directly in equity Final cash dividend for the year ended 31 December 2018 at Rs. 1.00 per share - - - - (1,102,463) (1,102,463) 11,024,636 2,351,445 (879,540) 1,833,863 4,234,293 18,564,697 Other comprehensive income / (loss) Movement in deficit on revaluation of investments - net of tax Balance as at 30 September 2019 (a) This represents reserve created under section 21(i)(a) of the Banking Companies Ordinance, 1962. (b) As explained in note 10.3.3 to these condensed financial statements, unappropriated profit includes an amount of Rs. 1,664.109 million net of tax as at 30 September 2019 (31 December 2018: Rs. 1,107.124 million) representing additional profit arising from availing forced sales value benefit for determining provisioning requirement which is not available for distribution either as cash or stock dividend to shareholders and bonus to employees. The annexed notes 1 to 42 form an integral part of these condensed interim financial statements. Mirza Zafar Baig Chief Financial Officer 12 Alauddin Feerasta Chairman SONERI BANK LIMITED Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director Manzoor Ahmed Director Mirza Zafar Baig Chief Financial Officer Alauddin Feerasta Chairman Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director Manzoor Ahmed Director SONERI BANK LIMITED 13
9. CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED) NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL STATEMENTS (UN-AUDITED) FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019 FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2019 30 September 2019 Note 30 September 2018 1 Soneri Bank Limited ("the Bank") was incorporated in Pakistan on 28 September 1991 as a public limited company under the repealed Companies Ordinance, 1984 (now Companies Act, 2017). Its registered office is situated at Rupali House 241-242, Upper Mall Scheme, Anand Road, Lahore, Punjab and its shares are quoted on Pakistan Stock Exchange Limited. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962 and operates with 296 branches including 21 Islamic banking branches (31 December 2018: 295 branches including 21 Islamic banking branches) in Pakistan. The credit rating of the Bank is disclosed in note 34 of these condensed interim financial statements. -------(Rupees in ‘000)-----CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Less: dividend income 2,065,651 206,628 1,859,023 2,167,269 152,973 2,014,296 394,406 84,888 213,173 104,879 197,219 (495,094) (10,309) (113,694) 5,023 380,491 2,239,514 360,560 82,282 86,732 (315,245) (18,862) 49,508 2,035 247,010 2,261,306 (581,761) (1,631,243) (12,306,046) (3,474,206) (17,993,256) STATUS AND NATURE OF BUSINESS 2 BASIS OF PRESENTATION 2.1 These condensed interim financial statements have been prepared in conformity with the format of financial statements prescribed by the State Bank of Pakistan (SBP) vide BPRD Circular No. 5 dated 22 March 2019. 2.2 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, SBP has issued various circulars from time to time. Permissible forms of trade-related modes of financing includes purchase of goods by banks from customers and immediate resale to them at appropriate mark-up in price on deferred payment basis. The purchase and resale arising under these arrangements are not reflected in these condensed interim financial statements as such, but are restricted to the amount of facility actually utilized and the appropriate portion of mark - up thereon. However, the Islamic Banking branches of the Bank have complied with the requirements set out under the Islamic Financial Accounting Standards (IFAS), issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under the provisions of Companies Act, 2017. 1,187,219 2,956,570 (9,137,543) 180,733 (4,813,021) 2.3 The financial results of all Islamic banking branches of the Bank have been consolidated in these condensed interim financial statements for reporting purposes, after eliminating material intra branch transactions / balances. The financial results of all Islamic banking branches are disclosed in note 39 to these condensed interim financial statements. 3 STATEMENT OF COMPLIANCE (969,875) (15,552,834) 13,880,638 4,786,171 2,144,100 (777,859) (1,185,474) 3.1 These condensed interim financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of: Income tax paid Net cash flow generated from / (used in) operating activities (472,708) 61,084,695 18,183,922 377,368 79,173,277 (743,351) 62,676,184 CASH FLOWS FROM INVESTING ACTIVITIES Net investments in available-for-sale securities Net investments in held-to-maturity securities Dividends received Investments in operating fixed assets Proceeds from sale of fixed assets Net cash flow (used in) / generated from investing activities (55,474,788) (6,494,155) 174,328 (518,865) 18,285 (62,295,195) 5,660,838 433,954 135,284 (583,639) 23,938 5,670,375 CASH FLOWS FROM FINANCING ACTIVITIES Payments of subordinated debt Dividend paid Net cash flow used in financing activities (1,200) (1,102,463) (1,103,663) (1,200) (826,848) (828,048) Increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (722,674) 26,911,493 26,188,819 3,656,853 20,305,022 23,961,875 24,527,882 1,693,211 (32,274) 26,188,819 22,306,862 1,715,964 (60,951) 23,961,875 Adjustments: Depreciation on fixed assets Depreciation on ijarah assets Depreciation on right-of-use assets Amortisation Interest expense on lease liability against right-of-use assets (Reversals) / provisions and write offs - net Gain on sale of fixed assets - net Workers' welfare fund Unrealised loss on revaluation of investments classified as held-for-trading 30 27 26 (Increase) / decrease in operating assets Lendings to financial and other institutions Held-for-trading securities Advances Others assets (excluding advance taxation) Increase / (decrease) in operating liabilities Bills payable Borrowings from financial institutions Deposits Other liabilities CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD Cash and balances with treasury banks Balances with other banks Overdrawn nostro accounts 6 7 16 The annexed notes 1 to 42 form an integral part of these condensed interim financial statements. - International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; - Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are notified under the Companies Act, 2017; - Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and - Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP). Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the SBP and the SECP differ with the requirements of IFRS or IFAS, the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the said directives prevail. 3.2 The SBP vide BSD Circular letter No. 10, dated 26 August 2002 has deferred the applicability of International Accounting Standard 39, Financial Instruments: Recognition and Measurement and International Accounting Standard 40, Investment Property for banking companies till further instructions. Moreover, SBP vide BPRD circular no. 4, dated 25 February 2015 has deferred the applicability of Islamic Financial Accounting Standards (IFAS) 3, Profit and Loss Sharing on Deposits. Further, according to the notification of the SECP issued vide SRO 411(I)/2008 dated 28 April 2008, International Financial Reporting Standard (IFRS) 7, Financial Instruments: Disclosures has not been made applicable for banks. Accordingly, the requirements of these standards have not been considered in the preparation of these condensed interim financial statements. However, investments have been classified and valued in accordance with the requirements of various circulars issued by the SBP. 3.3 The disclosures made in these condensed interim financial statements have been limited based on a format prescribed by the SBP vide BPRD Circular Letter No. 5 dated 22 March 2019 and IAS 34, Interim Financial Reporting. They do not include all the disclosures required for annual financial statements, and these condensed interim financial statements should be read in conjunction with the financial statements of the Bank for the year ended 31 December 2018. 3.4 Standards, interpretations and amendments to published accounting and reporting standards that are effective in the current period: IFRS 16, the accounting standard for leases, became effective for annual reporting periods commencing on or after 1 January 2019.The impact of the adoption of IFRS 16 on the Bank's condensed interim financial statements is disclosed in note 4.1.2 of these financial statements. Mirza Zafar Baig Chief Financial Officer 14 Alauddin Feerasta Chairman SONERI BANK LIMITED Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director Manzoor Ahmed Director SONERI BANK LIMITED 15
10. In addition , there are certain other new standards and interpretations of and amendments to existing accounting standards that have become applicable to the Bank for accounting periods beginning on or after 1 January 2019. These are considered either to not be relevant or not to have any significant impact on the Bank's financial statements." 3.5 Standards, interpretations and amendments to published accounting and reporting standards that are not yet effective in the current period The following new standards and amendments to existing accounting standards will be effective from the dates mentioned below against the respective standard or amendment: - IFRS 3, Business Combinations (Amendments) - IAS 1, Presentation of Financial Statements (Amendments) - IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (Amendments) - IFRS 9, Financial Instruments Effective date (annual periods beginning on or after) 1 January 2020 1 January 2020 1 January 2020 Effective date (periods ending on or after) 1 January 2021 IFRS 9 'Financial Instruments' and amendment — Prepayment Features with Negative Compensation (effective for annual periods beginning on or after 1 July 2018 and 1 January 2019 respectively)- IFRS 9 replaces the existing guidance in lAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from lAS 39. The Securities and Exchange Commission of Pakistan vide its notification dated 14 February 2019 modified the effective date for implementation of IFRS 9 as 'reporting period / year ending on or after 30 June 2019 (earlier application is permitted)'. SBP had earlier informed the Bank that keeping in view the implementation challenges of IFRS 9 and representations by the banking industry, IFRS 9 would not be applicable on financials of period ending 30 June 2019 for banks / DFIs / MFBs. Thereafter, the SBP vide BPRD Circular No 4 of 2019, dated 23 October 2019 has issued fresh timelines for implementation of the said standard, and has issued detailed instructions over the steps required to be undertaken, setting 01 January, 2021 as the effective date of implementation The Bank expects that adoption of the remaining amendments will not affect its financial statements in the period of initial application. 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 4.1 The significant accounting policies and the methods of computation used in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended 31 December 2018 except for the following: 4.1.1 The State Bank of Pakistan (SBP) through its BPRD Circular No. 5 dated 22 March 2019 has amended the format of quarterly and half yearly financial statements of banks. All banks are directed to prepare their quarterly financial statements on the revised format effective from accounting year starting from 1 January 2019. Accordingly, the Bank has prepared these condensed interim financial statements on the new format prescribed by the State Bank of Pakistan. - Condensed Interim Profit and Loss Account As a result of adoption of the revised format, the figures for the quarter and nine month period ended 30 September 2018 in the condensed interim profit and loss account have been reclassified and reflected based on the requirements of the revised format. - Condensed Interim Statement of Comprehensive Income As a result of adoption of the revised format, the figures for the quarter and nine month period ended 30 September 2018 in the condensed interim statement of comprehensive income have been restated to incorporate the effect of movement in surplus on revaluation of fixed assets and non-banking assets. 4.1.2 16 In the period, 'IFRS 16 - Leases' became applicable to the Banks. IFRS 16 replaces existing guidance on accounting for leases, including 'IAS 17, Leases', 'IFRIC 4, Determining whether an Arrangement contains a Lease', 'SIC-15, Operating Leases - Incentive', and 'SIC-27, Evaluating the Substance of Transactions Involving the Legal Form of a Lease'. IFRS 16 introduces single lease accounting model and requires a lessee to recognise assets and liabilities of all leases with a term of more than twelve months unless the underlying assets are of low value. A lessee recognizes a right-of-use asset representing its right of using the underlying asset and a corresponding lease liability representing its obligations to make lease payments. Lessor accounting remains similar to the current standard i.e. lessors continue to classify leases as either finance or operating leases. SONERI BANK LIMITED The Bank adopted IFRS 16 using the modified retrospective approach with the date of initial application of 01 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard being recognised at the date of initial application. The Bank has elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Bank also elected to use the recognition exemptions for lease contracts that, at the commencement date, having a lease term of 12 months or less and do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset is of low value (‘low-value assets’). The Bank has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and adjustments arising from the initial application of the standard are therefore recognized in the Statement of Financial Position as on 01 January 2019. On adoption of IFRS 16, the Bank has recognised liabilities in respect of leases which had previously been classified as operating leases under IAS 17. These liabilities were initially measured as the present value of the remaining lease payments, discounted using the Bank’s incremental weighted average borrowing rate of 15.03% per annum at 1 January 2019. The lease liability is subsequently measured at amortised cost using the effective interest rate method. As at 01 As at 30 September January 2019 2019 (Un-audited) (Rupees in '000) Lease liability recognised 1,985,843 1,834,549 On adoption of IFRS 16, the associated right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of prepaid lease payments recognised in the statement of financial position immediately before the date of initial application. The right-of-use assets recognised subsequent to the adoption are measured based on the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred. The right-of-use assets are depreciated on a straight line basis over the lease term as this method most closely reflects the expected pattern of consumption of future economic benefits. The right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements of lease liability. As at 30 As at 01 September January 2019 2019 (Un-audited) (Rupees in '000) The recognised right-of-use assets relate to the following types of assets: Right of Use Asset - Property 1,931,372 1,944,125 1,931,372 (100,847) 54,361 1,884,886 1,944,125 (109,576) 1,834,549 (1,985,843) (1,834,549) (100,957) - The effect of the change in accounting policy is as follows: Impact on Statement of Financial Position Increase in fixed assets - RoU assets Decrease in other assets - advances, deposits and prepayments Increase in other assets - advance taxation Increase in other liabilities - lease liability in respect of RoU assets (Decrease) / increase in net assets Impact on Profit and Loss Account For the nine months ended 30 September 2019 (Un-audited) (Rupees in '000) (197,219) Increase in mark-up expense - lease liability against RoU asset (Increase) / decrease in administrative expenses: - Depreciation of RoU assets - Rent expense Decrease in profit before tax Decrease in taxation Decrease in profit after tax (213,173) 255,074 (155,318) 54,361 (100,957) SONERI BANK LIMITED 17
11. Earnings per share for the nine months period ended 30 September 2019 are Rs . 0.0916 per share lower as a result of the adoption of IFRS 16. 9 INVESTMENTS 9.1 Investments by type: While implementing IFRS 16, the Bank has used a single discount rate methodology for a portfolio of leases with similar characteristics. The Bank has opted not to recognise right-of-use assets for leases of low value. The payments associated with such leases are recognised as an expense on a straight line basis over the lease term. Cost / amortised cost 5 BASIS OF MEASUREMENT AND FINANCIAL RISK MANAGEMENT 5.1 These condensed interim financial statements have been prepared under the historical cost convention except that certain operating fixed assets / non-banking assets acquired in satisfaction of claims have been stated at revalued amounts, certain investments and derivative financial instruments have been stated at fair value and net obligations in respect of defined benefit schemes and lease liability under IFRS 16 are carried at their present values. Held-for-trading securities Federal Government securities Shares Judgments and estimates Available-for-sale securities Federal Government securities Shares Non-Government debt securities Units of mutual funds 5.2 Held-to-maturity securities Federal Government securities Non Government debt securities The significant judgments made by management in applying its accounting policies and the key sources of estimation uncertainty were the same as those applied to the financial statements of the Bank for the year ended 31 December 2018. 5.3 Financial risk management Total investments 9.2 8,856,928 185,635,659 4,244,315 3,459,120 215,213 193,554,307 9,879,778 144,205 10,023,983 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 against foreign currency deposits mobilised With National Bank of Pakistan in Local currency current accounts Prize bonds 7 BALANCES WITH OTHER BANKS In Pakistan In current accounts In deposit accounts Outside Pakistan In current account 8 (Un-audited) (Audited) 30 September 31 December 2019 2018 ------(Rupees in '000)-------5,645,862 1,329,039 6,974,901 4,801,197 3,897,197 8,698,394 12,875,611 868,612 11,253,545 990,087 2,370,021 16,114,244 2,877,854 15,121,486 1,217,946 2,185,378 220,791 14,421 24,527,882 26,019,679 12,029 50,957 62,986 12,022 184,908 196,930 1,630,225 1,693,211 982,682 1,179,612 800,000 2,977,186 25,845 700,000 4,503,031 3,921,270 3,921,270 Provision for diminution Surplus / (deficit) Carrying value Cost / amortised cost Provision for diminution Surplus / (deficit) Carrying value - (5,023) (5,023) 8,851,905 8,851,905 7,225,664 7,225,664 - 21 21 7,225,685 7,225,685 - (574,638) 185,061,021 130,337,353 - (1,574,373) 128,762,980 3,456,943 4,471,440 31,503 33,537 (753,835) (565,970) 3,873,967 32,393 3,491,513 3,011,459 117,559 3,129,018 (57,059) 158,154 (49,118) 210,149 259,267 33,537 (1,353,139) 192,167,631 138,079,519 31,503 (2,071,902) 135,976,114 86,094 86,094 - 9,879,778 58,111 9,937,889 3,306,438 223,390 86,094 3,529,828 86,094 - 3,306,438 137,296 3,443,734 212,435,218 119,631 (1,358,162) 210,957,425 148,835,011 117,597 (2,071,881) 146,645,533 Investments by segments: The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the financial statements for the year ended 31 December 2018. 6 (Audited) 31 December 2018 ---------------------------------------------(Rupees in '000)-------------------------------------------- 8,856,928 The preparation of these condensed interim financial statements in conformity with accounting and reporting standards requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and income and expenses. It also requires management to exercise judgment in the application of its accounting policies. The estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. These estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future periods. (Un-audited) 30 September 2019 Cost / amortised cost (Un-audited) (Audited) 30 September 2019 31 December 2018 Provision for diminution Surplus / (deficit) Carrying value Cost / amortised cost Provision for diminution Surplus / (deficit) Carrying value ---------------------------------------------(Rupees in '000)-------------------------------------------Federal Government Securities Market Treasury Bills 13,739 136,699,358 96,248,954 (5,889) 96,243,065 136,685,619 Pakistan Investment Bonds 65,029,372 - (582,158) 64,447,214 42,145,713 - (1,561,303) 40,584,410 Bai Muajjal from Government of Pakistan (GoP) 2,272,374 2,074,788 2,074,788 2,272,374 Ijarah sukuks 373,758 392,840 (11,242) (7,160) 385,000 400,000 - (579,661) 203,792,704 140,869,455 - (1,574,352) 139,295,103 204,372,365 Units of mutual funds Shares: Listed companies Un-listed companies Non-Government debt securities Listed Unlisted Total investments (57,059) 158,154 4,227,515 16,800 4,244,315 27,837 (753,835) 5,700 33,537 (753,835) 696,499 2,906,826 3,603,325 16,269 69,825 86,094 215,213 - 2,854 29,539 32,393 - (49,118) 210,149 3,445,843 11,100 3,456,943 4,454,640 25,803 16,800 5,700 4,471,440 31,503 (565,970) (565,970) 3,862,867 11,100 3,873,967 683,084 2,866,540 3,549,624 422,794 16,269 2,812,055 69,825 3,234,849 86,094 4,096 113,463 117,559 410,621 2,855,693 3,266,314 259,267 212,435,218 119,631 (1,358,162) 210,957,425 148,835,011 117,597 (2,071,881) 146,645,533 LENDINGS TO FINANCIAL AND OTHER INSTITUTIONS Call / clean money lendings Repurchase agreement lendings (reverse repo) Margin trading system Letters of placements 18 SONERI BANK LIMITED SONERI BANK LIMITED 19
12. (Un-audited) 30 September 2019 9.2.1 Investments given as collateral - market value Bai Muajjal with Government of Pakistan Bai Muajjal investment less: deferred income Bai Muajjal investment - net 9.4 67,724,920 48,209,675 115,934,595 48,850,834 11,518,661 60,369,495 2,855,000 (582,626) 2,272,374 2,855,000 (780,212) 2,074,788 Provision for diminution in the value of investments 117,597 2,034 119,631 Advances include Rs.10,662.893 million (31 December 2018 Rs. 11,357.132 million) which have been placed under non-performing status as detailed below: (Audited) (Un-audited) 31 December 2018 30 September 2019 Category of Classification NonNonperforming performing Provision Provision loans loans -----------------------------(Rupees in '000)------------------------------ Category of classification 117,452 145 117,597 (Un-audited) 30 September 2019 Specific General Total 86,094 86,094 86,094 86,094 86,094 86,094 45,674 550,195 1,672,610 9,088,653 11,357,132 1,418 27,568 436,068 7,849,430 8,314,484 (Audited) 31 December 2018 Specific General Total -----------------------------------(Rupees in '000)------------------------------------ (Audited) 31 December 2018 NonProvision Performing Investments Opening balance Charge for the period / year Reversals -----------------------------(Rupees in '000)-----------------------------Loss Total 18,625 66,937 7,581,372 7,666,934 Particulars of provision against advances Particulars of provision against debt securities (Un-audited) 30 September 2019 NonProvision Performing Investments 31,459 190,427 432,781 10,008,226 10,662,893 Other Assets Especially Mentioned Substandard Doubtful Loss 10.3 Opening balance Charge for the period/year Closing balance 9.5 10.2 ---------(Rupees in ‘000)-------- Market Treasury Bills Pakistan Investment Bonds 9.3 (Audited) 31 December 2018 Amounts written off Transfers Closing balance 86,094 86,094 8,314,484 972,602 (1,551,424) (578,822) (68,728) 7,666,934 41,538 8,356,022 8,440,840 38,675 8,479,515 972,602 - (1,551,424) (578,822) (68,728) 41,538 7,708,472 899,550 (988,162) (88,612) (37,744) 8,314,484 2,863 2,863 41,538 902,413 (988,162) (85,749) (37,744) 8,356,022 9.6 The market value of securities classified as held-to-maturity as at 30 September 2019 amounted to Rs. 9,677.800 million (31 December 2018 : Rs. 3,189.450 million). 10.3.1 The general provision against consumer financing is required to be maintained at varying percentages based on the non-performing loan ratio present in the portfolio. These percentages range from 1% to 2.5% for secured and 4% to 7% for unsecured portfolio. 9.7 Federal Government Securities include Pakistan Investment Bonds having book value of Rs. 30.700 million (31 December 2018: Rs. 30.700 million) pledged with the State Bank of Pakistan and National Bank of Pakistan to facilitate T. T. discounting facility for the branches of the Bank. Market Treasury Bills and Pakistan Investment Bonds under Federal Government Securities, are eligible for discounting with the State Bank of Pakistan. 10.3.2 The Bank has maintained general provision against housing finance portfolio at the rate of 0.50% of the performing portfolio.The State Bank of Pakistan vide its circular no. 9 of 2017 dated 22 December 2017 abolished the requirement of maintaining general reserve of 1% against secured Small Enterprise (SE) portfolio, while general reserve to be maintained against unsecured SE portfolio has been reduced from 2% to 1%. Currently, the Bank does not have any unsecured SE portfolio. 10 ADVANCES 10.3.3 The Bank has availed the benefit of forced sales value of pledged stocks, mortgaged residential and commercial properties held as collateral against non-performing advances as allowed under the Prudential Regulations issued by the State Bank of Pakistan. Had the benefit not been taken by the Bank, the specific provision against non-performing advances would have been higher by Rs. 2,560.168 million (31 December 2018: Rs. 1,703.268 million. The additional profit arising from availing this benefit - net of the tax amounts to Rs. 1,664.109 million (31 December 2018: Rs. 1,107.124 million). The FSV benefit is not available for distribution either as cash or stock dividend to shareholders and bonus to employees. 10.3.4 The SBP has granted relaxation in provisioning requirements in respect of exposures in Dewan Mushtaq Group (DMG). Had this relaxation not been available, provision against loans and advances would have been higher by Rs 44.930 million (31 December 2018: Rs 44.930 million). Loans, cash credits, running finances, etc. Islamic financing and related assets Bills discounted and purchased Advances gross Performing Non-performing Total 30 September 31 December 30 September 31 December 30 September 31 December 2019 2018 2019 2018 2019 2018 --------------------------------------------(Rupees in '000)------------------------------------------- Provision against advances - Specific - General Advances - net of provision 181,399,612 170,877,658 10,465,168 11,278,991 191,864,780 182,156,649 8,778,893 6,142,038 196,320,543 8,008,498 4,587,917 183,474,073 96,825 100,900 10,662,893 69,059 9,082 11,357,132 8,875,718 6,242,938 206,983,436 8,077,557 4,596,999 194,831,205 (41,538) (41,538) 196,279,005 (41,538) (41,538) 183,432,535 (7,666,934) (7,666,934) 2,995,959 (8,314,484) (8,314,484) 3,042,648 (7,666,934) (41,538) (7,708,472) 199,274,964 (8,314,484) (41,538) (8,356,022) 186,475,183 (Un-audited) 30 September 2019 Particulars of advances (Gross) In local currency In foreign currencies 20 SONERI BANK LIMITED (Audited) 31 December 2018 ---------(Rupees in ‘000)-------200,575,115 6,408,321 206,983,436 191,180,048 3,651,157 194,831,205 11 FIXED ASSETS Capital work-in-progress Property and equipment Right-of-use assets 11.1 (Un-audited) (Audited) 30 September 31 December 2019 2018 Note -------(Rupees in ‘000)-----11.1 4.1.2 167,575 6,159,709 1,931,372 8,258,656 155,841 6,082,832 6,238,673 75,363 90,037 2,175 167,575 87,397 63,782 4,662 155,841 Capital work-in-progress Civil works Advances to suppliers and contractors Consultant's fee and other charges SONERI BANK LIMITED 21
13. 11 .2 Additions to Fixed Assets (Un-audited) (Un-audited) 30 September 30 September 2019 2018 -------(Rupees in ‘000)------ Note 13 Income / mark-up accrued in local currency Income / mark-up accrued in foreign currencies Dividend receivable Advances, deposits, advance rent and other prepayments Advance taxation (payments less provisions) Non-banking assets acquired in satisfaction of claims Branch adjustment account Mark to market gain on forward foreign exchange contracts Stationery and stamps in hand Due from the State Bank of Pakistan Advance against subscription of shares Advance against subscription of term finance certificates Acceptances Others The following additions have been made to fixed assets during the period: Capital work-in-progress Buidling on freehold land Buidling on leasehold land Leasehold improvements Furniture and fixture Electrical office and computer equipment Right-of-use assets Vehicles Total 11.3 11,734 - 1,720 40,621 88,766 36,142 291,607 200,420 20,814 680,090 691,824 37,190 2,946 48,067 12,302 264,015 25,958 390,478 390,478 Less: provision held against other assets Other assets - total Disposal of fixed assets The net book value of operating fixed assets disposed off during the period is as follows: Leasehold land Improvement Furniture and fixture Electrical office and computer equipment Vehicles Total 12 INTANGIBLE ASSETS Computer Software Trademark 12.1 Additions to intangible assets 4,771 606 2,503 96 7,976 2,701 199 2,176 5,076 (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)-----376,844 274 377,118 454,129 407 454,536 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 -------(Rupees in ‘000)------ There were no disposals in intangible assets during the current and prior period. 27,461 13.1 13.2 13.2 & 13.4 13.1.1 7,226,914 8,512 40,000 361,493 1,275,202 780,623 377,478 41,932 482,576 50,000 25,000 3,816,860 503,215 14,989,805 (237,160) 14,752,645 4,239,379 1,629 7,700 369,791 1,410,432 76,027 9,548 335,045 38,945 194,330 50,000 125,000 4,489,160 372,393 11,719,379 (156,077) 11,563,302 783,131 76,989 13.1 Market value of non-banking assets acquired in satisfaction of claims 13.1.1 The non-banking assets acquired in satisfaction of claims by the Bank have been valued by independent professional valuers in May 2018 & October 2018. The valuation was carried out by F.K.S Building Services, Harvester Services (Pvt) Limited, Arch-e-Decon, Danish Enterprises, Oceanic Surveyors (Pvt) Limited and K. G. Traders on the basis of professional assessment of present market values. Note 13.1.2 Non-banking assets acquired in satisfaction of claims Opening balance Acquired during the period / year Depreciation Closing balance 13.3 (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)-----76,027 707,104 (2,508) 780,623 76,989 (962) 76,027 13.2 This includes an amount of Rs. 143.443 million (31 December 2018 : Rs.143.443 million) in respect of fraud and forgery claims relating to cash embezzlement made in the Bank. The Bank has initiated legal proceedings against the alleged and has also taken necessary steps to further strengthen its internal control system. 13.3 This includes a property of Rs. 700 million acquired in the current period, under a debt swap arrangement entered with a delinquent borrower. The benefit of the forced sales value of the property has also been utilized while calculating provision for non performing exposure of the said borrower in prior years. The following additions have been made to intangible assets during the period: Directly purchased OTHER ASSETS (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)------ 346,788 13.4 13.4.1 Provision held against other assets Provision held against receivable against fraud & forgeries Others 143,443 93,717 237,160 143,443 12,634 156,077 156,077 81,083 237,160 156,077 156,077 3,520,817 3,993,525 Movement in provision held against other assets Opening balance Charge for the period / year Closing balance 14 (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------- CONTINGENT ASSETS There were no contingent assets as at the balance sheet date. 15 BILLS PAYABLE In Pakistan 22 SONERI BANK LIMITED SONERI BANK LIMITED 23
14. (Un-audited) (Audited) 30 September 31 December 2019 2018 16 Secured Borrowings from State Bank of Pakistan Under export refinance scheme Long term financing facility for plant and machinery Modernisation of SME-Rice Husking Financing facility for storage of agriculture produce Repurchase agreement borrowings 11,342,828 1,499,364 10,139 139,543 98,707,437 111,699,311 Repurchase agreement borrowings - other banks Borrowings from other financial institutions - local Borrowings from other financial institutions - foreign Total secured Unsecured Call borrowings Overdrawn nostro accounts Total unsecured DEPOSITS AND OTHER ACCOUNTS (Un-audited) 30 September 2019 In local currency Customers Current deposits Savings deposits Term deposits Others Financial Institutions Current deposits Savings deposits Term deposits 17.1 3,931,220 11,860,880 7,519,499 80,653,894 14,111,875 32,274 14,144,149 1,021,225 287,798 1,309,023 142,792,088 81,962,917 136,505,198 6,286,890 142,792,088 74,155,620 7,807,297 81,962,917 Particulars of borrowings with respect to currencies In local currency In foreign currencies 17 11,322,048 1,139,389 15,810 44,865,048 57,342,295 2,985,264 7,708,748 6,254,616 128,647,939 In foreign currencies Listed Term Finance Certificates - Additional Tier I This denotes rated, listed and unsecured Term Finance Certificates (TFCs) issued as instrument of redeemable capital of Rs. 4,000 Million issued under Section 66 of the Companies Act, 2017. The funds raised by the Bank through the issuance of these TFCs have contributed towards the Bank’s Additional Tier 1 Capital for meeting capital adequacy requirements as per Basel III Guidelines set by SBP under BPRD Circular Number 6 dated 15 August 2013. The instrument is sub-ordinated as to the payment of principal and profit to all other indebtedness of the Bank (including the listed term finance certificates - Tier II previously issued by the Bank) and is not redeemable before maturity without prior approval of SBP. Furthermore, these funds are intended to be utilized for the Bank’s ongoing business operations in accordance with the Bank’s Memorandum and Articles of Association. The key features of the issue are as follows: -------(Rupees in ‘000)------ BORROWINGS 16.1 18.1 Issue amount Rs. 4,000 million Issue date 06 December 2018 Maturity date Perpetual Rating (Note 34) "A" by PACRA on 19 June 2019 Security Unsecured Profit payment frequency Semi-annually Redemption No fixed or final redemption date Mark-up 6 Months KIBOR + 2.00% per annum Call option (if any) The Bank may call the TFCs (either partially or in full), after five (5) years from the date of issuance with the prior approval of SBP. Moreover, and as per Clause iv(b) of Annexure 2 of the Basel III Circular, the Issuer shall not exercise a call option unless the called instrument is replaced with capital of same or better quality. The Call must be subject to a prior notice of not less than 60 days given by SNBL to the investors. The Call Option once announced will not be revocable. Lock-in-clause (if any) The TFCs contain a lock-in clause which stipulates that no profit payments would be made if such payments result in a shortfall in the Bank’s Minimum Capital Requirement (MCR) or Capital Adequacy Requirement (CAR) or increase any existing shortfalls in MCR and / or CAR. Loss absorbency clause The TFCs are also subject to loss absorbency and / or any other requirements under SBP’s Basel III Capital Rules. Upon the occurrence of a Point of Non-Viability event as defined by SBP’s Basel III Capital Rule, SBP may at its option, fully and permanently convert the TFCs into common shares of the Bank and / or have them immediately written off (either partially or in full). Number of shares to be issued to TFC Holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFC’ divided by market value per share of the Bank’s common equity on the date of trigger of the non-viability event as declared by SBP, subject to a cap of 360,000,000 shares. (Audited) 31 December 2018 Total In local currency In foreign currencies Total ---------------------------------------(Rupees in ‘000)--------------------------------------58,583,962 77,246,887 99,569,158 3,568,773 238,968,780 7,228,474 6,224,514 2,006,491 15,459,479 65,812,436 83,471,401 101,575,649 3,568,773 254,428,259 54,008,141 73,435,215 89,046,247 5,158,255 221,647,858 5,908,167 6,325,280 1,183,916 13,417,363 59,916,308 79,760,495 90,230,163 5,158,255 235,065,221 1,776,518 13,856,051 9,823,976 25,456,545 264,425,325 623,777 54,102 677,879 16,137,358 2,400,295 13,910,153 9,823,976 26,134,424 280,562,683 854,351 13,440,369 12,744,728 27,039,448 248,687,306 274,092 274,092 13,691,455 1,128,443 13,440,369 12,744,728 27,313,540 262,378,761 Deposits eligible under Insurance arrangements 18.2 Listed Term Finance Certificates - Tier II This denotes rated, listed and unsecured Term Finance Certificates (TFCs) issued as instrument of redeemable capital with a tenor of 8 years. The instrument is sub-ordinated as to the payment of principal and profit to all other indebtedness of the Bank, except Listed Term Finance Certificates - Additional Tier I as recently issued; and is not redeemable before maturity without prior approval of SBP. The key features of the issue are as follows: Issue amount Rs. 3,000 million Issue date 07 July 2015 Maturity date 07 July 2023 Rating (Note 34) "A+" by PACRA on 19 June 2019 Security Unsecured Profit payment frequency Semi-annually Redemption Principal is redeemable semi-annually in such a way that 0.30% of the principal will be redeemed in the first 90 months and the remaining principal of 99.70% at maturity at the end of the 96th month in July 2023. Mark-up 6 Months KIBOR + 1.35% per annum Call option (if any) The Bank may call the TFCs, in part or full, on any profit payment date from the 60th month from last day of public subscription and on all subsequent profit payment dates, subject to SBP's approval and not less than 45 days prior notice being given to the Trustee. Lock-in-clause (if any) The TFCs contains a lock-in clause which stipulates that neither interest nor principal may be paid (even at maturity) if such payments will result in shortfall in the Bank’s Minimum Capital Requirement (MCR) or Capital Adequacy Requirement (CAR) or increase any existing shortfall in MCR and CAR. This includes deposits eligible to be covered under the State Bank of Pakistan's Depositor Protection Scheme. The amount of eligble deposits worked out based on the Audited Financial position of the Bank as at 31 December 2018 amounts to Rs. 106,280 million. Note 18 SUBORDINATED DEBT - UNSECURED Listed Term Finance Certificates - Additional Tier I Listed Term Finance Certificates - Tier II 24 SONERI BANK LIMITED 18.1 18.2 (Un-audited) (Audited) 30 September 31 December 2019 2018 --------(Rupees in ‘000)-------4,000,000 2,995,200 6,995,200 4,000,000 2,996,400 6,996,400 SONERI BANK LIMITED 25
15. Loss absorbency clause 19 The instrument will be subject to loss absorbency and / or any other requirements under SBP’s Basel III Capital Rules. Upon the occurrence of a Point of Non-Viability event as defined by SBP’s Basel III CapitalRule, SBP may at its option, fully and permanently convert the TFCs into common shares of the Bank and / or have them immediately written off (either partially or in full). Number of shares to be issued to TFC Holders at the time of conversion will be equal to the ‘Outstanding Face Value of the TFC’ divided by market value per share of the Bank’s common equity on the date of trigger of the non-viability event as declared by SBP, subject to the cap of 225,000,000 shares. (Un-audited) 30 September 2019 DEFERRED TAX LIABILITIES At 1 January 2019 Deductible temporary differences on - Post retirement employee benefits - Deficit on revaluation of investments - Provision against advances, off balance sheet etc. Note 21 Recognised Recognised At 30 in the profit in Other September and loss Comprehensive 2019 account Income 21.1 Taxable temporary differences on - Surplus on revaluation of fixed assets - Accelerated tax depreciation 3,626 3,626 251,567 251,567 (13,941) (473,599) (190,347) (677,887) 683,807 369,327 1,053,134 (29,889) 2,241 (27,648) - 653,918 371,568 1,025,486 120,054 (24,022) 251,567 347,599 Recognised Recognised At 31 in the profit in Other December and loss Comprehensive 2018 account Income (22,751) Note 20 OTHER LIABILITIES Mark-up / return / interest payable in local currency Mark-up / return / interest payable in foreign currencies Unearned commission and income on bills discounted Accrued expenses Acceptances Unclaimed dividends Branch adjustment account Charity fund balance Payable to workers' welfare fund Lease liability against right-of-use assets Sundry deposits Others 26 SONERI BANK LIMITED 39.5 4.1.2 (792,906) 22 22.1 21.1 Surplus on revaluation of fixed assets CONTINGENCIES AND COMMITMENTS 2,528,112 83,810 64,409 476,078 4,489,160 55,079 380,778 511,533 468,298 9,057,257 22.1 22.2 22.3 Guarantees: Financial guarantees Performance guarantees Other guarantees 22.2 120,054 (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------3,434,822 101,548 82,517 537,445 3,816,860 67,331 37,464 228 267,084 1,985,843 584,021 646,685 11,561,848 Deferred tax on surplus / (deficit) on revaluation of: - Available-for-sale securities - Fixed assets - Guarantees - Commitments - Other contingent liabilities -----------------------(Rupees in ‘000)----------------------Deductible temporary differences on - Post retirement employee benefits (23,185) 9,244 (13,941) - Deficit on revaluation of investments 76,984 (802,150) (725,166) - Provision against advances, off balance sheet etc. (192,567) (1,406) (193,973) (138,768) (1,406) (792,906) (933,080) Taxable temporary differences on - Surplus on revaluation of fixed assets 717,598 (33,791) 683,807 - Accelerated tax depreciation 356,881 12,446 369,327 1,074,479 (21,345) 1,053,134 935,711 9.1 21.1 Less: related deferred tax liability on: - revaluation as at 01 January - incremental depreciation charged during the period (Audited) 31 December 2018 At 1 January 2018 Surplus / (deficit) on revaluation of - Available-for-sale securities - Fixed assets Surplus on revaluation of fixed assets as at 01 January Transferred to unappropriated profit in respect of incremental depreciation charged during the period/year - net of deferred tax Related deferred tax liability on incremental depreciation charged during the period/year Surplus on revaluation of fixed assets as at 30 September -----------------------(Rupees in ‘000)----------------------(13,941) (725,166) (193,973) (933,080) SURPLUS / (DEFICIT) ON REVALUATION OF ASSETS 22.2.1 Commitments: Documentary credits and short-term trade-related transactions - letters of credit Commitments in respect of: - forward foreign exchange contracts - forward lending Commitments for acquisition of: - operating fixed assets - intangible assets 22.2.1 22.2.2 Other commitments 22.2.3 (1,353,139) 2,487,780 1,134,641 (2,071,902) 2,573,180 501,278 473,599 (653,917) (180,318) 954,323 725,166 (683,807) 41,359 542,637 2,573,180 2,669,725 (55,510) (62,754) (29,890) 2,487,780 (33,791) 2,573,180 (683,807) 29,890 (653,917) 1,833,863 (717,598) 33,791 (683,807) 1,889,373 16,508,375 145,770,290 2,990,257 165,268,922 17,619,705 180,624,314 2,278,386 200,522,405 2,384,438 13,533,162 590,775 16,508,375 2,413,133 13,536,585 1,669,987 17,619,705 21,524,762 23,117,645 119,801,013 4,348,350 152,359,696 3,056,954 66,472 16,418 81,102 39,971 13,275 145,770,290 1,968,946 180,624,314 64,683,149 55,117,864 119,801,013 80,729,599 71,630,097 152,359,696 4,348,350 3,056,954 Commitments in respect of forward foreign exchange contracts Purchase Sale The maturities of the above contracts are spread over a period of one year. 22.2.2 (Un-audited) (Audited) 30 September 31 December 2019 2018 --------(Rupees in ‘000)------- Commitments in respect of forward lending Undrawn formal standby facilities, credit lines and other commitments to lend 22.2.2.1 22.2.2.1 These represent commitments that are irrevocable because they cannot be withdrawn at the discretion of the Bank without the risk of incurring significant penalty or expense. The Bank has certain other commitments to extend credit that represent revocable commitments and do not attract any significant penalty or expense in case the facility is withdrawn unilaterally. SONERI BANK LIMITED 27
16. 22 .2.3 Commitment in respect of equity / government securities Sale 22.3 Other contingent liabilities 22.3.1 (a) (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)-----13,275 1,968,946 2,990,257 2,278,386 The Income tax returns of the Bank have been filed up to Tax Year 2018 (accounting year ended 31 December 2017). The Income tax authorities have issued amended assessment orders for tax years 2011, 2015 & 2016 thereby creating additional tax demands of Rs. 210.718 million which have been paid as required under the law. The Bank has filed appeals before various appellate forums against these amendments. Assessments from Tax Year 2001 up to Tax Year 2010 have been decided at the level of Appellate Tribunal Inland Revenue. The department has filed tax references in respect of certain matters with the Honourable Lahore High Court which are currently pending. In case of any adverse decision, an additional tax liability of Rs. 617.120 million (which includes impact of certain timing differences as well) may arise. Further, assessments for tax years 2012, 2013, 2014 and 2017 have been decided at the level of Commissioner Inland Revenue (Appeals). The department has filed appeals for tax years 2012 and 2013 with Appellate Tribunal Inland Revenue which are currently pending and in case of any adverse decision, an additional tax liability of Rs. 866.384 million (which include impact of certain timing differences as well) may arise. The Bank has decided to file appeal for Tax Year 2014 and 2017 with Appellate Tribunal Inland Revenue which, in case of any adverse decision, may create an additional tax liability of Rs. 60.67 million. However, the management is confident that these matters will be ultimately decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on these accounts. (b) Tax Authorities have passed orders for Tax Years 2008 to 2012 levying Federal Excise Duty on certain items. The Bank has filed appeals against these assessments which are pending before various appellate forums. The aggregate net amount involved is Rs. 81.083 million. The management of the Bank is confident that the appeals will be decided in the favor of the Bank based on the advice of Bank's consultant. However, on the recommendation of the State Bank of Pakistan the same has also been provided for in the current period. (c) Tax Authorities have passed order for Tax Years 2014, 2015, 2016 and 2017 under section 161/205 of the Income Tax Ordinance 2001, creating a demand of Rs. 106.685 million, Rs. 67.672 million, Rs. 43.52 million and Rs. 43.12 million respectively for non-deduction of tax at source. Against the said demands, the Bank has already filed appeals before the Commissioner Inland Revenue (Appeals), which are currently pending. However, the management is confident that these matters will be ultimately decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on these accounts. 22.3.4 A penalty of Rs. 50 million has been imposed by the Competition Commission of Pakistan ("the Commission") on the Bank on account of uncompetitive behaviour and imposing uniform cost on cash withdrawal from ATM transactions. The Bank along with other Banks had filed a constitutional petition before the Competition Appellate Tribunal which has set aside the order of the Commission. Against the said order of the Competition Appellate Tribunal, the Commission has filed an appeal before the Supreme Court of Pakistan, the hearing of which is currently pending. The management of the Bank is confident that the appeal will be decided in the favor of the Bank. 22.3.5 Through the Finance Act, 2008 an amendment was made in the Employees Old Age Benefits Act, 1976 whereby the exemption available to banks and their employees was withdrawn by omission of clause (e) of Section 47 of the said Act and banks and their employees were made liable for contribution to Employee Old Age Benefit Institution. The Lahore High Court, subsequently, nullified the amendments made through the Finance Act, 2008. Subsequently, several other banks also filed the Constitutional Petition before the Sindh High Court which decided the matter in favor of the banks. As a result of the decision of the Lahore High Court and Sindh High Court, the Bank stopped EOBI contribution w.e.f. February 2012. An appeal was filed by the EOBI in the Supreme Court of Pakistan which has been disposed of by the Honorable Court vide its order dated 10 November 2016 in favor of the Banks. However, EOBI has filed review Petition on 07 March 2019 before the Supreme Court of Pakistan which is currently pending. In case of any adverse decision by the Supreme Court of Pakistan, a contribution of Rs.176.509 million (upto 31 December 2018: Rs. 155.426 million) will become payable by the Bank to the EOBI. The said amount of Rs. 176.509 million has not been provided in these financial statements as the Bank is confident that the case may be decided in the Bank's favour. 23 (e) (f) Claims against the Bank which are not acknowledged as debts amounted to Rs. 10.458 million (31 December 2018: Rs. 9.760 million). 22.3.3 The Assistant Commissioner, Inland Revenue vide orders under section 182/140 of the Income Tax Ordinance, 2001 has levied penalties against staff of the Bank amounting to Rs. 30 million. The action taken by the Bank in this case was backed by legal opinion of the customer's lawyer / stay order of the Islamabad High Court. Currently, the matter is pending before Commissioner Inland Revenue (Appeals) subsequent to appeal filed by the staff. In case of any adverse decision in appeals, the Bank reserves the right of recourse on customers for re-imbursement. However, the management is confident that these matters will be ultimately decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on these accounts. 28 SONERI BANK LIMITED MARK-UP / RETURN / INTEREST EXPENSED Deposits Borrowings Subordinated debt Cost of foreign currency swaps against foreign currency deposits / borrowings Finance cost of lease liability Sindh Revenue Board has passed order for year 2012 under section 23 of the Sindh Sales Tax on Services Act, 2011, creating demand of Rs. 213.43 million on non-deduction of Sindh Sales Tax. The Bank has filed appeal before Commissioner Inland Revenue (Appeals) against this order, which is currently pending. However, the management is confident that this matter will be ultimately decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on this account. 22.3.2 17,022,834 9,465,324 379,745 50,749 66,907 26,985,559 Note Punjab Revenue Authority has passed order for year 2015 under section 14 and 19 of the Punjab Sales Tax on Services Act, 2012, creating demand of Rs. 144.688 million, on non-deduction of withholding tax. The Bank has filed appeal before Commissioner Inland Revenue (Appeals) against this order, which is currently pending. However, the management is confident that this matter will be ultimately decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on this account. The Income tax authorities in Azad Jammu & Kashmir region have issued amended assessment orders for Tax Year 2013 to Tax Year 2018, thereby creating additional tax demands which have been paid by the Bank as required under the law. The Bank has filed appeals before Commissioner Inland Revenue (Appeals) against the same. In case of any adverse decision, an additional tax liability of Rs. 268.2 million may arise. However, the management is confident that these matters will ultimately be decided in favor of the Bank and the Bank may not be exposed to any additional tax liability on these accounts. MARK-UP / RETURN / INTEREST EARNED Loans and advances Investments Lendings to financial institutions Balances with banks On placement and call lendings Income on bai muajjal placements 24 (d) (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------- 25 FEE AND COMMISSION INCOME Branch banking customer fees Consumer finance related fees Debit card related fees Investment banking / arrangement fees Commission on trade Commission on guarantees Commission on cash management Commission on remittances including home remittances Commission on bancassurance Rebate income Others 4.1.2 8,617,162 6,072,780 78,687 20,673 275,487 49,224 15,114,013 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 (Restated) ---------(Rupees in ‘000)-------15,539,806 4,125,698 692,982 6,801,861 2,966,463 203,244 462,715 197,219 21,018,420 141,578 10,113,146 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------342,883 33,775 70,885 41,224 480,403 56,376 5,468 11,896 104,612 168,635 50,827 1,366,984 SONERI BANK LIMITED 264,427 25,732 85,519 70,682 377,351 59,148 6,484 12,740 121,964 107,127 36,664 1,167,838 29
17. Note 26 (LOSS) / GAIN ON SECURITIES Realised Unrealised - held for trading Unrealised - forward sale of equity 26.1 26.1 9.1 (623,226) (5,023) (262) (628,511) Note Other operating expenses Directors' fees and allowances Fees and allowances to Shariah Board Legal & professional charges Outsourced services costs Travelling & conveyance NIFT clearing charges Depreciation Training & development Postage & courier charges Communication Stationery & printing Marketing, advertisement & publicity Donations Auditors' Remuneration Brokerage and commission Entertainment Fees and subscription Motor vehicles running expenses Service charges Insurance Repair & maintenance Deposit protection insurance premium Others 275,066 (2,035) 273,031 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------- Realised (loss) / gain on: Federal Government securities Shares 27 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 (Restated) ---------(Rupees in ‘000)-------- 31,940 (655,166) (623,226) 195,073 79,993 275,066 10,309 9,245 7,777 27,331 18,862 10,227 3,577 32,666 OTHER INCOME Gain on sale of fixed assets-net Staff notice period and other recoveries Insurance claim 28 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------- OPERATING EXPENSES Total compensation expense Property expense Rent & taxes Insurance Utilities cost Security (including guards) Repair & maintenance (including janitorial charges) Depreciation on right-of-use assets Depreciation on owned fixed assets Information technology expenses Software maintenance Hardware maintenance Depreciation Amortisation Network charges Others 28.1 28.1 2,474,849 2,247,053 363,554 14,890 265,289 235,025 163,101 213,173 141,654 1,396,686 525,382 16,446 233,571 220,536 149,214 139,270 1,284,419 170,417 59,737 123,382 104,879 161,402 119,856 739,673 167,034 29,847 88,130 86,732 131,264 85,363 588,370 28.1 28.1 28.2 9,344 2,700 65,261 114,259 30,661 29,977 133,160 8,825 45,267 42,227 122,903 63,483 15,000 12,475 12,893 127,504 34,174 127,727 56,986 43,247 82,625 40,003 75,746 1,296,447 5,416,289 Total Cost for the period relating to outsourcing activites included in other operating activities and property expenses is Rs. 467.793 million (2018: Rs. 450.374 million) being paid to companies incorporated in Pakistan. Name of company Nature of Service Prime HR services Business Development Services (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------102,776 114,259 This represents the insurance premium paid to the State Bank of Pakistan’s Depositors Protection Corporation (DPC) during the quarter. The premium amount was worked out in accordance with the mechanism specified by DPC , based on eligible deposits position of the Bank as at 31 December 2018. 28.3 This includes reversal of provision for worker’s welfare fund (WWF) aggregating to Rs. 154.9 million. This provision is attributable to the branches located in provinces of Pakistan other than Sindh, and has been accumulated in the years 2013 to 2018. Accordingly, in the current period, provision for Sindh worker’s welfare fund (SWWF) is computed and recognized, on estimated profits earned in the province of Sindh. Note OTHER CHARGES Penalties imposed by State Bank of Pakistan Others 30 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 (Restated) ---------(Rupees in ‘000)-------59,388 59,388 16,522 25 16,547 2,035 (578,822) 81,083 411 199 (495,094) (317,432) 2,187 (315,245) PROVISIONS / (REVERSALS) & WRITE OFFS - NET Provisions for diminution in the value of investments Reversal against loans & advances Provision against other assets Fixed assets written off Bad debts written off directly SONERI BANK LIMITED 10,781 3,825 48,309 102,776 29,354 28,578 129,370 7,537 56,865 45,684 144,871 49,347 10,500 6,479 17,736 145,068 50,685 155,814 93,759 66,795 121,532 127,536 108,249 1,561,450 6,172,658 28.2 29 30 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------- 10.3 22.3.1(b) SONERI BANK LIMITED 31
18. Note 31 TAXATION ------- (Rupees in ‘000)------ Current Prior years Deferred 31.1 32 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 31.1 759,081 119,500 (24,020) 854,561 940,959 (67,298) 873,661 This represents the super tax charge for the Tax Year 2018 as imposed by the Finance Supplementary (Second Amendment) Bill, 2019 at the rate of 4% of taxable income for the accounting year ended December 31, 2017. Tax related contingencies are disclosed in note 22.3 to these financial statements. For the quarter ended For the nine months ended (Un-audited) (Un-audited) (Un-audited) (Un-audited) 30 September 30 September 30 September 30 September 2019 2018 2019 2018 BASIC EARNINGS PER SHARE Profit for the period ------------------------------(Rupees in '000)-----------------------------236,091 317,626 1,211,090 1,293,608 -----------------------------(Number of shares)---------------------------Weighted average number of ordinary shares 1,102,463,483 1,102,463,483 1,102,463,483 1,102,463,483 ---------------------------------(Rupees)--------------------------------Basic earnings per share 0.2141 0.2881 For the quarter ended (Un-audited) (Un-audited) 30 September 30 September 2019 2018 33 DILUTED EARNINGS PER SHARE Profit for the period Weighted average number of ordinary shares (adjusted for the effects of all dilutive potential ordinary shares) 1.0985 1.1734 For the nine months ended (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ------------------------------(Rupees in '000)-----------------------------236,091 317,626 1,211,090 1,293,608 34 1,102,463,483 1,102,463,483 1,102,463,483 1,102,463,483 0.2141 0.2881 1.0985 1.1734 CREDIT RATING The Pakistan Credit Rating Agency (PACRA) has maintained the long term credit rating of 'AA-' (Double A Minus) and short term rating of 'A1+' (A One Plus) with Stable Outlook of the Bank through its notification dated 19 June 2019 [2018: long term 'AA-' (Double A Minus): short term 'A1+' (A One Plus)] PACRA has also maintained the credit rating of the Bank's unsecured, subordinated and listed Term Finance Certificates (TFC – 2) issue of Rs 3,000 million at 'A+' (Single A plus) with Stable Outlook through its notification dated 19 June 2019. Furthermore the Bank's unsecured, subordinated, rated, listed perpetual and non-cumulative Term Finance Certificates of Rs 4,000 million issue last year were assigned a rating of 'A' with Stable Outlook by PACRA through its notification dated 19 June 2019. 35 FAIR VALUE MEASUREMENTS The fair value of quoted securities other than those classified as held to maturity, is based on quoted market price. Quoted securities classified as held to maturity are carried at cost. The fair value of unquoted equity securities, other than investments in associates and subsidiaries, is determined on the basis of the break-up value of these investments as per their latest available audited financial statements. The fair value of unquoted debt securities, fixed term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be calculated with sufficient reliability due to the absence of a current and active market for these assets and liabilities and reliable data regarding market rates for similar instruments. 32 SONERI BANK LIMITED Fair value of financial assets The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements: Level 1: 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 assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable inputs). The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised: 30 September 2019 (Un-audited) Level 1 Level 2 Level 3 Total On balance sheet financial instruments ------------------------------(Rupees in '000)-----------------------------Financial assets - measured at fair value Investments Federal Government securities 193,912,926 193,912,926 Shares 3,445,843 3,445,843 Non-Government debt securities 3,491,513 3,491,513 Units of mutual fund 158,154 158,154 Financial assets - disclosed but not measured at fair value Investments Federal Government securities Non-Government debt securities - 9,618,453 59,347 - 9,618,453 59,347 Off-balance sheet financial instruments - measured at fair value Forward purchase of foreign exchange Forward sale of foreign exchange - 64,551,410 54,608,647 - 64,551,410 54,608,647 3,603,997 326,242,296 Non - Financial Assets Operating fixed assets (land and buildings) 4,100,573 4,100,573 4,100,573 333,946,866 -----------------------------(Number of shares)---------------------------- ---------------------------------(Rupees)--------------------------------Diluted earnings per share 35.1 On balance sheet financial instruments Financial assets - measured at fair value Investments Federal Government Securities Shares Non-Government debt securities Units of mutual fund 31 December 2018 (Audited) Level 1 Level 2 Level 3 Total -----------------------------(Rupees in '000)----------------------------3,873,967 210,149 135,988,665 3,129,018 - - 135,988,665 3,873,967 3,129,018 210,149 Financial assets - disclosed but not measured at fair value Investments Federal Government securities Non-Government debt securities - 3,050,630 138,820 - 3,050,630 138,820 Off-balance sheet financial instruments - measured at fair value Forward purchase of foreign exchange Forward sale of foreign exchange - 83,572,972 74,138,425 - 83,572,972 74,138,425 4,084,116 300,018,530 4,148,354 4,148,354 4,148,354 308,251,000 Non - financial Assets Operating fixed assets (land and buildings) The Bank's policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the period. SONERI BANK LIMITED 33
19. (a) Financial instruments in level 1 ------------------------------30 September 2019 (Un-audited)-----------------------------Retail Banking Financial instruments included in level 1 comprise of investments in listed ordinary shares and units of mutual funds. (b) Financial instruments in level 2 Financial instruments included in level 2 comprise of GoP Ijarah Sukuks, Pakistan Investment bonds, Market Treasury bills, Corporate bonds, Term Finance and Sukuk certificates. (c) Financial instruments in level 3 Financial instruments included in level 3 comprise of operating fixed assets (land and building). Valuation techniques and inputs used in determination of fair values Item Fully paid-up ordinary shares Pakistan Investment Bonds / Market Treasury Bills Government of Pakistan - Ijarah Sukuks Term Finance, Bonds and Sukuk certificates Units of mutual funds Operating fixed assets (land and building) Valuation techniques and input used Fair values of investments in listed equity securities are valued on the basis of closing quoted market prices available at the stock exchange. Fair values of Pakistan Investment Bonds and Treasury Bills are derived using the PKRV rates (Reuters page). Fair values of GoP Ijarah Sukuks are derived using the PKISRV rates announced by the Financial Market Association (FMA) through Reuters. These rates denote an average of quotes received from nine different pre-defined / approved dealers / brokers. Investments in debt securities (comprising term finance certificates, bonds, sukuk certificates and any other security issued by a company or a body corporate for the purpose of raising funds in the form of redeemable capital) are valued on the basis of the rates announced by the Mutual Funds Association of Pakistan (MUFAP) in accordance with the methodology prescribed by the Securities and Exchange Commission of Pakistan. In the determination of the rates, MUFAP takes into account the holding pattern of these securities and categorises them as traded, thinly traded and non-traded securities. Fair values of investments in units of mutual funds are determined based on redemption prices as at the close of the business day. Land and buildings are revalued on a periodic basis 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 reasonable certainty. Accordingly, a qualitative disclosure of sensitivity has not been presented in these condensed interim financial statements. 36 SEGMENT INFORMATION 36.1 Segment details with respect to business activities ------------------------------30 September 2019 (Un-audited)-----------------------------Retail Banking Corporate Islamic Trading and Sales Others Total ----------------------------------------(Rupees in '000)---------------------------------------Profit and loss Net mark-up / return / profit (8,629,810) 9,797,981 387,336 5,130,635 (719,003) 5,967,139 Inter segment revenue - net 13,388,926 (8,428,983) (6,198,316) 1,238,373 Non mark-up / return / interest income 1,250,266 250,199 73,297 502,086 (354,078) 1,721,770 Total income 6,009,382 1,619,197 460,633 (565,595) 165,292 7,688,909 Segment direct expenses Inter segment expense allocation Total expenses (Reversal) / Provisions Profit before tax 34 SONERI BANK LIMITED 3,882,141 148,668 4,030,809 (655,678) 2,634,251 146,250 2,209 148,459 75,722 1,395,016 275,527 8,715 284,242 2,657 173,734 102,530 400 102,930 (668,525) 1,711,904 (159,992) 1,551,912 82,205 (1,468,825) Balance sheet Cash & bank balances Investments Net inter segment lending Lendings to financial and other institutions Advances - performing - non-performing Others Total assets Borrowings Subordinated debt Deposits & other accounts Net inter segment borrowing Others Total liabilities Equity Total equity & liabilities Corporate Islamic Trading and Sales Others Total ----------------------------------------(Rupees in '000)---------------------------------------20,972,078 173,107,633 48,852,244 1,942,382 5,367,383 250,241,720 2,463,587 29,703 134,768,055 940,053 5,659,001 143,860,399 1,537,516 5,213,870 700,000 8,778,894 65,947 2,912,206 19,208,433 1,247,912 205,713,852 (194,255,071) 3,803,031 1,810,455 18,320,179 21,147,438 3,879,812 47,577 7,639,374 32,714,201 26,221,093 210,957,425 4,503,031 196,279,005 2,995,959 23,388,419 464,344,932 7,587,545 237,583,951 5,070,224 250,241,720 250,241,720 5,196,705 26,207,972 110,441,211 2,014,511 143,860,399 143,860,399 208,000 16,770,760 1,736,004 493,669 19,208,433 19,208,433 129,799,838 (112,177,215) 697,556 18,320,179 18,320,179 6,995,200 7,154,304 14,149,504 18,564,697 32,714,201 142,792,088 6,995,200 280,562,683 15,430,264 445,780,235 18,564,697 464,344,932 ------------------------------30 September 2019 (Un-audited)-----------------------------Retail Banking Corporate Islamic Trading and Sales Others Total ----------------------------------------(Rupees in '000)---------------------------------------Contingencies & commitments In respect of letter of credit / guarantees 22,563,099 14,532,064 937,974 38,033,137 In respect of forward foreign exchange contracts 119,801,013 119,801,013 In respect of forward lendings 4,348,350 4,348,350 In respect of fixed assets 82,890 82,890 In respect of equity / government securities 13,275 13,275 In respect of other contingencies 2,990,257 2,990,257 Total 22,563,099 18,880,414 937,974 119,814,288 3,073,147 165,268,922 ------------------------------30 September 2018 (Un-audited)-----------------------------Retail Banking Profit and loss Net mark-up / return / profit Inter segment revenue - net Non mark-up / return / interest income Total income Segment direct expenses Inter segment expense allocation Total expenses (Reversal) / Provisions Profit before tax Corporate Islamic Trading and Sales Others Total ----------------------------------------(Rupees in '000)---------------------------------------(2,751,669) 6,432,527 1,070,009 4,750,867 4,551,034 (3,825,790) 287,533 1,012,777 233,144 47,635 280,779 3,060,767 (3,028,685) 916,539 948,621 (92,409) 421,948 11,785 341,324 5,000,867 2,333,501 7,334,368 3,498,127 132,904 3,631,031 (361,339) 1,481,175 159,042 2,378 161,420 43,851 807,506 220,350 8,316 228,666 56 52,057 92,692 408 93,100 855,521 1,512,133 (144,006) 1,368,127 2,187 (1,028,990) 5,482,344 5,482,344 (315,245) 2,167,269 6,118,352 6,118,352 (495,094) 2,065,651 SONERI BANK LIMITED 35
20. -----------------------------------31 December 2018 (Audited)----------------------------------Retail Banking Balance Sheet Cash & bank balances Investments Net inter segment lending Lendings to financial and other institutions Advances - performing - non-performing Others Total assets Borrowings Subordinated debt Deposits & other accounts Net inter segment borrowing Others Total liabilities Equity Total equity & liabilities Corporate Islamic Trading and Sales Others Particulars 22,442,200 153,247,434 56,246,103 2,277,440 5,002,428 239,215,605 2,875,362 67,917 115,614,636 663,082 4,558,699 123,779,696 1,218,456 5,147,722 7,964,587 40,777 398,221 14,769,763 7,555,688 224,726,717 6,933,200 239,215,605 239,215,605 4,593,322 25,414,862 89,921,291 3,850,221 123,779,696 123,779,696 328,236 12,237,182 1,779,538 424,807 14,769,763 14,769,763 Retail Banking 663,273 141,429,894 (169,745,870) 3,921,270 2,200,309 (21,531,124) 16,498,436 3,607,209 61,349 6,096,854 26,263,848 27,199,291 146,645,533 3,921,270 183,432,535 3,042,648 18,256,511 382,497,788 69,485,671 - 6,996,400 (91,700,829) 684,034 1,278,574 (21,531,124) 8,274,974 - 17,988,874 (21,531,124) 26,263,848 81,962,917 6,996,400 262,378,761 13,170,836 364,508,914 17,988,874 382,497,788 Corporate Islamic Trading and Sales Others Total ------------------------------------------(Rupees in '000)------------------------------------------ 24,119,784 In respect of forward foreign exchange contracts In respect of forward lendings In respect of fixed assets In respect of government securities In respect of other contingencies 24,119,784 Total 14,961,863 3,056,954 18,018,817 1,655,703 1,655,703 152,359,696 1,968,946 154,328,642 121,073 2,278,386 2,399,459 40,737,350 152,359,696 3,056,954 121,073 1,968,946 2,278,386 200,522,405 36.1.1 The operations of the Bank are currently based only in Pakistan, therefore, geographical segment is not relevant. 37 RELATED PARTY TRANSACTIONS The Bank enters into transactions with related parties in the ordinary course of business and on substantially the same terms as for comparable transactions with person of similar standing. Contributions to and accruals in respect of staff retirement benefits and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment. Details of transactions with related parties during the period, other than those which have been disclosed elsewhere in these financial statements are as follows: 31 December 2018 (Audited) Other related Directors parties Key management personnel Other related parties ----------------------------------------(Rupees in '000)---------------------------------------- Investments Opening balance Investment made during the period / year Investment redeemed / disposed during the period / year Closing balance Advances Opening balance Addition during the period/year Repaid during the period/year Transfer in / (out) - net Closing balance Other assets Interest / mark-up accrued Other receivables against E-banking settlement against investment Deposits and other accounts Opening balance Received during the period / year Withdrawn during the period / year Transfer in / (out) - net Closing balance Other liabilities Payable to staff retirement fund Interest / mark-up payable Contingencies and Commitments Guarantees - - 259,268 69,263 - - 240,000 50,005 - - (113,318) 215,213 - - (30,737) 259,268 3,000 5,000 (3,000) 5,000 169,576 72,627 (47,659) (4,327) 190,217 - 3,500 500 (1,000) 3,000 111,729 85,361 (33,235) 5,721 169,576 - 324 43 - 167 33 - 324 43 113,819 50,000 163,819 167 33 115,100 50,000 165,100 247,127 2,092,961 (1,738,714) 601,374 25,704 457,656 (473,258) 5,125 15,227 4,993,206 93,552,759 (93,778,732) 4,767,233 235,344 1,196,771 (1,184,988) 247,127 46,327 380,449 (375,081) (25,991) 25,704 4,323,175 76,961,727 (76,291,696) 4,993,206 3,323 93 72,661 49,793 2,204 98 41,278 - - - - - 2,287 30 September 2019 (Un-audited) Particulars Directors Key management personnel 30 September 2018 (Un-audited) Other related Directors parties Key management personnel Other related parties ---------------------------------------(Rupees in '000)--------------------------------------Profit and loss account Income Mark-up / return / interest earned Fee and commission income Expense Mark-up / return / interest paid Rent expense ATM and ADC charges SONERI BANK LIMITED Key management personnel Statement of financial position The Bank has related party transactions with its related group companies, major shareholders, staff retirement funds, directors and their close family members (inculding their associates) and key management personnel. 36 Directors ------------------------------------------(Rupees in '000)------------------------------------------ -----------------------------------31 December 2018 (Audited)----------------------------------- Contingencies & Commitments In respect of letter of credit /guarantees 30 September 2019 (Un-audited) Total 370 37 8,938 12 179 190 40 7,064 98 185 19,268 - 464 - 425,165 8,829 7,810 10,084 - 576 - 99,688 7,976 8,624 SONERI BANK LIMITED 37
21. (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------38 Minimum Capital Requirement (MCR): Paid-up capital (net of losses) 11,024,636 11,024,636 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) 16,015,534 3,256,478 19,272,012 4,599,853 23,871,865 15,359,095 3,082,678 18,441,773 4,995,354 23,437,127 132,715,714 7,527,556 17,105,251 157,348,521 133,719,523 8,246,679 17,422,308 159,388,510 10.18% 12.25% 15.17% 9.64% 11.57% 14.70% Common Equity Tier 1 Capital Adequacy ratio Tier 1 Capital Adequacy Ratio Total Capital Adequacy Ratio (Un-audited) (Audited) 30 September 31 December 2019 2018 National minimum capital requirements prescribed by SBP CET1 minimum ratio Tier 1 minimum ratio Total capital minimum ratio Leverage Ratio (LR): Eligible Tier-1 Capital Total Exposures Leverage Ratio - percentage 6.00% 7.50% 11.90% 19,272,012 525,749,220 3.67% LIABILITIES Bills payable Due to financial institutions Deposits and other accounts Due to head office Other liabilities Total liabilities 39.4 39.6 CONTINGENCIES AND COMMITMENTS 39.7 106,681,288 98,057,854 108.79% 107,190,086 92,037,670 116.46% Net Stable Funding Ratio (NSFR): Total Available Stable Funding Total Required Stable Funding Net Stable Funding Ratio - percentage 214,594,171 187,647,634 114.36% 204,605,129 164,874,965 124.10% The Bank follows the below mentioned approach for determining credit risk, market risk and operational risk exposures in the capital adequacy calculation: (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------1,142,981 394,535 700,000 5,213,870 8,844,841 350,450 2,108,164 453,592 19,208,433 887,183 331,273 5,147,722 8,005,364 208,419 189,802 14,769,763 115,623 208,000 16,770,760 378,046 17,472,429 161,871 328,236 12,237,182 165,587 97,349 12,990,225 1,736,004 1,779,538 1,500,000 173,734 62,270 1,736,004 1,500,000 129,190 150,348 1,779,538 The profit and loss account of the Bank's Islamic banking branches for the period ended 30 September 2019 is as follows: Note Profit / return earned Profit / return expensed Net profit / return Approach adopted by Bank Standardized Approach Standardized Approach Basic Indicator Approach 39.1 39.2 39.3 REPRESENTED BY: Islamic banking fund Accumulated profit Surplus on revaluation of assets - net of tax 18,441,773 515,189,170 3.58% Liquidity Coverage Ratio (LCR): Total High Quality Liquid Assets Total Net Cash Outflow Liquidity Coverage Ratio - percentage SONERI BANK LIMITED 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 Other assets Total assets NET ASSETS 6.00% 7.50% 11.90% (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------- 38 The Bank is operating 21 Islamic Banking branches (31 December 2018: 21). The statement of financial position and profit and loss account of these branches (including Islamic Banking Division) are as follows: Note Risk Weighted Assets (RWAs): Credit Risk Market Risk Operational Risk Total Risk Type Credit Risk Market Risk Operational Risk ISLAMIC BANKING BUSINES BSD circular letter No. 03 dated 22 January 2013 requires all Islamic Banks and Banks with Islamic Banking Branches to present all financing, advances for assets under Islamic modes of financing and any other related items pertaining to Islamic mode of financing under the caption Islamic Financing and Related Assets in the Statement of Financial Position. CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS 38.1 39 Other income Fee and commission Income Foreign exchange income Loss on securities Other income Total other income Other expenses Operating expenses Other charges Total other expenses Profit before provisions Provisions and write offs - net Profit before taxation 39.8 39.9 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 -------(Rupees in ‘000)-----1,307,300 919,964 387,336 699,329 466,185 233,144 44,239 27,986 1,072 73,297 460,633 35,872 10,924 (49) 888 47,635 280,779 283,862 380 284,242 228,666 228,666 176,391 (2,657) 173,734 52,113 (56) 52,057 SONERI BANK LIMITED 39
22. 39 .1 Due from Financial Institutions 30 September 19 (Un-audited) 31 December 2018 (Audited) In local In foreign currency currency In local In foreign currency currency Total Total 39.4 Customers Current deposits Savings deposits Term deposits Other ---------------------------------(Rupees in ‘000)-------------------------------Musharaka placement 39.2 700,000 700,000 - 700,000 700,000 - - - Investments by segments: 30 September 2019 (Un -audited) Cost / Provision Surplus / amortised for (deficit) cost diminution Carrying value -------------------------------------------(Rupees in ‘000)-----------------------------------------Federal Government securities -Ijarah sukuks -Bai muajjal from Government of Pakistan (GoP) 385,000 - (11,243) 373,757 400,000 - (7,160) 392,840 2,272,374 2,657,374 - (11,243) 2,272,374 2,646,131 2,074,788 2,474,788 - (7,160) 2,074,788 2,467,628 Non-Government debt securities -Listed 275,000 -Unlisted 2,277,360 2,552,360 (19,860) (19,860) 2,854 32,385 35,239 277,854 2,289,885 2,567,739 406,525 2,174,194 2,580,719 (19,860) (19,860) 4,096 115,139 119,235 410,621 2,269,473 2,680,094 5,209,734 (19,860) 23,996 5,213,870 5,055,507 (19,860) 112,075 5,147,722 Total Investments 39.3 Islamic financing and related assets Ijarah Murabaha Musharaka Diminishing Musharaka Salam Istisna Other islamic modes Advances against islamic assets Murabaha Ijarah Diminishing musharaka Salam Istisna Gross Islamic financing and related assets Less: Provision against Islamic financing - Specific - General Islamic financing and related assets - net of provision Financial Institutions Current deposits Savings deposits Term deposits 31 December 2018 (Audited) Cost / Provision Carrying Surplus / amortised for value (deficit) cost diminution (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)-----398,206 1,169,026 1,002,127 4,025,097 580,324 400,000 - 423,793 880,480 735,531 3,540,549 72,015 - 359,944 24,220 187,804 728,971 8,875,719 754,348 58,193 13,471 1,405,323 150,000 8,033,703 30,878 30,878 8,844,841 28,339 28,339 8,005,364 Deposits and other accounts 39.4.1 39.5 Charity Fund Payments / utilization during the period/year Health Closing balance Profit / Return Earned of Financing, Investments and Placement Profit earned on: Financing Investments Placements Others 39.9 SONERI BANK LIMITED 22,299 4,718,891 200,000 4,941,190 12,237,182 (Un-audited) (Audited) 30 September 31 December 2019 2018 ---------(Rupees in ‘000)-------228 228 228 - 129,190 173,734 (129,190) 173,734 160,665 129,190 (160,665) 129,190 408,744 529,230 937,974 435,565 1,220,138 1,655,703 (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------847,866 455,569 3,865 1,307,300 218,903 226,954 250,398 3,074 699,329 833,846 2,421 83,697 919,964 466,343 975 (1,133) 466,185 Profit on Deposits and Other Dues Expensed Deposits and other accounts Due to financial institutions Others 40 153,260 6,685,767 1,238,000 8,077,027 16,770,760 CONTINGENCIES AND COMMITMENTS -Guarantees -Other contingent liabilities 39.8 2,160,426 3,817,937 641,477 676,152 7,295,992 Islamic Banking Business - Unappropriated Profit Opening balance Add: Islamic Banking profit for the period/year Less: Transferred / remitted to Head Office Closing balance 39.7 2,194,175 4,937,840 1,228,097 333,621 8,693,733 This includes deposits eligible to be covered under insurance arrangements amounting to Rs 5,725 million as at 31 December 2018. Opening balance Additions during the period/year Received from customers on account of delayed payment 39.6 (Un-audited) (Audited) 30 September 31 December 2019 2018 -------(Rupees in ‘000)------ SONERI BANK LIMITED 41
23. 39 .10 Pool Management 30 September 19 (Un-audited) Normal Pool Special Pool 31 December 2018 (Audited) Normal Pool Total Special Pool 915,685 191,269 611,000 373,758 1,049 10,318 431,412 4,297 53,708 206,275 708,968 4,193 400,000 188,085 4,100,017 531,457 304,021 180,453 2,272,374 10,999 525,094 248,909 3,922,156 104,201 82,670 69,347 1,681,857 25,155 9,958,693 1,447,142 495,290 180,453 611,000 2,646,132 12,048 525,094 259,227 4,353,568 108,498 53,708 288,945 778,315 1,686,050 400,000 213,240 14,058,710 924,782 632,739 497,336 23,096 424,840 201,024 37,331 120,148 52,296 181,905 600,702 281,161 400,000 421,899 4,799,259 56,526 62,654 232,842 270,000 2,467,628 501,184 4,146,182 948,084 8,685,100 Contractual maturities of mudaraba based deposit accounts Total --------------------------------------(Rupees in '000)-------------------------------------Chemical and Pharmaceuticals Textile Cement Sugar GOP Bai Muajjal / Ijarah Sukuk Automobile and transportation equipment Financial Electronics and electrical appliances Production and transmission of energy Exports Imports Wholesale & Retail Trade Construction Food and allied Services Iron & Steel Individual Others 39.13 981,308 695,393 232,842 767,336 2,467,628 23,096 926,024 201,024 4,183,513 120,148 52,296 181,905 600,702 1,229,245 400,000 421,899 13,484,359 30 September 2019 Particulars Total Upto 1 Month Over 1 to 3 Months Over 3 to 6 Months Over 6 Months to 1 Year Over 1 to 2 Years Over 2 to 3 Years Over 3 to 5 Years ----------------------------------------------------(Rupees in '000)--------------------------------------------------2,466,097 189,113 1,556,400 178,554 521,330 4,600 16,100 Fixed Deposits Savings Deposits 10,265,376 10,265,376 Current Account 1,358,231 1,358,231 - Remunerative 14,089,704 11,812,720 1,556,400 178,554 521,330 4,600 16,100 Profit / (loss) distribution to depositor's pool Profit General Sharing Remunerative Ratio Depositor's (Depositor: Pools Mudarib) Profit rate return earned Mudarib Share transferred to the Depositors through Hiba (Rs in '000) Mudarib Share Mudarib transferred share to the Depositors Net of through Hiba Hiba (Rs in '000) (Percentage) Profit Mudarib rate Profit share and rate Net of weightage return announcement Hiba distributed period Percent Musharaka investments from the SBP under Islamic Export Refinance Scheme (IERS) are channelled towards the export sector of the economy and other financings as per SBP guidelines. 39.11 Key features and risk and reward characteristics of all pools The 'Mudaraba Pool' for Local Currency caters to all Soneri Bank Limited - Islamic Banking depositors and provides profit / loss based on Mudaraba. Mudaraba Pool Normal Pool Special Pool Total 75.00% 75.00% 75.00% 5.28% 12.56% 6.50% 9,972 103,415 113,387 33.10% 51.81% 49.35% 20,154 96,201 116,355 16.72% 12.05% 22.73% Monthly Monthly Monthly 4.27% 10.91% 9.14% The IERS Pool caters to the 'Islamic Export Refinance' requirements based on the guidelines issued by the SBP. The risk characteristic of each pool mainly depends on the asset and liability profile of each pool. "Share of Jointly financed by the Bank and unrestricted investments / PLS deposit account holders IERS Musharaka Pool This represents all earning assets of the Bank except those tagged to the Islamic Export Refinance Scheme. Major categories include: Funded Income Islamic financing and related assets Investments Due from financial institutions Others 39.12 Incentive profits (Hiba) Expenses Gains / (loss) on sale of securities Profit rate and "HIBA profit to (Rupees in Ratio of weightage announcement weightage of SBP '000)" period Bank to SBP (Rupees in '000)" Profit rate return earned by SBP Total -------------------------(Rupees in '000)--------------------------844,196 844,196 455,569 455,569 3,865 3,865 1,303,630 1,303,630 The Bank paid an aggregate amount of Rs. 113.387 million as incentive profits (Hiba), which includes Rs. 9.972 million for normal pool and Rs. 103.415 million for special pool during the nine months ended 30 September 2019. The following guidelines are approved by the Bank's Shariah Advisor for determination of incentive profits (Hiba): - Special weightage deposits in designated tiers / slabs in Mudaraba Pool shall be offered extra weightages outside the Mudaraba Pool, provided the specified parameters are met ; - The deposit deal shall be at least of Rs 100 thousands ; Musharaka Pool SBP's Islamic Export Refinance Scheme 0.1114 2,289 - Quarterly 1.44% Parameters used for allocation of profit, charging expenses and provisions, etc. along with a brief description of their major components: Income generated from relevant assets, calculated at the end of each month is first set aside for the Musharaka pool arrangement between the Bank and the State Bank of Pakistan. It is then allocated between the participants of the pool as per the agreed weightages and rates. The Mudaraba Pool profit is divided between the Bank and depositors in the ratio of Bank’s average equity (pertaining to Islamic banking branches) and average depositors balances commingled in each pool on a pro-rata basis. The depositors' share of profit is allocated amongst them on the basis of weightages declared before start of each month, after deduction of a mudarib fee. During the period ended 30 September 2019, the Bank charged 25% (2019: 25%) of the profit as Mudarib fee. These weightages are declared by the Bank in compliance with the requirements of the SBP and Shariah. The allocation (of income and expenses to different pools) is made on a pre-defined basis and accounting principles / standards. Provisions against any non-performing assets of the pool are not passed on to the pool. - In case a Term Deposit is pre-maturely encased, profit shall be paid at the expected rate of completed tenor; - The payment of Hiba on deposits will be at the sole discretion of the Bank and could be decreased or / and removed any time during the tenure of the deposit, under intimation to the customer, if the customer fails to meet the prerequisites at any time during the tenure of the deposit and / or the profit rate no longer remains sustainable from Bank's share; and - The Bank shall ensure that all the operational procedures and controls to the satisfaction of Shariah are in place. 42 SONERI BANK LIMITED SONERI BANK LIMITED 43
24. LIST OF BRANCHES AS AT 30 SEPTEMBER 2019 39 .14 Allocation of Income and Expenses to Depositors' Pools a) Following are material items of revenues, expenses, gains and losses (Un-audited) (Un-audited) 30 September 30 September 2019 2018 ---------(Rupees in ‘000)-------- DHA Phase-III Branch, Lahore Kana Kacha Branch, Lahore Tel. No: (042) 35734081, 2, 3 & 5 Tel. No: (042) 35472222 & 0316-8226316-8 Chungi Amer Sadhu Branch, Lahore Sabzazar Branch, Lahore Tel. No: (042) 35922182,184 & 186 Tel. No: (042) 37830881-6 Johar Town Branch, Lahore DHA Phase-IV Br., Lahore Tel. No: (042) 35204191-3 Tel. No: (042) 35694156-7 Gulberg Branch, Lahore Wahdat Road Branch, Lahore Azam Cloth Market Branch, Lahore Tel. No: (042) 35713445-8, 35759273 & Tel. No: (042) 37424821-7 & 37420591 Tel. No: (042) 37662203-7 Gunpat Road Branch, Lahore Jail Road Branch, Lahore Tel. No: (042) 37361607-9 Tel. No: (042) 35408936-8 Airport Road Branch, Lahore Badami Bagh Branch, Lahore Tel. No: (042) 35700115-8 Tel. No: (042) 37731601, 2 & 4 Timber Market Branch, Lahore Montgomery Road Branch, Lahore Tel. No: (042) 37725353-8 Tel. No: (042) 36291013-4 Shahdara Branch, Lahore Islamic Banking Tel. No: (042) 37920085, 37941741-3 & DHA Phase: VI Branch, Lahore CENTRAL REGION Profit / return earned on financings, investments and placements Other income (including other charges) Directly related costs attributable to pool b) 1,303,630 73,297 1,376,927 698,171 47,635 (3,281) 742,525 Main Branch, Lahore Tel: (042) 36368141-8 & 111-567-890 Defence Branch, Lahore Following weightages have been assigned to different products under the Mudaraba Pool during the period: Tel. No: (042) 35730760-1, 3574616 & Percent -age of total Mudaraba based deposits (042) 35691037-9 Minimum weightage 71% 0.8% 0.2% 10% 18% Savings - Soneri Munafa Account Savings - Soneri Bachat Account Savings - Assan Account Current Account - Remunerative Time Deposits - Soneri Meadi Maximum weightage (042) 35772294-5 0.4211 0.4211 0.4211 0.0038 0.4977 1.0146 0.4211 0.4211 0.0038 1.0237 The Bank shares all its revenue generated through banking operations with the deposit account (pertaining to Islamic Operation) holders. 40 Circular Road Branch, Lahore Tel. No: (042) 37670483, 86, 89 & (042) 37379319 Model Town Branch, Lahore Tel. No: (042) 35889311-2 & 35915666 Peco Road Branch, Lahore COMPARATIVES Tel. No: (042) 35222306-7, 35203050-1, Comparative information has been re-classified and re-arranged in this condensed interim financial statements, wherever Comparative information has been reclassified, rearranged or additionally incorporated in these condensed interim financial statements for the purposes of better presentation. The Comparative information has been reclassified and / or restated as a result of revised format of interim financial statement as more fully explained in note 4.1.1 to these condensed interim financial statements. 41 (042) 35177804 & 35173392 (042) 37921743-8 Tel. No: (042) 37180535-7 Cavalry Ground Branch, Lahore Manga Mandi Branch, Lahore Bahria Town Branch, Lahore Tel. No: (042) 35383516-9 Tel. No: (042) 35976354 & 0316-8226346-9 Islamic Banking Temple Road Branch, Lahore Badian Road Branch, Lahore Expo Centre Branch, Lahore DATE OF AUTHORISATION FOR ISSUE Tel. No: (042) 36376341, 2 & 6 Tel. No: (042) 37165390-2 Tel. No: (042) 35314087, 88, 90 & 91 These condensed interim financial statements were authorised for issue on 24 October 2019 by the Board of Directors of the Bank. Allama Iqbal Town Branch, Lahore Mughalpura Branch, Lahore Wapda Town Branch, Lahore Tel. No: (042) 37812395-7 Tel. No: (042) 36880892-4 Tel. No: (042) 35187611-2 Baghbanpura Branch, Lahore Upper Mall Branch, Lahore Shah Alam Market Branch, Lahore Tel. No: (042) 36832811-3 Tel. No: (042) 35789346, 49, 51 & 55 Tel. No: (042) 37376213-4 & 0316-8226277-8 Thokar Niaz Baig Branch, Lahore Islampura Branch, Lahore DHA Phase-V Branch, Lahore Tel. No: (042) 35313651, 3 & 4 Tel. No: (042) 37214394-7 Tel. No: (042) 35695678 & 0316-8226322-3 Garhi Shahu Branch, Lahore Chauburji Branch, Lahore Tel. No: (042) 36294201-3 & 36376096 Tel. No: (042) 37112228 & 0316-8226325-7 Zarrar Shaheed Road Br., Lahore Walton Road Branch, Lahore Tel. No: (042) 36635167-8 Tel. No: (042) 36672305 & 0316-8226339, 40 & 41 Hamdard Chowk Kot Lakhpat Br., Lahore Faisal Town Branch, Lahore Tel. No: (042) 35140261-3 Tel. No: (042) 35170540 & 0316-8226335, 7 & 8 Tel. No: (042) 36653728-30 & 36619702 GENERAL Figures have been rounded off to the nearest thousand rupees unless otherwise stated. 42 CENTRAL OFFICE 10th Floor, PNSC Building, M. T. Khan Road Karachi Tel. No: (+92-21) 32444401-5 & 111-567-890 Swift: SONEPKKAXXX REGISTERED OFFICE Rupali House, 241-242 Upper Mall Scheme, Anand Road Lahore-54000 - Pakistan Tel. No: (+92-42) 35713101-2 & 35792180 0317-4484542-3 Ghazi Chowk Branch, Lahore Tel. No: (042) 35188505-7 & 35185661-3 Islamic Banking New Garden Town Branch, Lahore Tel. No: (042) 35940611-616 Mirza Zafar Baig Chief Financial Officer 44 Alauddin Feerasta Chairman SONERI BANK LIMITED Mohammad Aftab Manzoor President & Chief Executive Officer Jamil Hassan Hamdani Director Manzoor Ahmed Director SONERI BANK LIMITED 45
25. Karim Block Branch , Lahore Samundri Branch, Distt. Faisalabad Mumtazabad Branch, Multan Abdul Hakeem Br., Distt. Khanewal Ellahabad Branch Khanpur Branch Tel. No: (042) 35417757 & 0316-8226412, 3 & 4 Tel. No: (041) 3423983-4 Tel No: (061) 6760212-4 Tel. No: (065) 2441888 & 0316-8226310-2 Tel. No: (049) 4751130 Tel. No: (068) 5577719-20 & 0316-8226307-9 Defence Road Branch, Lahore Painsera Branch, Distt. Faisalabad Gulgasht Colony Branch, Multan Mian Channu Branch Khudian Branch Narowal Branch Tel. No: 0316-8226415-8 Tel. No: (041) 2557100-11 & 2574300 Tel. No: (061)-6222701 & 0316-8226393-5 Tel. No: (065) 2662201-2 Tel. No: (049) 2791595-6 Tel. No: (0542) 411405 & 0316-8226328-30 Safari Garden Branch, Lahore Khurrianwala Branch Wapda Town Branch, Multan Depalpur Branch Sambrial Branch Rajanpur Branch Tel. No: 0317-4484537-9 Tel. No: (041) 4360701-2 Tel. No: (061) 6213011 & 0316-8226441-2 Tel. No: (044) 4541341-2 Tel. No: (052) 6523451-3 Tel. No: (0604) 688108 & 0316-8226396 Raiwind Branch, Lahore Chiniot Branch Azmat Road Br., Dera Ghazi Khan Okara Branch Gagoo Mandi Branch, Distt. Vehari SOUTH REGION Tel. No: (042) 35398661-2 & 0317-4484562-4 Tel. No: (047) 6333840-4 Tel. No: (064) 2471630-6 Tel. No: (044) 2553012-4 & 2552200 Tel. No: (067) 3500311-2 Main Boulevard Branch, Gulberg, Lahore Jhang Branch Lodhran Branch Mailsi Branch, Distt. Vehari Tel. No: (042) 35759924-5 & 0316-8226086-9 Tel. No: (047) 7651601-2 Tel. No: (0608) 364766-7 Hujra Shah Muqeem Branch District Okara Muridke Branch Small Industrial Estate Branch, Sialkot Rahim Yar Khan Branch Tel. No: (042) 37166511-4 & 37981100 Tel. No: (052) 3242607-9 Tel. No: (068) 5886042-4 Main Branch, Gujranwala Pasrur Road Branch, Sialkot Liaqatpur Br., Distt. Rahim Yar Khan Tel. No: (055) 3843560-2 & 111-567-890 Tel. No: (052) 3521655, 755 & 855 & Tel. No: (068) 5792041-4 Main Branch, Karachi Tel. No: (055) 3861931-3 & 5 Haveli Lakha Branch Sahiwal Branch Islamic Banking Sialkot Cantt Branch, Sialkot Tel. No: (068) 5702162, 5800161, (068) 5800661 & 5801161 Daska Branch, Distt. Sialkot Tel. No: (052) 6617847-8 Tel. No: (062) 2731703-1 Peoples Colony Branch, Faisalabad Tel. No: (041) 8555714 & 8555720 Ghulam Muhammadabad Branch, Faisalabad Nankana Sahib Branch Tel. No: (056) 2876342-3 Wazirabad Branch Tel. No: (055) 6603703-4 & 6608555 Ahmedpur Sharqia Branch District Bahawalpur Chichawatni Br., Distt. Sahiwal Islamic Banking East Canal Road Branch, Faisalabad Tel. No: (041) 2421381-2 Civil Lines Branch, Faisalabad Tel. No: (041) 2648105, 8 & 11 Madina Town Branch, Faisalabad Tel. No: (041) 8735551-2 & 0316-8226451-3 Tel. No: (055) 3832611-2 Main Branch, Multan Tel. No: (061) 4504018, 4504118, Hasilpur Branch Layyah Branch Club Road Branch, Sargodha Tel. No: (048) 3726021-3 Pull-111 Branch, Distt. Sargodha Tel. No: (048) 3791403-4 & 0316-8226449 & 50 Tel. No: (0454) 723011-2 Bhalwal Branch Tel. No: (048) 6642224 & 0316-8226331-2 Tel: No: (041) 4312201-6 46 SONERI BANK LIMITED Kharoor Pacca Branch Tel. No: (061) 6210690-2 Tel. No: (021) 35113898-9, 35113900-1 & 0316-8226189-92 Tel. No: (046) 2513203-4 Tel. No: (0608) 341041-2 AKU Branch, Karachi Gojra Branch, Distt. Toba Tek Singh Tel. No: (021) 34852251-3 & 33102498-9 Tel. No: (046) 3516392 & 3515577 Tel. No: (066) 2422901, 3 & 5 Haidery Branch, Karachi Kamalia Branch, Distt. Toba Tek Singh Fazal Garh Sanawan Branch, Distt. Muzafargarh Korangi Industrial Area Br., Karachi Tel. No: (046) 3411405-6 Tel. No: (021) 36638617, 36630409-410 & 0316-8226231-8 Tel. No: (066) 2250214-5 Sheikho Sugar Mills Branch Distt. Muzafargarh Tel. No: 0345-8530242-4 Pir Mahal Branch Jodia Bazar Branch, Karachi Tel. No: (046) 3361690 & 5 Tel. No: (021) 32441786, 32442208 & 32463894 & 0316-8226202-10 Gujrat Branch Shahbaz Khan Road Branch, Kasur Tel. No: (0492) 764890-3 Shahrah-e-Faisal Branch, Karachi Tel. No: (021) 34316128, 34316395, 34322150, Kharian Branch (021) 34398430 & 34535545-46, 53-54 Jalalpur Bhattian Br., Distt. Hafizabad Tel. No: (0547) 500848-50 DHA Branch, Karachi Pak Pattan Br., Distt. Pak Pattan Tel. No: (021) 35852209, 35845211 & 35340825 Tel.: (0457) 371781-5 Tel. No: (065) 2551560-3 Hafizabad Branch Tel. No: (0547) 541641-4 Gulshan-e-Iqbal Branch, Karachi Arif wala Br., Distt. Pak Pattan Tel. No: (021) 34811830-33 & 0316-8226239-45 Tel.: (0457) 834013, 5 & 6 Kabirwala Br., Distt. Khanewal Tel. No: (065) 2400910-3 Jaranwala Branch, Distt. Faisalabad Tel. No: (063) 2251664-5 Tel. No: (053) 7602904, 5 & 7 Shah Rukn-e-Alam Branch, Multan Bosan Road Branch, Multan F. B. Area Branch, Karachi Tel. No: (021) 36373782-3 & 36811646 Tel. No: (053) 3520591, 2 & 4 Jauharabad Branch, District Khushab Khanewal Branch Tel. No: (061) 6784051-4 & 6782081 Tel. No: (063) 2274795-6 Tel. No: (060) 6414205-7 Tel. No: (062) 2441481-7 & 2441478 (061) 4519927 & 4512884 Islamic Banking Tel. No: (021) 32232877-8 Tel. No: (040) 5484852-3 Tel. No: (062) 2271345 & 0316-8226404, 6 & 8 Tel. No: (041) 2680114, 110 & 117 Ghakkar Mandi Branch Garden Branch, Karachi Bahawalnagar Branch Muzafargarh Branch Tel. No: (056) 3810933 & 3813133 Tel. No: (0546) 507602, 3 & 8 Toba Tek Singh Branch Main Branch, Faisalabad Sheikhupura Branch (021) 35375448 Haroonabad Br., Distt. Bahawalnagar Bahawalpur Branch Godhpur Branch, Sialkot Kamokee Branch, Distt. Gujranwala (041) 111-567-890 Tel. No: (021) 35877773-4, 35861286 & Tel. No: (040) 4467742-3 Tel. No: (052) 4563932-3 Tel. No: (041) 2639873, 7-8 & Clifton Branch, Karachi Tel. No: (067) 3773110 & 20 & 3355779 Mandi Bahauddin Branch Sadiqabad Branch Wapda Town Branch, Gujranwala Tel. No: (055) 6813501-6 (021) 111-567-890 Burewala Branch, Distt. Vehari Tel. No: (044) 4775412-3 Tel. No: (052) 4560023-7 Tel. No: (055) 4291136-7 Tel. No: (021) 32436990 & 32444401-5 & Tel. No: (044) 4860401-3 & 0316-8226419-21 (052) 3611655 & 755 Islamic Banking Gujranwala Cantt. Branch, Gujranwala Tel. No: (067) 3750140-5 Pattoki Branch Tel. No: (049) 4422435-6 SITE Branch, Karachi Chishtian Branch Tel. No: (021) 32568330, 32550997 & 32550903-4 Tel. No: (063) 2501141-2 & 0316-8226304-6 SONERI BANK LIMITED 47
26. Zamzama Branch , Karachi Bahadurabad Branch, Karachi Shireen Jinnah Colony Branch, Karachi Marriot Road Branch, Karachi Sanghar Branch, Distt. Sanghar Deharki Branch Tel. No: (021) 35375835 & 35293435 Tel. No: (021) 34135842-3 Tel. No: (021) 34166262-4 Tel. No: (021) 32461840-42 & 0316-8226428-30 Tel. No: (0235) 543376-7 & 0316-8226246-7 Tel. No: (0723) 644156, 158 & 160 Gole Market Branch, Karachi New Challi Branch, Karachi Tando Adam Branch, Distt. Sanghar Thull Branch Tel. No: (021) 32625246 & 32625279 Islamic Banking Al-Tijarah Centre Branch, Karachi Gulshan-e-Maymar Branch, Karachi Tel. No: (021) 36618932, 36618925 & Tel. No: (021) 36881235-6 & 0316-8226445-47 Tel. No: (0235) 571640-44 Tel. No: (0722) 610153-4 Shersha Branch, Karachi Shahdadpur Br., Distt. Sanghar Kandkhot Branch Tel. No: (021) 32583001-3 & 0317-4484534-6 Tel. No: (0235) 841982-4 Tel. No: (0722) 572883-6 Main Branch, Hyderabad Shahpur Chakar Br., Distt. Sanghar Jacobabad Branch Tel. No: (022) 2781528-9, 2782347 & Tel. No: (0235) 846010-12 Tel. No: (0722) 654041-5 Golarchi Branch, Distt. Badin Shahdadkot Br., Distt. Qamber Shahdadkot Tel. No: (0297) 853192-4 Tel. No: (074) 4012401-2 Talhar Branch, Distt. Badin Dadu Branch Tel. No: (0297) 830387-9 Tel. No: (025) 4711417-8 & 0316-8226294-6 Deh. Sonhar Branch, Distt. Badin Shikarpur Branch Tel. No: (0297) 870729 & 870781-3 Tel. No: (0726) 540381-3 & Tel. No: (021) 34169251-3 0316-8226154-62 Shah Faisal Colony Branch, Karachi Gulistan-e-Jauhar Branch, Karachi Tel. No: (021) 34602446-7 Tel. No: (021) 36645688-9 Tel. No: (021) 34020943-5 Zaibunissa Street Saddar Br., Karachi M. A. Jinnah Road Branch, Karachi Barkat-e-Haidery Branch, Karachi Tel. No: (021) 35220025-7 Shadman Town Branch, Karachi Tel. No: (021) 36903038-9 Tel. No: (021) 32213972 & 32213498 (022) 111-567-890 Liaquatabad Branch, Karachi Gulbahar Branch, Karachi Tel No: (021) 34860723-25 Tel. No: (021) 36607744 & 0316-8226434-5 Enquiry Office Nazimabad No: 2 Branch, Karachi F. J. Road Branch, Hyderabad Tel. No: (021) 36601502-5 Tel. No: (022) 2728131 & 2785997 Lea Market Branch, Karachi North Karachi Branch, Karachi Tel. No: (021) 32526193-4 Tel. No: (021) 36920140-5 & 0316-8226171-2 Korangi Township No: 2 Branch, Karachi Block-7 Gulshan-e-Iqbal Branch, Karachi Timber Market Branch, Karachi North Karachi Ind. Area Branch, Karachi Tel. No: (021) 32442961 & 32442977 Tel. No: (021) 34983878 & 34837443-4 Tel. No: (021) 32742491-2 F. B. Industrial Area Branch, Karachi Tel. No: (022) 2651968 & 70 Matli Branch Tel. No: (021) 35347413-6 Islamic Banking Isra University Br., Distt. Hyderabad Tel. No: (022) 2032322 & 2030161-4 Napier Road Branch, Karachi Tel. No: (021) 35640731-6 35640235-7 Prince Ali Road Branch, Hyderabad Tel. No: (022) 2638514 & 2622122 Tel. No: (021) 32713539-40 Tel. No: (081) 2821610 & 2821641 Tel. No: (0297) 854554-6 Buhara Branch, Distt. Thatta Tel. No: (021) 34894941-3 Dhabeji Branch, Distt. Thatta Tel. No: (021) 34937933 & 34141296 Metroville Branch, Karachi Tel. No: (021) 35311491-2 & 0316-8226285-7 Khuzdar Branch Faqir Jo Pir Branch, Hyderabad Tel. No: (022) 2612685-6 Tel. No: (021) 36752206-7 Hub Branch, Distt. Lasbela Tel. No: (021) 34387673-4 Defence Phase-II Extension Br., Karachi Tel. No: (021) 36340553, 549 & 0316-8226291-2 Gawadar Branch Auto Bhan Road Branch, Hyderabad Tel. No: (022) 2100062-3 & 0316-8226313-4 Tel. No: (021) 35386910-12 Umerkot Branch Tel. No: (021) 32239711-3 & 32239678 North Karachi Township Branch, Karachi Tel. No: (021) 36870506-7 & 0316-8226409-11 NORTH REGION Matyari Branch, Distt. Matyari Tel. No: (022) 2760125-6 Tel. No: (021) 36968604-7 Nawabshah Branch Tel. No: (0244) 363918-9 Clifton Block-08 Branch, Karachi Islamic Banking Waterpump Branch, Karachi Tel. No: (021) 36312113 & 36312108, (021) 36312349 & 36311908 Apwa Complex Branch, Karachi Tel. No: (021) 32253143 & 32253216 Stock Exchange Branch, Karachi Tel. No: (021) 35867435-6 & 0316-8226425-7 Tel. No: (021) 34682682-4 Alyabad Branch, Karachi Sultanabad Branch, Distt. Tando Allah Yar Garden Market Branch, Karachi Tel. No: (022) 3404101-2 Tel. No: (021) 34517982-3 48 SONERI BANK LIMITED Saudabad Branch, Malir, Karachi Tel. No: (021) 34111901-5 Chowk Yadgar Branch, Peshawar Larkana Branch Tel. No: (074) 4058211-13 Islamic Banking Khyber Bazar Branch, Peshawar Tel. No: (091) 2566811-3 Tel. No: (021) 32244195-6 & 0316-8226431-3 Tando Muhammad Khan Branch Block-N North Nazimabad Branch, Karachi Clifton Block-2 Branch, Karachi Malir Branch, Karachi Tel. No: (0233) 821221 & 821317-8 Tel. No: (091) 2573335-7 & 2220006 Tel. No: (021) 34988781-2 Tel. No: (021) 36826727 & 36332517 Tel. No: (021) 35361115-7 Mirpurkhas Branch Block-02 Gulshan-e-Iqbal Br., Karachi Gulshan-e-Jamal Branch, Karachi Main Branch, Peshawar Tel. No: (091) 5277914-8 & 5277394 Tando Allah Yar Branch Tel. No: (022) 3890260-4 Tel. No: (021) 32414003-4 & 32415927-8 Tel. No: (0864) 211103-5 & 0316-8226454, 5 & 6 Tel. No: (0238) 571350 & 356 New Sabzi Mandi Branch, Karachi Nishtar Road Branch, Karachi Tel. No: (0848) 412861-3 & 0316-8226466-68 Tel. No: (0853) 310225-7 Gulberg Branch, Karachi Allama Iqbal Road Branch, Karachi Tel. No: (0826) 613685 & 0316-8226342-4 Tel. No: (021) 34420030, 31 & 39 DHA Phase-IV Branch, Karachi Chandni Chowk Branch, Karachi Tel. No: (081) 2820227-30 & 37 Chamman Branch S.I.T.E. Branch, Hyderabad Tel. No: (022) 3886861-2 Tel. No: (021) 34710252 & 256 Islamic Banking Shahrah-e-Iqbal Branch, Quetta Tel. No: 0316-8226439-40 New M. A. Jinnah Road Branch, Karachi Gulshan-e-Hadeed Branch, Karachi Main Branch, Quetta Tando Bago Branch, Distt. Badin Bahria Complex-III Branch, Karachi Suparco Branch, Karachi (021) 37080810 & 0316-8226457 0316-8226319-21 Qasimabad Branch, Hyderabad Tel. No: (0297) 840171-2 Khayaban-e-Ittehad Branch, Karachi Tel. No: (021) 36829961-4 Tel. No: (021) 34970560, 34158325-6, Tel. No: (022) 3816309 & 3816625 Tel. No: (021) 36962851, 52 & 55 Paria Street Kharadar Branch, Karachi Tel. No: (021) 32201059, 60 & 61 Latifabad Branch, Hyderabad Tel. No: (021) 35058041 & 35071181 Tel. No: (021) 34815811-2, 34833728 & 777 Islamic Banking Cloth Market Branch, Karachi (022) 2780205 Islamic Banking Rashid Minhas Road Br., Karachi Tel. No: (022) 3340371-2 & 0316-8226267-8 Panjhatti Branch Tel. No: (0243) 552183-6 Main Branch, Rawalpindi Tel. No: (051) 5123123, 4, 5 & 8 & Tel. No: (021) 36641623-4 & 0316-8226436-38 Sukkur Branch Tel. No: (071) 5622382, 5622925 & Ghotki Branch (051) 5123136-7 Tel. No: (0723) 680305-6 0316-8226055-63 SONERI BANK LIMITED 49
27. Chandni Chowk Branch , Rawalpindi G-11 Markaz Branch, Islamabad Skardu Branch Tel. No: (051) 4571160, 63, 86 & 87 & Tel. No: (051) 2363366-68 Tel. No: (05815) 450327 & 450188-9 (051) 4571301 Abbottabad Branch F-11 Markaz Branch, Islamabad 22 Number Chungi Branch, Rawalpindi Tel. No: (051) 5563576-7 Jhelum Branch F-6 Branch, Islamabad Muslim Town Branch, Rawalpindi Chitral Branch, Distt. Chitral PWD Branch, Islamabad Tel. No: (051) 5595148-9 & 5974073 Islamic Banking Peshawar Road Br., Rawalpindi Chakwal Branch Lathrar Road Branch, Tarlai, Distt. Islamabad Mardan Branch Soan Garden Br., Distt. Islamabad Muzaffarabad Branch Islamic Banking Chillas Branch, Distt. Diamer Waisa Branch, Distt. Attock Kallar Syedan Branch, Distt. Rawalpindi Tel. No: (051) 3570903 & 0316-8226106 Main Branch, Islamabad Tel. No: (051) 2348174 & 78 & (051) 111-567-890 G-9 Markaz Branch, Islamabad Tel. No: (051) 2850171-3 Islamic Banking I-10 Markaz Branch, Islamabad Islamic Banking Mingora Branch, Swat Islamic Banking Swabi Branch, Distt. Swabi Tel. No: (0938) 221741-45 Mirpur Branch, (AJK) Tel. No: (05827) 444488 & 448044 Islamgarh Branch, (AJK) Tel. No: (05827) 423981-2 Jattlan Branch, Distt. Mirpur (AJK) Tel. No: (05827) 403591-4 Gilgit Branch Tel. No: (05811) 453749, 450504, 450498 & (05811) 451838 Tel. No: (051) 4101733-5 Denyore Branch, Distt. Gilgit I-9 Markaz Branch, Islamabad Tel. No: (05811) 459986-7 Tel. No: (051) 4858101-3 Jutial Branch, Distt. Gilgit E-11 Branch, Islamabad Tel. No: (05811) 457233-5 Tel. No: (051) 2228757-8 Aliabad Branch, Hunza DHA Phase-II Br., Islamabad Tel. No: (05813) 455000, 455001 & 455022 Tel. No: (051) 5161967-9 & 5161970-72 Gahkuch Branch Islamic Banking F-8 Markaz Branch, Islamabad Tel. No: (051) 2818019-21 50 SONERI BANK LIMITED Tel. No: (05812) 450631-2 Tel. No: (057) 2651068-9 Tel. No: (051) 3360274-5 Tel. No: (051) 4511140-1 & 0317-4484551-3 Tel. No: (0582) 2920025-6 Tel. No: (051) 3516328, 29 & 30 Tel. No: (051) 5733772-3 & 5733768-9 Wah Cantt. Branch, Distt. Rawalpindi Tel. No: (0937) 864753-7 Tel. No: (051) 5738940-2 Gujar Khan Branch Bewal Br., Distt. Rawalpindi Tel. No: (0543) 543128-30 & 0316-8226045 Tel. No: (051) 2241661-5 Tel. No: (051) 5460113-7 Bahria Town Branch, Rawalpindi Tel. No: (0943) 412078-9 Tel. No: (051) 5708789, 90 & 91 Tel. No: (051) 4419020-22 Gulraiz Branch, Rawalpindi Tel. No: (0544) 625794-5 Tel. No: (051) 2826573-4 & 0316-8226303 Tel. No: (051) 5405506 & 4931112-3 Pindora Branch, Rawalpindi Tel. No: (0992) 385231-3 & 383073-75 Tel No: (051) 2101076-7 & 0316-8226282-4 Tel. No: (05814) 450409-10 Tel. No: (0946) 714355, 714400 & 0316-8226273-75 Battagram Branch Tel. No: (0997) 311044-6 Mansehra Branch Tel. No: (0997) 301931-6 Kohat Branch, Distt. Kohat Tel. No: (0922) 511011 & 511033 IB - Nowshera Branch, Distt. Nowshera Tel. No: (0923) 611545-8