ABL Annual Financial Statements 2019

About this report
The Board is responsible for the preparation of

this Annual Report. It is prepared in accordance
with the following regulations, frameworks and
guidelines:
• The International Integrated Reporting <IR>

Framework issued in December 2014 by the
International Integrated Reporting Council.
• The Banking Companies Ordinance, 1962

issued by the State Bank of Pakistan.
• The Companies Act, 2017 issued by the

This report is published within three months of
Securities and Exchange Commission of
the date of the Statement of Financial Position
Pakistan.
and is available in three mediums to cater the
need of our various readers.
• The Listed Companies (Code of Corporate
Governance) Regulations, 2019 issued by
the Securities and Exchange Commission of
Pakistan.
A limited number of printed reports have been
• International Financial Reporting Standards produced to be dispatched to those who have
and Interpretations issued by the requested for the same.
International Accounting Standards Board.
Readers who prefer viewing our report online
• Islamic Financial Accounting Standards and on the go can access through https://
issued by the Institute of Chartered www.abl.com/investor-relations/financials/
Accountants of Pakistan. financial-presentations/
• Directives issued by the State Bank of A soft copy (PDF) version of the report is
Pakistan and the Securities and Exchange also available in CD (compact disk) format
Commission of Pakistan. for those who would like to maintain an
easily- portable digital version of the Report.
CONTENTS
Overview 02 Who We Are

This section provides information covering who we are and
04 Awards and Accolades
our corporate structure. It also contains message from the
Chairman Board of the Directors. 06 Business Excellence
08 Corporate Structure
10 Board of Directors
14 Chairman’s Message
18 Management Team
20 Our Value Creation Business Model
22 Products & Services
Strategy and Resource Allocation 28 Achievments Against Our Strategic Objectives

This section contains the CEO’s thoughts on pertinent
30 Director’s Report
matters and recaps the year’s performance.
42 CEO’s Review
52 Group Reviews
64 Key Performance Indicators
66 Horizontal & Vertical Analysis
70 Value Creation for Shareholders
73 Cash Flow
74 Stakeholders Engagement
Risk Management 80 Risk & Opportunities Approach & Oversight

This section details our commitment to robust and
81 Risk & Opportunities
effective risk management framework.
Governance 84 Our Governance Philosophy

This section details our commitment
85 Board Committees Managing
to sound and effective governance and sustainability.
87 Conflict of Interest
88 Report of the Audit Committee
89 Statement of Internal Controls
90 Statement of Compliance
91 Independent Auditor’s Review Report
92 Remuneration Report
94 Shariah Board
94 Report of Shariah Board
98 Information Technology Governance
100 Whistle Blowing Policy
100 Investor Grievance
101 Corporate Social Responsibility Policy
102 Corporate Sustainability Report
108 Our Committment to Sustainable Development Goals
111
Financial and Other Reports Unconsolidated Financial Statements
203
Consolidated Financial Statements
286
Pattern of Shareholding
290
Notice of 74th Annual General Meeting
292
Glossary
295
Form of Proxy
Allied Bank Limited 01
WHO WE ARE
Total Assets (PKR) ABL is the 4th largest private sector commercial bank and 5th
1,481 largest bank in Pakistan in terms of total assets which accounts for
approximately 7.3% of sector assets.
billion
As one of Pakistan’s leading bank, we understand the intricacies of
the local market and provide a wide range of financial services with a
Total Deposits (PKR) nationwide coverage and customer outreach.
1,049 Our superior asset quality depicted by an industry leading

coverage, infection ratios, diverse revenue streams, resilient
billion
deposit-based funding structures and a solid capital base,
supplemented by high standards of corporate governance have
Total Equity (PKR)
contributed towards maintaining a strong financial position with stable
115 billion profitability.
Keeping track of the fast paced, dynamic and a competitive

Profit After Tax (PKR)
market scenario, we are constantly updating our technology
14.1 billion platforms to enhance customer experiences and improve
operating effectiveness.
Earnings Per Share (PKR)

The Bank is among the group of select few which have been
12.3 awarded highest long term and short-term entity credit ratings of
AAA (Triple A) and A1+ (A One Plus) respectively.
Over
4 million
customers
Over
11,000
Employees
Over
1,375
Branches
Over
1,500
ATMs
Bank Ranking (As per

Bankers ALMANAC)
5
In Pakistan Pakistan’s Widest
Network with
coverage in
128 547
Present in 4 markets globally with 2 overseas branches (Bahrain & Karachi Export
processing Zone) and 2 overseas representative offices (Peoples Republic of China & Dubai).
Districts & Cities/Towns
Annual
02 Report 2019
Vision
To become a dynamic and efficient bank providing integrated solutions in order to be the first choice
rd of Directors
Mohammad Naeem Mukhtar (Chairman) Mr. Sheikh Mukhtar Ahmad
Muhammad Waseem Mukhtar Mr. Abdul Aziz Khan Mission
Muhammad Akram Sheikh Mr. Zafar Iqbal To provide value added services to our customers
Nazrat Bashir To provide high tech innovative solutions to meet customers’ requirements
Tahir Hassan Qureshi (CEO) To create sustainable value through growth, efficiency and diversity for all stakeholders
To provide a challenging work environment and reward dedicated team members according to their a
riah Board To play a proactive role in contributing towards the society
fti Muhammad Iftikhar Baig (Chairman) Mufti Tayyab Amin
fti Mahmood Ahmad
Core Values
ef Financial Officer Integrity
Mehmud ul Hassan High Performance
Excellence in Servic
Innovation and Growth
mpany Secretary
Muhammad Raffat
ditors
G Taseer Hadi & Co. Chartered Accountants
al Advisor
dviwalla & Zafar Advocates
re Registrar
Share Registrar Services Limited
gistered and Head Office 3 Tipu Block, New Garden Town, Lahore, Pakistan
al Code 54000
tact Details
-42) 35880043
: 111-225-225
pk
edbankpk
r/alliedbankltd
pk

Annual
04 Report 2019
BUSINESS
EXCELLENCE
Digital Transformation
In 1 Link Acquiring transaction volume having 13.1% market share with

26 million transactions count and Rs. 250 billion transaction volume.
In PayPak POS transactions having 21.1% market share.
In Launch of PayPak Cards.
Up 54%
123,555 million
Volume of PIB
Transactions
Up 81% Up 29%
3,253,800
9,303 million
No. of PIB
POS Volume
Transactions
Up 46% Up 25%
426,853 2,396,966
PIB Users POS
Transactions
190,452
6 New to Bank Up 33%
Customers 427 million
Digital/
e-commerce
Self-Service Volume of
Branches Up 14% Up 53% Transactions
1,742,335 123,179
Cards in e-commerce
97% Circulations Transactions
ATM Uptime
Up 10%
100 417,510
New Debit
56:44
Branches e-banking
Cards
with Kiosks Transaction
Up 7% Ratio
Up 46% 53,189,236
675 Number of
BIB Users ATM
Transactions
Up 10%
Up 43% 605,180 million
182,800 Volume of
No. of BIB ATM
Transactions
Transaction
Up 46%
16,423 million
Volume of
BIB
Transactions
PIB: Personal Internet Banking

BIB: Business Internet Banking
Annual
06 Report 2019
Service Delivery
Allied Phone Banking is working 24/7 to serve its customers and provide First Call Resolution
(FCR). Allied Bank customers may get in touch with Allied Phone Banking using telephone
service, email, webchat, social media and state of the art ABL Video Phone Banking.
1.79 1.83
1.83 CAF Rating
CAF Rating
CAF Rating (Product
(Dispute
(Culture) Service
Resolution)
& Design)
99%
35,023 3.87 100
Number of Customer Branches
Complaint days Mystery
Resolutions Complaint shoppings
Resolutions
TAT
158 85
Customer Branches
support with EQMS
staff
CAF: Conduct Assessment Framework for Banks by SBP

EQMS: Electronic Queue Management System
Human Resource Diversity
1
Women 17.44% 1
Director Female to Male Female HOD
Staff Ratio
47 4
Diffrently abled
Female Employees
Employees
reporting directly
to HODs
HOD: Head of Department, reporting directly to the CEO

CORPORATE
STRUCTURE
BOARD OF DIRECTORS
Shariah Board*
Board Risk
Management Committee e-Vision Strategic Planning & Human Resource and Audit Committee of
Committee Monitoring Committee Remuneration Committee the Board
Chief Executive Officer
Risk
Management Asset Liability Fair Treatment Compliance
Management
Committee Committee Committee Committee
Committee
Centeral
Human
IT Steering Administrativ
Resource
Committee e Action
Committe
Committee
e
Audit & Risk Review
Corporate & Business Planning

Investment Banking Human Resource
& New Initiatives
Service Standards
Treasury Banking Services
& Quality
Commercial & Retail Marketing & Corporate

Risk Management
Banking (South) Communication
Commercial & Retail

Information Technology Anti
Banking (North) Harassmen
t
Committee
Islamic Banking Finance
Digital Banking Compliance
General Services &

Special Assets Management
Real Estate
Corporate Affairs
Board Committee Management Committee Group Function
* Independent Shariah Board overseas Islamic banking operations
Annual
08 Report 2019
ahim Group and renamed as Allied Bank Limited in 2005. Its journey from Awain Shah Chiragh Building, Lahore to Head Office Building, New Garden Town, Lahore is worth-emulation sag

BOARD OF
DIRECTORS
HIGHLIGHTS
Sitting from Left to Right Standing from Left to Right

• Nazrat Bashir • Zafar Iqbal
• Mohammad Naeem Mukhtar • Tahir Hassan Qureshi
• Sheikh Mukhtar Ahmad • Muhammad Waseem Mukhtar
• Abdul Aziz Khan • Dr. Muhammad Akram Sheikh
Annual
10 Report 2019
2019

BOARD OF
DIRECTORS
Mohammad Naeem Mukhtar

Chairman / Non-Executive Sponsor Director
He is Chairman of the Board of Allied Bank since August 2004. He has done MBA from Cardiff
Business School UK, Post Graduate diploma in Textiles from UK and Chartered Textile Engineer
(CText ATI) from The Textile Institute in Manchester UK. He has over 34 years of experience of
finance and industrial manufacturing. Besides Chairman of Board of Directors of Allied Bank Limited,
he is also Chief Executive Officer/ Director of M/s. Ibrahim Fibres Limited and M/s. Ibrahim Holdings
(Pvt.) Limited, In addition, he is also on the boards of M/s. Ibrahim Agencies (Pvt.) Limited, ABL Asset
Management Company Limited, Karachi Education Initiative and Pakistan German Business Forum.
He is also a Member of Board of Governors of National Management Foundation, the parent body of
Lahore University of Management Sciences (LUMS). He is also representing ABL at Pakistan
Business Council and is Industry Co-Chair Banking Sector of NUST Corporate Advisory Council
(CAC) as well as Senior Fellow at Global Think Tank Network (GTTN).
Sheikh Mukhtar Ahmad

Non-Executive Sponsor Director
He started his business career immediately after migrating from India at the time of
independence of Pakistan in 1947 and contributed to the industrial and business growth of
Pakistan through his entrepreneurship skills and business acumen. He has over 58 years of
experience in establishing and successfully managing various industrial and financial
companies. He has been on the Board of Directors of Allied Bank Limited since April 2005 and is
a “Certified Director” from Pakistan Institute of Corporate Governance. He is also Chairman of
the Board of Directors of M/s. Ibrahim Fibres Limited, Ibrahim Holdings (Pvt.) Limited, Ibrahim
Agencies (Pvt.) Limited and ABL Asset Management Company Limited.
Muhammad Waseem Mukhtar

Non-Executive Sponsor Director
He is MBA from the University of Chicago Booth School of Business, Illinois, USA. He also holds a
Master’s degree in Total Quality Management (TQM) from University of Glamorgan, Wales, UK, and
has 22 years of diversified experience of Finance, IT and Industry. His strategic guidance played a
vital role in technological up-gradation of the Bank. He has been on the Board of Directors of Allied
Bank Limited since August 2004 and is a “Certified Director” from Pakistan Institute of Corporate
Governance. He is also Director on the Boards of M/s. Ibrahim Fibres Limited, Ibrahim Holdings (Pvt.)
Limited, Ibrahim Agencies (Pvt.) Limited, ABL Asset Management Company Limited.
Abdul Aziz Khan

Non-Executive Director
Mr. Abdul Aziz Khan has enriched and diversified experience of more than 56 years in the fields
of General Banking, Credit, Lease Finance, Business Development and Administration. His
accomplishments include 16 years of experience as Board Member of ABL, 11 years of
experience as Chief Executive Officer of M/s. Ibrahim Leasing and 9 years of international
banking, holding key positions. He is on the Board of Allied Bank Limited since August 2004.
Annual
12 Report 2019
Dr. Muhammad Akram Sheikh
Independent Director
Dr. Muhammad Akram Sheikh (Hilale-Imtiaz) has over 54 years of work experience in the public and
private sectors. He has founded Global Think Tank Network (GTTN) and currently chairs its Board of
Directors. He is also Director on the Boards of Quality School Foundation, Tricon Boston Consulting
Corporation (Pvt.) Limited (a 100% subsidiary of Sapphire Textile Mills Limited - STML).
In addition to the above, Mr. Akram Sheikh is a member of KPK Search and Selection Committee for
Vice Chancellors and Pakistan Engineering Council Elders Committee.
He has held prestigious senior positions including Federal Minister/Head of Planning Commission,
Federal Secretary of the Ministries of Communication, Water & Power and Industries & Production,
Managing Director and Chairman of some of the largest public sector industrial establishments.
During the period from 1998 to 2008, he also spearheaded many strategic policy initiatives including
Medium Term Development Framework and Vision 2030 which lays down strategic directions for the
future of the Country. He is on the Board of Directors of Allied Bank Limited since February 2015.
Nazrat Bashir
Ms. Nazrat Bashir belongs to Pakistan Administrative Service. She retired in BPS-22 from the
government Service. Her academic qualifications are Master’s in economics from New York
University, USA and Master’s in Psychology from University of Peshawar. She is a Certified
Director from the PICG.
Ms. Bashir has over 36 years of diversified civil service experience to her credit. During her
career she served in different Ministries. She remained Additional Finance Secretary, Internal
Finance, Finance Division, Government of Pakistan, Managing Director, Public Procurement
Regulatory Authority (PPRA) and Senior Advisor, Wafaqi Mohtasib Secretariat. She also held
directorship in various Government and Semi Government Organizations and attended
numerous Conferences, Workshops Seminars in Pakistan and abroad. She is on the Board of
Directors of Allied Bank Limited since August 2018.
Zafar Iqbal
He has 34 years’ experience in senior management positions in financial and power generation
sector. He was the Managing Director/ CEO of Pak Oman Investment Company Limited, a DFI owned
jointly by the Governments of Pakistan and Sultanate of Oman. During his 8 years stay at Pak Oman
he led the company in becoming the leading DFI in its peer group. Over the past 27 years, he has
served on the Boards of number of listed and non-listed companies and financial institutions. He is a
Fellow member of Institute of Chartered Accountants in England & Wales (ICAEW) and the Institute of
Chartered Accountants of Pakistan (ICAP). He is a “Certified Director” from Pakistan Institute of
Corporate Governance. He specialized in Investment Banking, Corporate Finance, Capital Markets,
Leasing, Aircraft Financing and Energy & Power Generation. Presently, he is associated in advisory
business and extensively travels within Middle East, South Asia, Europe and North America for
business negotiation. He is on the Board of Directors of Allied Bank Limited since August 2015.
Tahir Hassan Qureshi

He is a seasoned professional banker and Fellow member (FCA) of the Institute of Chartered
Accountants of Pakistan (ICAP) with a diversified experience of more than 31 years including
over 26 years of experience in the banking industry where he has held senior management
positions. He has served on various Committees of the ICAP and Pakistan Banks’ Association.
Before Joining Allied Bank Limited he held senior management positions in The Bank of Punjab,
Habib Bank Limited and MCB Bank Ltd. He joined Allied Bank Limited in 2008 and served as
Chief, Audit & Risk Review (A&RR), Chief Financial Officer and Chief Operating Officer (COO).
Apart from attending various seminars and conferences locally and internationally, he also
represented Allied Bank Limited on World Economic Forum’s annual meetings of the New
Champions. He is ‘‘Certified Director’’ from the ICAP and is Bank’s nominee director on the
Board of Habib Allied Holding Limited - UK, ABL Asset Management Company Limited and
Pakistan Corporate Restructuring Company Limited. He is Member of Council of the Institute of
Bankers Pakistan and Finance and Investment Committee (A working Committee of IBP's
Council). He is a lifetime fellow member of Institute of Bankers Pakistan and a representative of
the Bank at Management Association of Pakistan and Pakistan Business Council. He is serving
as CEO of the Bank since January 2017.

CHAIRMAN’S
MESSAGE
The World is continuously

being transformed by digital
revolution with a momentum
not experienced since the 19th
century industrial revolution;
embedding digital practices
and capabilities into the fabric
of global economies thereby
inculcating fundamental
changes in all areas of modern
life including society and
government.
The mass adoption of
digital technologies through
connected services and
devices has accelerated
economic growth, facilitated
digital entrepreneurship
for the next generation,
especially millennials, reduced
socioeconomic inequalities
amongst citizens and enabled
transparent and efficient
governance.
Annual
14 Report 2019
As governments and businesses seek
continuous growth in an evolving framework governing e-financial services; hence, Global Financial Inclusion Database
global economy, many have turned to further efforts are needed to reach the scale (FINDEX), only 14% of the adults
digitization; the digital economy now necessary for transforming the cash- have access to a formal account,
constitutes 23% of the global Gross based economy to digital economy. with the percentage dropping as low
Domestic Product and is expected to as 7% in case of females.
grow by approximately US$ 5.5 trillion to Country’s economic growth has
increase its share in the world economy witnessed a slowdown as the incumbent With a population base of more than
to 25% by end 2020. Global Banking Government, paying heed to the 220 million, around 2/3rd of the total
landscape is also being reshaped to deteriorating economic imbalances, population falling below the age of 30
yield a new business normal; displacing undertook restrictive policy actions and and one of the fastest growing mobile
banks focus from a closed operating several reforms; consumption led Gross markets globally with over 150 million
environment to more open ended and Domestic Product (GDP) growth rate mobile phone subscribers accounting
agile e-banking platforms. thereby moderating to 3.3% in FY 2018- for 73% tele-density, Pakistan’s low
19 from an un-sustainable level of 5.8% ranking in the Digital Infusion Index and
Banks are developing long term achieved in FY 2017-18. Mobile Connectivity Index (MCI)
strategies to strike a balance between highlights vast potential for growth in
brick and mortar branches and e- Curtailment of non-essential imports, the e-banking spectrum, while at the
banking platforms. Furthermore, exchange rate adjustments, initiatives same time reflecting immense challenges
disruptions posed by Fintechs and encouraging remittance inflows, and support faced in achieving transformation from
heightened customer expectations are from friendly countries reduced infancy to pioneer stage.
gradually impacting banks traditional external vulnerabilities, while Extended
approach of growth and efficiency while Finance Facility (EFF) program agreed Engulfed in a challenging macroeconomic
concurrently raising concerns about cyber with the International Monetary Fund and operating scenario, banking sector’s
security, data governance, high (IMF) to support Government’s growth trajectory has remained stressed;
transitioning structural reform agenda paved way for with repricing lag between earning assets
and infrastructure costs, complexity of country’s access to international and remunerative liabilities, rising risks
technology migration and skills markets and concessionary financing to credit profiles and increasing cost of
shortage. from other multilateral partners. doing business amidst emerging
regulatory requirements focusing on
Long standing structural weaknesses compliance, leaving a marked impact on
Technologies like Internet of Things continue to impact fiscal discipline; as
(IoT), Big Data, Artificial Intelligence (AI), interest margins. However, stabilization of
lowest taxes to GDP ratios in the interest rates, during first half of FY 2019-
Advanced Machine Learning, region, burgeoning debt servicing
Blockchain Technology and Cloud 20, have helped ease pressure on
and unavoidable expenditure leaves banks bottom line and assisted in
Computing little fiscal space to address economic in-
are having a growing impact on digital consolidating revenue growth
efficiencies. Primary deficit and overall momentum.
ecosystems in general and particularly deficit worsened to reach 3.5% and 8.9% of
the traditional banking processes GDP respectively in FY 2018-19.
including credit expansion, low cost Credit growth has registered a sharp
slowdown which had averaged 16%
funding mobilization, compliance and A legacy of unsynchronized policy over the last three years. Muted
risk management. decisions has led the country into the demand and flagging economic activities
current economic dilemma and while weighed down on private sectors credit
Cross-divisional integration of e-banking the stabilization measures adopted uptake; which has grown by only 2.2%
processes and company-wide by the incumbent Government have during the first half of FY 2019-20 as
information linkages are enabling swiftly placed the country on the path compared to a growth rate of 8.5%
gradual launch of virtual branches of macroeconomic adjustment, it still achieved in the corresponding period of
facilitating customers faces a long and arduous journey to FY 2018-19.
to perform transactions without human lay the foundation for driving structural
intervention through Graphical User and governance reforms to improve Although, Non-Performing Loans have
Interface (GUI), applications and documentation, broaden tax net and witnessed a gradual buildup on the back
remote helpdesks; thus, improving increase exports base to support a move of deteriorating asset quality indicators;
productivity, efficiency and offering from consumption driven to exports the incremental formation is primarily
customers an omni-channel experience driven economy. driven by idiosyncratic factors rather than
based on their individual needs. a systematic risk.
While threats emanating from digital
Amidst high penetration of smart disruptions are more visible globally; Rising currency in circulation due to
phones, banks continue to tap into the Pakistan’s banking industry’s transition
digital domain by offering innovation, enriched un-documentation in the economy
is at a comparatively slower pace in and prevailing income tax regime
mobile applications and web access to view of country’s unique population
a wider community in order to remain has remained a key challenge to
competitive and increase financial demographics and aforementioned deposit mobilization, which has
inclusion. economic dynamics. depicted a
growth rate of 10% mainly due to rising
In a digitally disruptive environment Encouraging strides have been made by Minimum Saving Rate (MSR). Currency
the sector in its e-banking drive through to deposit ratio has increased to 37%
banks’ ability to manifest opportunities investments in sophisticated tools and in December 2019 as against 34% in
by progressively transforming processes, processes for provision of digital
leveraging intelligent analytics, incubating December 2018. This factor has also
support, extension of branchless impacted the growth of low-cost private
robotic assisted environments and banking to far flung areas, creation of digital
forming strategic external partnerships sector deposits, which has depicted a
innovation labs and digitization of muted growth rate of 5% against a period
to create customer value will payments along with initiatives to
eventually determine their end growth of 15% in public sector
educate consumers about the benefits of e- deposits as at December 2019.
sustainability. banking. However, the progress remains
hampered by an underdeveloped financial Your Bank’s robust asset quality
Pakistan is considered to be amongst ecosystem, both on the issuance and
the major emerging global economies. depicted by industry leading coverage
acceptance side; trailing other countries and infection ratios, diverse revenue
On the digital participation metrics, with similar macroeconomic profiles and
however, the country still lags other streams, resilient deposit-based funding
supporting one of the lowest financial inclusion structures and a solid capital base,
regional economies. Cash transactions ratios in the region. supplemented by high standards of
continue to heavily dominate
corporate governance have contributed
Pakistan’s US$ 275 billion plus According to the recent World Bank towards maintaining a strong financial
economy; characterized by country’s position with stable profitability despite
large informal sector, infrastructural aforementioned challenges. The
impediments, performance has also culminated into
low affordability due to low-income recognition as the “Best Bank of the
population, low digital literacy and Year
an evolving regulatory and
supervisory
CHAIRMAN’S
MESSAGE
of the society. More than 10,900 persons
2018 – Large Banks” by the into the need for heightened focus on
from local communities attended
prestigious CFA institute and “Best monitoring of Data Governance and
these sessions. Lauding Your Bank’s
Primary Dealer” by the State Bank of Cybersecurity risks. Your Bank contribution to the national financial
Pakistan. remaining fully cognizant of these risks inclusion agenda, Your Bank was
has implemented robust information declared an industry leader in NFLP’s
Your Bank’s evolving 10 year rolling security (info-sec) platforms, arranged execution.
strategic plan takes into consideration awareness programs for customers and
the aforementioned changing operating has undertook regular system audits Playing its role as a responsible
environment and challenges while along with independent information corporate citizen, Your Bank generously
paving the Bank’s future roadmap. technology security and risk contributed towards Corporate Social
Establishing, nurturing and deepening assessments. Responsibility (CSR) programs through
of relationships with both individual and active assistance to reputable healthcare,
institutional clients, undertaking e- A multi-layered safety approach educational and environmental protection
banking initiatives and following through encompassing extension of biometric initiatives, proactively supporting
on a comprehensive innovation strategy verification services, undertaking re- various charitable organizations in
entailing forging of strong partnerships carding activity with upgradation to chip
and PIN capability, installation of anti- their endeavors.
with leading technology platforms and
partners for provision of premier skimming devices and implementation
of ‘Euro-Pay, Mastercard and Visa’ In continuance of Bank’s distinctive
services to the customers remains at the initiative of engaging with the obligors
forefront of Your Bank’s strategic focus. (EMV) compliance standards across the
entire ATM network remained an to offer them the latest insights on
business management and strategies;
During the year under review, Your imperative part of Your Bank’s strategic
priority. Initiation of 3-D secure services three interactive seminars for
Bank collaborated with Avanza Premier corporate, commercial and SME
Payment Services (APPS) to revamp on all ABL Visa debit and credit cards
further facilitated in improving customer obligors on the topic “Transition from
online transactions through APPS’ Family Owned Business Structure to
payment gateway, Payfast; thereby confidence in online shopping while
minimizing risk of fraud. Corporate Structure” were organized
enabling customers to shop on APPS’ during
vast ecosystem of merchants using their 2019. Furthermore, implementation of
bank accounts. Your Bank’s contribution towards
enhancing financial services’ access to Enterprise Resource Planning (ERP)
country’s population remained on system was successfully completed at
Keeping track of the fast paced, two SME obligors to facilitate transition
dynamic and a virtually competitive course as 50 additional branches
were towards an ERP based automated
market scenario, Your Bank has book keeping and accounting system,
constantly updated its technology added into the network during the year with off the shelf features, in turn enabling
platforms to enhance customer to expand bank’s overall outreach to enhanced control over their financial
experiences and improve operating 1,395 branches, while concurrent in decision-making processes.
effectiveness. Oracle Big Data Appliance roads made into introducing service offering’s
was successfully installed to support in the e-banking realm supported launch
of a state of the art, self-servicing branch Acknowledging the sound business and
data driven business decisions based governance performance, Pakistan’s
on meaningful insights and machine at Lahore University of Management Credit Rating Agency (PACRA) has
learning models while implementation of Sciences (LUMS); enabling customers maintained Long Term and Shot Term
several use cases on Robotic Process to conduct banking seamlessly and ratings of Allied Bank at the highest level
Automation Solution has enabled Your independently 24/7 using various e- of “AAA” (Triple A) and “A1+” (A One
Bank in instilling and further strengthening touch points. plus) respectively. Your Bank further
operational efficiencies. consolidating its position as one of only a
Upon attaining a reasonable select group of financial institutions in the
myABL has been augmented with new footprint of 117 Islamic Banking country to maintain highest entity credit
features to provide customers a branches, sustained focus on rating.
reliable e-banking channel that is further promoting
rapid, secure and customer friendly. Islamic Banking amongst a vast
potential customer base has continued
Future Outlook
myABL’s upgrade to the latest version
of Oracle Digital Banking Experience through addition of 50 “Islamic According to IMF, Pakistan has
(OBDx 18.1), during Windows” at viable conventional achieved most of its milestones on the
the year, has been designed exclusively branches. Similarly, the ATM network of heels of tax and non-tax revenue
to enable customers to seamlessly the Bank has increased from 1,388 growth and pragmatic development
perform financial operations and conveniently ATM’s to 1,515 ATM’s including spending.
utilize a wide range of available mobile 329 offsite ATM’s. Resultantly, fiscal stimulus to support
payments options while simultaneously exports along with envisaged interest
offering exciting and distinct features of 360- Developing a highly skilled and rate cut on the back of improving
degree view of accounts, touch and face capable workforce within the external indicators is expected to bolster
ID login, Master Card QR payments, perspective of upcoming digital age economic outlook for 2020.
credit card bill payment facility using remains one of the key objectives of
“1Bill” option and ticket purchasing Your Bank. Specialized in-house and However, the reversal in economic
options for various utilities from any external training programs were downtrend still remains largely
location. conducted to instill and reinforce dependent on Government’s ability to
existing workforce with skills prioritize efforts towards implementing
Your Bank optimistically and actively necessary to transforming them into a structural and governance reforms to
engages in focus driven partnerships dynamic and progressive work force sustain recent uplift in fiscal discipline,
to avail sustainable results for the capable further improve “ease of doing business”
stakeholders while attracting customers of delivering in this age of metric to encourage corporatization,
in an inclusive manner. In order to technology revolution. incentivize export-oriented industries to
elevate fee income streams by support current account adjustment and effective
increasing debit and credit card Sustaining focus on creating an anchoring of market sentiment to exploit
circulation alongside engaging the tech inclusive work environment immense potential for growth in foreign
savvy customer segment, Your Bank encompassing gender diversity and a direct investment; amidst sustained
signed an agreement with Golootlo to offer a multi-cultural workforce through pressure on the financial front due to rising
wide array of discounts at more than provision of equal employment debt servicing costs.
12,500 merchants nationwide via opportunities to female employees as
myABL Digital Banking App and UPI- well as internal elevations across the World Bank’s latest release on country’s
PayPak co-badged debit cards. bank has enabled to achieve female outlook has re-affirmed the need to focus
ratio of 17.4% during the year. on 4 key elements to achieve and
Immense growth in conventional and
e-banking platforms has culminated In line with SBP directives for training
initiatives under the National Financial Annual
Report Literacy program (NFLP), Your Bank 16 2019
arranged 496 sessions in 37 remote
districts of the country to improve
financial inclusion in unbanked segments
sustain industry growth; (i) Accumulation
of physical and human capital to In line with changing industry also optimize resources allocation.
utilize country’s growing working age dynamics and long term-strategic
population; (ii) Productive allocation of vision of Your Bank, focused efforts are Data governance and Data
resources; (iii) Environmental and social being made to increase the mix of e- security shall remain at the
sustainability; (iv) Proper governance banking transactions vide adoption of forefront of Your
Artificial Bank’s strategic focus to supplement
to ensure successful implementation of intelligence, machine learning, humanoids the transition and strengthen the
reforms. and implementation of “Integration structure for informed decision making
Framework Studio” and “AA and service provision to valued
Furthermore, Pakistan needs to target Architecture” on T24-R16, which will
curtailment in population growth to customers.
facilitate Your Bank’s business analytics,
2%, increase tax to GDP ratio to 18% customer service offerings and operational
and rise up 86 points in the “ease of Your Bank shall continue to leverage
efficacy, in the e-banking era. upon emerging technologies including
doing” business metric to be ranked
within top 50 countries in the world by digital recruitment solutions, internal
Your bank, maintaining its industry communication platforms and
year 2023. With the dynamic growth pioneer status in innovative solutions
framework already in place together with workforce engagement software in
has launched Application Programming creating a workforce for the future;
improvement in literacy rate, the country Interface (APIs) with a view to establish
is expected to gradually reach upper- thereby introducing better learning and
open ended and agile platforms through development platforms, performance
middle income status by 2047. which third parties including FinTech’s’, monitoring tools, workforce mobility
while becoming ecosystem partners, and efficient HR services to ensure better
The country’s e-commerce industry can engage, collaborate and innovate
thereby has the potential to strengthen employment experience and agility in
for the benefit of customers. Encouraging meeting evolving business needs.
country’s economy by creating job headways were achieved during the
opportunities for the youth who are more year towards launch of branchless Visualizing 2020, I am optimistic that
open to embracing advancements in banking; augmenting Your Bank’s e- Your Bank will remain well positioned to
technology. banking register steady growth in shareholder’
suite in line with the SBP’s objective of value. On behalf of the Board of
In this era of the 4th industrial revolution, building a dynamic and inclusive financial sector
people aspire easy access, proficiency, Directors, I would like to extend my
under National Financial Inclusion gratitude to the regulatory bodies
convenience and transaction swiftness. Strategy. Commercial launch in 2020
This revolution is expected to thoroughly including State Bank
shall add to Your Bank’s e-touch points, of Pakistan, Securities and Exchange
transform bank-customer relationship facilitating in expanding its customer
with the objective to continuously stay Commission of Pakistan and Federal
base particularly in unserved areas of Board of Revenue for their uninterrupted
in touch vide cyber space and offer the country.
seamless and limitless services assistance and co-operation. I would
24/7. also like to appreciate our valued
myABL (Personal Internet Banking) shareholders’ for putting up their
and myABL Business Internet Banking confidence in long-term strategic goals.
Banking sector’s future success, thereby, (BIB) facilities shall continue to be
clearly depends on amalgamating augmented with the purpose of
conventional banking platforms with Finally, I would like to pay my gratitude
converting conventional ways of to Allied Banks’s management team and
smart mobile and virtual technologies interaction with our customers towards
such as cyber-physical systems, artificial the 11,000+ Allied bankers, for their
a handheld experience, thereby utmost hard work and commitment on
intelligence and cloud computing to capitalizing on the technological edge.
intelligently track user behaviors and the road to building a robust and
meet customer expectations with technologically empowered Allied Bank.
Your Bank would keep focusing on
personal, contextual, and predictive serving priority sectors, while remaining
services while simultaneously handling Mohammad Naeem Mukhtar
cognizant of enabling environment, Chairman
the advice and communication part of
the customer services domain through including agriculture and SME sectors
data analytics. Concurrent focus on by expanding bank-maintained
adopting emerging data protection and warehouse initiative with the purpose of
cryptographic techniques to improve increasing quality lending portfolio and
secrecy and integrity of data is Country’s GDP.
paramount to supplement the transition Your Bank aims to continue its efforts
amidst evolving vulnerabilities. towards expanding the horizon of
Robotic Process Automation and
Machine Learning solutions, which will
not only inculcate operational efficiencies but
shall
MANAGEMENT TEAM
Tahir Hassan Qureshi

Owais Shahid Ahmad Faheem Khan Asif Bashir

Chief Corporate & Investment Banking Chief Treasury Chief Commercial & Retail Banking South
Shahid Aamir Muhammad Idrees Sohail Aziz Awan

Chief Commercial & Retail Banking North Chief Islamic Banking Chief Digital Banking
Retired since December 31, 2019
Annual
18 Report 2019
Mujahid Ali Aizid Gill Saira Shahid Hussain
Chief Information Technology Chief Risk Management Chief Human Resource
Tariq Javed Ghumman Mehmud ul Hassan Abid Anwar

Chief Banking Services Chief Financial Officer Chief Special Assets Management
Ahmed Mansoor Muhammad Mohsin Muhammad Raffat

Chief Compliance Chief General Services & Real Estate Company Secretary
Imran Maqsood
Chief Audit & Risk Review

Our Value Creation
Business Model
OUR CAPITALS - Inputs ACTIVITIES
Enrichment of Customer Experience

Financial Capital
• Equity - Tier 1 89,542 million
• Total Equity 115,351 million
• Deposits 1,049,043 millionFacilitate Payments and Transactions - Conventional & Digital
Manufactured Capital
• Domestic & Foreign Branches 1,395
• ATM Network 1,515
• Core IT Systems 93
• Digital Touch points 14
• Other Fixed Assets
Risk Management to balance Risk and Reward
Human Capital
• Engaged and capable employees
• Female Employees 2,034
• Male Employees 9,631
• Total Number of Employees Maintain, optimize11,665
and invest in our operations, including technology, infrastructure and r
• Total Number of Graduates 10,706
• State of the Art Management Development Centers 3
• Culture of Empathy
Social And Relationship Capital

• Depositors 4.2 million
• Obligors 24,500
• Regulators Pakistan BusinessReward Compensation structure linked with performance and value drivers; staff development
Council,&PBA,
Chammebrs of Commers and Industry
• Community Service (CSR)
• Strong Social Media Presence
• Robust Complaint Handling Mechanism
Intellectual Capital
• 10 Year Strategic Rolling Plan
• Strong IT Platform
• Robust Risk Management (RAMS)
• Comprehensive Compliance Management
• Detailed Policies & Procedures
• Strong Management Structure - Leadership Teams
Natural Capital
• Solar Branches 58
• Inverters 1,060
• Green Banking Initiatives
• Compliance to Environmental Laws
Annual
20 Report 2019
VALUE FOR STAKEHOLDERS
Shareholders
Generate NIM on earning Assets / Liabilities • 4th Largest private sector commercial bank of the country
• Profit Before Tax 24,242 million
• Profit After Tax 14,113 million
• Earning per Share Rs. 12.32
• Full-year dividend per share Rs. 8
Data Analytics • Return on Equity (Tier 1) 16%
• Return on Assets 1%
• Capital Adequacy Ratio (CAR) 22%
Data Governance Customer

• Advances Growth 11%
• Deposits Mobilization 7%
• Non Performing Loans Reduction -1%
Automation • CASA Mix Improved 1%
• Customer Onboarding (Approx) 750,000+
• Customer Complaint Resolutions 99%
• myABL Registered Users (Approx) 426,000+
Pay taxes in the jurisdictions in which we operate • myABL volume of transactions (PKR million) 125,555
• No. of Debit Cards issued (Approx) 417,000+
• Digital Transactions increase 2%
• Corporate Website Visits 5,869,766
• Social Media Fan 1,002,370
Collaboration & Alliances
Employees
• Salaries and Benefits (Rs. In million) 13,180
• Employee Retention Ratio 93%
• Training Programs 1,396
• Employees Trained in Service 10,800+
• Total Investmnet in Employee Trainings 97 million
• Team building events
Regulators
• Long Term Entity Credit Rating AAA
• Short Term Entity Credit Rating A1+
• Corporate Governance Rating CGR 9+
• Compliance with all Regulatory requirements
Society
• Contribution to National Exchequer Rs. 18,653 million
• Customer Relations Rs. 943 million
• Improving Workplace Environment Rs. 435 million
• Environmental Sustainabilty Rs. 204 million
• Plantation of saplings of environment friendly plants 16,000 +

PRODUCTS &
SERVICES
Branch Banking over the country gives 24/7 access Allied Basic Banking Account empowerment as it provides a safe
With a vast network of 1,395 to cash withdrawals, mini statement, A non-remunerative PKR checking place to save money and opens
branches and 1,515 ATMs, Bank bill payments, fund transfers and account that gives our customers up a channel to credit which can
is committed to provide real much more. ABL has 12 CCDMs the support they need to manage be used for investing in education,
time online banking solution to installed at selected branches their bank account in a simple and property or business along with
its customers in an efficient and offering facility to deposit cash & hassle-free way. bundle of free of cost services
convenient manner. cheques round the clock. including lower locker fee.
Allied Business Account
Saturday Banking & Extended Biometric ATM Service Allied Business Account is meant Platinum Rewarding Profit
Hours Banking ABL has set another milestone for growing business proprietors Account
ABL offers added convenience of “full by introducing the Biometric ATM looking for exceptional value and Get all the benefits and features of a
service” Saturday Banking to its service on the entire ATM network services, packed with multiple free remunerative current account with
customers. The extended week of network for the convenience of of cost features. It is a cost effective premium profit rates and manage your
banking operations, is currently valued customers. Now customers and simple way to consolidate daily transactions, frequent payments
available at 165 branches from can seamlessly perform ATM business and personal banking and flow of funds.
10:00 AM to 02:00 PM. transactions without using the needs into one tailored package. Allied Senior Citizen Account
Extended hours banking facility is Prepaid or Debit card. Allied Asaan Account Your Bank launched Allied Senior
also offered at selected branches.
Allied Easy Current Account Allied Asaan Account is tailored Citizen account offering a host of free
Theme Branches Allied Easy current account is to cater to the banking needs services including free visa debit
In the quest to evolve into a tailored to meet banking needs of unbanked people of society card, free cheque books along with
customer friendly bank in the retail of every individual. With Allied with simplified account opening health insurance and discounted
industry, Bank is adopting modern Easy Current Account Financial requirement. Customers can open lab testing facilities, which relieves
technology and signature themes. transactions can be conducted current or saving account according senior citizens from their health
Accordingly, the Bank has launched through variety of e-banking to their needs with a number of free worries.
Women branches, Youth branches and channels without any minimum facilities offered. Allied Youth Account
Village branches. balance requirement with zero Allied Khanum Assan Your Bank launched Allied Youth
ATMs and CCDMs (Cash & service charges on minimum Account Account to meet the financial needs of
Cheque Deposit Machines) balance requirement. Access to a bank account is millennials across the country.
The vast network of 1,515 ATMs all essential for women’s economic The account offers Branded Youth
Annual
22 Report 2019
Visa Debit Card along with free
great way to accumulate children’s Salaried Individuals who want to Debit Card Variants
accidental insurance coverage
savings for their future while invest their savings and earn profit. Non- Customers have liberty to choose
and premium access to Vouch365 inculcating saving habits amongst Resident Pakistanis (NRPs) who from a variety of Visa Debit Card
application with exciting offers for children with exclusive free features want to invest their remittances in a ‘Sapphire’ packages, offering wide-
restaurants, health & fitness and like welcome pack, birthday gift, scheme which gives them immediate ranging transactional limits to pay
leisure/travel activities. accidental insurance coverage up to advance profit. for everyday shopping or get access
PLS Saving Account Rs. 500,000, ATM / VISA Debit card Institutions who want to retain their to funds at ATMs in Pakistan and
Bank offers savings accounts and cheque book. savings by earning advance profit. abroad.
bundled with free features on Allied Term Plus Deposit Foreign Currency Term Allied Co-Badged Debit Card
maintenance of certain minimum Allied Term Plus is a regular term Deposit Allied Bank welcomes you to a world
monthly average balance. deposit with the flexibility of tenure and Allied Bank’s Foreign Currency Term of convenience and security with
Allied Express Account frequency of profit payment which Deposit offers industry’s competitive profit first ever Co-Badged Union Pay &
Allied Express Account is exclusively allows the customers to opt for rates for customer chosen term and is PayPak Debit Card in Pakistan. Now
crafted for remitting money in investment plan best suited to their ideal to help them save in a foreign you not only can conduct ATM and
Pakistan. Customers can remit need. currency. This particular account is retail transactions within Pakistan
funds to their own account or Allied Advance Profit Plus available in multiple currencies, but around the globe as well.
accounts of their loved ones in Payment including: US Dollar, British Sterling
E-commerce Transactions on
Pakistan through Allied Express Pound, and Euro.
Is Ideal for, Individuals who intend VISA Debit Card
Account and enjoy free of cost to start banking for the first time and Allied VISA Debit Card Allied Bank Visa Debit Card holders
banking services i.e. Cheque Books, want to build a profitable Allied Visa Debit Card is Allied can now use their VISA Debit
ATM Visa Debit card, SMS Alerts relationship with a strong, stable and Bank’s flagship product that gives our cards for online and ecommerce
Internet Banking etc. Remittances robust bank. customers access to their bank transactions. Considering evolving
can be originated from different Parents who are already saving and accounts and convenience to use it customer needs Allied Bank delivers
time zones and countries in multiple intend to invest for the best and at over 50,000 retailers in Pakistan services that fit customers’ lifestyles and
currencies. immediate returns and millions of retailers worldwide. offers more choice as to
Allied Rising Star – Youth’s Businessmen who are looking for It also gives cardholders access to where, when and how customers
1st Bank Account an opportunity to earn instant profit millions of retailers and over 13,000 conduct transactions. Allied Bank
Allied Rising Star Account is a against their savings. ATMs in Pakistan. differentiates not just by offering
PRODUCTS &
SERVICES
multi-dimensional channels to
plans and competitive return and mobile banking platform which self-service banking offers a blend of
customer but also by enhancing
oriented funds of Allied Asset offers a more secure, reliable and “Conventional” and “Self- Service
their experience from utilization of
Management Company-a wholly efficient e-banking service. Banking” facilities to its account
the new and innovative channels.
owned subsidiary of ABL) and myABL Business Internet holders as well as walk-in
EZ Cash Prepaid Card BANCA products in collaboration Banking customers. It is equipped with
Allied EZCash is a re-loadable with EFU and Jubilee Insurance hi-tech equipment, which enables
With Business Internet Banking,
prepaid card which comes with the partners. ABL customers to address their
customers can significantly enjoy the
convenience of easy load, reload, banking needs while interfacing with
Jazz Cash Domestic multiple benefits of “Efficiency, Ease of
top-up from any ABL branch. This is
Remittance Services use and Economy”. diverse range of digital touch points
the first prepaid card launched on local i.e. tablets, interactive tables, video
In line with the Financial Inclusion Business Internet Banking (BIB) is
payment scheme PayPak. This card conferencing and digital kiosks,
Strategy set by SBP, Allied Bank Allied Bank’s online internet banking
is instantly issued from all ABL
collaborated with Jazz Cash [a service exclusively designed and eliminating hefty paper work and
branches and can be used on ATM
Branchless Banking Brand of Jazz developed for non-individual long queues.
for cash withdrawal, bill payment,
(Mobilink) & Mobilink Microfinance customers. The internet banking Allied Business Finance (ABF)
mobile top-ups and purchasing
Bank Limited (MMBL)] to provide platform has a user-friendly and Allied Business Finance is designed
goods from merchants at Point of
domestic remittance services to device-responsive facility which for SME sector to avail financing
Sale (POS) machines where
prospective customers. Through allows users in online tracking and against non-cash securities. The
PayPak Cards are accepted. Allied
this initiative the beneficiary of Jazz maintaining the accounts while Bank offers evergreen line in
EZCash offers added security of PIN
Cash Domestic Remittances can enabling the customers to execute shape of Running Finance, Letter
for Point-of-Sale (POS)
send and collect their remittances Banking transactions from their of Guarantee, Finance for Exports
Transactions
from any ABL Branch in addition to workstation and offices. (working Capital) & Letter of Credit
as well i.e. use of Prepaid Card for
the existing network of Jazz Cash along with Term Loans.
shopping requires cardholders to
agents.
ABL Self Service Digital
enter PIN to authorize their purchase Branch Allied Fast Finance (AFF)
transactions. myABL Personal Internet ABL has introduced Self Service Allied Fast Finance is a facility
Banking Banking facility at Lucky One Mall secured against cash backed
Third Party Products: Mutual myABL Personal Internet Banking is
Funds & BANCA and LUMS with state of the art securities i.e. Lien on TDR &
the new face of Allied Direct Internet
ABL offers distinctive third party e.b anking channels. Allied Bank’s Account designed to meet liquidity
Banking. It is the latest internet
products; Mutual Funds (investment
Annual
24 Report 2019
requirements of obligors without
a demand finance facility with Hari Bhari Agriculture to working capital needs as well as
disturbing their core savings. This repayment in equal monthly Revolving Credit Scheme long term investment for purchase
product offers evergreen line in shape installments spread over the term of new equipment and machinery
This facility is designed to facilitate
of Running Finances, Letter of of the finance with a competitive for farm, hatchery incubators,
farmers in obtaining agriculture
Guarantee & Letter of Credit as well mark-up rate. generators, farms equipment and
based loans to meet working capital
as Term Loan. construction of sheds for extension
Allied Visa Credit Card (Pay needs of farming. Credit is available
Prime Minister Youth of current poultry farms
wave – Chip Based) on revolving basis.
business Loan (PMYBL) It
Allied Visa Gold and Platinum Credit Tractor Financing Allied Aabayari (Irrigation
is a long-term loan scheme
Cards are exclusively being offered to Tractor financing is designed to Solution)
specifically launched for
the bank’s valued customers. facilitate farmers in obtaining This financing facility is designed to
unemployed youth under the
Allied Visa Credit Card offers a host of Agriculture Development Loans facilitate farmers in obtaining
directives of GOP and SBP. The
privileges, benefits and savings, (Term Finance) for purchase of brand Agriculture Development Loans for
scheme especially funds startups.
together with attractive service new Tractor. purchase and installation of electric
Loans are offered at subsidized rates. charges and a free credit period of or solar tube wells, lift pumps &
Allied Home Finance Agriculture Finance for Dairy
up to 50 days. high efficiency irrigation systems
farming
The Bank, in its endeavor to provide Allied Personal Finance e.g. sprinkler, trickles, drip and rain
This product is designed to support
current and prospective customers gun etc. This product will target the
(APF) Allied Personal Finance is a dairy farmers in meeting working
a complete suite, launched “Allied prospective obligors who possess
term loan facility targeting capital needs of businesses as
Home Finance” to fulfill customers’ experience in the farm sector
Employees well as purchase of assets and
needs to build, buy and renovate activities and actively involved in
of Corporate under corporate construction of sheds for extension
their own home. the farm business management
arrangement, Salaried Individuals of their dairy farms for enhanced
interested to achieve operational
Allied Car Finance fall under Cross-Sell Criteria and productivity.
efficiencies
This product is designed to serve Affluent Individual of the Bank. with a
Agriculture Finance for
vehicle financing needs of bank’s low mark-up rate. Product offers
Poultry Farming & Allied
depositors and the employees smart financial solutions
Activities
of institutional customers. It’s to customers for their immediate
Bank has developed this product
personal financial needs.
program for poultry farmers to cater
PRODUCTS &
SERVICES
Allied Farm Mechanization electronic verification a button through myABL. Letters of Guarantee, Letters of Credit and Export Financing.
This financing facility is designed to only. Corporate Banking Corporate Banking provides a single
Salary Management Account
facilitate farmers in obtaining Allied Bank Fast, easy and convenient services point within the Bank to cater to all business requirements of our
Agriculture Development Loans Call Center corporate and institutional
are just some of the benefits of Allied
(Term Finance) to purchase customers, including public sector enterprises with the primary
Customers no Salary Management Account.
Agricultural Equipment to be objective of enhancing customer service. Bank offers full suite of
longer have to Organizations can enjoy one of the
employed for farm mechanization. take time out to products including Working Capital Facilities, Term Loans,
largest branch networks with ease
Allied Commercial Lease visit branches and convenience of technologically Structured Trade Finance Facilities, Letters
Allied Bank offers leasing products to for everyday advanced banking. ABL offers quick and
meet the business needs of its banking needs. efficient payroll service with instant
customers with flexible terms & Self- credit of salaries and offers Allied
conditions based on customers’ service banking offers Salary Management Account for
choice of asset & repayments. assistance in all company employees with a number
Allied Bank Lockers transactions by of free features.
Bank Lockers provide high-security Interactive Voice
SME Financing
protection for customers’ valuables. Response System
The Bank continues to focus on
Lockers of different capacities are (IVR).
SME business with a vision to
available nationwide at conveniently Allied Pay capitalize on the bank’s countrywide
located branches. Anyone footprint and longstanding customer
Digital Lockers A unique product loyalty to become a preferred and
First ever bank in Pakistan to bring in which the prudent provider of a “Total Banking
an innovative, secure and customer- Bank’s customers Solution”. The Bank offers a wide
friendly technology in the form of can send cash to range of funded and non-funded
any individual in products and services to meet
Digital Lockers. Digital Lockers
Pakistan even if needs of various types of SME
are fully automated version of
the beneficiary businesses under the umbrella of
traditional lockers operational round
doesn’t have a bank Allied Hunarmand, Allied Tijarat and
the clock (even on weekends and
account. This is Allied Seasonal Support Financing,
non-banking hours). These lockers
done at the click
are powered by revolutionary robotic Emerging Corporates
of
technology enabling access of your Middle Market caters to all
locker 24/7 at any time of your business requirements of our top
convenience. Digital lockers are tier commercial obligors with
made accessible vide self-service wide range of products including
kiosk placed in a secure room at our Working Capital Facilities, Term
branch that can be entered through Loans, Trade Finance Facilities,
of Guarantee, Letters of Credit, Fund Transfers / ope sic with minimum transactional
Remittances, Bill Discounting, Export Financing and ning Ba requirements. It enables customers to
Receivable Discounting. proc nk fulfill their basic banking needs.
Investment Banking Investment Banking (IB) edur in Allied Islamic Youth Account
wing of the Bank strives to meet complex financing e, g ABL-IBG has developed a Shariah
needs of its clientele by providing a full suite of financing initia Ac compliant Mudharabah based
solutions to corporate clients including debt l co product (Saving Account) for
syndications, capital markets, project financing and dep un individuals between the age group
osit t of 18 to 35 years. This product
advisory services.
requ It is is designed to cater the Banking
Home Remittances Home Remittances irem a requirements of Youth segment through a
provide a seamless inflow of foreign remittance ent ban Shariah compliant solution and is offered
credited in the of king in Regular & Asaan variants.
beneficiary accounts and over the counter payment. Rs.1 acc
Allied Aitebar Senior Citizen
Cash Management 00. oun
Account
Cash Management is a state of the art real- time The t for
A Shariah compliant Mudharabah
service providing customers with efficient liquidity prod day
based product (Saving Account) for
management solutions, across the robust ABL uct to
individuals of 55 years or above age.
is day
network. This Account is designed to cater
avail tran
Treasury Product Services Bank offers fixed the banking requirements of senior
able sact
income treasury services, having attractive returns, to citizens and offered in regular & asaan
both ions
its institutional and retail clients. ABL’s treasury is variants.
in with
an active participant in the interbank securities Curr out Allied Islamic Saving Account
trading and FX trading, capitalizing on its primary ent any Regular chequing account, offered in
dealer status, providing competitive pricing. and risk local and foreign currencies, on the
s or basis of “Mudharabah” with
Allied Islamic Current Account Savi
rew no minimum balance requirement.
Based on principles of “Qard”, it provides ng
ard Profit is calculated on monthly average
convenience of dep
s. A balance and credited on six monthly
conducting day-to-day transactions available both in osit
sim basis, offering a number
local and foreign currencies. There is no restriction cate
ple of free services on maintaining a
on withdrawals or numbers of transactions. gori
ban minimum monthly average balance.
es.
Allied Islamic Asaan Account It is developed k Allied Islamic Anmol Plus
on the guidelines provided by SBP for Pakistani Alli
ed
acc Account
Nationals with simplified account oun This is a “Mudharabahdeposit
Isl
t for product for individuals available in
am
indi local currency. Profit is calculated on
ic
vidu monthly average balance and
Ba
als credited on six monthly basis. The
Annual
26 Report 2019
customers can avail a large number
and Non-Banking Financial • Allied Aitebar Home
of free services by maintaining a
Institutions available in local Musharakah
certain average monthly balance as • Allied Aitebar Tractor
currency. Profit is calculated on daily
per specifications. Financing
average balance and paid on
Allied Islamic Business Plus • Allied Aitebar Hari Bhari
monthly basis.
Agriculture Financing
Account
Allied Aitebar Premium • Allied SME Financing
This is a savings account with
several unique features that make it
Account myABL integration with
A Shariah compliant saving deposit Fintechs
very suitable for use as a business
product particularly for high net- The Bank has integrated with
account. On maintaining minimum
worth individuals, business entities, Fintechs like GoLootlo, Easy
monthly average balance, as
pension / benevolent funds, Govt. / Tickets, 1 Link and Avanza Premier
per specification, the customer can
semi-Govt. bodies which is based Payment Services through myABL
avail a large number of free
on Mudharabah. Profit is calculated on mobile apps. Now customer can
services. Account can be opened
daily average balance and paid scan QR and avail different deals at
in local currency only.
monthly. thousands of merchants through
Allied Islamic Khalis Munafa
Allied Aitebar Express myABL mobile application.
Account
Account
This is a tier based savings
A Shariah compliant banking
account specially designed to
product especially designed for
encourage and promote savings.
Home Remittance Beneficiaries to
Minimum deposit required for
facilitate hassle free transfer of
opening an account is Rupees
home remittances. This Pak Rupee
1,000 only.
based product is developed on
Allied Islamic Sahulat the concept of Mudharabah and
Account operated like normal chequeing
The product is designed account(s) on profit / loss sharing
to facilitate allocation of basis.
complimentary safe deposit
Allied Islamic Notice Period
lockers upon maintaining of certain
Certificate
balance in account. The account
This product is designed to cater to
is offered in Pak Rupees only and
the requirements of the customers
profit is paid semi-annually.
who want to place their deposit for
Allied Islamic Investment short tenure like 7 days, 30 days
Certificates etc. The profit is calculated on daily
Islamic Investment Certificates are basis and paid at maturity.
Term Deposit certificates for
Islamic Financing Products
investment periods ranging from
Various Islamic Financing Products
period of 1 month to 5 years with
based on the following modes of
profit payment options of monthly,
finance are being offered by the Bank
quarterly, half yearly or at maturity. • Murabaha
Investment certificates are issued with • Salam
investment of Rs.25,000 with no • Istisna
maximum limit. Pre-mature • Islamic Export Refinance
withdrawal can be made as per Scheme
product features. • Ijarah
• Diminishing Musharakah
Allied Aitebar Institutions • Business Musharakah
Account • Forward Cover
This is a “Mudharabah” deposit • Allied Islamic Car Ijarah
product for Financial Institutions

ACHIEVEMENTS AGAINST OUR
STRATEGIC OBJECTIVES
Continuous re-engineering of policies, procedures, SOPs, SLAs and TATs, ensuring operational efficiencies through effecti
ating shareholders’ value through sustainable performance, while optimizing return against acceptable risk appetite.
Installation of Oracle Big Data Appliance in partnership with IBM
tal adequacy ratio with sustainable growth.
Implementation of Robotics Process Automation for improved service delivery
ow” – International Finance Awards 2018 by International Finance
Launched 3D Secure service to secure e-commerce transactions
h Management, Employee Banking and Business Internet Banking and Personal Internet Banking.
Automation of approvals through system
rbright Bank to formalize strategic partnerships
Upgradation to IBFT 3.0 for complying with SBP Electronic Fund Transfer (EFT) guidelines
Upgradation of Financial Crime and Compliance Management (FCCM) application & Review of Benchmarks
Deployed Compliance Risk Management solution from Bench Matrix.
Establishment of dedicated Countering Financing of Terrorism (CFT) Desk.
Re-carded all debit and prepaid cards with chip and PIN capability to comply with SBP guidelines
Self-service branch at LUMS Lahore with state of the art facilities including instant Debit Card issuance and Interactive Teller Machine (ITM)
Powered top 100 branches with Self Service Kiosks providing myABL digital banking, complaint services, customer feedback, various promotions and discounts offers
Full week banking operations from Disaster Recovery site for robust banking operations.
through innovative and diversified technologies, building customers’ confidence through convenient delivery channels and product designs.
Capacity Building & awareness provided to 1,668 staff during the year through class room trainings.
tail payments
ervices on all ABL ATMs

e, Senior Citizen and Youth segments.
Instilling a culture of ethics and responsibility among human resource and becoming an ‘Employer of Choice’ fo
Trainings, Seminars & Workshopsfor employees.
Awarded “Best Place to Work” under the category of “Financial Services”
Annual
28 Report 2019
DIRECTOR’S
REPORT
Dear Shareholders,
On behalf of the Board of Directors, we are pleased to present the Annual Report of Your Bank for the year ended December 31, 2019. The
operating results and appropriations, as recommended by the Board are included in the appended table:
Year ended December 31,

2019 2018 Growth
Rs. In Million %
Profit after tax for the year 14,113 12,881 10
Accumulated profits brought forward 52,501 49,212 7
Effect of re-measurement of defined benefit plans - net of tax (503) 455 (211)
Transferred from surplus on revaluation of operating fixed assets
to un-appropriated profit - net of tax 116 112 4
Transferred from surplus on revaluation of non-banking assets
to un-appropriated profit - net of tax 166 3 5,433
Profit available for appropriation 66,392 62,663 6
Final cash dividend for the year ended December 31, 2018 at Rs. 2.00 per share (2018:
Year ended December 31, 2017 at Rs. 1.75 per share) (2,290) (2,004) 14
First interim cash dividend for the year ended December 31, 2019 at
Rs. 2,00 per share (2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary share) (2,290) (2,290) -
Second interim cash dividend for the year ended December 31, 2019
at Rs. 2.00 per share (2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary share) (2,290) (2,290) -
Third interim cash dividend for the year ended December 31, 2019 at
Rs. 2.00 per share (2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary share) (2,290) (2,290) -
Transfer to statutory Reserves (1,411) (1,288) 10
Accumulated profits carried forward 55,821 52,501 6
Earnings Per Share (EPS) (Rs.) 12.32 11.25 10
The Board of Directors has proposed a final cash dividend of Rs. 2 per share (aggregate cash dividend of Rs 8 per share including interim
dividends). This, together with the interim dividends declared during 2019, will be approved in the forthcoming Annual General
Meeting.
Macroeconomic subdued during FY 2018-19, macro including International Monetary Fund

Developments 2019 stabilization measures entailing currency (IMF) have assisted in supporting the
devaluation amidst transition to a dwindling reserves; which stood at US$
Pakistan’s Gross Domestic Product
flexible, market determined exchange rate, 7.3 billion as at end June 2019.
(GDP) growth has moderated to
monetary tightening, reduction
3.3% in FY 2018-19 from 5.8% in
in development spending and trade Improvement in Balance of Payments
FY 2017-18 on account of measures protectionist measures implemented position gained further momentum
implemented to address the twin deficit through imposition of various tariff and non- during the first half of FY 2019-20.
crises emanating from consumption tariff barriers assisted in reducing Contracting trade deficit and steady worker’s
led growth in preceding years. Policy country’s import bill by 8%. remittance inflows despite a synchronized
induced demand management global economic slowdown translated
measures weighed in on the aggregate Supplemented by 10% growth in into favorable current account
demand which has resulted in worker remittances on back of stronger developments, while a trend reversal
contraction of the Industrial activity. inflows and enhanced focus, current in foreign portfolio investment, on the
Agriculture production was also affected account deficit balance contracted by 30% back of improving market sentiment,
due to high input as compared to a sizeable expansion of disbursement of IMF’s economic
cost, lower fertilizer offtake, water 58% in FY 2017-18. program related inflows and activation of
shortages and redistribution of area Saudi Arabia’s oil facility extended much
under cultivation resulting in a muted Foreign Direct Investment has needed support on the financial front; further
growth of 0.85% during FY 2018-19 witnessed a marked slowdown, falling easing pressure on State Bank
as compared to previous year’s by 52% in FY 2018-19 as ensuing of Pakistan’s foreign exchange
growth of 3.9%. Service sector was also uncertainty regarding exchange rate volatility, reserves which have consequently
affected due to aforementioned external financing risk and completion of risen to US$
reasons and has depicted a growth early harvest CPEC related energy 11.3 billion as at end December 2019.
rate of 4.7% as projects impacted the business confidence Fiscal consolidation gained traction to
against 6.2% in FY2017-18, falling short and the growth trajectory. However, external counter deteriorating indicators; fiscal deficit
of the annual target by 1.8%. financing from bilateral and multilateral was recorded at 8.9% of GDP in FY 2018-19
On the external front, notwithstanding agencies owing to low taxation base,
country’s export volumes which
remained
Annual
30 Report 2019
shortfall in revenue collections, broad
contraction and impact realization million. As a result, Your Bank has posted
based expansion in current
of government offered incentives for net mark-up income of Rs. 41,507 million
expenditures, bloating energy sector
export-oriented industries are expected against Rs. 32,115 million in 2018,
circular debt, untargeted subsidies and
to support economic growth under reflecting a growth of 29%.
loss-making public sector enterprises. Government of Pakistan’s economic
reform agenda; while measures aimed Diversification of revenue streams through
However, Governments’ adopted broad- based
at curtailing imports, partial withdrawal continuous enrichment of service suite
taxation reforms encompassing partial
of tax reliefs, tightening in regulatory along with concurrent focus on
withdrawal of tax reliefs, enhancing
and federal excise duties shall improve upholding highest service standards has
regulatory duties and federal excise,
revenue mobilization amidst sustained enabled Your Bank to post a robust
public confidence building measures together
pressure on expenditure and financial growth of 17% in fee income which has
with austerity measures to manage non-
account management due to rising debt reached Rs. 5,092 million.
development expenditures improved
servicing costs and maturing external
revenue mobilization; which witnessed a
debt. Prudent positioning of Your Bank’s foreign
growth of 18.4% in first
exchange assets and liabilities assisted
half of FY 2019-20 as compared to the
corresponding period of FY 2018-19.
Financial Performance a notable growth of 32% in income from
dealing in foreign currencies to close
Pakistan’s banking sector continued the year at Rs. 1,992 million against
Attributable to higher Government
to face significant ramifications and Rs. 1,504 million recorded in 2018.
borrowing from State Bank of Pakistan
private sector credit appetite has
(SBP) during FY 2018-19, lagged impact
remained subdued stemming from the Dividend income has decreased, as
of currency devaluation, hike in
prevailing economic circumstances. compared to the corresponding year,
domestic fuel costs and rising food Sector’s bottom line was affected by sharp as aforementioned economic
prices, Consumer Price Index (CPI) was repricing pace of funding liabilities, slowdown weighed in on shareholder
recorded at a multi-year high level of 8% credit losses, impairment related to returns, thereby impacting dividend
on a year on year (YoY) basis in FY equity portfolio, rising cost of doing payouts.
2018-19. business, increasing compliance cost Active participation as a Primary
During the first half of FY 2019-20, CPI and regulatory changes. However, in second Dealer along-with staggered
rose further to reach 12.6% at end half of the year ended December 31, derecognition of equity portfolio has
December 2019, on a YoY basis, as 2019 improved asset repricing on the resulted in capital gains of Rs. 1,579
inflationary pressures persisted; reflecting back of stabilizing interest rates has
various rounds of upward adjustments in million realized during the year; lower
diluted the impact. than Rs. 2,382 million recognized in
administered tariffs of gas and electricity and
rising prices of perishable and non- 2018 on the
Your Bank fully cognizant of these
perishable food items owing to supply back of prudent disposal of Pakistan
developments, prudently managed its
disruptions. Investment Bonds, foreseeing imminent
economic capital during the year under
sharp increase in benchmark rates.
review. Capitalizing on consistent
In view of the above, SBP proactively Correspondingly, non markup income
growth in low and no cost deposits
managed its monetary policy stance stood at Rs. 10,891 million for the year
along with superior quality asset base,
leading to a cumulative increase of 475 as against Rs. 11,289 million in the
a multi- faceted long-term strategy
bps in policy rate during the FY 2018- corresponding year.
governing optimum organizational
19 to reach 12.25% at end June 2019. structure, comprehensive risk
However, as inflation outcomes achieved parity In line with SBP’s National Financial
management framework, investment
with projections, policy rate increase Inclusion Strategy for building a dynamic
towards digital transformation,
was curtailed to 100 bps during the first and inclusive financial services sector in the
enhanced customer acquisition and
half of FY 2019-20; with no-hike country, Branch outreach expanded to
continuous enrichment of its innovative
announcements in monetary policy 1,395 branches including 1,278
and well-diversified service suite has
announcements of September 2019 conventional and 117 Islamic banking
facilitated Your Bank
and November 2019 respectively. branches across Pakistan. Islamic
in achieving sustainable financial
network was further augmented with
performance.
Although the current account deficit balance 50 windows added to the network at
has been brought down to sustainable viable conventional branches while
Positive volumetric growth in average
level, posting a contraction of 75% contemporaneous growth in ATM
earning assets supported by improving
during first half of FY 2019-20, the network increased total ATMs to 1,515,
spreads and effective duration
external position still remains inclusive of 1,186 on-site and 329 off-site
management of investments through
challenging as the containment exercise re-profiling towards flexible, shorter ATMs.
is primarily driven by import contraction tenor investments in a rising interest
rather than import substitution and the rate scenario has enabled Your Bank During the year, Punjab Workers
economy still carries the risk of trend Welfare Fund Act 2019 (PWWF) has
to post a higher gross mark-up income
reversal when the local demand starts introduced provincial levy of WWF in
by Rs. 49,363 million, higher by 67%
to rebound. Punjab with effect from December 13,
over the last year.
2019. Your Bank, based on the legal
Going forward rising business and opinion of the Bank’s tax consultant,
In-spite of volumetric growth in deposits
consumer confidence on the back of conservatively reversed the cumulative
with immediate re-pricing upon each
improving “ease of doing business” provision maintained, against WWF
policy rate change, gross mark-up
metric, expected agriculture sector from 2014 till the date of PWFF’s
expense growth curtailed to Rs. 39,971
rebound from weather induced enactment.
Despite aforementioned outreach
expansion coupled with new and ongoing
Allied Bank 31
Limited
DIRECTOR’S
REPORT
compliance related regulatory changes, along with a robust risk management the requirement of 6.0% and 7.5%
sustaining inflationary pressures, ongoing framework facilitated growth of 10% in respectively; clearly depicting a well-
investment in technological gross advances, well above the industry capitalized position of Your Bank.
infrastructure along-with performance growth of 4%; Gross Advances thereby
awards and merits adjustments of the crossed the half a trillion mark and The economy continues to pass through
human resource; implementation of closed the year at Rs. 500,168 million challenging times with GDP growth
technology- based solutions has compared to Rs. 453,867 million posted projections remaining strangulated in
assisted Your Bank in optimizing at end December 2018. the medium term. Decrease in public
operating costs; thus, Non- markup sector spending’s amidst limited fiscal space
expense growth was curtailed With rising credit risks and a dearth of owing to low tax revenues and high
to 15%. quality lending avenues, incremental current expenditures remain key
liquidity diversified towards investments; the impediments to economic growth.
Realization of systematic risks posed portfolio was reprofiled, anticipating peaked
by the aforementioned economic interest rates, to reach Rs. Implementation of envisaged governance
slowdown has culminated into a lack 757,957 million at end December 2019; and structural reforms to strengthen
luster performance by Pakistan Stock posting an increase of 13%, institutional frameworks and enhancing
Exchange during the year under synchronized with the industry trend. documentation of economic activities
review. The liquidity shall remain critical to credibly reversing
In consideration of downtrend along with was placed primarily in Government the trend of fiscal deterioration; while further
translation of other idiosyncratic factors, securities, Rs. 542,742 million laying the foundation for achieving long
Your Bank has recognized a net charge deployed in T-bills and Rs. 155,134 term sustainable and balanced GDP
of Rs. 979 million for diminution in value million diverted to Pakistan Investment growth.
of equity securities. Bonds (PIB’s); thereby increasing PIB’s
Proactive monitoring and recovery contribution
efforts has resulted in a net provision
in total investment mix to 20% at end
Risk Management
reversal against non-performing
loans;
December 31, 2019 as against 9% in the Framework
corresponding year.
aggregating to Rs. 394 million for the
The Board of Directors manages risk
year under review; thereby infection ratio
Despite a notable increase in through a framework of sound risk
fell to 3.2% while coverage ratio stood a
Minimum Saving Rate amidst principles which include establishment
strong level of 95.6%, well above the
monetary tightening cycle, unabated of risk tolerance limits, identification
September 2019 industry averages of
8.2% and 84.4% respectively. No FSV growth in the undocumented economy of potential risks, assessment of their
benefit has taken while determining the and prevailing income tax regime impact on the Bank and formulation of
provision against non-performing loans hampered deposit growth. M2 growth strategies to mitigate all foreseeable
as allowed under the guidelines of the was registered at 11.2%, while risks to the Bank while ensuring
State Bank of Pakistan. Currency in Circulation has grown to continuous monitoring.
Rs. 5,391 billion at end December 31,
As a result, Your Bank has earned profit 2019, on the back of Risk mitigating strategies were
before tax of Rs. 24,242 million for the a staggering CAGR growth of 16% recommended and monitored through
year ended December 31, 2019 as achieved in last 2 years. Board of Directors’ sub-committee
compared to Rs. 21,016 million “Board Risk Management Committee”
earned in the corresponding year; reflecting Accumulation of zero-cost and low- (BRMC). Management sub-committees
a healthy growth of 15%. cost deposits during the year has “Risk Management Committee” (RMC),
Super Tax, which was initially levied vide remained a key strategic objective of Compliance Committee and “Asset and
Finance Act, 2015 has continued and Your Bank. Thereby, non-remunerative Liability Committee” (ALCO) ensuring
vide Finance Act 2019 was extended deposits have grown by 17% to close effective risk management. Summarized Risk
with retrospective effect causing an additional at Rs. and related mitigating factors are
charge of Rs. 835 million, for the tax 388,019 million; constituting 37% of covered in annexed Risk and
year 2018, recognized in first quarter of 2019; the total deposits mix as at end Opportunity Report.
effective tax rate thereby rising to 42%. Profit December 2019. Total Deposit base of
after tax stood at Rs. 14,113 million as Your Bank has registered a healthy The Risk Management Group (RMG) is
against Rs. 12,881 million achieved in increase of mandated to implement this framework
the corresponding year. Barring impact Rs 64,568 million and stood at Rs. as a function, independent of commercial
of aforementioned incremental super 1,049,043 million, reflecting a YoY growth of lines of business. RMG took following
tax charge, Profit after tax has posted a 7%. major initiatives in 2019 to further
notable growth of 16%. strengthen the risk management
Consequently, aggregated asset base framework:
Resultantly Earnings per share of Your of Your Bank has increased by 10% to
Bank has improved to Rs. 12.32 while reach Rs. 1,481,121 million as against • Owing to Small and Medium
Return on Equity and Return on Assets Rs. 1,350,599 million at end December, Enterprises economic significance and in
stood at a strong level of 16% and 1% 2018, while the equity base stood at light of SBP’s initiative to promote
respectively. robust level of Rs. 115,351 million; SME financing, Your Bank participated in
Loan growth momentum has slowed recording an increase of 7%. Innovative Challenge Fund (ICF3)
sharply as a weaker economic scenario Capital Adequacy ratio (CAR) under “Transforming SME Financing,
and elevated interest rates has Basel III stood at a healthy level of Innovative Credit Scoring Model
dampened credit demand; industry 21.7% on standalone basis whereas of SMEs” launched by Karandaaz
advances growth declined by 83% the consolidated CAR stood at 21.8%;
during the year. Amidst aforementioned adequately meeting the requirements Annual
industry downtrend,
Report
Your Bank’s pragmatic business strategy
of the State Bank of Pakistan. 32 2019
Common Equity Tier ratio (CET) and
Tier 1 ratio (CET1) have stood at 17%
as against
Pakistan (a non-profit organization) and
got selected as a Partner for this
the year, the management has Chief Executive Officer’s
undertaken initiative for major
project. The financing activity under the
upgrade in the system, providing Review
project to the targeted segment is
expected to commence shortly. This additional tools and information for
the risk approvers and monitoring The Board of Directors fully endorses
project will not only help us in fulfilling
teams. the Chief Executive Officer’s Review on the
our social responsibility of financial
Bank’s operational performance for the
inclusion but also facilitate in
• The Project of Oracle Financial year ended December 31, 2019.
creating business opportunities for
the Bank. Services Analytical Application
(OFSAA) for Enterprise Risk Statement of Internal
Management was completed
• State Bank of Pakistan (SBP)
during the year with the Control.
issued detailed directions on
implementation of International implementation of Assets Liability
Management (ALM) & Liquidity The Board is pleased to endorse the
Financial Reporting Standard-9 statement made by management
(IFRS 9) vide BPRD Circular No. Risk Management (LRM) Modules.
With the successful completion of relating to internal controls including
04, dated October management’s evaluation of ICFR. The
24, 2019. The effective date for OFSAA and Bench Matrix
practices, a wide spectrum of Management’s Statement on Internal
implementation of IFRS 9 is Control is included in the Annual
January 1, 2021 and the Banks are Enterprise Risk now stands
automated in the Bank; enabling Report.
required to conduct parallel run
effective monitoring of the underlying
and make necessary preparations
risks. Corporate Sustainability
for its implementation during 2020.
Your The Board is pleased to endorse the
Bank has already submitted a • In compliance with the Green
Banking Guidelines issued by the Corporate Sustainability initiatives taken
detailed quantitative and qualitative by Your Bank, as disclosed separately in
impact analysis report to SBP for State Bank of Pakistan, Your Bank
has established the Annual Report.
adoption of IFRS-9 for the year
ended December 31, 2017. a dedicated Green Banking Office
(GBO) to promote environmentally Entity Rating
In order to ensure smooth transition
towards the compliance of SBP’s friendly practices. In this regard,
Your Bank has formulated & During the year, Pakistan Credit Rating
instructions for implementation of
implemented a Green Banking Agency (PACRA) maintained Bank’s
IFRS 9, Project Steering Committee
Policy to reinforce its commitment long- term and short-term credit rating at
of the management comprising senior
for environmental sustainability. the highest level of “AAA” (Triple A) and
members of Finance, Risk, IT and
The objective of this policy is to “A1+” (A One Plus) respectively. These
Business Groups has been formed
reduce the vulnerability of ratings indicate highest credit quality
while presenting periodical project
the Bank from the Environmental and an exceptionally strong capacity for
status to the “Board Risk
Risks and to reduce its carbon payment of financial commitments.
Management Committee”. The main
stakeholders are acting in a footprint on the environment. Your
coordinated manner through the Bank is one Corporate Governance
of the leading Banks in the Industry,
Committee forum towards
which has successfully implemented
Rating
preparedness of the Bank for smooth
implementation. Environment Risk Management
VIS Credit Rating Company Limited
(EnvRM) discipline to identify,
re-affirmed Allied Bank’s Corporate
The Bank believes that assess, mitigate and monitor
Governance Rating of ‘CGR-9+’.
implementation of IFRS 9 in Pakistan environmental risks arising from
The rating indicates a ‘very high
requires a comprehensive forward- operations of obligor’s business.
level of corporate governance’; thus,
looking approach, less dependent on Besides, Your Bank is also actively
depicting a strong commitment towards
subjectivity, by all the stakeholders pursuing the initiative
governance framework by the Board and
and alignment of existing laws and of creating a sustainable
Management of Your Bank. VIS has
regulations with IFRS 9 paperless environment.
noted that Human Resource and Remuneration
requirements. Committee be chaired by an
• In continuance of Bank’s distinctive
independent director as per Listed
• The Bank has successfully initiative of engaging with the
Companies (Code of Corporate
implemented Bench Matrix obligors to provide them with latest
Governance) Regulations 2019, which is
Solution for Operational and insight
currently being headed by a non-
Compliance Risk Management. on business management and
executive director.
This system has strategies; three interactive seminars
enabled the bank to automate various for corporate, commercial & SME
functions pertaining to Operational obligors on the topic “Transition
from Family Owned Business
and Compliance risk management as
Structure to Corporate Structure” Board of Directors
per best practices.
were organized during 2019.
The profile of all Board members is
• The Bank has an in-house The Bank devotes considerable
disclosed separately in Overview
developed state of the art Risk resources in managing the risks to which
section of the Annual Report.
Assessment and Management it is exposed. The momentum attained
System (RAMS) for loans processing thus far will be continued in the future
through significant investments in human Composition of the Board of Directors is
and Monitoring. The system has
enabled the Bank towards effective resources, training and technology.
management of Credit Risk, also reflected
by one of the lowest infection ratios in
the industry. During
DIRECTOR’S
REPORT
specified in “Statement of Compliance with IV. Independent Directors. on record our gratitude to esteemed
Code of Corporate Governance”. While V.Other Non-Executive Directors. shareholders and valuable customers
Composition of Board committees is VI.Board of Directors’ Committees. for placing their trust in Allied Bank.
also disclosed separately in the Annual VII. Chief Executive Officer. Securities and Exchange Commission
Report. of Pakistan, State Bank of Pakistan
The responses and feedback from the and other regulatory authorities for
Non-Executive Directors (excluding directors on each of the above- their consistent direction and
those who have opted not to mentioned categories (except Chairman) oversight. We would also like to
receive is compiled and submitted to the extend appreciation to our colleagues
meeting fee on voluntary basis) are paid Chairman enabling him to discuss the for their diligent work
a reasonable and appropriate results/findings with each individual Board towards meeting customer expectations
remuneration for attending the Board member, if so desired. and their dedication towards achieving
and/or its committees’ meetings which the Bank’s goals and objectives.
is disclosed in the Financial Statements The authorized independent director
note 38. communicates the feedback in respect For and on behalf of the Board of
of the Chairman to the Company Directors.
This remuneration is not at a level that Secretary for incorporation in the
could be perceived to compromise consolidated performance report.
independence. No fee is paid to the
directors who do not attend a meeting. Accordingly, the report comprising of Tahir Hassan Qureshi
Similarly, fee is not paid for the consolidated evaluation results and Chief Executive Officer
proposals considered through action plan forwarded by the Chairman
circulation. is submitted to the Board of Directors for Mohammad Naeem Mukhtar
consideration. The Board of Directors, Chairman Board of Directors
in its 244th Meeting dated February
Performance evaluation 07,2020, noted contents of Board
Mechanism for the Annual Evaluation for the year 2019 Lahore
Date: February 07, 2020
Board and expressed its satisfaction on its
results.
The Board of Directors (BOD), while Annual
Reportregulatory compliance is also
ensuring External Auditors 34 2019
vested with fiduciary responsibility on behalf
of the shareholders to protect Bank’s The present Auditors M/s KPMG Taseer
interests, provide strategic direction Hadi & Co, Chartered Accountants in
pursuance of the Code of Corporate
and monitor the execution of strategic
Governance become ineligible for
objectives.
re-appointment having completed a
term of five years. However, State Bank of
The Companies Act 2017, Banking
Pakistan and Securities Exchange
Companies Ordinance 1962, SBP’s
Commission of Pakistan has granted
Prudential Regulations and Code of
permission to the Bank to extend the
Corporate Governance (The Code)
term of M/s KPMG Taseer Hadi & Co,
describes the role of Board of Directors
Chartered Accountants for next term.
along with its responsibilities and
Extension was sought to avoid self-
functions.
review threat in light of exceptional
In order to comply with the requirement
circumstances which arose due to
of Code, the Board, in the year 2014, put
evaluation of automated solutions to
in place an effective mechanism for Board
comply with regulatory requirements.
Evaluation.
M/s KPMG Taseer Hadi & Co, Chartered
Subsequently, SBP vide BPRD
Accountants retired and offered
Circular No. 11 dated August 22,
themselves for re-appointment.
2016, issued detailed Guidelines on
Performance Evaluation of Board of
The Board of Directors, on the
Directors. As per these Guidelines,
recommendation of the Audit Committee
the Board decided
has recommended M/s KPMG Taseer
to opt for in-house approach with Hadi & Co, Chartered Accountants, as
quantitative techniques and evaluation Statutory Auditors for the next term.
by an external independent evaluator
every three years. Accordingly, Pattern of Shareholding
independent assessment was
conducted in 2018 and for 2019, in-
Pattern of Shareholding, is annexed.
house approach has been exercised.
As per approved mechanism,

Acknowledgement
performance evaluation of following
On behalf of the Board and the
categories was carried out:
Management, we would like to place
I. Chairman.
II.Overall Board of Directors
III. Sponsor Directors.
Annual
36 Report 2019
Annual
38 Report 2019
Annual
40 Report 2019
CEO’S REVIEW
Annual
42 Report 2019
Economic Review adjustment path. Deficit contracted by 62% amidst higher debt servicing costs
during the year 2019 on the back of continued to hamper fiscal consolidation.
According to the International Monetary favorable trends in trade balance and However, results of various initiatives,
Fund, global economy is in synchronized worker remittances growth. broad-based taxation reforms,
stagnation, with growth for the year public facilitation and confidence building
2019 downgraded further to 2.9% Unfolding impact of aforementioned measures have helped to improve
compared to 3% projected in October macro stabilization measures and an revenue growth and resource
2019, delineating its slowest pace imminent economic slowdown, import mobilization, with collections during first half of
since the global financial crisis. The demand contracted, with total bill FY 2019-20 increasing by 18.4%
sluggish trend has emanated from shrinking by 17.5% for the year 2019 as compared to the corresponding period
escalating trade barriers, geopolitical compared to the corresponding year. of 2018; the growth driven primarily by
tensions and aberrant economic In case of exports, lower unit values domestic tax collection with 21%, 34%
pressures in key emerging markets. dominated; partially offsetting the impact of and 26% increase witnessed in income
Amidst aforementioned headwinds, volumetric rise achieved in a number of tax, sales tax and federal excise duty
global growth started to bottom out by major export products and thereby collection respectively.
the fourth quarter of 2019; unfolding stagnating growth to keep exports at
lagged impact of a broad-based shift the previous year’s level of US$ 30,000 Banking Sector Performance:
towards an accommodative monetary million.
policy, improving sentiments following Banking sector witnessed multifarious
announcement of “Phase One” of US- Workers’ Remittances posted a growth challenges emanating from domestic
China trade deal and fading fears of a of 5.3% to reach US$ 22,204 million, in macro-economic bottlenecks and digital
no Brexit deal. Global growth for the 2019, compared to US$ 21,079 million transformation in sync with the global
year 2020 and 2021 has thereby been posted in 2018. The impetuous was trend; changing business models,
projected to improve to 3.3% and 3.4% provided by the persistent uptick in increasing regulatory compliance
respectively. inflows from US, UK, Malaysia and Saudi requirements, looming cyber security
Arabia which has assisted in offsetting threats, asset liability repricing lag and
Pakistan’s economy found itself remittances decline from UAE due to rising risk of credit losses.
struggling against another economic general economic slowdown.
quagmire as the legacy of yesteryear’s Nonetheless, during the year under
policies, including incurrence of large Barring impact of one-off inflows into the review the sector has maintained its
fiscal deficits, accommodative monetary telecom sector, in lieu of license renewal growth trajectory, as net interest spread
stance and an overvalued exchange fee, net foreign Direct Investment had expansion gained traction on the back of
rate had fueled consumption led growth, witnessed a sharp decline of 6% and stabilizing interest rates.
which steadily eroded macroeconomic stood at US$ 2,211 million in 2019;
buffers resulting in increased external and reflecting completion of first phase Headline Return on Equity for the
public debt. of China Pakistan Economic Corridor banking sector during the period ended
(CPEC) related projects and weakening September 2019 stood at 12.3%, higher
The incumbent government persistently business confidence. However, cognizant of than 11.5% for the corresponding
adopted a three-pronged strategy these issues, policy measures and period of 2018 in spite of hefty one
encompassing currency devaluation, initiatives taken by the Government to offs and market related factors such as
monetary tightening and trade create a business-friendly environment, prior years super tax imposition, deposit
protectionism to curtail the burgeoning progress on Financial Action Task Force’s insurance cost levy, regulatory non-
twin deficits and avert an imminent action plan through legislative updates compliance penalties, loan losses and
Balance of Payment (BoP) crisis. In and enhanced inter- agency cooperation, equity related impairment charges
line with the aforementioned macro waning political uncertainty, elevating putting a drag on the earnings; barring
stabilization measures, Pakistan’s GDP confidence level about sustainability of which the increase would have been
growth moderated to 3.3% in FY 2018- 19. market-based exchange rate system and more pronounced.
comfort provided by initiation of IMF’s
Industrial activity contracted with sector Extended Fund Facility program have Rise in Minimum Saving Rate (MSR),
growth falling to 1.4% in FY 2018-19 started yielding results; the country’s PKR depreciation and increased inflows under
against target of 7.6%, compared to 4.9% position has improved 28 notches as per Government amnesty scheme facilitated
achieved in the FY 2017-18. Large Scale latest “Ease of Doing Business” report a growth of 10% for Industry deposits
Manufacturing (LSM) witnessed released by the World Bank. during 2019 compared to 8% growth
a broad-based decline of 5.9% during achieved in 2018. Deposits, hence
the period of July 2019 to November The positive sentiment also depicting closed at Rs. 14,575 billion as at end
2019 as compared to the corresponding in the performance of KSE 100 index December 2019, compared to Rs.
period; domestic oriented industries during latter half of the year; which had 13,303 billion in December 2018.
such as automobile, petroleum and rebounded from its lowest level of 28,765
construction allied firms have particularly points in August 2019 and gained a total The growth trajectory remained
suffered adversely. of 11,970 points to close the year at a hampered by growing currency in
high level of 40,735 points. circulation (CIC) due to informal
Water shortages and weather-related economy and prevailing income tax
concerns in tandem with higher cost The improvement in CA along with regime; currency to deposit ratio had
of major inputs had dented agriculture sufficient availability of external financing had led increased to 37% in December 2019 as
outcome, resulting in lower than to building of reserve buffers; Rupee has against 34% posted in December 2018,
projected growth in the Agriculture thereby appreciated by 5.2% since June while M2 posted a growth of 11.2%
sector. The decelerating trend in both of 2019 to close the year at a parity of Rs. in 2019 compared to 10.2% in 2018;
these sectors led to moderation in the 154.55 against the US$, while gross The burgeoning informal economy is
services sector growth as well, which foreign exchange reserves have reached also impacting the growth of low-cost
fell to 4.7% in FY 2018-19 compared to US$ 18,081 million, which depicts its private sector deposits which has fallen
6.2% achieved in FY 2017-18. highest month end level achieved during compared to the growth in expensive
the last 2 years. public sector deposits; increasing by 5%
On the external front, Balance of as compared to 15% growth witnessed
Payment position has improved Long standing structural frailties, in public sector deposits during 2019.
considerably as current account (CA) subsiding economic growth and
balance moved progressively along the sustained financial account pressures Imminent from macroeconomic
slowdown, multi-year high interest

CEO’S
REVIEW
rates, rising risks to credit quality, The aforementioned RM platform, in the year facilitated improvement in
declining public sector spending and addition to facilitating an overall growth overall CASA share to 83%
increased Govt. borrowing, industry of 11% in advances portfolio during
advances growth dampened to mere the year, also remained the underlying Your Bank’s strong Equity base grew by
4% during 2019 as compared to 21.4% driving force behind Your Bank’s low 7% to reach Rs. 115,351 million as at
growth registered in 2018; with almost infection ratio and high coverage end December 2019. Tier 1 equity
all segments witnessing a slowdown ratio of 3.2% and 95.6% respectively. increased to Rs. 89,542 million and
as Banks stayed shy of lending to Proactive monitoring and recovery effort’s enabled Your Bank to post a Capital
structurally weaker institutions. Industry contributed towards net provision reversal of Adequacy ratio (CAR) well above the
infection and Coverage ratio deteriorated Rs. 394 million against Non- Performing requirements of the State Bank of
to 8.2% and 84.4% as at September Loans, which declined to Rs.15,152 Pakistan. The standalone CAR stood at
2019 against 7.5% and 87.8% in million from Rs.15,549 million during the a healthy level of 22%. Common Equity
December 2018 respectively. year under review. Tier ratio (CET) and Tier 1 ratio (CET1)
stood at 17% as against the requirement
Amidst weakening credit demand, Apart from consistent growth in Corporate of 6.0% and 7.5% respectively; clearly
banks channeled incremental liquidity advances, profitable Emerging Corporates depicting a well-capitalized position of
towards government backed avenues. segment posted a strong increase of Your Bank.
Investment in Government securities 54% and laid the basis
rose to 44% of total assets as at end for Your Bank to cross a significant Positive volumetric growth in average
December 2019 compared to 41% at milestone of “half a trillion” in total earning assets supplemented by
end December 2018. Resultantly, sector advances as at December 31, 2019; duration and cost management along
investments stood at Rs. 8,767 billion Gross Advances thereby reaching Rs. with gradually increasing assets and
as at end December 2019, compared to 500,168 million. liability spreads has enabled Your Bank to
Rs.7,545 billion at end December 2018; post Net interest income (NII) of Rs.
posting a YoY increase of 16%. Pro-actively managing the evolving 41,507 million; representing a healthy
interest rate risk, incremental resource growth of 29% from the comparative
Business Performance: mobilization was utilized towards shorter period.
tenor instruments. Effective management of
During the year under review, Your Bank repricing gaps, optimization of investment The Bank continued to maintain focus
maintained its steady growth trajectory portfolio duration and exploitation of on diversifying revenue streams with
despite aforementioned challenging interbank lending opportunities resulted emphasis on the growth of fee-based
macroeconomic and operating scenario; in positive net interest income along-with income. Accordingly, non-mark-up
elucidated by the long-term strategic curtailment of revaluation and opportunity income reached Rs. 10,891 million for
direction set by the Board of Directors. losses. the year with major contribution from
fee-based income that registered a
Your Bank continued to purposefully and Enhanced focus on customer service strong growth of 17% and stood at
diligently work towards improving all and delivery channels by capitalizing Rs.5,092 million as compared to Rs.
aspects of banking operations, enhancing on a resilient technology platform of 4,361 million in the corresponding year.
customer offerings, enriching technology Your Bank to strengthen customer base
platforms and developing Bank’s human paved way for augmentation of account Capitalizing on the opportunities in
capital for gearing up towards the e- opening run-rates during the year. As a interbank foreign exchange market, Your Bank
banking transition; resultantly, driving result, a record 750,000+ New to Bank posted a significant growth of 32% in
stable profitability along with robust growth (NTB) accounts were opened in 2019; income from dealing in foreign currencies,
in financial position and sustainable depicting a significant growth of 15% over reaching at milestone figure of Rs. 2 billion
value created for stakeholders. the corresponding year. as compared to Rs. 1,504 million in the
corresponding year.
Another year of sustainable business Special emphasis was maintained on
performance has translated into a leveraging Bank’s unparalleled network Forecasting imminent rise in interest
growth of 10% in total Assets footing, of touch-points to extend outreach to rates amidst SBP’s restrictive policy
which stood at Rs. 1,481,121 million underbanked and unbanked segments stance, Your Bank had realized sizeable capital
as at December 31, 2019, while the of the rural community through opening gains in 2018 for duration management
equity base stood at level of Rs. 115,351 of Asaan Accounts; which contributed through divestment of
million; recording an increase of 7%. 43% to the total NTB accounts mix for its Fixed Income investments; which,
the year. thereby, witnessed a decline during the
Subdued economic activity, on the back year under review. However, continued
of trend reversal in expansionary cycle of Overall growth in domestic deposits active participation in the Fixed
various industries and higher borrowing remained stifled for private sector banks due to Income securities, trading business has
costs weighed in on the credit offtake; intense competition and unabated growth facilitated Your Bank in realizing capital
creating a dearth of quality lending in undocumented economy amidst gains of Rs. 593 million through
avenues in the market and concurrently prevailing income tax regime. trading. Significant progress and market
alleviating systematic risks posed to Nonetheless, substantial growth in coverage in this segment also translated
asset quality. customer base has facilitated Your Bank to into Your Bank’s recognition as the Top
post a Year on Year (YoY) growth of 10% in Primary Dealer in the market, by State
However, Your Bank remaining fully average deposits and 7% on an Bank of Pakistan, during the FY 2018- 19.
cognizant of the paradigm shift in the outstanding basis, which increased by
evolving economic and banking sector Rs. 64,568 million to reach Rs. 1,049,043 Amidst sustained volatility in the stock
dynamics, regularly upgraded its multi- million at the end of 2019 market, Your Bank prudently and
dimensional and comprehensive Risk cautiously de-recognized its equity
Management (RM) framework, which In a rising interest rate scenario, portfolio in a staggered manner; thereby
comprises of robust risk assessment repricing lag between earning assets realizing Rs. 991 million in capital gains
models, effective pre-disbursement and liabilities further emphasized the from equity divestments.
evaluation tools and an array of post- need to accumulate zero and low-cost
disbursement monitoring systems to deposits. Hence, Your Bank, maintaining its Automation led saving initiatives and
sustain focus on lending practices while strategic focus, achieved a growth of centralization of operations enabled
maintaining superior asset quality. 13% in Current Deposits; which reached Your Bank to restrict growth in operating
Rs 410,262 million as at December 31, expenses to 15% during 2019, despite
2019, while a CASA growth of 7% during
Annual
Report 44 2019
continued investments towards
technological uplift for the “Digital Pakistan banking sector dynamics are Your Bank continued to augment its Debit
Age”, regulatory compliance, footprint continuously evolving, with challenges Card base during the year under
expansion in both conventional and emanating from rapid technological review. Therefore, total debit cards in
e-banking channels and continuous advancements along with persistently circulation increased to 1.7 million as
development of the human capital. enhancing customer preferences. at December 31, 2019, registering a
Digitization is at the forefront of this YoY growth of 14%. The Bank’s pioneer
Promulgation of Punjab Workers Welfare profound transformation and innovation initiative of issuing subsidized PayPak
Fund Act 2019 (PWWF), with effect in banking service offerings. debit cards, for the low-income segment,
from December 13, 2019 introduced yielded results as the volume increased
provincial levy of WWF in Punjab. Your Your Bank has adopted a multipronged long- by 1.5 times during the year, to close at
Bank, based on the legal opinion of the term strategy to focus on broad based 550,214 cards.
Bank’s tax consultant has reversed the digitization and transformation through
cumulative provision maintained there- adoption of cutting-edge technologies Moreover, to facilitate customers, who
against resulting in a net reversal of Rs. geared towards delivering customer seek both international and domestic
769 million during the year. centric user experiences, while spending convenience, the Bank launched
simultaneously taking concrete steps Pakistan’s first ever co-badged EMV Chip
Resultantly, Your Bank’s Profit Before Tax towards circumventing related cyber and PIN debit card powered by UnionPay
increased to Rs. 24,242 million for the security and data governance threats. International (UPI) & PayPak. The card
year, compared to Rs. 21,016 million in offers not only an array of exciting features
the corresponding year depicting a Capitalizing on its extensive and benefits of both payment schemes but
growth rate of 15%. technological infrastructure, including also comes with enhanced security
an in-house maintained “Innovation features; enabling customers to carryout
Profit after current years’ taxation stood at Lab”, Your Bank kept pace with the transactions at millions of acceptance
Rs. 14,948 million, as against Rs. transforming e-banking landscape points including ATMs, Point of Sale
12,881 million for the corresponding through upgrade of ‘myABL’ e-banking (PoS) terminals and e-commerce sites
year. Super Tax, which was initially levied platform to the latest version of Oracle across Pakistan and around the world.
vide Finance Act, 2015 continued and Digital Banking Experience (OBDx);
was extended vide Finance Act 2019 designed to enable customers to The advent of sophisticated technologies
which led to an incremental super tax seamlessly perform financial operations while has contributed towards evolving
levy for the tax year 2018 amounting offering an enhanced user friendly and methods of skimming attacks, with
to Rs. 835 million, recognized in first device responsive interface. ATM fraud becoming one of the fastest
quarter of 2019. This led to an additional growing cyber security crimes in the
drag on the profitability of Your Bank and The aforementioned upgrade together world. The Bank proactively devised a
resultantly Your Bank’s Profit after tax with the launch of card management multi-layered safety approach to counter
amounted to Rs. 14,113 million; facility on myABL platform, entailing emerging security threats through
depicting a notable growth of 10%. activation, temporary block/unblock, extension of biometric verification services,
PIN change and international card undertaking re-carding
In view of the above developments, EPS usage blocking/unblocking option, activity with upgradation to chip and
of Your Bank improved to Rs.12.32 per drove a significant growth of 46% in PIN capability, installation of anti-
share against an EPS of Rs.11.25 per myABL registered users at the close of skimming devices and implementation
share last year. Despite a significant the year. of ‘Euro-Pay, Mastercard and Visa’
additional taxation liability, Return on (EMV) compliance standards across the
Equity (ROE) and Return on Assets Business Internet Banking (BIB) module, entire ATM network to ensure provision
(ROA) also stood at a robust level of geared towards facilitating institutional of maximum protection to the Bank’s
16% and 1% respectively. customers in conducting banking customers.
transactions, including bulk payments
and trade business, continued to be well Following through on its strategy to
received by the market; the number of vigorously engage with the IT-Savvy and
E-Banking Initiatives registered customers rising at the end highly educated customer segment,
of December 2019 registering a growth Your Bank installed additional Interactive
of 46%.

CEO’S
REVIEW
Teller Machines (ITMs) during the year

under review. These ITM’s, combining eateries chains for its debit card holders; simultaneously attaining operational
convenience of an ATM with the Your Bank partnered with Golootlo to offer efficiencies.
personal touch of banking services in a wide array of discounts via MyABL Digital
branch, engage virtual off-site tellers to assist Banking App and UPI- PayPak Service Excellence Measures
customers in conducting financial co-badged Debit Cards. As a result,
transactions and meeting their dynamic debit card spent increased by 29% and Your Bank sustains focus on developing
needs, flexibly and seamlessly. debit card transactions elevated by 24% effective strategies for proactively
on YoY basis. responding to various dimensions
Furthermore, in order to shift over-the- influencing quality parameters, thereby driving
counter (OTC) transactions towards Green Banking and environment excellence in service offerings for effectively
digitized channels and facilitate personal protection differentiating Your Bank
banking, the Bank installed ‘Point- from the competition while ensuring 24/7
of-Sale’ (POS) machines at selective In compliance with the Green Banking availability of its comprehensive services
branches to facilitate accountholders Guidelines issued by the State Bank of suite in an omni-channel environment,
in withdrawing cash, paying utility and Pakistan, Your Bank has established combining “brick-and-mortar” banking
telco bills through use of their Debit and a dedicated Green Banking Office branches with mobile and online
Prepaid Cards. (GBO) to promote environmentally channels.
friendly practices. In this regard, Your
The sustained concentration towards Bank has formulated & implemented Striving to deliver superior, customer
alternate delivery channels with a Green Banking Policy to reinforce centric services and enhancing user
aforementioned focus on the ATM its commitment for environmental experiences, Your Bank developed an
network yielded positive results. sustainability. The objective of this electronic que management system
Consequent to these initiatives, the policy is to reduce the vulnerability of (EQMS) live dashboard for effectively
digital service channel mix, in the the Bank from the Environmental Risks measuring and monitoring the real-time
overall transactions, mix improved from and to reduce its carbon footprint on cash counter performance at Top-100
54% in 2018 to 56% in 2019; thereby the environment. Your Bank is one branches. Enabled with an auto update
contributing in reducing the costlier of the leading Banks in the Industry, feature, the dashboard provides a
counter transaction mix. which has successfully implemented vibrant display of branches’ performance
Environment Risk Management against pre-specified quality benchmarks; in
(EnvRM) discipline to identify, assess, turn enabling Your
Bank’s innovation strategy also
encompasses forging strategic mitigate and monitor environmental risks Bank to take necessary and timely
arising from operations of obligor’s measures for improvement, where
partnerships with leading technological
platforms and partners to facilitate business. Besides, Your Bank is also required.
actively pursuing the initiative of creating
provision of the premier services to the
a sustainable paperless environment. Your Bank has persistently worked towards
customers while simultaneously playing
the project of flagship branches, under which
a positive role in expanding the domestic
Your Bank continued to invest in energy selected top performing branches were
technology ecosystem.
saving solutions through convergence renovated, supplemented with additional
to renewable energy sources during the facilities, together
During the year under review, Your Bank
year under review. Apart from operating with up to date gadgets, equipment.
collaborated with Avanza Premier
58 branches vide solar energy, one Furthermore, customer service at these
Payment Services to revamp online
bank-maintained warehouse was also branches was augmented by placement
transactions through payfast payment
converted to solar. and training of top-tier staff and Customer
gateway; allowing customers to shop on Support Officers to provide enhanced
Avanza Premier Payment Services’ vast service quality and user experience for
merchant base ranging from schools, In view of promoting a paperless
environment, Your Bank continued its our valued customers.
billers, mutual funds and marketplaces
vide their bank accounts. focus on process automation during the
year whereby, an “Asset Management Governance around monitoring and
System” was deployed with the measurement was strengthened
Expanding strategic business alliances with mystery shopping as well as
objective of automating approvals
with ecommerce companies, large independent customer surveys in order
to create paperless environment,
retailers, trading houses and major to align internal service measures with
avoiding excessive courier costs while
Annual
46 Report 2019
customer feedback. This has resulted
in tangible improvements in service conducted various security assessment emanating from country’s inclusion
levels, branch upkeep and overall high exercises including vulnerability in grey list by FATF through timely
satisfaction. assessments, penetration testings’ and upgradation of Financial Crime and
technical risk assessments together Compliance Management (FCCM)
During the year 2019, Allied Phone with compromise assessment activity as software for improved transaction
Banking introduced Outbound Call mandated by SBP. PCI DSS Certification monitoring with structured workflow.
Center with the purpose of connecting was also achieved during the year Combating financing terrorism (CFT) desk
with our existing and potential customers under review; depicting a major security has also been established in
in order to widen our customer base by milestone along with compliance to accordance with SBP AML/CFT
lead generation and offering competitive swift customer security program being Guidelines on Risk Based Approach
bank’s products. mandated by Swift International. (RBA).
Allied Phone Banking is working 24/7 Assets Liability Management (ALM) The Bank has an in-house developed
to serve its customers and provide First & Liquidity Risk Management (LRM) state of the art Risk Assessment and
Call Resolution (FCR). The organization- modules of Oracle Financial Services Management System (RAMS) for
wide focus on visibility of customer Analytical Application (OFSAA) for loans processing and Monitoring. The
complaints and quick complaint Enterprise Risk Management (ERM) system has enabled Your Bank towards effective
resolution has also improved the have been successfully implemented to management of Credit Risk, also reflected by
customer satisfaction. enable Your Bank to measure and meet one of the lowest infection ratios in the
risk-adjusted performance objectives, industry. During the year, the management
The Fair Treatment to Customers (FTC) lower compliance and regulation costs has undertaken initiative for major upgrade
committee worked on various cross- and improve customer insights while in the
functional initiatives to improve Conduct cultivating a risk management culture system providing additional tools and
Assessment Framework (CAF) as per across the bank. information for the risk appraiser and
the SBP’s guidelines. They were able to monitoring teams.
achieve an improvement in the Bank’s Persisting in its endeavor to ensure
CAF rating. optimum management of compliance Your Bank aims to continue the pace of
risks; arising out of an evolving initiatives in 2020 with further
Risk Management, Compliance landscape and promulgation of new laws augmentation of bank-maintained
and Controls and standards, Your Bank places intense warehouses for pledge financing and
emphasis on adopting alert-based enhancements in robust risk
Risk Management (RM) of Your Bank is technology enabled solutions to optimize management systems, through
continuously striving towards managing compliance functionality. During the significant investments in technology and
risk through an augmented framework year under review, Your Bank completed human resource development to
of sound risk principles supported by implementation of C-link, creation of maintain an effective risk management
optimum organizational structure, robust additional private lists in C-link and its framework. Meanwhile, emphasis
risk assessment models and effective integration with core banking to conduct on further strengthening the Bank’s
monitoring systems in an IT enabled name screening against an enriched Information Security Posture shall
environment to safeguard the strength proscribed database with real time continue.
of the capital base of Your Bank while updates. The Bank wide implementation
achieving maximum shareholders value. of this screening tool along with
integrated mechanism at Bank’s Customer Awareness Sessions
Although digitalization of the banking centralized account opening significantly
sector has brought in benefits of lower enhanced effectiveness and efficiency of AML/ In continuance of Bank’s distinctive
transaction costs, improved agility, KYC related controls and enabled effective initiative of engaging with the obligors
increased flexibility, low latency and screening of Politically Exposed Persons and to provide them with latest insight on
enhanced virtualization, it has also led to other High-risk entities with enhanced business management & strategies;
the evolution of emerging IT and cyber due diligence. interactive seminars for corporate,
security risks. Staying ahead of the curve commercial & SME obligors on the topic
on these rising vulnerabilities, Your Bank Your Bank took discrete measures to “Transition from Family Owned Business
combat compliance requirement’s Structure to Corporate Structure” were

CEO’S
REVIEW
organized during 2019.

on digitalizing Bank’s operations Organizational structure of Bank’s
Information Technology through exploiting common access to functions was revamped, making
technological solutions has led Your Bank them robust, smart and transformation
Keeping track with fast-paced, vigorous to complete implementation of “Phase enabler while augmenting functional role
and virtually competitive market One” of Oracle based Human Resource and achieving optimal alignment with
scenario, Your Bank continuously focusing Management System; thereby enabling operational activities of each group.
on strengthening IT Infrastructure automatic calibration of Human Further, performance management
including systems, Networks, Resource functions and processes matrix was redefined and scope of Key
Applications and Data Centers including benefits administration, payroll, Performance Indicators (KPIs) was
according to the expectations of its recruiting, training, performance analysis enhanced during the year. The revised
customers supported by Big Data, and review into one package. matrix aimed at enhancing performance
Artificial Intelligence (AI) and Robotic in ever changing industry dynamics,
Process Automation (RPA). With the aim of creating a performance achieving customer satisfaction, service
driven culture, the Bank empowered excellence and regulatory compliance,
Existing Information Technology its employees by providing them with while rewarding performers. It
Systems are timely upgraded and new the means to perform to their fullest simultaneously introduces paradigm shift
hardware/software solutions promptly potential. Resultantly, Your Bank and divert branch focus towards digital
acquired to prevent systems failure and launched Allied Onboarding Journey transactions.
obsolescence while simultaneously (AOJ). Fully customized automated
laying the foundation for supporting online program designed for newly Human Resource policy was reviewed,
risk management initiatives, strengthen hired employees, across all functions in view of State Bank of Pakistan’s
compliance culture and improve data of the Bank. AOJ program provides guidelines, to align annual performance
analytics to drive business growth and a comprehensive onboarding journey appraisal scores with underlying
achieve operational efficiencies. mapped up to 12 weeks covering risk adjustments in line with best
orientation about the Bank, inculcation international practices. Remuneration
Business continuity and disaster of code of ethics, function/role specific structure relating to Material Risk Takers
recovery remained a high priority to regulatory requirements, digital (MRTs) and Material Risk Controllers
ensure availability of round the clock transformation and desired culture fit (MRCs) across the Bank was defined and
service. Following the practice of behaviors. implemented under revised Human
conducting annual mock exercise to Resource policy.
monitor the security and robustness Being a value driven organization,
of the Disaster Recover (DR) site, Your Your Bank believes in the concept of “best Your Bank encourages gender diversity and
Bank has successfully shifted and ran fit” and has undertaken various initiatives multi-cultural workforce, providing equal
the critical business applications from for employees’ capacity building employment opportunities to female
Bank’s DR Site for 1 week over 80 through its extensive training candidates across the Bank which has
services/applications in one go to ensure and development program. The human resulted in female ratio of 17.44% at end
banking systems availability for its capital management strategically aimed of the year 2019.
customers in bare minimum time. at strengthening Your Bank’s competitive
advantage by enhancing skills and
knowledge base of its employees Outreach Expansion
coupled with professional & leadership
Investments in Human Capital development. The training and In line with the SBP’s objective of
development activities for the year expanding Financial Inclusion, Your Bank
Role of Human Resource in digital 2019 revolved around technological has taken concrete measures through
transformation is twofold, it is not only
agility, productivity, ethics & compliance, augmentation of e-banking and
responsible for its own transformation
design thinking, customer excellence and conventional banking services all
using automation but also involves
personal effectiveness. Your Bank achieved across Pakistan. During the year under
empowering employees with a digital
96% employee coverage by imparting review, outreach was expanded to 1,395
mindset to improve workforce processes
1,396 trainings to 10,844 number of staff branches including 1,278 conventional
and enhance productivity.
with 7.6 training man days per employee. and 117 Islamic banking branches;
Human Capital management premised thereby improving district-wide coverage
of Your Bank’s branch network to
Annual
48 Report 2019
128 districts across Pakistan at end
December 2019. With the addition of from the Securities and Exchange Bank’s Corporate Governance Rating
14 new rural branches, the total rural Commission of Pakistan (SECP) to of ‘CGR-9+’. Rating indicates a ‘high
network expanded to 282 branches carry on Asset Management Services level of corporate governance’; thus,
geared towards serving the un-banked and Investment Advisory Services as a depicting a strong commitment towards
and under-banked population of the Non-Banking Finance Company (NBFC) governance framework by the Board
country. Simultaneously 36 new urban under Non-Banking Finance Companies and management of Your Bank, while
branches were added, which aggregated (Establishment and Regulation) Rules, noting that the Human Resource and
to 1,113 branches at end December 2003. The Company has also obtained Remuneration Committee to be chaired
2019. license to carry out business as Pension by an independent director as per
Fund Manager, under the Voluntary Listed Companies (Code of Corporate
Islamic network was further augmented Pension System Rules, 2005. Governance) Regulations, 2019,
with 50 windows added to the network requirements.
at viable conventional banking branches; ABL AMC offers a portfolio of 15 products
thereby bringing the total number of including investment solutions, mutual International Rating
Islamic banking windows to 60 at end funds and investment advisory services to
December 2019 and enabling Your Bank’s cater to specific investment needs of a Moody’s Investor Service maintained
Islamic Banking arm to further expand its wide array of customers. Your Bank’s deposit rating at B3 during
low costs deposit base in this niche 2019, with outlook upgraded to stable,
market, without investing in new physical ABL AMC’s financial position at year end aligned with the stable outlook on
branches. remained healthy and closed at Rs.2.8 the sovereign rating; indicating stable
billion, 22% higher on a YoY basis. Assets deposit – based funding profile, high
ATM network increased to 1,515, under management (AUM) increased by liquidity buffer and good earnings
inclusive of 1,186 on-site, 328 off-site 25%, despite deteriorating key generating capacity
ATMs and 1 Mobile ATM during the year. economic indicators, to close the year at
Your Bank also successfully maintained its Rs.55 billion; representing a market Future Outlook
ATM uptime at 97% during the year, well share of 7.8% and improving AMC’s
above the industry average. market position to 5th within Country’s GDP growth is projected to
the private fund category. The Special remain strangulated in the short term
Managed Assets (SMA) hiked by 200% with current growth projection of 3.5%,
Rewards and Accolades to close the year at Rs.5.9 billion. by the State Bank of Pakistan, for the FY
Resilient risk management, high focus 2019-20, expected to be revised even
on compliance with domestic and VIS Credit Rating Company Limited further downwards owing to sustaining
international applicable regulatory (VIS) has reaffirmed the Management Quality downside risks in the form of supply
requirements and high standards of Rating (MQR) of ABL AMC at ‘AM2++’ shocks, hike in industry input prices and
corporate governance; Your Bank (AM-Two-Double Plus). The medium to fiscal constraints regarding budgeted public
achieved tremendous success in 2019 long term rating of ‘AM2++” exhibits spending.
which also translated into various very good management characteristics.
awards and recognitions by prestigious Outlook on the assigned rating is Agriculture sector’s performance
institutions; ‘Stable’. continues to be impacted by persisting
structural shortcomings and is expected
1. Best Bank of the Year – Large The assigned rating derives strength to remain below par primarily on account
Banks by CFA. from ABL AMC’s strong sponsor profile, of adverse supply side disruptions to
2. Best Primary Dealer by State Bank adequate control functions, one of cotton production; while other major
of Pakistan. the highest equities in the industry, kharif crops are expected to grow in line
3. Best Place to work in Financial continuous investment in technology with the revised targets.
Services – Pakistan Society of and balanced board composition. Rating
Human Resource Management also takes into account, company’s Contraction in Large Scale
4. Top issuer of PayPak debit Cards sound governance framework as Manufacturing (LSM) is expected to
by 1-Link. reflected by professional management team, persist in inward oriented industries,
5. Certificate of Merit Corporate satisfactory board oversight along the which continue to bear the brunt of
Governance Disclosure by South adequate risk management and control rising input prices amidst sustained
Asian Federation of Accountants. framework. inflationary pressures and demand
6. Certificate of Excellence 2019 by dampening regulatory measures, high
Management Association of Entity Ratings cost of borrowings and declining real
Pakistan. incomes, while export oriented and
7. 2nd Position in Best Corporate Your Bank’s sustainable and robust import competing industries are likely
Report 2018 by Institute of financial position, capable of absorbing to witness a gradual recovery amidst
Chartered Accountants of economic cycles, one-off shocks and impact realization of export incentives
Pakistan and Institute of Cost proficient enough to deliver stable results and trade protectionist measures.
& Management Accountants of culminated into Pakistan
Pakistan. Credit Rating Agency Limited (PACRA) The near-term outlook for services
8. Utility Deal of the Year from Triple-A maintaining the highest long term sector performance, inextricably
Asia Infrastructure Awards 2019. and short-term entity credit ratings of linked to the commodity producing
9. Most Innovative Islamic Bank AAA (Triple A) and A1+ (A One Plus) sectors, hence will remain affected by the
Window by International Finance respectively; reflecting very high credit aforementioned impediments to
Awards 2018. quality of the organization. agriculture and industrial sector growth.
ABL Asset Management Corporate Governance Rating On the external front, marked
Company Limited contraction in imports bill has been the
Your Bank’s corporate governance aims primary reason for a narrowing trade
Allied Bank Limited wholly owned to instill effective and prudent deficit balance while the exports have
subsidiary, ABL Asset Management management to deliver sustainable witnessed a muted growth. However,
Company Limited (AMC) is a public long-term value. Therefore, Your Bank on recent uplift in market sentiment on
unlisted company, incorporated in yearly basis have its corporate the back of an improving “ease of
Pakistan as a limited liability company. governance practices reviewed by an doing business” metric shall support
ABL AMC has obtained licenses independent evaluator. VIS Credit Rating corporatization drive, while a reducing
Company Limited re-affirmed Your Real Effective Exchange Rate (REER),

CEO’S
REVIEW
signaling towards a stable USD /
PKR parity, and impact realization of without considering ecosystem, inflation redemption facility through Your Bank’s e-
Governments adopted measures in driven expenditure growth and banking platforms and drive digital
incentivizing credit schemes for export discriminatory tax regime with the transformation by implementing tech
oriented manufacturing entities shall continuation of the Super tax pose savvy procedures to improve services.
improve market competitiveness while significant challenges to the sector’s bottom
paving the way for a favorable outlook line outlook. Additional headways into the branchless
for exports growth. banking endeavor through planned
Your Bank would continue to focus on launch of Home Remittance facility
Improving external position together with operational excellence vide deployment on myABL Wallet, within the ambit of
recent uptick in foreign capital inflows and upgrading of technological tools and “Branchless Banking Regulations” of the
in the form of portfolio investments and automated processes within the Bank. State Bank of Pakistan (SBP), shall keep
bilateral agreements, on the back of an Targeted implementation of Business Your Bank well positioned to take benefit of
IMF program bode well for the country’s Process Management, Warehouse opportunities for generating fee-based
FX position; IMF also terming external Management System, and Customer income avenues while concurrently
debt repayment ability as adequate in Relationship Management system are facilitating swift and cost-effective inflow of
its latest review. However, downside expected to optimize, automate and home remittances and improving financial
risks emerging from slippages in twin streamline business processes and inclusion through enhanced usage of e-
deficits would continue to exert strain on enhance profitability in the long run. banking platforms.
country’s gross financing needs thereby
keeping FX position in check. Enhanced focus shall continue to tap Emergence of new enabling technologies
into opportunities in the captive business is transforming retail payment
Federal Board of Revenue (FBR) available with Your Bank’s vast corporate systems and allowing public to pay
posted an impressive Year on Year (YoY) obligors base and by focusing on and receive money in real time. Your
growth of 18.4% in tax collection during emerging corporate segment. Quality Bank maintaining its industry status
the first half of FY 2019-20; however, the growth in priority sectors including SME of pioneering technological initiatives,
collection still fell short of the indicative would remain under focus, by expanding intends to achieve commercial launch
target set by IMF by PKR 118 billion. bank-maintained warehouse initiative, of Micro Payment Gateway; thereby
Hence, it is of paramount importance launching of shariah compliant business simplifying the payment mechanism
that the Government of Pakistan’s finance product and initiating SME financing and offering swift retail payments with
persists with its renewed resolve for activity under karandaz’s cash- flow based advanced Application Programming
improving documentation of economic lending project. Interfaces (APIs) and directory services
activities while concurrently undertaking to the public.
structural reforms in the taxation With gradual transition from a closed
department, encompassing utilization of environment towards more open ended Contributing to the SBP’s objective of
technological upgrades, for streamlining and agile platforms, information security improving new customers accessibility
tax collection, reducing cost of shall remain a significant operational risk for for account opening, driving usage
compliance and creating the necessary financial institutions. Your Bank intends to of digital financial services through
fiscal space. implement network visibility and security increased number of account-to-account
analytics solution together with End point transactions across various networks
Going forward, it remains imperative that detection, response EDR and Trade and providing digital access to a range
while capitalizing on improving Balance Based money laundering solution in of quality financial services; Your Banks
Of Payment dynamics, recovering FX order to promptly detect and mitigate Asaan Mobile Account (AMA) scheme
reserves, falling external vulnerability these emerging threats. shall provide an integrated platform
risks as re-affirmed from Moody’s upgrade for swiftly and seamlessly opening a
of country’s outlook from negative to Planned implementation of “Integration digital transaction account, via mobile
stable and recent uplift in business Framework Studio” will offer a graphical phone, through a unified unstructured
confidence, the Government instills a sense development environment enabling supplementary service data (USSD) code
of policy stability and follows through on “Wizard Based Development Technique” from anywhere at any time.
envisaged structural and governance and “Web Services”, while the intended
reforms to improve fiscal discipline and implementation of Agile framework “AA Your Bank intends to apply internet and
promotes FX earnings vide exports and Architecture” shall facilitate in developing big data technologies to drive its
Foreign Direct Investment; in turn laying new products with high degree of business transformation and
the foundation for credibly reversing the reusability and customization. development; in turn laying the basis
trend of tightening macroeconomic for launch of “Payday Initiative” for self-
adjustments and thereby stimulating E-banking services suite enrichment service personal loans. This innovation
economic growth. shall persist with the launch of Open will offer customers to select and apply
Banking Application Programming instant personal loans through Your Bank’s
As macro indicators begin to show Interface Portal. This portal will help mobile banking application in just few
improvement and key economic adopt an “Open Banking” approach taps; thereby providing customer
fundamentals driving SBP’s tightening to incubate value added services and convenience through ease of access,
monetary policy stance, including features for online community together minimum documentation, user friendly
inflation projections, achieve parity with with benefiting corporate clients of Your online portal and instant approvals while
expectations, SBP is likely to begin Bank in having real time access to their concurrently enabling exploitation of
monetary policy transmission towards financial information for better decision credit expansion opportunities by Your Bank.
an adoptive stance, albeit in a gradual making and funds management by
integrating their internal systems. Your Bank seeks to build long-term
manner, while simultaneously anchoring
business partnerships to strengthen
markets inflation expectations.
Your Bank continues to focus on enhancing banking relationships with financially
e-banking proposition for attracting and capable enterprises proposing
Banking sector outlook is linked with
retaining the technically proficient competitive solutions that contribute
these evolving macro-economic
“millennial” customer segment. Hence, Your towards achievement of Bank’s
developments and emerging challenges.
Bank intends to achieve commercial launch corporate objectives. A Memorandum
Despite the rate hike; resultant credit
of branchless banking services together of Understanding (MOU) was signed
costs, expansion in currency in
with further augmentation of e-banking with Pakistan’s largest online real estate
circulation, rising compliance costs
network portal Zameen.com, which shall enable
amidst tougher regulatory environment
to include greater digital touch points, Allied home financing offering to be
introduce ABL AMC booking and
Annual
50 Report 2019
made live on Zameen.com portal along
with placement of loan calculator on the processes in order to improve efficiencies Bank’s strategic, operational and
respective website. and enhance transparency. financial developments. Your Bank
As a result, planned implementation continues to meticulously evaluate
In an effort to promote e-payments Your of Audit Management system (eAudit), and adopt requirements of Revised
Bank has signed a strategic agreement with shall enable Your Bank to attain Listed Companies (Code of Corporate
National Institutional a holistic, centralized, integrated, Governance) Regulations 2019 and
Facilitation Technologies (NIFT) to efficient, paperless and automated audit E-Commerce Policy Framework 2019.
enable e-commerce through NIFT environment. The system shall be further
platform under the brand name “NIFT evaluated with a view of automating the After marked success in the conventional
ePay”. follow-up procedure of Board and Board banking business, Your Bank aims
Committee’s decisions with necessary to replicate success in the growing
Mobile Banking Unit (MBU) pilot, which enhancements to drive additional niche market for Islamic Banking.
contains an ATM within and offers banking operational efficiencies. Digitalization would continue to be key
services of cash collection and cash driver for facilitating Islamic Banking
payment while also operating as an In order to ensure swift and flexible Group in graduating to the emerging
ATM on wheels, continued to be monitoring of ATMs, mobile application technological advancement era; thereby
well received and is been expanded to (app) would be developed. While enabling improved service offering with a
additional two major cities. Similarly, premised on taking a strategic, complete range of customer centric
response to the launch of Pakistan’s first ever organized and systematic approach to Shariah compliant services.
Automated Robotic Digital Lockers that employee training and development that
can be operated on a 24/7 basis via self- aligns individual growth with business
service kiosks at the convenience goals, launch of app driven learning Acknowledgement
of the valued customers has been facility shall further augment Your Bank’s
encouraging and Your Bank plans to employee learning platform. I would like to express my deepest
gradually expand this facility in other appreciation to the Board of Directors
high-end niche markets. Implementation of IFRS-9 shall result for their round the clock leadership
in development of a comprehensive and guidance. I would also like to
Your Bank’s robust compliance framework forward-looking approach for acknowledge that the skills, experience
has evolved to embrace legal and incorporation of loss provision. However, and commitment of our team members
regulatory requirements as well as its successful implementation in are the key to realizing our vision.
emerging industry best practices and Pakistan shall remain largely dependent Special praise is due towards our
is founded on the highest standards on alignment of existing laws and much-valued customers for placing
of corporate conduct and ethics. regulations, maturity of supporting their continuous faith in our products
Persisting strategic focus is to automate software solutions and development and services. Furthermore, I would
documentation, review processes of required skill set of human capital. extend my sincere appreciation to
and use key Risk Indicators (KRIs) to Internally, Your Bank remains committed to the State Bank of Pakistan, Securities
identify, assess and monitor compliance work in a coordinated manner through its and exchange commission and other
risk. Your Bank continues to pursue committee forum towards ensuring regulatory bodies for their direction and
identification and evaluation of artificial Bank’s preparedness for smooth ceaseless support.
intelligence-based solution for enterprise implementation.
vide compliance, transaction monitoring
and sanction screening together with Your Bank administers it business subject
development of live risk matrix for to ongoing regulations and associated
managing bank wide Anti-Money legal and compliance risks. As per
Laundering (AML) and Combating the provisions of PSX notice no PSX/N-92 Tahir Hassan Qureshi
Financing of terrorism CFT risk. dated January 28th, 2019, Your Bank Chief Executive Officer
successfully conducted Corporate Briefing
The ongoing transformation agenda Session during
of Your Bank involves focusing on the year under review to enlighten Dated: February 07, 2020
automated, technologically driven shareholders and analysts with

GROUP
REVIEWS
Corporate & Investment
Banking
Corporate and Investment Banking
Group (CIBG) continued to capitalize
its strong position as one of the leading
wholesale banking services provider
in the industry. CIBG’s strength lies
in unmatched ability to understand
business relationships and competency
to provide structured financial solutions while
ensuring comprehensive relationship
coverage and consistent level of service
excellence. CIBG offers a broad array of
products and services covering all types
of funding and trade facilities, cash
management, remittance business and in increasing Bank’s penetration into Gain and Dividend Income amounted
customized investment banking this segment and added several new to Rs. 2,815 million during the year.
solutions. bankable relationships to supplement Revaluation surplus as at December 31,
Bank’s overall portfolio growth and 2019 registered at Rs. 9,686 million.
CIBG also maintains a well-diversified business generation. EC portfolio grew
capital markets portfolio with exposure by impressive 55% during the year. The Financial Institutions & International
in high quality stocks having a steady Division continued to enhance ABL’s
and resilient dividend stream. Investment Banking (IB) offers a wide global institutional banking relationship
range of investment banking services base with leading and reputed financial
Additionally, CIBG manages Your Bank’s and solutions to corporate clients institutions to support trade, treasury,
relationships with both overseas and partnering to achieve their growth and and foreign exchange payments. In
local Financial Institutions and strategic objectives. ABL’s Investment addition, our partnerships with various
is also responsible for the overseas Banking is building business on the multi-lateral agencies and global banks
operations in Bahrain, Dubai and back of strong corporate relationships; continued to facilitate customers’
China. Furthermore, CIBG consistently in-depth understanding of structured growing and diversifying international
synergizes with other business groups finance and local regulations; and rich past banking requirements. Your Bank
for maximizing cross sell opportunities. experience. has more than 300 international
correspondents located in 79
Amidst macro-economic challenges, The Debt Syndication and Advisory countries, providing global reach and
CIBG continued to deliver on its Unit’s forte is executing big ticket debt acceptability.
business objectives in line with the arrangement transactions ranging
Bank’s overall strategy of quality from advising on IPOs, Underwritings, The Bahrain branch and Dubai office
lending. Core business drivers Divestments, Debt Restructurings remained instrumental in harnessing
remained; deepening of relationships and Merger & Acquisition Deals. The opportunities for business in the Gulf
with top tier corporates, expanding Project Finance Unit offers services to region. Our Representative Office in
client base, enhancing relationship project sponsors for development of a Beijing, People’s Republic of China,
coverage and increased focus on non- credit-worthy and bankable financial continued to develop relationships
funded and ancillary business income. structure for Greenfield / Brownfield with leading Chinese Banks to explore
Investment Projects with appropriate potential business opportunities for
Corporate Banking (CB) aims to work risk management. The team also trade and investment flows between
on the basis of long term relationship arranges funding on a syndicated China and Pakistan. During the year
with the primary objective of meeting basis for these Projects. During 2019, under review, Memorandums of
all business requirements of our Investment Banking advised and Understanding were signed with Bank
corporate and institutional customers financed multiple transactions covering of China and China Everbright Bank
while offering tailored and cost effective diverse sectors including power to formalize strategic partnerships
credit solutions with highly personalized generation and distribution, steel and with these banks and collaborate
services. During 2019, Corporate telecommunication. with them on RMB business, trade
Banking’s performing loan portfolio finance, treasury and corporate banking
increased by Rs.39 billion transactions.
Investment Banking’s pre-eminence in
or 10% as against December 2018. the local banking environment can be
Simultaneously, momentum towards gauged from the numerous local and Home Remittance Division (HRD),
augmenting CIBG’s trade finance portfolio international awards received over the continued to enhance remittance
was also maintained to maximize past years. During the outgoing year, inflows by strengthening relationships with
earnings for the Bank. ABL won the award for “Utility Deal of existing correspondent partners and
the Year - Highly Commended” from The adding new-tie-ups globally.
Emerging Corporate (EC) division Asset Triple A Asia Infrastructure During 2019, new tie-up relationships
within CIBG has remained focused on Awards 2019. were established with correspondent
its core objective of providing value
partners from UK, Ireland, Sweden and
added financing solutions and advisory The Capital Markets division, operated Japan. Contribution to income by HRD
services to mid-tier clientele including by highly experienced equity investment amounted to Rs. 444 million during the
growing commercial entities; while specialists, manages a well-diversified equity year.
simultaneously enlightening them with portfolio with enhanced focus on
better corporate practices. During the investment quality, diversification and stable
year, EC has remained instrumental Annual
dividend payout. Total Capital
Report 52 2019
Future Outlook This positioned ABL in an advantageous enabling 10% average deposit growth
position to benefit from the upward and is well positioned to exhibit further
Going forward, CIBG aims to maintain movement of the yield curve. On the FX growth while remaining part of the
its quality lending approach with side ABL treasury’s performance was “Trillion” Club.
primary focus on top tier and blue- noteworthy as timely position taking
chip corporate clientele, in mid-tier supplemented with excellent client Your Bank continued to expand its
corporate segment, cross selling of servicing resulted in contribution of Rs. footprint; branch network was
financial institutions products while 2 billion to the bank’s bottom line. expanded by 50 new branches during
capitalizing upon established corporate the year to reach at 1,395 along with
relationships and exploring avenues SBP’s award of “Best Primary Dealer” 10 new regions to support business
for maximizing fee based and ancillary status to Your Bank boasts for the expansion in new geographies.
business income exploiting on its Treasury Group’s remarkable Remaining focused on boarding NTB
domestic and international network. contribution towards development of relationships, CRBG has added 700,000
Country’s primary and secondary fixed plus accounts to existing account base.
Treasury income markets. ABL’s FX interbank In line with the objectives of National
desk continued to manifest its status as Financial Inclusion strategy of SBP,
Major global financial markets witnessed one of the leading market maker in the Your Bank continued to play its pivotal role.
subdued volatility in 2019 amid spot and FX swap market while sales Services like Allied Youth Account and
sustained growth and a shift towards desk further strengthened its share in Allied Senior Citizen Account
easing bias by G-7 central banks reflecting fixed income sales segment through were further enriched during the year
the underlying fragility of the global competitive pricing and diverse offering of contributing towards financial inclusion of
economic recovery. The easing impacts sovereign fixed income and money market relatively un-banked, low income
of announcement opportunities. segments of the society and also
of “Phase One” of US-China Trade adding to deposit base of the bank.
deal, fading fears of a no Brexit deal
supplemented by lagged impact Future Outlook Being cognizant of significance of
of broad-based accommodative Small and Medium Enterprises in
monetary policy paved the way towards Going forward, in 2020 global economy our economy, Your Bank has always
acceleration in global growth rates. is likely to continue its consolidation supported this segment through
phase as challenges to maintain the provision of exceptional financial and non-
Federal Reserve acknowledged policy pace of global growth remain high financial services. In line with the Bank’s
error of 2018 target rate hike, along with with Middle East and US-China trade strategic objective to create an
its spillover effect on world economy, tensions posing a potential risk. On the enabling environment for SMEs;
resulting in series of rate cuts that domestic front, inflation is expected to ease CRBG has continued its practice to
brought the policy rate down to 1.75% off in later half of the year before touching arrange SME awareness sessions,
from 2.5%. This, along with assurance a multi-year high, owing to factors like road shows, seminars to engage
of policy accommodation by other rupee appreciation and ongoing fiscal various stakeholders and disseminate
major central banks, provided much consolidation. Although the stabilization product knowledge of SBP schemes
needed relief and dispelled the fears of measures have to SMEs. During the year multiple
another crisis similar to the one faced started bearing fruit, however cautious nationwide awareness seminars were
by Asian countries in 1997. approach still seems appropriate for the conducted and attended by numerous
economic managers to safeguard the representatives from SMEs, trade
Pakistan economy faced significant nascent recovery. Treasury will continue associations and business community.
headwinds for most part of 2019, mainly to closely monitor the changing Moreover, in order to support women
due to the twin deficits experienced in past economic landscape particularly the entrepreneurs and introduce financial and non-
years resulting in stagflation as change in direction and the pace of financial advisory services of Your Bank,
the GDP growth slowed to under 4% change in the economic indicators that CRBG held sessions with Women
while inflation touched double digits. In order will determine the portfolio strategy. Chamber of Commerce and Industry in
to counter these pressures, SBP Faisalabad and Lahore.
increased policy interest rate by 325bps Commercial and Retail
and shifted towards market determined Banking Taking further the partnership
exchange rate system. These measures with Karandaaz Pakistan (Non-
came in tandem with a new IMF Commercial & Retail Banking Group Profit Organization funded by the Bill
program and with commitments to foster (CRBG) has capitalized on its legacy & Melinda Gates Foundation for
policies directed towards economic of an enriched services suite, tailored Innovation Challenge Fund
stabilization and sustainable economic to fulfill customers’ diversified banking “Transforming SME Financing -
growth. needs, complimented through Innovative Credit Scoring of SMEs”),
Towards the end of 2019, the economy e.c hannels and enhanced service Your Bank has successfully developed an
began to show signs of stabilization, quality, despite challenges emanating innovative credit scoring model and
with improved outlook as acknowledged from the economic and operating has planned disbursement to
by international institutions resulting in environment. The Bank has achieved the selected segment during 2020
improved credit ratings and resumption historic milestone of surpassing the which will not only support SMEs by
of foreign flows, however, the risks remain deposit of 1,000 billion during 2019, augmenting their access to finance but will
elevated. complemented by impressive growth in also add towards gradual quality asset
CASA and Rack deposit mix from 82% growth of Your Bank, while remaining
Anticipating the impact of elevated twin to 83%. Resultantly increase in cost of cognizant of enabling environment.
deficits on interest rates and USD-PKR deposit was restricted to 273 bps as
parity, ABL divested most of its long against 487 bps rise in average Policy CRBG also continued to expand its
term bond portfolio and reduced the Rate. Moreover, 13% growth was novel initiative of financing through ABL
maturity profile of assets to benefit from witnessed in Current Account volume,
upward movement of the yield curve.

GROUP
REVIEWS
Warehouses. This product supports the farming community in adopting best achieving business targets.
various classes of obligors to avail mechanical and irrigation practices
financing on relaxed collateral securities and to improve per-acre yields. “Allied
other terms. Aabyari” & “Allied Farm Mechanization”, Islamic Banking
were developed during 2019. In
CRBG continued with unique continuation of its initiatives towards Islamic finance has emerged as an effective
corporate social responsibility initiative diversification, CRBG is evaluating to tool for financing development worldwide,
of imparting financial literacy to our SME collaborate with Agriculture Universities including in the non-Muslim countries.
obligors through free of cost to introduce courses on the Hydroponic According to The Banker, top Islamic
implementation of Enterprise Greenhouse Farming techniques and Financial Institutions rankings show
Resource Planning (ERP) software. planning to finance the pilot projects under overall asset growth in the sector in
During the year ERP was successfully CSR. Efforts to launch web based Agri 2019, with regions such as Asia
implemented at two SME obligors. Advisory Services are also underway. booming and others, such as Africa,
CRBG is ambitious to remain CRBG has been actively creating holding plenty of unbanked potential.
instrumental in financial literacy, including awareness among the farming
implementation of ERP systems, of community through regular Farmers ABL IBG started its journey during
SMEs contributing towards the societies Financial Literacy Programs. 2014 and by the end of 2019, it not
in which it operates. only achieved its breakeven but also
In line with the Bank’s vision to registered annual profit of Rs. 79 million,
CRBG adopts a realistic approach digitize processes, CRBG has entered excluding the impact of IFRS-16 the
towards consumer portfolio and in into agreement with Punjab Land profit amounted to Rs 196 million.
addition to building relationships with Record Authority for generation of The total assets and deposits have
new obligors, focuses on strengthening computerized land record leading to registered healthy growth of 54% and
relationships with existing customers efficient services with reduced lead- time. 40% respectively on YoY basis, i.e.
by offering cross sell consumer Assets increased to Rs.42,107 million
finance services. During the year, CRBG Future Outlook from Rs.27,304 million with ”Nil”
expanded its consumer finance services Going forward CRBG segment of Your Non-performing loans, and deposits
suite through launch of “Allied Home Bank aims to focus on transformation increased to Rs.34,389 million from
Finance”, a mortgage financing product, towards digital platform by focusing on Rs.24,633 million. In order to facilitate
with unique embedded feature of Life internal and external awareness about its customers, IBG expanded outreach
Insurance of the obligor, which is ABL’s e-banking services, financial by opening 50 more Islamic Banking
currently not being offered by peer banks. inclusion by increasing outreach of Window (IBWs) at selected conventional
The product also caters for low cost our service offerings, augment fee- based branches and making the count to total
housing needs. avenues by directing efforts on services, 60 IBWs besides its network of 117
channels and cross sell opportunities dedicated Islamic Banking Branches.
Aligned with the bank’s focus to play that have the highest potential to add
a significant role in development to the bottom-line. Total Advances and Investments as
of innovative financing services for Optimization of the network in light of at December 31, 2019 reached at
deployment of clean energy the Bank’s long term strategic plan and Rs.25,067 million, a growth of 46%.
technologies and providing Green gradual transformation towards digital Strengthening the product suite, IBG
Banking, CRBG has developed new era shall be further focused upon. developed and launched segment
service product “Allied Solar System Furthermore, CRBG aims to maintain based Shariah Compliant service
Finance” which is ready for launch in and further build upon the momentum products for Consumer, Agriculture,
early 2020. through capitalizing on customer Senior Citizen and Youth segments.
segmentation; working closely with all IBG, following the initiative of SBP, also
CRBG has enriched its agriculture support functions to maximize return by launched refinancing facility products Islamic
financing services suite to encourage
Long Term Financing Facility
Annual
54 Report 2019
through murabaha and Istisna modes.
transformed, wherein digital disruption, accounts.
consistent innovation and dynamic
Allied Aitebar Islamic Banking, in 2019,
products from Fintechs are continuously In line with the SBP’s objective of
won the award of “Most Innovative
challenging the traditional banking building a dynamic and inclusive
Islamic Bank Window – International
industry to focus on augmenting financial sector under National Financial
Finance Awards 2018” by International
customer experience through adopting Inclusion Strategy, which aims to
Finance.
latest technologies and excellence encourage people to have a bank
in services on both conventional account and ensure its digital presence,
Seminars were held in Gujranwala and
and e-banking fronts. Attracting and DBG has soft launched branchless
Bahawalpur Chamber of Commerce
retaining the technically proficient banking to augment its e-banking suite.
to enhance awareness about Islamic
“millennial” customer segment is also
Banking. Ulamas, Islamic sharia
an emerging challenge of digital age. myABL (Personal Internet Banking)
scholars, obligors and other participants
As a forward-thinking Bank, DBG has complements individual users’
attended the sessions. Going forward,
responded to these market disruptions experience over mobile apps for
IBG is determined to focus towards
by expanding in-house capabilities and Apple iOS and Google Android and
enhancing market share while providing
also has partnered with Fintechs for works seamlessly across wide array
innovative and customer centric
new digital offerings. of devices. It offers a wide array of
shariah compliant services to its valued
customer features, available 24/7 on
customers.
DBG is maintaining strategic focus on internet and mobile. The numbers of
broad based digitalization to augment registered myABL users has increased
During the year, enhancing the human
the service products suite by offering by 46% during 2019. Keeping pace with
resource capabilities remained the focal
personalized and innovative solutions the ever-evolving needs of business
point for the IBG, therefore In-house
catering to the evolving needs of and institutional customers, exclusively
training sessions were conducted to
different customer segments. designed user friendly and device
provide Islamic banking training to
responsive interface; myABL Business
staff along with arranging training from In the transforming digital financial Internet Banking (BIB) facility enables
reputable external training institutes. landscape and with a view to provide customers to execute wide range
high-end cashless solution, DBG has of banking transactions online from
Digitalization and automation in
launched Open Banking Application their respective workstation. Business
Islamic Banking Group has remained Program Interface (API) portal to entities can initiate multiple transactions
part and parcel of the Bank’s overall
enable its innovation ecosystem on BIB including specialized trade
strategy during the year. In order to and collaborated with the following finance transactions letter of credits,
keep pace with the rapid technological
FinTechs: guarantees and export collections, term
advancements in the competitive
deposit issuance and encashment and
banking industry; Islamic Banking • “EasyTickets” to provide online perform general banking transactions
Group is meeting challenges of digital cashless booking of movie, bus [funds transfers, bill payments, tax
era with digitalization concept and and event tickets on myABL Digital (FBR) payments, bankers cheque
availing every opportunity for its Banking platform. printing] and bulk payment transactions.
implementation within the Group. • “Golootlo” to offer discounts on a
wide array of products and Self-service banking (SSB) enables the
Future Outlook services at 12,500+ merchants customers to cater their banking needs
nationwide through myABL Digital while interfacing with diverse range of
Coping with the challenges of strong Banking App and UPI-PayPak Co- digital touch points including tablets,
industry competition, ABL Islamic Badged Debit Cards. interactive tables, video conferencing
Banking commits to offer a complete range • “1LINK” to provide bill payment and digital kiosks and provides an
of Shariah compliant customer centric aggregation services to pay bills instant paperless user experience. SSB
services, where dedicated hard work conveniently through 1LINK branch network is also being expanded
with clarity would enable capturing the member bank’s channels. gradually across selected locations.
sizable share of this growing niche • “Avanza Premier Payment
segment. Customer awareness sessions Services (APPS)” to revamp online Various discount campaigns were
would be given significant importance to transactions through Payfast; an executed during the year with leading
promote Islamic banking and to spread APPS’ payment gateway enabling retailers including Daraz.pk, Serene
savoir-faire on services being offered. the ABL customers to shop on Air, Metro Cash & Carry, Zenith,
Digital Banking APPS’ vast ecosystem of schools, MeatOne etc. to encourage card-based
billers, mutual funds, marketplaces transactions and promote cashless
Banking industry is gradually being and other entities vide bank economy. Resultantly phenomenal

GROUP
REVIEWS
growth of 29% was witnessed in debit

and re-carding activity to achieve EMV remittance facility through branchless
card spent on YoY basis.
compliance to ensure multilayered account, commercial launch of Micro
security approach to guard our valued Payment Gateway, enhancement of
During the year, Your Bank has
customers against emerging security digital branch network with more digital
centralized all its cash management
threats, and simultaneously achieving touch points and drive transformation in
services under one payment hub
Compliance of PCI DSS standards. the bank by augmenting e-services.
wherein customized batch mode
processing or API based integration is
offered to customers. Consequently, DBG
Innovation Lab has worked closely with Information Technology
the Branch Transformation team to
has onboarded 37 New To Bank cash
improve the customer experience for Technological advancements are
management mandates during the year
self-service equipment including Cash consistently revolutionizing the banking
from government, educational, real
& Cheque Deposit Machine (CCDM), landscape. Machine Learning, Artificial
estate and housing sectors.
Interactive Teller Machine (ITM), Intelligence, Big data and Robotics are
Tablets, Digital Signage machines, and transforming the traditional brick and
Focusing on enriched customer
Self- Service Kiosks. mortar banking model. Responding to
experience and convenience, Your Bank
continuously evolving trends, Your Bank has
remained the top issuer of PayPak Debit
cards and ranked as N.o 1 transaction
Future Outlook made significant advancement in serving
banking needs of its diversified customer
acquirer in terms of number and volume
Keeping in view the customer needs base through state of the art
in the industry, while continuing to
and desire from millennials, Digital technological infrastructure. The Bank
expand its ATM network providing 24/7
Banking Group will further strengthen is converging to ensure uninterrupted
service to the customer with a leading
the products suites. DBG aims to 24/7 customer service, using emerging
position of 97% uptime during the year.
adapt agile approach towards product technologies and by enhancing its
Your Bank continues to supplement its
development for faster implementation. digital footprint so that customers are
ATM network with the extension of
Key initiatives are planned in 2020 such delivered all “digital and networked
biometric verification services,
as commercial launch of Branchless banking services” on the go.
installation of anti-skimming devices
Banking services, launch of home
The Bank has positioned its Information
Technology Infrastructure including
systems, networks, applications and
robust data centers supported by
Big Data, Artificial Intelligence (AI)
and Robotic Process Automation
(RPA) to ensure seamless
banking
services beyond the expectations of its
customers.
Big Data, Machine Learning & Deep

Learning are creating disruption in entire
financial landscape. Your Bank has
implemented Oracle Big Data Appliance,
a multi-purpose engineered solution for
Hadoop workloads and data processing,
in partnership with IBM
and has started building its Data Lake.
The data being extracted from multiple
source systems is uploaded into Data
Lake to support data driven business
decisions based on meaningful insights
Annual
56 Report 2019
and machine learning models, and in
Status management and enhanced network
turn, improve and personalize customer
• Improved Service Level Turn visibility and security analytics.
experiences.
Around Time
In addition to above commitments,
Your Bank has implemented several use-
In order to ensure business continuity enabling learning environment and
cases on Robotic Process Automation
and availability of critical services to the continuing job enrichment shall be
Solution for improving operational
customers’ in case of a disaster, ITG ensured throughout the function.
efficiency, control and cost saving.
periodically conducts mock exercise
Automation of these manual processes
resulted in timely availability of services
to monitor the security and robustness Risk Management
of the marked disaster recovery site.
to the customers and reduction in
Like-wise In 2019, ITG has successfully Risk Management (RM) of Your Bank is
resolution turn-around time
performed Head Office functions continuously striving towards
consequently task automation has
from marked disaster recovery sites management of risk through an
improved human resource
for a week’s time. During this period augmented framework of sound risk
management.
ITG successfully delivered more than principles, reinforced by optimum
80 services and applications to the organizational structure, robust risk
Additionally, ITG has adopted effective
customers. assessment models and effective
measures to gauge network efficiency
monitoring systems in an automated
resulting in astounding-over 97% ATM
uptime and related network services.
Future Outlook environment to safeguard the strength
of the capital base of Your Bank while
Furthermore, the Bank is planning to
Looking Forward to 2020, Information achieving maximum value for the
develop cross platform Android & iOS
Technology Group aims to focus stakeholders.
based mobile application, to enable
on augmentation in Core banking
real-time monitoring of ATM network
solution towards implementation of Dedicated functions of Risk
operational status. The application shall
drive following benefits: agile framework for digital era, graphic Management Group include Corporate
development environment enabling & FI Risk; Commercial, SME &
• Field Force Optimization and web services and wizard-based Consumer Risk; Credit Administration
Workload Management development techniques, adoption and Monitoring; Technical Appraisal;
• Real time visibility of ATM Cash to Big data, Artificial Intelligence and Information Security and Governance
Data Governance, business process and Enterprise Risk which operate
cohesively to continuously augment
the risk monitoring and assessment
architecture, ensuring superior quality
of asset portfolio while keeping the
aggregate risks well within the Bank’s
overall risk acceptance criteria.
During 2019, RMG continued to hone

and innovate its risk management
practices through use of latest
technology and took following key
initiatives to further strengthen risk
monitoring and assessment processes:
• Owing to Small and Medium

Enterprises economic significance and
in light of SBP’s initiative
to promote SME financing,
Your Bank participated in

GROUP
REVIEWS
Innovative Challenge Fund (ICF3)

forward -looking approach by all the with latest insight on business
“Transforming SME Financing,
stakeholders and alignment of existing management & strategies; three
Innovative Credit Scoring Model
laws and regulations with IFRS 9 interactive seminars for corporate,
of SMEs” launched by Karandaaz
requirements. commercial & SME obligors on
Pakistan (a non-profit organization) and
the topic “Transition from Family
got selected as a Partner for this
• RMG successfully implemented Owned Business Structure
project. The financing activity under
BenchMatrix Solution for to Corporate Structure” were
the project to targeted segment is
Operational and Compliance Risk organized during 2019.
expected to be commenced
Management. This system has • Your Bank also conducted various
shortly. This project will not only
enabled Your Bank to automate Security assessment exercises in
help us in fulfilling our social
various functions pertaining to 2019 on Information assets of the
responsibility of financial inclusion
Operational and Compliance Bank. This includes Vulnerability
but also facilitate in creating
risk management as per best Assessment (VA), Penetration
business opportunities for the
practices. Testing (PT) and Technical Risk
Bank.
• The Bank has an in-house Assessment (TRA) exercises. A
• State Bank of Pakistan (SBP)
developed state of the art Risk Compromise Assessment activity
issued detailed directions on
Assessment and Management as mandated by State Bank
implementation of International
System (RAMS) for loans on all e-banking channels was
Financial Reporting Standard-9
processing and Monitoring. The also conducted as part of these
(IFRS-9) vide BPRD Circular No.
system has enabled the Bank assessment activities. PCI DSS
04, dated October 24, 2019. The
towards effective management of Certification was also achieved in
effective date for implementation of
Credit Risk, also reflected by one of 2019 as a major security milestone
IFRS-9 is January 1, 2021 and the
the lowest infection ratio in the along with compliance to Swift
Banks are required to conduct
industry. During the year, the Customer Security Program (CSP)
parallel run and make necessary
management has undertaken as mandated by Swift International.
preparations for its implementation
initiative for major upgrade in Various Information Security
during 2020. Your Bank has already
the system providing additional campaigns were conducted which
submitted a detailed quantitative
tools and information for the risk include sending SMSs and Emails
and qualitative impact analysis
assessor and monitoring teams. to the customers to educate them
report to SBP for adoption of IFRS-
• The project of Oracle Financial on security issues.
9 for the year ended 31st Dec
2017. Services Analytical Application
(OFSAA) for Enterprise Risk Your Bank continued to invest in energy
Management was completed saving solution through convergence
In order to ensure smooth transition
during the year with the to renewable energy sources during
towards the compliance of SBP’s
implementation of Assets Liability the year under review. Accordingly, one
instructions for implementation of
Management (ALM) & Liquidity bank-maintained warehouse was also
IFRS 9, Project Steering Committee
Risk management Modules. With converted to solar energy. Moreover,
of management comprising senior
the successful completion of paper-based approval process for
members of Finance, Risk, IT and
OFSAA for Basel, Market Risk, fixed asset disposal was replaced by
Business Groups was formed and
ALM and Liquidity Risk and “Asset Management System”, to avoid
monitored by Board Risk Management
Benchmatrix for Operational Risk excessive use of paper and in turn
Committee. The main stakeholders
Management, the wide spectrum minimize courier cost.
are working in a coordinated manner
of Enterprise Risk now stands
through the Committee forum towards
preparedness of the Bank for smooth automated in the Bank enabling Future Outlook
effective monitoring of the
implementation.
underlying risks. Risk Management aims to continue
• In continuance of Bank’s the pace of major initiatives in 2020
We believe that implementation of IFRS
distinctive initiative of engaging such as effective utilization of the
-9 in Pakistan requires a comprehensive
with the obligors to provide implemented Modules of OFSAA
them
Annual
58 Report 2019
and Benchmatrix, process design organizational structure, encompassing
assessments and Control Testing, all functional groups. This was aimed Career growth opportunities were
re-validation and calibration of Obligor to transform the organization into a offered to employees at all hierarchal
Risk Rating Models by external robust, smart and agile by augmenting levels through merit-based elevations
consultant, automation of workflows in Risk functional role and achieving optimal of Bank’s internal resources to provide
Assessment and Management resource utilization in each function. cross functional exposures at Chief,
System, information security awareness Group Head, Divisional Head, Regional
campaigns, implementation of IFRS-9, In order to address the increased Head and Unit Head positions. Through
augmentation of Bank maintained regulatory regime, business expansion effective succession planning at junior
warehouses for pledge financing. in new geographies was supported management levels, 193 cadre change
through carving ten (10) new business promotions were made along with
Meanwhile, emphasis on further regions, alongside control structure 1,907 grade promotions during the
strengthening the Bank’s Information was amplified by creating the same in year 2019 to provide adequate growth
Security Posture shall continue along Banking Services domain as well. opportunities within the organization.
with investments in technology and Induction of the best available and
human resource development to Your Bank believes in ‘Pay for tech savvy talent to support expanding
maintain an effective risk management Performance’ strategy and each year branch network and bank’s business
framework across the Bank. the Branch performance management strategy was carried on with recruitment
matrix is evaluated and redefined. This year of 1,866 new employees.
Human Resource based on the business and market
analysis, the scope of Key Performance Human Resource Group supports
Human Resource Group (HRG) has Indicators were enhanced to cover gender diversity and equal employment
continued to play pivotal role in the relationship management segment opportunities were offered to females and
organizational development through and to bring in the right mix of over candidates belonging to minority groups
strategic capacity building of all the counter transactions and digital across the Bank, at present the female
functions of the Bank, it remained platform. employees’ ratio is 17.44%.
focused on recruiting, training and
retaining quality human capital. The Human Resource policy was revamped The in-house Psychometric Assessment
Bank’s culture was further strengthened to align annual performance appraisal Center ‘CARE’ continued to perform
with forward looking positivity thus scores with underlying risk adjustments its function with vigor. A number of
paving way for conducive work in line with best international practices. strategic initiatives were introduced,
environment. Remuneration structure relating to such as competency assessment for
Material Risk Takers (MRTs) and new Management Trainee Officers
Keeping pace with evolving digital age, Material Risk Controllers (MRCs) across (MTOs), learnability curve assessment
HRG took the role of transformation the Bank was defined and implemented and personality profiling of existing MTOs
enabler and revamped the Bank’s under revised HR policy. and aptitude test for new Tellers.

GROUP
REVIEWS
Moreover, psychometric assessment deployed to achieve the training and recognition of Allied Bank’s
for posting of Regional Heads was also milestones. HRG achieved 96% unwavering professional resolve and
introduced to find the best fit for this employee coverage by imparting progress towards inducting, retaining
critical middle management position. training to 10,844 participants with 7.6 and nurturing the best human capital
Psychometric Assessments was also training man days per employee. as well as successfully managing
made mandatory for promotions from all functions of human resource
Management Grade 7 (MG7) to MG6. Being a responsible corporate entity, management in line with the core
Allied Bank continued training initiatives values, mission and vision of the Bank
With the deployment of Robotic in underprivileged and unbanked under the guidance of its Board.
Process Automation in branch banking areas focusing on National Financial
processes, the Manpower plan (MPP) Inclusion Strategy. These trainings were Future Outlook
required a harmonized approach. conducted by the Bank’s resources in
Thus, the ‘Universal Banker’ concept Baluchistan, FATA, Gilgit/Baltistan, etc. As integral part of Bank’s hierarchy
was implemented, aimed at improving The central Bank recognized our efforts for HRG shall continue its concerted efforts
service standards and rationalizing this national cause and designated Your towards providing and augmenting
workload among branch employees. Bank as a ‘Lead Bank’ for National the right human capital. HRG shall
Financial Literacy Program in 37 focus on establishing world class
This year while remaining abreast districts of Pakistan. So far, a total of Management Development Centers;
with industry dynamics, a unique 10,983 nationals across Pakistan have equipped with video conference facility,
program of Allied Leadership Talent attended these sessions. collaboration and resource sharing of
Pipeline (ALTP) was introduced to MDCs with other reputable institutions,
ensure effective succession at the mid- MTO Reconnect program was leading Digital Transformation’ training
level management. Under this launched for existing MTOs, working for middle management, shift toward
program, Based on individual leadership across various functions in the e-recruitment, introduction of shared
potential, young leaders were Bank to provide platform for sharing performance objectives program and
categorized in three echelons: High insights, professional experience career development plan aligning
potential successor, Intrinsic potential and journey within the Bank, thereby individual career objectives and
successor and Extrinsic potential providing mature feedback for further organizational goals and improve female
successor. A comprehensive training improvement in bank’s processes, employee ratio.
cycle for a group of 83 employees, based policies and working environment.
on identified individual needs in each Allied Onboarding Journey (AOJ), a Banking Services
echelon was delivered to enhance their fully customized automated online
leadership skills and build their capacity program was introduced for newly Banking Services Group plays a
for senior level assignments, hired employees. It encompasses pivotal role in business growth through
in coming years. Focused learning vital information on Bank’s functions effective and efficient support
interventions were executed under and provides the new hire with supplemented by strengthening
ALTP, through engaging in-house comprehensive onboarding journey control environment. It aims to ensure
mentors, and external industry experts. mapped up to 12 weeks covering delivery of banking services with
orientation about the Bank, its mission utmost customer satisfaction which
Training and Development of and value statements, code of ethics, in turn synergizes the New To Bank
employees continued to remain primary information on job specific regulatory (NTB) relationship building along with
focus of HR initiatives. This year with requirements, vision on digital deepening in the existing clientele.
higher focus on regulatory compliance transformation and desired culture fit Opening and reviving of almost 1
in various functions, training needs behaviors. million accounts during 2019 were the
increased manifold and therefore result of professional support extended
modern technology solutions such The Bank has won the prestigious during the year. Furthermore, healthy
as e-Learning, gamification modules, award of ‘Best Place to Work’ under the percentage of the total unclaimed
online assessments, webinars, online category of ‘Financial Services’ for the deposits were re-activated and retained
tutorials, bite-sized learning were Year 2019. This award is manifestation during the year.
In order to improve the service delivery
timelines and support growing network,
ten new controlling regions were
formed during the year.
Automation and digitization remained
the key objective of the Group during
the year. Initiatives like utilization of
Biometric Verification for Asaan Account
opening, Biometric Authentication
for Locker operation, introduction
of Universal Banker concept (One-
window operation) and installation of
Interactive Digital Signage machines
at over 750 branches reflect Bank’s
strong commitment towards high class
customer service. By affirming its
impression as a cross-selling and digital
transformation agent, consistent efforts were
made ensuing significant growth in digital
transaction mix and cross sell segments.
Annual
Report 60 2019
Along with regular banking operations,
transaction Turn-Around-Time, SMS expansion of existing fleet of full-service
Banking Services Group ensures
alert for transaction exceeding Rs. Mobile Banking Unit to three major
dedicated support to the Compliance
300,000/- threshold was implemented cities of Islamabad, Karachi and Lahore.
function to comply with the SBP
and Call Back Confirmation was The Group remained instrumental
guidelines and regulation, evident from
automated through recorded call. in successful planning & testing of
the successful execution of Biometric
Straight Through Processing was business continuity plan ensuring
verification exercise to strengthen AML/ KYC
regime. implemented at ABL SWIFT along bank’s preparedness to continue
The Bank’s Branch Banking Solution, with integration of Image Management to provide banking services to its
namely T-24, was expanded to Bahrain System for SWIFT transaction to customers even under unusual
Branch & Export Processing Zone supplement international correspondent circumstances.
Branch during the year. banking. Automated Solution was
implemented for screening of SWIFT Banking Services Group is fully
In line with the Bank’s strategy
messages for Foreign Remittances committed to continue with the
of capitalizing on the evolving
and trade transactions. Additionally, momentum of flow of fee-based income
technologies, Robotics Technology
almost 40% agents were converted attributable directly to its service
was deployed to automate issuance
on Application Programming Interface, delivery, the Group resolves to
of Statement of Accounts on demand.
Cloud based platform to make the outperform their standards, to bring
Moreover, Intimation Letters to
payment availability on practically real about efficiency in customer service.
customers were replaced with SMS
alerts for enhancing cost and time time basis. Direct debit mode was also
efficiency. implemented to eradicate risk of any
Outreach of centralized inward overdraft in agent account.
clearing was expanded to additional Dedicated efforts were continued to be made Future Outlook
107 branches (total reaching 555 during the year to facilitate Your Bank in
achieving industry leading ATM uptime Going forward BSG aims to focus on
branches) in order to strengthen
and top acquirer status. automation of processes to enhance
control environment and improve
Banking Services Group has Digital customer experience along with system
process centralization. Digital reading
Banking infrastructure which was augmentation to strengthen control
of cheques was introduced to reduce
augmented during the year with environment. In this context BSG

GROUP
REVIEWS
shall focus on biometric verification FRMU has also implemented Visa Risk requirements. CG maintained its focus
facilitated customer transactions, Manager Module for 24/7 monitoring to enhance compliance at all the levels
extension of digital lockers and mobile of e-banking transactions on real time of the Bank including the following key
banking facilities, data enrichment, basis and foiled various fraudulent areas:
augment home remittance transactions, attempts by strengthening internal
digital signage at branches. control design measures. • Compliance risk management and
monitoring;
Special Assets Future Outlook. • Entity and Process level controls
Management to avoid Money Laundering
Going forward, SAMG is focusing on (ML), Terrorist Financing (TF)
Fragile economic conditions, subdued up-gradation of Litigation Management and Proliferation Financing (PF);
business activity coupled with System (LMS), integration of NPL/ • Continuous and consistent
monetary measures, adopted by SBP Write off loans settlement with Risk adherence to Regulatory
to counter inflationary pressure, gave rise to Assessment & Management System promulgations and frameworks;
impaired repayment capacity of (RAMS) and enhancements in • Maintenance and updation of
businesses and obligors which, in-turn, Financial Crime & Compliance bank-wide Policies and Procedure
deteriorated the industry’s infection Management (FCCM) & FRACTALs documents;
ratio. (Fraud • Coordination with the regulator
Detection Module for Branch Banking along with ensuring accurate and
Across the banking sector, the remedial transactions) with new scenarios along timely regulatory reporting;
assets management has gained with imparting professional trainings to • Enhanced & Effective Stakeholder
increasing importance for preserving staff for enhancement in professional Management & Organization wide
Bank’s profitability. Special Asset expertise. awareness through Recurring &
Management Group of Your Bank, through Relevant Training/ Education;
its dedicated remedial team, continued Compliance • Effective technology utilization and
its multipronged strategy upgradation;
for recovery against non-performing Compliance Group (CG) aims to • Issues tracking and resolution
loans during the year, along with ensure strong compliance culture on identified during internal and
playing its contribution in the overall entity wide basis through effective external reviews and audits
bottom-line. The function focusses adoption of regulatory requirements
more on negotiated settlements to in all policies and procedures of Your During the year, Your Bank implemented
avoid unnecessary cost on lengthy and Bank, strengthening compliance review Operational and Compliance Risk
complex litigation process. function, ensuring compliance of Management solution to augment
internal and external audit observations, technology supported controls. The
The year 2019 proved another enhancing stakeholder engagement Bank also completed Implementation
successful year for SAMG with and awareness, skill enhancement of C-link, a name-screening solution,
recovery of over Rs. 1,290 million. of compliance staff and ensuring technology along with creation of additional private
Infection ratio (NPL/Gross advances) driven controls for effective implementation lists in C-link & its integration with
decreased to 3.2% as at December 31, of Anti Money Laundering and Core banking System for enhanced
2019 compared to 3.5% in December Combating the Finance of Terrorism due-diligence measures based on an
2018. Meanwhile, loan loss coverage (AML/CFT) framework within the bank. enriched proscribed database with
(including general provision) decreased capability to update on real time basis.
to 96% as at December 31, 2019 from CG performed its core responsibility of This tool has enabled Your Bank to
97% as at December 31, 2018. ensuring strong regulatory compliant effectively screen out Sanctioned Entities,
environment bank wide, inculcating Politically Exposed Persons, other
Infection and coverage ratios are strong compliance culture and High-risk entities and Over the
significantly better than the industry’s establishing robust compliance risk Counter Home Remittance transactions.
infection and coverage ratio recorded framework enabling the Bank to remain
at 8.2% and 84% respectively at period abreast with the continuously evolving During the year, Oracle’s Financial
ended September 30, 2019. domestic and international regulatory Crime and Compliance Management
SAMG has played an active role in

recent incorporation of “Pakistan Annual
Report Restructuring Company
Corporate 62 2019
Limited (PCRCL)”, and is a key
shareholder along-with nine other
major banks. PCRCL has been setup
to acquire, restructure and resolve
non-performing assets of financial
institutions thereby reorganizing and
reviving the commercially or financially
distressed companies.
In line with Your Bank’s overall vision

towards digitalization and paperless
banking, SAMG has digitized its
settlement approval, release of
securities and Fraud Risk Management
Unit (FRMU) approval process through
Workflow Automation System (WAS).
solution was upgraded and customer
interacting with customers through followers has increased from 879,143 to
jurisdictions for Risk assessment were
face-to-face interactions, on telephone, 972,940. Facebook followers reached
significantly enhanced from 12 to 21, which
resulted in further broadening the scope and vide other communication 966,382 from 872,392; Instagram
of its coverage. mediums. Service Standards & Quality followers touched 6,166 from 814
(SS&Q) Group is committed to nurture a whereas and Twitter followers stretched
The Bank has redesigned e-KYC form to service culture across the organization. to 6,392 from 5,937, comparing Year
capture trade related business The governance around monitoring and 2019 against Year 2018.
information of customers to ensure measurement was strengthened with At ABL, we maintain customer trust
effective KYC/ CDD and strengthening mystery shopping and independent by striving to protect their data
review of AML/ CFT & PF measures. customer surveys in order to align and information, and delivering fair
internal service measures with customer outcomes for them – and in rare cases
During the year 2019, Your Bank feedback. of customer grievance, addressal
developed Entity Risk Rating The Initiative of top 100 flagship of customer complaints in a timely
Mechanism for Terrorist Financing & branches was introduced to provide manner. The Bank has a centralized
Money Laundering and conducted an impetus to service quality across Complaint Management Division in
two assessments in line with revised the bank through availability of trained place to efficiently and effectively
National Risk Assessment (NRA) and dedicated human resources and resolve customers’ grievances and
report of Pakistan with respect to creation of a pleasant ambiance for strengthen the ‘customer-bank’
vulnerability risk, threat risk and customers. Customer Support Officers relationship. With the aim to create
determination are assigned at the greeting station near awareness among customers about
of residual risk after accounting for branch entrance areas to implement the Bank’s complaint lodgment
mitigating controls. Your Bank is also in meet and greet concept. Provision of process and available mediums,
process of identification & selection of Electronic Queue Management system information was disseminated through
Trade Based Money Laundering and feedback tablets has been installed SMS, e-mails, corporate website,
solution. to facilitate customers in conducting digital signages and ATMs as part of
transactions conveniently and providing Your Bank’s initiatives for Fair Treatment
Your Bank made continuous interaction valuable feedback on the delivered of Customers (FTC). Your Bank taking
banking services. Availability of Internet appropriate measures promptly achieved
across organization for creating
Banking Kiosks has also enabled better 99% resolution rate with average
strong Compliance culture through
customers’ facilitation towards self- Turnaround Time (TAT) of
role-based training for Compliance
especially awareness of KYC and AML service banking. 3.9 working days within the prescribed
aspects by conducting onsite & class In order to further streamline and TAT, for resolution of customer
room trainings of more than 1,668 improve the delivery of support services complaints lodged during the year.
participants covering branches, regional to the branches and other offices of Allied Phone Banking is striving 24/7
offices and Centralized Processing Unit. the Bank, the internal ticket resolution to serve its customers and ensure
system has been revamped. It First Call Resolution (FCR). Allied
Future Outlook provides work categorization, standard Bank customers are welcomed to get
turnaround times, and automatic in
Going forward Compliance function escalation mechanism ensuring timely touch with Allied Phone Banking agents
of Your Bank aims to focus on, provision of internal support services. through telephone, email, webchat,
inculcating strong compliance culture The Bank has arranged for video social media and high-tech ABL Video
through enhanced awareness by mystery shopping of Top 100 flagship Phone Banking. During the year under
creating distant learning & role-based branches through an external research review, Outbound Call Centre was
learning opportunities, automation partner. Mystery shopping allows introduced to connect with existing and
Your bank to evaluate the level of potential customers for lead generation
of documentation review & approval
customer experience from a third and information on service offering related
process, using key risk indicators to
party’s unbiased perspective. The to cross sell and new products.
identify, assess and monitor compliance
exercise provides an objective view of
risk, conducting compliance reviews of
bank’s material and high-risk areas to
the services experienced by customers Future Outlook
at these branches. Prior to initiation of
evaluate the adequacy of implemented
the activity, Service Quality personnel Going forward Service Quality resolved
compliance controls. Identification and
conducted training sessions for branch to the following initiative in 2020
evaluation of artificial intelligence-based
staff and provided guidance about including installation of Electronic
solution for enterprise vide compliance,
customer services aspects to be Queue Management System (EQMS)
transaction monitoring and sanction
evaluated during the mystery shopping. & feedback tablet in additional 100
screening along with implementation
Branch Service Health parameters branches, develop and monitor Service
of trade-based money laundering
and Service Standards were further Quality Standards for branches and
framework shall be focused upon.
strengthened with enhanced scope to support units, upgrade Allied Phone
track delivery of services against the set
Service Standards & Banking Web Chat Solutions, system
Quality performance benchmarks for front-desk
and back-end functions of the Bank.
improvement to augment complaint
resolution and gradual transfer of
With the objective to engage customers customer services from branches to call
Service Quality is a strategic priority
and nourish relationship with the center .
for Your Bank and is viewed as a key
customers on the mediums of their Additionally, service quality hankers to
product offering to our valued
preference, the Bank maintains profiles on continue its conspicuous supporting
customers. Customer service in
social media websites and actively role in customer convenience while
banking is one of the most important
interacts with the customers on a ensuring high class service delivery.
tools to enhance its market share. It
variety of topics. Customer engagement
includes responding to customers’
through timely attention and resolution
needs and addressing their complaints
of customer queries, total social media
in a thorough and timely manner by

KEY PERFORMANCE
INDICATORS
Long Term Key Performance Significance
Objectives Indicators Analysis Going Forward
Maintain Overall Earnings Amidst multifarious challenges emanating from struggling KPI shall
profitability trend domestic economy, changing business models, increasing remain
enabling regulatory compliance, cyber security threats, asset liability relevant for
continuous repricing lag and rising risk of credit losses; Your Bank has future
recognition maintained its bequest of steady growth along with robust
among the top tier progression in financial position. Profit before taxation for the year
profitable banks of ended December 31, 2019 grew by 15% and stood at Rs.
the country 24,242 million. Your Bank’s profitability was attributed to volumetric
growth in average earning assets, asset duration
management, healthy growth in CASA and Rack based
deposits, noteworthy growth in non markup income including
32% increase in foreign exchange earnings capitalizing on
favorable swap curve during the year.
Super Tax, which was initially levied vide Finance Act, 2015
has continued and vide Finance Act 2019 was extended
with retrospective effect translating in an additional charge of Rs.
835 million, for the tax year 2018, effective tax rate thereby rising
to 42% and accordingly Profit after tax stood at Rs.14,113 million.
ABL’s Return on Equity (ROE) stood at 16% in 2019, which

is in line with top 9 banks’ average ROE of 16% while
remaining well above the average industry ROE of 12% as at
September 2019.
Your Bank’s EPS stood at Rs.12.3 per share as compared to

Rs.11.25 per share in 2018.
Continuous Deposits Your Bank continued to focus on increasing its outreach including KPI shall
growth in Mobilization underbanked and unbanked segments of our economy. 50 remain
Statement new branches were opened during 2019, with total number of relevant for
of Financial branches standing at 1,395 as at December 31, 2019. At the future
Position primarily same time, focus on expanding e-banking channels for
through Zero customers convenience was maintained, consequently ATM
/low costs network was increased to 1,515 inclusive of 1,186 on-site, 328
deposits off-site and 1 Mobile ATM as at December 31, 2019 with an
addition of 127 ATM’s during the year.
Along with robust growth in outreach, sustained efforts towards deposit

mobilization yielded encouraging results, as the total Deposits
of Your Bank stood at Rs.1,049,043 million reflecting a prominent
average deposits growth of 10% as against industry
outstanding deposit growth of 10%; while remaining fully
committed towards evolving compliance framework.
Your Bank continued its focus on increasing zero cost deposits, with
13% growth in Non-remunerative current deposits which
closed at Rs. 410,134 million. Resultantly, growth in CASA
and Rack deposits mix improved to healthy 77% as at
December 31, 2019 from 71% as at December 31, 2018.
ABL’s Lower than Industry’s deposits growth on outstanding

basis is mainly in line with ABL’s strategic shift to lower reliance
on costly corporate deposits. Mix of Current deposits and Total
of CASA and Rack deposits grew by 2% and 5% respectively;
resultantly mix of corporate deposits decreased to 23% as on
December 31, 2019 as compared to 29% on December 31,
2018.
Improved CASA mix has assisted Your Bank in curtailing cost of

deposit, which grew by only 273bps as against 487 bps
average rise in policy rate.
Annual
64 Report 2019
Long Term Key Performance Significance
Objectives Indicators Analysis Going Forward
Consistently Quality of Robust risk management framework is in place that has KPI shall
augment Risk Assets enabled Your Bank to adequately contain any potential surge in remain
Management associated risks while ensuring quality of assets. relevant for
culture resulting future
Your Bank’s comprehensive Risk management platform, in
in superior asset addition to facilitating 11% growth in quality advances
quality portfolio has remained instrumental in curtailing infection
ratio to 3.2% in 2019 as compared to 3.5% in 2018.
The industry’s infection ratio stood at 8.2% as at September

30, 2019.
The loan loss coverage stood at 96% as at December 31,

2019, well above industry’s coverage ratio of 84% as at
September 30, 2019.
Your Bank has not taken benefit of Forced Sale Value of

collaterals, while calculating the provision against non-
performing loans.
Inculcate Effective and Despite exponential rise in cost of doing business resulting KPI shall
operational efficient cost from currency devaluation, increasing compliance cost, remain
efficiencies through controls inflationary pressures and investments in human capital; effective cost relevant for
innovative and rationalization initiatives and implementation of automated solutions future
viable cost and sustained focus on centralization of processes has enabled
Your Bank in optimizing costs while achieving operational efficiencies
controlling
and manage intermediation cost at 2.7% of average deposits in
measures 2019.
This is well below the average intermediation cost of top 10

peer banks of 3.1% as at September 30, 2018.
Cost to income ratio for the year ended December 31, 2019
significantly improved to 52% as compared to 54% during 2018
and industry’s average of 57% as at September 2019.
Strengthen Capital Your Bank in line with its business strategy as well as the minimum KPI shall
capital base to Adequacy requirements of the State Bank of Pakistan (SBP) continued its remain
support business Status. focus on establishing a robust equity base. relevant for
development Compliance future
with regulatory Your Bank’s Total Equity grew by 7% to reach Rs. 115,351 million
minimum as at December 2019, whereas Tier 1 equity increased to Rs.
capital 89,542 million
requirements
Common Equity Tier ratio (CET) and Tier 1 ratio (CET1) have
stood at 17% as against the requirement of 6.0% and 7.5%
respectively; clearly depicting a well-capitalized position of
Your Bank.
Capital Adequacy Ratio as per Basel III requirements was

maintained at 22% during 2019. This is well above the
regulatory requirement of 12.5%.
Banking sector CAR as at September 30, 2019 stood at

16.7%. Bank is well positioned to capitalize on any credit
expansion opportunities in future.
Sustainable Return to Your Bank has maintained the steady dividend stream during the year KPI shall
payout to our Shareholders under review. Cash Dividend of Rs. 8.0 per share was remain
Shareholders declared in 2019 in line with 2018. relevant for
future

STATEMENT OF
FINANCIAL POSITION
Six Years HORIZONTAL & VERTICAL Performance Highlights
2014 2015 2016 2017 2018 2019

ASSETS Rs. in Million
Cash & Balances

with Treasury & Other 44% CAGR for the last six years-annualized is 17.5%
22% 18% 18%
Banks -8%
16%
7.5% 8.1%
6.1% 6.9% 6.9%
5.0% 18% YOY growth in balance is mainly due to
expanded ATM's and remote branch
network and fulfil regulatory reserve
requirement in line with increase in deposit.
42,129 60,789 73,884 86,016 101,763 120,546
Lendings to 519%
Financial 213% CAGR for the last six years-annualized is 1.5%
65% -17%
Institutions -84% -75%
4.0%
1.0% 0.7% 0.9% 75% YOY declline is mainly pertains to

0.2% 0.3% maturity of placement during the year 2019.
2,030 3,356 10,513 8,694 53,780 13,607
Investments -
Net 27%
18% 8%
18% 13% CAGR for the last six years-annualized is 13%
-4%
54.8% 55.0% 55.9%

50.6% 49.7% 51.2%
Investments continue to take the major

share of the total asset base. 13% YOY
growth in investment portfolio is due to the
higher yield on investments which is inligned
428,791 544,349 589,865 698,082 671,228 757,957 with the overall indusrty growth of 16% .
Advances - Net
15% 18% CAGR for the last six years-annualized is 10.5%

5% 13% 11%
2%
36.1% 32.7%
32.4% 30.7% 32.5%
29.8%
Steady growth in advances over the last six

years coupled with 11% YOY growth helped
in imparing Advances to Deposit Ratio
(ADR) of 48% in 2019.
306,014 321,605 329,562 372,038 438,317 485,016
Fixed Assets (including

Intangible Assets)
48%
23% 23% CAGR for the last six years-annualized is 19.4%

14%
6% 8%
4.3%
3.9% 3.9%
3.2% 3.1% YOY growth of 23% is mainly due to
2.9%
capitalization of lease contracts as “Right of
use assets” in pursuance to implementation
of IFRS-16 “Leases”
27,250 28,850 32,757 48,327 52,128 64,084
Other Assets
45%
20
CAGR for the last six years-annualized is 5.9%
4% 3% -9% %
-17%
4.9% 3.4% 3.3% 2.9%

20% YOY growth is primarily due to
increase in accrued markup which is in line
41,199 34,148 35,598 36,508 39,911
with the increase in average benchmark rate
by 487bps.
Total Assets
17%
17%
15%
ABL managed to grow its asset base by
8% 10%
8% 10% YOY surpassing the industry growth by
over 5%.
847,413 993,097 1,072,179 1,249,665 1,350,598 1,481,121
Annual
66 2019
2014 2015 2016 2017 2018 2019

LIABILITIES Rs. in Million
Bills Payable
99% CAGR for the last six years-annualized is 8.3%

-1% 2% -1% 2%
-20%
0.9%
0.6% 0.6% 0.6%

0.5% 0.5%
2% YOY increase.
4,832 4,942 9,849 7,835 7,753 7,879
Borrowings
101% 109%
77%
1% 18%
-8% CGAR for the last six years-annualized is 41.7%
17.9% 18.0%
16.7%
13.9%
11.8%
18% YOY growth is mainly due to increase
7.8% in Repo Borrowings by Rs.14,910, call
money borrowings by Rs.12,741 million,
SBP (ERF/LTF) by Rs.12,409 million and
other borrowing by Rs.507 million .
66,096 137,960 126,369 223,556 225,883 266,448
Deposits and
other accounts
11%
10% 10% 10% 10%
78.8%
74.0% 70.7%
75.1% 72.9% 70.8%
7% YOY steady growth in outstanding

deposits in comparison to overal growth of
10% in industry deposits is mainly due to
strategic shift to increase the mix of no/low
cost deposits.
667,878 734,596 805,111 883,741 984,475 1,049,043
Sub- Ordinated Loans

0% 0% 0% 0%
-29%
-100%
0.4%
Reflects robust capital base of the Bank
which is not supported by additional Tier-1
2,994 capital.
Other Liabilities (Including

Deferred Tax 68%
Liabilities)
11% 7% 15%
-8% -9%
2.9% 2.7% 2.8% 2.9%

2.2% 1.9%
68% YOY increase is mainly due to

recognition of present value of lease liablity
24,723 26,343 30,176 27,817 25,183 42,400 under IFRS 16.

STATEMENT OF
FINANCIAL POSITION
2014 2015 2016 2017 2018 2019

EQUITY Rs. in Million
Share Capital
0% 0% 0% 0% 0%
1.4%
1.2% 1.1%
0.9% 0.8% 0.8% Fully compliant with the regulatory requirement.
11,451 11,451 11,451 11,451 11,451 11,451
Reserves

9%
11% 9% 9% 13% 10%
10% YOY growth is on account of exchange

1.6%
1.5% 1.5% 1.5% 1.5%
translation of net investment in foreign
1.4%
branches & statutory reserve transfer from
un-appropriated profits.
13,549 15,102 16,533 17,980 20,277 22,270
Unappropriated Profits

20%
12% 12%
6% 7% 6%
4.4% 4.3%
4.2%
3.9% 3.9% 3.8% 6% YOY growth is on account of current
year's profit after appropriations.
37,053 41,415 46,490 49,212 52,500 55,821
Surplus on revaluation
of assets - net
51%
23%
13% 7% 12%
-18%
2.2% 2.1% 2.4% 2.2%

1.7% 1.7%
12% YOY growth is due to increase in
revaluation of investment.
18,837 21,288 26,200 28,073 23,077 25,809
Total Liabilities & Equity 847,413 993,097 1,072,179 1,249,665 1,350,598 1,481,121
CAGR: Compound Average Growth Rate

YOY: Year on Year (2019 vs 2018)
Annual
68 Report 2019
PROFIT AND LOSS
ACCOUNT
2014 2015 2016 2017 2018 2019

INCOME Rs. in Million
Markup Income 67.4%

23.6%
7.6% 11.5%
-10.4% 1.7% CAGR for the last six years-annualized
is 14.6%
84.0% 88.1% 85.2% 88.1% 86.7% 91.8%
67% YOY growth resulting from positive

volume variance of mark-up bearing assets
along with positive rate variance mainly on
account of increase in average benchmark
67,001 72,116 64,606 65,709 73,274 122,637 policy rate.
Non-Markup Income
32.6%
27.3%
14.9% CAGR for the last six years annualized is -2.1%
-3.5%
-23.4% -20.9%
16.0% 14.8% 3.5 % YoY decline is mainly because of lower
11.9% 11.9% 13.3%
capital gains on disposal of investments and
8.2%
redcued dividend payouts of the investee
companies.
12,736 9,755 11,210 8,871 11,289 10,891
Total Income
57.9%
CAGR for the last six years annualized is 13.1%
24.9% 2.7% 13.4%
-7.4% -1.6%
79,737 81,871 75,816 74,580 84,563 133,528
EXPENSES CAGR for the last six years annualized is 16.4%

Markup Expense 97.1%
19.2% 20.6%
-7.3% -12.9% 8.9%
The increase is mainly due to rise in cost of
60.8% deposits, (on account of change in policy
48.7%
45.8%
48.7% rate) and higher average deposit volume,
43.9% 41.3%
along with increase in cost of borrowings.
(38,815) (35,977) (31,345) (34,130) (41,159) (81,130)
Non-Markup Expense 17.6% CAGR for the last six years annualized is 9.7%
11.2%
10.0% 7.3% 5.3% 7.0% 17.6% YOY incease in Non mark-up expense is
29.4% 27.8%
27.5% due to increase in Deposit Protection Cost by
21.9% 22.9% SBP, recognizing depreciation instead of rental
20.7%
expense under IFRS 16, and augmentation of the
branch network. The Non-Markup expense has
been partially offset by reversal of Workers'
Welfare Fund.
(17,466) (18,742) (20,839) (21,938) (23,478) (27,610)
1089.4% Better Infection and coverage ratio than industry.

99.7% 31.5% -54.0%
-112.1% -150.2%
(Provisions) / Reversals 2.0% Increase is due to recognition of impairment

1.6% 0.4% against investment.
-3.2%
-1.3%
-0.3%
(1,254) (1,649) 199 2,367 1,090 (547)
Taxation 5990.7%
CAGR for the last six years annualized is 110%
44.5% -9.4% -13.4% -0.1% 24.5%
Increase is due to higher profitability and
12.7% 12.4% 10.9% 9.6% recognition of one time super tax related to FY-
9.0% 7.6%
2018
(7,187) (10,383) (9,404) (8,145) (8,136) (10,129)
Profit after Taxation

CAGR for the last six years annualized is 0.6%
2.5% 0.7% 1.1% 9.6%
-4.6% -11.7%
Sustained profitability.
18.8% 19.0%
18.5% 17.1% 15.2% 10.5%
15,015 15,120 14,427 12,734 12,880 14,112
CAGR: Compound Average Growth Rate YOY: Year on Year (2019 vs

2018)
VALUE CREATION FOR
SHAREHOLDERS
Through our financial performance we demonstrate our commitment to delivering long-term value for our shareholders. Over the last six years the bank
increased it's break-up value per share at a CAGR of 6%, which also reflected in improving value creation (market value less breakup value) of 22% for our
shareholders in 2019. Growing "Total assets to shareholder's funds" coupled with ROA also contributed in achieving higher ROE from respective average ratio
of the industry .
119.2
113.1
107.5
100.7
94.1 93.7 95.6
93.2
87.
9 85.0
77.9 78.2
70. 73.6
68.7
6 65.0
59.4
54.2
2014 2015 2016 2017 2018 2019
DUPONT ANALYSIS
27.8% 31.2% 31.4% 28.1% 24.9%

18.8% 18.5% 19.0% 15.2% 18.2% 1.9%
17.1% 1.6% 1.4%
1.1%
1.0% 1.0%
2017 2018 10.6%
2019
201420152016
2014 2015 2016 2017 2018 2019
10.1%
8.9% 9.4%
7.4% 16.3 16.3 17.0
14.6 15.3 15.0
6.4% 6.5%
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
25.9%
23.3%
20.3%
16.6%
15.8% 16.2%
16.1%
15.6%
14.4% 10.7% 11.4%
11.5%
2014 2015 2016 2017 2018 2019
Annual
70 Report 2019
ROBUST BALANCE SHEET ENABLED AN ATTRACTIVE DIVIDEND PAYOUT
Our CET1 & Tier 1 and Capital Adequacy ratios of 16.98 % and 21.7% respectively, LCR of 167.84% and an NSFR of 143.13 % ,on a pro forma basis, are all
Basel III-compliant and are a reflection of a strong balance sheet. On the back of solid earnings growth in operations and a strong capital position, a final dividend
of Rs. 2 was declared. Our full-year dividend cover was 1.54 times exactly also approved by our board.
19.8% 20.9% 20.8% 22.4% 22.2% 21.7%

7.0% 6.4% 5.9% 4.6% 3.5% 3.2%
17.1% 17.3% 16.2% 15.8% 15.4% 16.1%

2014 2015 2016 2017 2018 2019
2014 2015 2016 2017 2018 2019
85.9% 95.6%
87.2% 91.6% 92.6% 96.8%
87.5% 87.7% 87.0% 86.3% 86.1% 84.8%
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
13.11 13.20 12.60 11.12 11.25 12.32 2.02

1.89 1.74 1.59 1.41 1.54
2014 2015 2016 2017 2018 2019
2014 2015 2016 2017 2018 2019
65.0% 70.0% 72.5% 70.0% 80.0% 80.0%
49.6% 53.0% 57.5% 62.9% 71.1% 64.9% 7.4% 6.1% 8.2% 7.4% 8.4%
5.7%
2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019

VALUE CREATION FOR
SHAREHOLDERS
SHARE PRICE MOVEMENT AND SENSITIVITY ANALYSIS
High Low Closing Market Capitalization

Rs. Capital (Million) Value (Million)
December 31, 2019 101.9 95.0 95.6 11,450 109,462
September 30, 2019 87.5 85.2 86.8 11,450 99,352
June 30, 2019 106.0 101.0 105.0 11,450 120,248
March 31, 2019 108.9 107.5 108.0 11,450 123,706
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19
Regularly recurring matters (such as financial results and dividends) have a temporary impact on the share price of Allied Bank Limited. However, Government/ Regulatory
policy changes such as inflation, discount rate , monetary policy and political & environment situation of the country are the key determinants for change in profitability of the
Bank ultimately having an impact on share prices.
STATEMENT OF VALUE CREATION

VALUE ALLOCATED
VALUE ADDED Rs. In Million
Income from banking services 52,012 13,458
Cost of services (8,316) 31.6%
10,129
Value added by banking services 43,696 22.7%
Non - banking income 387 9,161
Reversals against non-performing assets (547) 20.5%
11,201
Total Value Added 43,536 25.1%

55
0.1%
Annual
72 Report 2019
CASH FLOW
Rs. In Million
STATEMENT FOR THE YEAR 2019
CASH FLOW FROM OPERATING ACTIVITIES
Mark-up / return / interest and commission receipts 128,678
Mark-up / return / interest payments (78,997)
Cash payments to employees, suppliers and others (21,492)
28,189
(Increase) / decrease in operating assets
Lendings to financial institutions 40,173
Held for trading securities (19,862)
Advances (46,449)
Other assets (excluding advance taxation) (7,822)
(33,960)
Increase / (decrease) in operating liabilities
Bills payable 126
Borrowings 40,745
Deposits 64,568
Other liabilities (excluding current taxation) 8,507
113,946
Cash flow from operating activities before tax 108,175
Income tax paid (9,229)
Net cash flow from operating activities 98,946
CASH FLOW FROM INVESTING ACTIVITIES

Net investments in 'available-for-sale' securities (67,525)
Net investments in 'held-to-maturity' securities 3,137
Dividend income received 1,826
Investments in operating fixed assets (7,409)
Proceeds from sale of fixed assets 373
Effect of translation of net investment in foreign wholesale branch 582
Net cash used in investing activities (69,017)
CASH FLOW FROM FINANCING ACTIVITIES

Dividends paid (9,130)
Payment of lease liability against right of use assets (1,837)
Net cash used in financing activities (10,967)
Increase in cash and cash equivalents during the year 18,962

Cash and cash equivalents at beginning of the year 103,874
Effect of exchange rate changes on opening cash and cash equivalents (2,354)
CASH AND CASH EQUIVALENTS AT END OF THE YEAR (under direct method) 120,482
SIX YEARS CASH FLOW ANALYSIS
Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities
148,505
119,790
98,946
57,504 63,803
33,680
(53,293) (118,571) (42,388) (99,712) (9,256) (69,017) (7,950) (11,257) (8,271) (7,987) (8,815) (10,967)
2014 2015 2016 2017 2018 2019

2014 2015 2016 2017 2018 2019
2014 2015 2016 2017 2018 2019

STAKEHOLDERS
ENGAGEMENT
Your Bank believes in connecting with its various stakeholder groups to create a better understanding of stakeholder
perspectives on key issues and consequently realize business value through informed decision making. Your Bank maintains
formal mechanisms to engage with each group of stakeholders and the responsibility for such engagement is shared across
the organisation at every stakeholder touch point. The key stakeholder groups and their related engagements as a means of
creating value are noted below:
Stakeholder Group Methods of Engagement Frequency of Needs & Expectations

Engagement
Regularly
Periodically
Occasionally
Continuously
Individuals • Video Mystery Shopping Excellent customer service,
Institutions • Customer Access Points convenient access across the
Customers
Corporates • Corporate website country, less complexity and

Entrepreneurs • SMS & Email Alerts improved flexibility, innovative
• CSR activities financial services & solutions,
• Customer Awareness value for money banking,
Seminars responsible banking services,
• Road Shows confidentiality, integrity and
• Promotional campaigns accountability, security for
• Print and electronic media customers investments,
• Social Media
ambience in touch points.
Annual
74 Report 2019
Why do they How We Create Value Activities
for Stakeholders
Matter
Customers are at the Understanding evolving customer • Conducted video mystery shopping to assess service delivery
center of our business requirements to roll out more efficient standards and understand customers’ experience and level of
strategy and customer channels thereby delivering competitive, satisfaction when using banking services and service
focus provides the basis convenient, technology driven and channels.
to achieve a profitable and innovative banking solutions. • Launched various innovative solutions to make banking more
sustainable business convenient and meet the needs of its clients. Details of which
model. are presented in CEO and Group reviews.
• The Bank continues to expand its footprint, branch network added
50 new branches during the year to reach at 1,395, expanded
ATM
network to 1,515 (including On-site and Off-site ATMs), while providing
Internet banking.
• Increased Gross Advances by Rs. 46,302 million and deposits by
Rs. 64,568 million.
• The Bank partnered with Karandaaz (Non-Profit Organization) for
Innovation Challenge Fund “Transforming SME Financing - Innovative
Credit Scoring of SMEs” to promote access of finance primarily to collateral
deficient entrepreneurs.
Safeguarding deposits and • Your Bank paid Rs. 81,130 million, interest / profit to its depositors.
investments while growing returns. • Continued investment in technological infrastructure, including
upgradation of T-24 core banking software, to improve data
security and maintain customer privacy.
• Conducted regular mock tests of documented processes to
ensure • institutional readiness for Business Continuity Planning.
• Conducted Vulnerability Assessment, Penetration Testing and
Technical Risk Assessments to ensure controlled environment
for customer related information.
• Replacement of all existing Magnetic Stripe based Debit Cards
with more secure EMV compliant chip-based cards to counter
ever increasing cyber security threats
• SMS Alerts all digital banking transactions to customers.
Timely communication of relevant • Undertook marketing communications through various channels

information on products and to extend outreach to customers and public at large.
services • Your Bank arranged awareness seminars and road shows to
engage customers and disseminate information regarding Banks’
services portfolio.
• Launched Open Banking Application Program Interface (API) portal
and partnered with Fintechs for new digital offerings for customers. In addition,
myABL was continuously updated to cater the evolving digital needs
of the Bank’s customers.
Upholding highest standards of • Complaint Management Division efficiently and effectively resolved 99% of
service quality across the Bank. customers’ complaints within a Turnaround Time of 3.87 Days on
average.
• High ATM uptime further improved to 97%.

STAKEHOLDERS
ENGAGEMENT
Engagement
Regularly
Periodically
Occasionally
Continuously
Sponsors • Annual Report Sustainable
Minority Shareholders • Interim Financial statements performance, dividend
Shareholders / Institutional Investor
Individual Investors • Corporate website payout, return on equity,

Institutional Investors • Annual General Meeting return on assets, earning
• Extra Ordinary General
per share, future growth
Meetings
• Analyst Briefings strategy,
• Coporate Breifing Sessions corporate governance, risk
management,
compliance with rules and
regulations.
State Bank of Pakistan • Directives and circulars Compliance with all legal and
(SBP) • Financial statements regulatory requirements, remain
Federal Board of • Statutory examination responsible tax payer, corporate
Revenue (FBR) • Regulatory reporting governance practices,
Securities and • Filing of income tax fedreal adherence to reporting
Exchange Commission Excise and sales tax requirements, risk management,
of Pakistan Pakistan returns sustainable business practices,
Stock Exchange (PSX) • Filing of corporate return timely withholding taxes and
Credit Rating Agencies • Interviews and meetings deposit, income tax, FED &
Other Public Offices and with representatives of sales tax payment including
Regulatory Bodies regulators, Pakistan advance tax
Banking Association,
Business Council
Annual
76 Report 2019
Why do they How We Create Value Activities
for Stakeholders
Matter
To ensure long term Generating sustainable financial returns, • Generated a sustainable ROE and ROA at 16% and 1%
shareholder value and enabled by growing revenues. respectively; Increased dividend yield ratio to 8.37%.
uphold the rights of the Managing risks
shareholder to ensure their while optimizing our cost base.
wealth maximization
Maintaining a strong balance • Financial position improved by 10% to Rs. 1,481,121 million; Your
sheet and safeguarding asset Bank’s Equity base stood at the robust level of Rs. 115,351
quality which contributes towards million; NPLs reduced by Rs. 211 million causing infection ratio to
sustainable performance. fall by 0.12% and improving coverage ratio to 97%.
Providing existing and potential • Annual Audited Financial statements together with the Auditor’s
shareholders with relevant and and Director’s report were circulated to all shareholders along with
timely information. the Notice of AGM.
• Analyst briefings and conference calls were conducted following
announcements of quarterly financial statements.
• Your Bank organized Allied Corporate Briefing Program at PSX regional office
for providing an overview of Your Bank’s achievements for the nine-month
ending on September 30, 2019. The program was attended by over 47
shareholders, investors and brokers.
• Major financial information disclosed under a separate section of “Investor
Relations” on corporate website.
Ensuring equitable treatment of • All required support is being provided to minority shareholders
all shareholders including for participation in election of Directors.
minority shareholders to attend,
contribute and vote at the
General Meetings
To ensure compliance Embracing prudent banking • Achieved the long-term rating of “AAA” and maintained short-
with legal and regulatory practices and regulatory term rating at “A1+” from PACRA.
directives. compliance that enables a safe
and stable banking system.
Ensuring regulator confidence in the • Continued to be the only Bank in industry to be rated on
Bank and reducing potential for Corporate Governance and maintained a high corporate
reputational risk. governance rating of “CGR-9+”
• Complied with all key aspects of Basel III requirements, with
Capital Adequacy ratio (Tier 1 and Tier 2) of 21.7%, above the
SBP requirements of 12.5%.
• Your Bank paid Rs 18,554 million in direct, indirect, staff taxes and Zakat
contribution while fulfilling its responsivity towards the society.
Providing timely and detailed • On-time submission of statutory returns and statutory payments.
regulatory updates and reporting • Adherence to PSX requirements for disclosure of key information.
disclosures
Record Management • The Bank has records management program that ensures
maintenance, protection, retention and disposal of records in
accordance with applicable regulations, operations, fiscal and legal
requirements.

STAKEHOLDERS
ENGAGEMENT

Engagement
Occasionally
Regularly
Periodically
Continuously
Permanent employees • Formal meetings Competitive remuneration,
Employees
Contractual employees • Informal & Ad hoc meetings career development and

Outsourced personnel • Performance appraisals advancement, effective
Employee union • Internal newsletter performance management,
• Informational and equal opportunity along with
Instructional Circulars safe, positive and inspiring
• Training programs work environment, work life
• Employee Satisfaction balance, recognition and
Surveys reward, grievance handling
• Intranet / Employee mechanism, culture of
Self Service Portal empathy, continuous training
• Team Building Events opportunities to grow as a
• Annual Family Festival person and professional, job
• Welfare events and activities security, succession planning.
• Disaster Recovery and
Emergency Response Drills
• Medical Benefits
• Retirement Benefits
Society at large • Service channels Social responsibility activities,

Media • Corporate website employment opportunities, financial
• Donations and Sponsorships resilience, community development,
• Press releases, conferences ethical business practices.
and media campaigns
• Public relation activities
Annual
78 Report 2019
Why do they Matter How We Create Activities
Value for
Stakeholders
Skills, experience, Retaining “Employer of Choice” • Total workforce of 11,665 employees. Female
and activities that our status by providing a safe, representation increased to 17.44%.
employees carry out inspiring and challenging work
drive the day to day environment.
operations of the bank. Inducting and retaining quality • 1,866 recruitments for permanent and contractual positions.
How our staff think and human resource in all functions of
feel about work are the Bank.
directly connected with Offering competitive remuneration and
customer satisfaction rewarding performance. • Rs. 13,458 million in terms of salaries, allowance and other benefits to
levels. employees
Motivating and inspiring our work force.
• Rewarded performance through 1,907 grade promotions.
• Invested Rs 97 million on inhouse and external staff training &

Skills training and development development programs.
initiatives to align workforce with • Training coverage of 96% employees during the year.
strategic objectives of the Bank.
Understanding and responding to

the needs and concerns of Bank’s • Employee survey conducted by external evaluator to assess
staff along with equal opportunity and and compare the work environment of the Bank with the
culture of empathy. industry.
• Your Bank was awarded with Best Place to Work – Financial Services
2019 by Pakistan Society of Human Resource Management (PSHRM)
• Other activities delineated in detailed CSR report
Working in tandem Community capacity building and • Your Bank plays a proactive role in contributing towards the
with global and empowerment. society. Detailed CSR report is included in the Annual Report.
local mandates
which safeguard the Social welfare of community.
environment and
promote community
empowerment.

RISK MANAGEMENT
APPROACH &
OVERSIGHT
The Board of Directors is responsible for the overall effective risk management and has a comprehensive risk
management and governance framework in place to effectively identify, evaluate and mitigate all risks undertaken
in the achievement of long-term strategic objectives of Your Bank. The robust risk management platform ensures
that sustainable value is created for all stakeholders.
The Board of Directors monitors the implementation of risk strategy, approves the risk acceptance criteria while
ensuring that risks are managed within tolerance level.
Risk Governance
RISK IDENTIFICATION RISK EVALUATION & MEASUREMENTRISK MANAGEMENT & RESPONSE MONITORING & REPORTING
Adequate and Risks are evaluated in Mitigation plans are Clear and concise risk
timely risk terms of their deployed and tracked reporting requirements
identifiction to qualitative and against predetermined developed to put
ensure that risks quantitative impact. timelines with the management and the
are appropriately necessary escalation BoD in a position of
catagorised. processes in place making effective and
timely decisions.
The Bank’s comprehensive and integrated risk management governance structure consists of the Board and the
management sub-committees, with varying areas of responsibilities, in order to maintain sustained focus on
monitoring and governance over differing categories of risk within the following risk universe:
Allied Bank’s Risk Universe
Credit Risk Market Risk Operational Liquidity Risk Capital Ade- Strategic Technology Reputational
Risk quacy Risk Risk Risk Risk
andnegative obligor orvalue due tofailed internalliabilities assupport its Cyber threats effects, public counterparty to adverse Processes, they fall due. growth or is not disrupting
Annual
80 Report 2019
RISK & OPPORTUNITIES
Risk and opportunities and the related mitigating factors are summarized below;
Risk Key Source of Risk Mitigating Strategy Impact Area

Credit Sovereign credit risk - Oversight is kept through guidance of Board of Directors Financial
Risk on exposure to Public and its sub-committee “Board Risk Management Capital
sector enterprises Committee” as
(PSE) well as through management committee of “Risk Management
Committee (RMC)”.
- Public sector advances are generally secured by sovereign
guarantee or the equivalent from the Government of Pakistan
(GoP).
- Certain PSEs have a well-defined cash flow stream and

appropriate business model, based on which the lending may be
secured through collaterals other than GoP guarantee.
Counterparty credit risk - Bank’s Risk Assessment and Management System (RAMS) uses Financial
on exposure to Private risk rating models, based on qualitative and quantitative factors, Capital
sector advances and to assign credit risk ratings to various categories of borrowers.
Interbank limits.
- Credit worthiness of borrowers is analyzed on work-flow
based RAMS, with focus towards balanced assessment of
credit risk and identification of related proper mitigants.
- In respect of interbank borrowers, Your Bank maintains eligibility

criteria that links exposure limits to counterparty credit ratings
(minimum credit rating of ‘A’)
- Concentration risk is monitored with obligor, group and sector

exposure limits and risk profile benchmarks.
- Automated ‘Watch-List’ categorization system facilitates to identify

deterioration in quality of loans.
- Country risk, exposure limits are in place that broadly captures

direct exposure on sovereigns and exposures on foreign
domiciled counter parties; limits linked to the sovereign ratings
- Specialized team comprising engineers and industry experts

conducts technology assessments of obligors’ plant & machinery
and reviews the technical feasibility of projects and valuation
reports.
Market Risk associated with - Oversight is kept through guidance of Board of Directors and Financial
Risk fluctuations in interest its sub-committee “Board Risk Management Committee” as Capital
rates, foreign currency well as through management committee – “Asset & Liability
rates, credit spreads, Committee (ALCO)”.
equity prices and
commodity prices - Comprehensive structure is in place aimed at ensuring that Your
Bank does not exceed its qualitative and quantitative tolerance for
market risk.
- Balanced approach towards risk taking in the market risk area

while keeping exposures within the defined risk acceptance
criteria.
- Tools like Value at Risk methodologies, sensitivity measures,

intraday exposure limits, notional limits and loss triggers are
monitored at a detailed portfolio level.
- Extensive stress testing is performed to capture and report

the multi-dimensional aspects of market risk using automated
solutions.

RISK & OPPORTUNITIES
Operational Risk of inadequate / - Oversight kept through Board of Director’s sub-committee “Board Financial
Risk failed internal processes Risk Management Committee” as well as through management Capital
and losses caused by sub- committee of “Risk Management Committee (RMC)”.
external events.
- Board of Directors’ approved Operational Risk Policy
- Detailed documented procedures
- Adequate system of internal controls designed to keep

operational risk at appropriate levels
- Business Continuity Policy and Plan driven towards

ensuring provision of un-interrupted banking services in
case of any unforeseen emergency and/or natural
calamities.
- Disaster recovery and evacuation plans were tested

successfully during the year.
- IT disaster recovery plans are tested on ongoing basis.
- Insurance coverages are in place for theft and damage to

physical assets.
Risk arising due to - Board of Directors’ oversight along with its sub committees “Human Human and
the unauthorized or Resource and Remuneration Committee” as well as through Intellectual
inappropriate employee management committees of “Human Resource Committee” and “Central Capital
activity and failure to Administrative Action Committee”.
adhere to staff policies
- Recruitment, pre-employment screening, employer feedback/exit
interviews.
- Proactive staff engagement.
- Strong staff development programs in place combining e-learning, in-house

and external trainings programs
- Insurance coverages are held for fraud and fidelity incidents.
- Whistle blowing mechanism is in place
Risk arising from - Independent Compliance Group to ensure compliance with specific regulatory Financial
non-compliance requirements. Capital
with statutory and/or
regulatory provisions - Compliance Policies and procedures are in place
applicable to the Bank
Liquidity Risks emanating - Oversight kept through Board of Directors and its sub- Financial
Risk from nature of the committee “Board Risk Management Committee” as well as Capital
Banking business, through management committee - “Asset & Liability Committee
from the macro factors (ALCO)”.
exogenous to the - ALCO oversees the activities of treasury, which operates in
Bank as well as from terms of an approved ALM policy.
internal financing and
operational policies. - Well-defined ALM triggers / limits, exposures against which are
regularly monitored by ALCO.
- Detailed Recovery Plan is in place which highlights the strategy
and critical tools for effective monitoring, escalation, planning, and
execution of recovery actions in the event of a financial crisis situation.
- Your Bank performs liquidity stress tests as part of its liquidity

monitoring activities regularly.
- Periodic gap analysis to re-profile the earning asset mix in accordance

with interest rate expectations as well as keeping asset and
liability mismatch within acceptable limits.
- Maintenance of appropriate marketable securities portfolio that can

be realized in the event of liquidity stress.
Annual
82 Report 2019
Capital Undertaking higher risks - Oversight kept through Board and its sub-committee “Board Risk Financial
Adequacy in view of more volatile Management Committee” (BRMC) as well as through Capital
Risk and competitive financial management sub committees of “Risk Management Committee”
markets. and “Asset & Liability Committee (ALCO)”.
- The ALCO assesses capital adequacy on a quarterly basis,

including a historical and future capital positioning review and
stress tests and reports regularly to the BRMC.
- The Internal Capital Adequacy Assessment Process (ICAAP)

Framework is updated and reviewed annually.
- Policy of sufficient profit retention.
- Periodic extensive stress testing activity in line with SBP

requirements.
Strategic Improper - Oversight kept through Board of Directors’ and its sub- Financial
Risk implementation of committee “Strategic Planning & Monitoring Committee” as well Capital
decisions, or lack as through Management Committees namely “Management
of responsiveness Committee” (MANCO), “Risk Management Committee” (RMC)
and “Asset & Liability Committee” (ALCO).
to evolving
industry, economic - Rolling 10-year strategic plan which is reviewed on annual
or interval basis along with operational plan to account for the
technological changes. evolving economic and business dynamics; duly in consideration
of the peer banks.
- The impact of events on the future direction of the business and

forecast results is constantly monitored and quantified.
Technologi- Risk arising from non- - Oversight kept through Board of Director’s sub committees “E- Financial
cal Risk availability of IT systems, Vision Committee” as well as through “IT Steering Committee” Capital
and disruptions due to (ITSC).
Cyber threats. - IT planning is conducted as part of Your Bank’s strategic
and operational planning process.
- Systems audits, IT Security & Risk Assessments are performed
for system before deploying into production environment.
- Significant ongoing investments in systems and processes to protect customer
databases through robust information security (Info-sec) platform.
- Info-Sec’s Security Operation Center utilizes Security Incident and

Event Management (SIEM) solution to proactively monitor and
respond to security threats.
- Countermeasures against cyber threats included regular penetration

testing and vulnerability assessment.
- Continuous awareness programs for customers about cyber threats
Reputation- Risk arising from any - Oversight kept through Board of Directors’ sub committees Social and
al Risk action or inaction “Board Risk Management Committee” as well as through Relational
perceived by any “Management Committee (MANCO)”. Capital
stakeholders to be
- Formal customer grievance redressal policy, including policy
inappropriate, unethical and procedures on receiving customer complaints and
or inconsistent with resolution mechanism.
the Bank’s values and
beliefs. - Timely and efficient communications among all stakeholders.
- Policies and procedures in place for securing digital payments

including protection of customers’ data.
Opportunities
The assessment of opportunities is integrated into the annual strategic planning process. Strategic planning enables Your Bank to identify and
analyze changing market dynamics at the domestic and global levels. These major opportunities and future outlook have been
covered in detail in CEO review.

OUR GOVERNANCE
PHILOSOPHY
Modus Operandi of Board of Directors Review of overall performance of the
The Board of Directors and Management of the Bank are
Board
committed towards maintaining a high standard of corporate
governance. Your Bank has formalized an in-house process for reviewing the
Board of Directors’ overall performance including performance
The Board of Directors is responsible for the overall of Chairman of the Board of Directors, individual Directors
stewardship and oversight of the Bank by reviewing, including Chief Executive Officer and Board Committees.
deliberating and approving the Bank’s strategic planning,
organizational structure and supervising the management for An independent external evaluation is being carried out once
ensuring enhanced shareholders’ value. in every three years to further augment the process with
evaluation findings, thoroughly reviewed independently for continuous
Chief Executive Officer and senior management are responsible for improvement and refinement. Accordingly an independent external
business operations by following board’s approved policies, evaluation was arranged in the year 2018.
while keeping the Board of Directors well informed by providing
timely information. Primary objectives of the Board of Directors, apart from
carrying out its fiduciary duties as required under relevant regulations,
The Board of Directors has adopted corporate governance includes providing strategic direction, financial oversight and
guidelines to assist in meeting its aforementioned governance guidance to the Management.
responsibilities.
The Board of Directors assisted by five Committees, performed its
duties diligently and effectively in the best interest of all
Key Governance Practices stakeholders, despite of challenging operating and regulatory
environment, whilst upholding the vision, mission and core
• The Board of Directors comprises of an appropriate mix of Directors values of the Bank.
in terms of experience, competence and financial acumen.
Board of Directors are committed to enhance shareholders’
• Five members of the Board of Directors are certified value while continuing to transform the Bank to cater to the
directors, whereas three directors are exempted from the
ever-evolving needs of the Bank’s valued customers.
requirement based on their experience.
Your Bank’s Board of Directors shall remain committed in carrying out
• Three members of the Board of Directors are independent their duties diligently and professionally while maintaining the
directors. Bank’s focus on sustainable growth and momentum ahead.
• Audit Committee of the Board of Directors is comprised of two
independent directors and also Chaired by an
independent Director. Annual
Report 84 2019
• Board of Directors has constituted four additional sub-
committees to assist in the governance of the Bank i.e.
e-Vision Committee, Board Risk Management Committee,
Strategic Planning & Monitoring Committee and Human
Resources and Remuneration Committee.
• Corporate Governance rating of “CGR 9+” by an independent

VIS Credit Rating Company Limited., indicates high level of
corporate governance; depicting a strong commitment
towards governance framework by the Board and
management of Your Bank.
Appointment and term of office

With a view to enable the Board to discharge its responsibilities
effectively, the Directors are nominated and appointed through
election, ensuring that the Members so elected possess
required skillset, knowledge and experience and fulfill Fit &
Proper Test (FPT) criteria regarding eligibility of a Director set by
the State Bank of Pakistan.
The Directors of the Bank are elected by Shareholders

of the Bank in a General Meeting for a three years’ term,
Casual Vacancy, if any occurred is filled by the Directors for the
remaining term in accordance with the provisions of the
Companies Act 2017 and SBP regulations. To facilitate
minority shareholders to contest election of directors, the
Bank provides them support as per regulatory requirements.
BOARD
COMMITTEES
Zafar Iqbalassets, re
Muhammad Waseem Mukhtartransactions
Dr. Muhammad Akram Sheikhof the Intern
quarterly review of the Internal Controls over Financial Reporting and review of all findings of SBP Inspection Report, Management Letter by external auditors and weaknesses identified in internal cont
Board Risk Management

Committee Terms of Reference
Constitution:
The primary functions of Board Risk Management Committee (BRMC) include
monitoring of Management’s adherence to prudent and sound risk policies,
Sheikh Mukhtar Ahmad assessing the ever changing risk profile and determining risk appetite of the Bank. BRMC also
Chairman ensures development of risk management principles to build stakeholders confidence, safeguard
and enhance reputation. BRMC also monitors quality of asset portfolio and suggest
Abdul Aziz Khan measures to keep the infected portfolio at the minimum level. The Committee
Member approves risk limits for credit, market and operational risks, credit approval grid and
proposals regarding write-offs above certain limits. In term of Bank’s recovery policy, BRMC
Dr. Muhammad Akram Sheikh considers and approves Debt-Asset-Swap proposals. It also monitors Bank’s Basel
Member initiatives including capital adequacy requirements and up-gradation of Risk
Management Systems. The Committee also reviews information security
Tahir Hassan Qureshi governance initiatives and periodical risk assessments. Overseeing of Asset Liability
Member Committee (ALCO) and Risk Management Committee (RMC), Risk Management,
Special Asset Management and Compliance functions is also undertaken by BRMC.
In addition, it reviews compliance status of the bank including AML/CFT
requirements, quarterly progress report on IFRS-9 implementation.
e-Vision Committee Terms of Reference

Constitution:
One of the key functions of the e-Vision Committee is to provide strategic direction
Mohammad Naeem Mukhtar for e-banking and adoption of evolving technologies for providing new products and
Chairman better services to its customers and to improve internal control environment. Review
of strategic plans to improve IT infrastructure and automation of processes and
Zafar Iqbal systems including alternate delivery channels are within the scope of the
Member responsibilities of the e-Vision Committee. The Committee provides assistance to
the Board with insights regarding international developments in the field of e-banking evolving
Ms. Nazrat Bashir technologies for adoption; keeping in view the Bank’s requirements. It also oversees
Member performance of IT Steering Committee (ITSC), Information Technology functions.
Besides the above, the Committee also decides in principle on matters related to
Tahir Hassan Qureshi acquiring/replacing/ upgrading technology, software and hardware such as banking
Member solutions, ATMs etc. involving Rs. 15 million and above.

BOARD
COMMITTEES
Strategic Planning &

Monitoring Committee Terms of Reference
Constitution:
Strategic Planning & Monitoring Committee (SPMC) is responsible to review medium
Muhammad Waseem Mukhtar to long term strategic plans, operational plan and budget of the Bank before Board’s
Chairman consideration / approval. The Committee also monitors progress against above
referred plans and budget. SPMC is also responsible to approve capital expenditure
Abdul Aziz Khan and disposal of fixed assets as per defined threshold. SPMC is also responsible to assist the
Member Board on corporate development activities and new initiatives including, but not
limited to acquisitions, mergers, alliances, joint ventures and divestitures etc. SPMC
Ms. Nazrat Bashir also oversees performance of management committee (MANCO) and Fair
Member Treatment of Customers (FTC) Committee, Corporate Investment Banking,
Commercial and Retail Banking, Islamic Banking, Treasury, Finance, Banking
Tahir Hassan Qureshi Services, Corporate Affairs, Digital Banking, General Services and Real-Estate functions
Member of the Bank.
Human Resource and

Remuneration Committee Terms of Reference
Constitution:
Human Resource and Remuneration Committee (HR&RC) defines the organizational structure
Abdul Aziz Khan
and functional responsibilities of all areas of the Bank. It approves staff strength, key
Chairman
appointments, salary revisions, bonuses and special allowances and recommends to
the Board appointment, remuneration bonuses/ performance awards, terms and
Muhammad Waseem Mukhtar
conditions of employment and other benefits of the key position holders. HR&RC also monitors
Member the utilization of training & development budget and implementation of approved
training & development policy. The Committee nominates the Bank’s directors and
Dr. Muhammad Akram Sheikh management personnel on the board of other companies / subsidiaries. HR&RC
Member also recommends Remuneration Policy and other Human Resource related policies
to the Board, besides monitoring performance of Human Resource Committee and
Tahir Hassan Qureshi Human Resource function. Besides the above, the Committee also ensures that a
(Permanent Invitee) fair, transparent and competitive remuneration mechanism is developed and put in
place to encourage the culture of ‘pay for performance’.
Board of Directors and Board’s Committees Attendance as of 2019
Strategic
Board Risk Human Resource
Board of Audit Committee Planning &
Name Management e-Vision Committee & Remuneration
Directors of the Board Monitoring
Committee Committee
Committee
Mohammad Naeem Mukhtar 6/7 × × 4/4 × ×
Sheikh Mukhtar Ahmad 7/7 × 5/5 × × ×
Muhammad Waseem Mukhtar 7/7 5/6 × × 10/10 6/6
Abdul Aziz Khan 5/7 × 5/5 × 9/10 5/6

Dr. Muhammad Akram Sheikh 7/7 6/6 5/5 × × 6/6
Nazrat Bashir 7/7 × × 4/4 10/10 ×

Zafar Iqbal 7/7 6/6 × 4/4 × ×
Tahir Hassan Qureshi (CEO) 7/7 × 4/5 4/4 9/10 ×
Total Number of meetings

7 6 5 4 10 6
held during 2019
None of the Board meeting held outside Pakistan during the year.
The information retaled to directorship of the Board members in other companies is as disclosed in Board of Directors section of the report.
Annual
86 Report 2019
MANAGING CONFLICT
OF INTEREST
Overview in bribery, kick-backs, payoffs, or any this clause shall apply to any state-
The Board and the Management of Al- other corrupt practices. ment made or views expressed by
lied Bank Limited (“the Bank”) are com- a Board Member, which are purely
mitted towards transparent disclosure, • Remain loyal to the Bank, keeping its factual in nature and are not con-
management and constant monitoring interest above own personal sidered as confidential, in his official
of potential conflicts of interest to ensure interests at all times. capacity or in due performance of
that no undue benefit is passed on. The Board the duties assigned to him.
recognizes the responsibility to adhere to Confidentiality:
the defined policies, procedures and avoid • Maintain the privacy and confiden- • Refrain from accepting gifts,
perceived conflicts of interest that may tiality of all the information acquired personal favors or preferential
arise during the course of business. being Member of Board of Directors treatment, that could, in any way,
of the Bank or come into their influence or appear to influence,
Disclosure of Interest by knowledge and refrain from dis- business decisions in favor of any
Director: closing the same unless otherwise person or organization with whom
or with which the Bank has or is
• Every director (including spouse and required by statutory authorities/law
and Bank’s own policies. All such likely to have business dealings.
minor children) of the Bank who is in
information will remain with them as
any way, whether directly or
indirectly, concerned or interested a trust and will only be used for the Insider Trading:
in any contract or arrangement purpose for which it is intended and • Directors shall not deal directly or
entered into, or to be entered into, will not be used for personal ben- indirectly in the securities of the
by or on behalf of the Bank shall efits. Inside information about the Bank whether on their own account
disclose the nature of his concern Bank’s affairs shall not be used for or their relative’s account, if they are
or interest at a meeting of the direc- their own gains or for that of others in possession of any unpublished
tors. either directly or indirectly. price sensitive information concern-
ing the Bank. Directors who are
• Directors are required to disclose • Directors of the Bank are strictly in possession of any unpublished
existing or perceived conflicts of prohibited to disclose the fact price sensitive information shall not
interest at the Board meeting as (comes into their knowledge) to the communicate directly or indirectly
per the requirements of prevailing customer or any other quarter that the said information to others who
law. Where a conflict of interest or a suspicious transaction or related trade on such information.
potential conflict of interest has been information is being or has been
disclosed, the concerned Board reported to any authority, except if • Where any director or his/her spouse
member shall not take part in the required under the law. sells, buys or takes any beneficial
Board discussion on that agenda position, whether directly or indirectly,
item. The member who has Conflict of Interest: in the shares of the Bank, he/ she
disclosed the conflict cannot vote on • Avoid all such circumstances in which shall immediately notify the
that agenda item. there is personal interest conflict, or Company Secretary in writing. Such
may appear to be in conflict with any director shall also deliver a written
Abidance of Laws / Rules: of the stakeholder as prescribed by the record of the price, number of
shares, form of share certificates,
• Conform to and abide by all the legal statutes and in probable case their
interest conflicts with any of the (i.e., whether physical or electronic
and standing requirements and within the Central Depository
Code of Corporate Governance stakeholder, he/she would
immediately declare such interest System), and nature of transaction
while performing their duties and to the Company Sec- retary. Further,
obey all lawful orders and directives. before the Board of Directors.
no director shall, directly or
All Board members shall comply indirectly, deal in the shares of the
with and observe all applicable • No director shall exploit for their own
personal gain, opportunities that Bank, in any manner, during the
related statutory requirements, closed period as determined by the
regulatory directives and the Bank’s are discovered through use of
corporate property, information or Board of Directors.
policies.
position, unless the opportunity is
• Shall not bring or attempt to bring disclosed completely in writing to Related Party Transaction:
political or other pressure and the Board of Directors of the Bank • The Bank has devised a mechanism
influence directly or indirectly on the and the Board allows him/her to for identification of related parties
Bank. avail such opportunity. and execution of related party
transaction at arm’s length, which
Integrity: • No interested person shall participate
in the discussion or vote in the
are executed in the normal course
of business. Based on the statutory
• Conduct themselves with the highest Board’s proceedings or participate requirements, complete
standards of ethics, professional in any other manner in the conduct transactional details of related par-
integrity and dignity in all dealings or supervision of such dealings. ties are presented before the Audit
with all stakeholders and not Committee for review and delibera-
engage in acts discreditable to • Avoid any dealing with contractors tions. The Audit Committee reviews
the Bank, their profession and the or suppliers of the Bank that and recommends the related party
nation. If they become aware of compromises the ability to transact transactions to the Board and AGM
any irregularity that might affect business on a professional, impar- (where required) for its approval.
the interests of the Bank, they shall tial and competitive basis or that
inform the Board immediately. may influence discretionary decision to • Moreover, as a statutory require-
be made by the Board Members / ment, a comprehensively prepared
• Maximum utilization of their abili- ties, Bank. return is submitted on half yearly
experience and expertise for interval to State Bank of Pakistan
achieving set goals, maintain high • No Director shall hold any position or that primarily covers every related
standards of professional conduct, job or engage in outside business or party transaction executed during
protect the Bank’s assets and other interest that is prejudicial to the said period.
respect interest of all the stakehold- the interests of the Bank.
ers. Practice transparency in all acts
and deeds related to the business • Shall not make any statement which has
of the Bank. the effect of adverse criticism of any
policy or action of the Bank or
• Reject corruption in all forms - direct, which is capable of embarrassing
indirect, public or private and do not the relation between the Bank and
directly or indirectly engage the public including all the stake-
holders. Provided that nothing in

REPORT OF
AUDIT COMMITTEE
The Audit Committee of the Board party transactions. the external auditors. In doing so,
comprises of three non-executive • Review of quarterly Consolidated the Audit Committee considers the
members including two independent Reports on Testing of Financial quality and efficiency of the services
directors, one being Chairman of Reporting Controls. provided by the external auditors,
the Audit Committee. The members • Review of significant issues the external auditors’ capabilities,
of the Audit Committee bring years highlighted by A&RRG during technical expertise and knowledge of
of diversified rich experience at senior audits and reviews of branches the Bank’s operations and industry.
management positions and and other functions of the Bank, The Audit Committee ensures
strategic roles in commercial banking, external auditors and SBP’s compliance with relevant regulations
investment banking, planning, energy, inspection reports and status with regard to tenure of external
manufacturing and engineering sectors. of compliance including regular auditors and provisions of non-audit
Detailed profile of the respective members updates on the rectification actions services by external auditors to ensure
is included in the Annual Report. taken by the management. independence and objectivity of
• Monitoring of compliance status of external auditors.
During the year under review, the observations highlighted in SBP’s
Audit Committee diligently performed inspection reports. The Audit Committee reviewed the
its duties and responsibilities • Review of analysis related to frauds, requirements for the rotation of external
in accordance with its Charter forgeries and dacoities incidents in auditors on completion of the five years term
approved by the Board of Directors the Bank; with specific focus on of the current auditors in 2019.
while remaining compliant with the nature and reasons along with The present Auditors M/s KPMG Taseer
requirements of the Code of Corporate management action(s) thereof. Hadi & Co, Chartered Accountants in
Governance and Prudential Regulations • Review and approval of risk based pursuance of the Code of Corporate
issued by State Bank of Pakistan (SBP). internal audit approach along with Governance become ineligible for
annual audit plan, 2020 and related re-appointment having completed a
The Committee oversees the functions enablers / budget along with term of five years. However, State Bank of
of the Audit and Risk Review Group resource requirements of A&RRG. Pakistan and Securities Exchange
(A&RRG) and ensures that A&RRG • Review of resolution status of Commission of Pakistan (SECP) has
has adequate financial, technological and complaints lodged under the granted permission to the Bank to
operational resources along Bank’s Whistle Blowing Policy extend the term of M/s KPMG Taseer
with appropriate human resources along with resolutions thereof. Hadi & Co, Chartered Accountants.
having required skill-sets, expertise • Approval of Framework for
and trainings necessary to perform assessment of efficacy of the The Audit Committee recommended to
A&RRG’s responsibilities independently, Bank’s Internal Controls over the Board of Directors re-appointment
effectively and objectively. Financial Reporting (ICFR) of M/s KPMG Taseer Hadi & Co.
by A&RRG. Chartered Accountants, as statutory
The Chief A&RRG reports directly to • Review of periodic activity review auditors of the Bank for the year ending
the Audit Committee. A&RRG assists reports of A&RRG. The Audit December 31, 2020 for 6th term after
the Audit Committee and the Board Committee also met with senior obtaining approval of SBP and SECP,
of Directors in discharging their staff members of A&RRG. subject to approval of the Bank’s
responsibility in respect of Internal • In addition to above, the Audit shareholders in the forthcoming Annual
Control System. A&RRG periodically Committee also reviewed and General Meeting.
reviews, assesses adequacy and recommended the following to the
monitors the ongoing effectiveness of Board of Directors: Furthermore, the Committee evaluates
control systems. its own performance on annual basis
• Statement of Internal Controls,
thereby assessing the targets achieved,
The meetings of the Audit Committee prior to endorsement by the
performance initiatives and whistle blow
are designed to facilitate and encourage Board of Directors; actions (If any) taken and submit the
communication between the Audit • Activity review report of ACOB report to the Board of Directors.
Committee, ARRG, the Bank’s senior for 2018
management, and the external auditors. • Charter of the Audit Committee Internal Controls
During the year 2019, six meetings of • Internal Audit Policy Framework and Role of
the Audit Committee were held and,
among others, following agenda items
• IBG External Shari’ah Audit ARR
Report and compliance status
were deliberated in the meetings: • Accounting, Disclosure and The Bank’s internal control structure
Related Party Transaction policy comprises of the Board of Directors,
of the Bank, accounting policies the Audit Committee of the Board,
• Review of the Bank’s annual and
interim financial statements prior to for Islamic Banking and Bahrain Management including Compliance
their approval by the Board of Branch Group and A&RRG. Roles of all the
Directors. That included detailed Furthermore, the committee ensured the functionaries have been defined in the
discussions with the Banks’ senior independence of the external auditor and Management’s Statement of Internal
management, external auditors efficient supervision of the internal control Controls, as part of the Annual Report
and A&RRG by focusing on major system by steering separate meetings which is duly endorsed by the Board of
judgmental areas, significant with External auditors, Chief A&RRG and
adjustments and issues resulting Directors.
internal audit staff.
from audit, going concern
assumption, any changes in The Audit Committee also recommends Zafar Iqbal
accounting policies and practices, the scope and appointment of Chairman Audit Committee
compliance with applicable external auditors, including finalization of Lahore:
accounting standards, listing audit and other fees. The Audit Dated: February 06 2020
regulations and other statutory and Committee evaluates the qualifications,
regulatory requirements and related performance and independence of
Annual
88 Report 2019
STATEMENT ON
INTERNAL CONTROL
The Bank’s management is responsible document life cycle management In addition, projections of effective
for establishing the Internal Control mechanism necessitating timely evaluation pertaining to future periods
System with the main objectives of review and updation of documentation are subject to the risk that controls
ensuring effectiveness and efficiency of to incorporate material regulatory may become inadequate because of
operations, reliability of financial requirements and enhance control changes in conditions or that the degree
reporting, safeguarding of assets and environment. In order to further of compliance with the policies or
compliance with applicable laws and strengthen the control environment, the procedures may deteriorate. However,
regulations. Bank has automated the compliance control activities are an ongoing process
processes especially related to Anti that includes continuous identification,
The Bank’s Compliance policy & Money Laundering (AML) & Countering evaluation and management of
procedures further strengthened by a Terrorism Financing to ensure significant risks faced by the Bank.
comprehensive Control Review and compliance with local and international
Testing Framework (CRTF), approved by regulations. The management has also As part of CRTF relating to financial
the Board, outlines the Bank’s overall established Compliance Committee to reporting, the Bank has documented
control objectives and approach towards strengthen oversight role on compliance and mapped As-Is processes and
implementation and testing of the Bank’s environment. controls, identified gaps and requisite
internal Control system. recommendations, developed
Risk Management Group is entrusted remediation initiatives and management
Under the aforementioned CRTF, the for implementation of effective testing plans. In addition, the Bank is
Bank’s Internal Control System is being operational risk management framework. formulating guidelines for adherence
evolved, reviewed and improved on an Risk control design assessment to Integrated Framework on Internal
ongoing basis to minimize risks which and control implementation self- Controls issued by the Committee of
are inherent in banking business and assessment is carried out to evaluate Sponsoring Organizations (COSO) of the
operations; with continuous monitoring operational controls both at design Treadway Commission on continuing
by the Compliance Group (CG), an and implementation level. Incident and basis.
independent Audit and Risk Review loss data are gathered for analysis and
Group (ARRG) respectively. suggesting improvements in existing Bank has completed all the stages of
control structure. Further, Key Risk Internal Control over Financial Reporting
ARRG works under direct supervision Indicators are defined in coordination with as specified by State Bank of Pakistan
of Audit Committee of the Board stakeholders for effective monitoring of (SBP), which has granted exemption
(ACOB). ACOB comprises of majority potential risk. from the requirement of submission
independent Directors and is chaired by of Long Form Report by the External
an independent Director as well. Concerted efforts are made by all functions Auditors. As a result, the bank shall
of the Bank to improve the Control submit “Annual Assessment Report on
ARRG assists ACOB and Board Environment at grass root level by Efficacy of Bank’s ICFR” approved by
of Directors in discharge of their continuous review and streamlining of ACOB.
responsibility in respect of Internal procedures to prevent and rectify control
Control System. ARRG reviews, lapses. The Bank’s management considers that
assesses adequacy and monitors the the existing Internal Control System
effectiveness of control systems on an Furthermore, compliance status of all is adequate and has been effectively
ongoing basis. irregularities identified during various audits implemented and monitored, based
and inspections are reported to upon the results derived through ongoing
All significant and material findings are ACOB, while other significant testing of financial reporting controls
reported to the ACOB; which actively compliance risk related matters are and internal audits carried out during
monitors that the identified risks and reported to the Board Risk Management the year. However, the management,
observations are properly mitigated to Committee (BRMC) as per approved adopting a prudent approach, would
safeguard the interest of the Bank. The ToRs. be continuously evaluating procedures
Board, acting through ACOB, provides and processes to further augment the
supervision and overall guidance in The Bank’s Internal Control System Internal Control System.
improving the effectiveness of the Internal is designed to provide reasonable
Control System. assurance to the Bank’s Management Based on the above, the Board of
and Board of Directors about the Directors has duly endorsed the
The CG is entrusted with the aforementioned objectives. Management’s evaluation of internal
responsibility to minimize compliance controls including ICFR in the attached
risk with reference to regulatory While the Internal Control System is Director’s report.
framework; internal, external and effectively implemented and monitored, there
regulatory audit compliance; control self- are inherent limitations in the
assessment, monitoring completeness effectiveness of any system, including the Tahir Hassan Qureshi
and maintaining up to date inventory possibility of human error or system Chief Executive Officer
of the Bank’s policies, procedures and failure and circumvention or overriding of Lahore.
controls. controls.
Bank has implemented effective Dated: February 07, 2020

STATEMENT OF COMPLIANCE
WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019
The Bank has complied with the requirements of the

requirements of the Regulations.
Regulations in the following manner:
11. Chief Financial Officer and Chief Executive Officer duly
1. The total number of directors are (08) including the CEO endorsed the financial statements before approval of the Board.
(Deemed Director) as per the following,
12. The Board has formed five (5) committees. The names and
a. Male: Seven (07) composition of the Committees along with details of the
b. Female: One (01) Committees members is disclosed separately in the Annual
Report.
2. The Composition of Board is as follows 13. The terms of reference of the aforesaid committees have
been formed, documented and advised to the committee
Category Names for compliance.
Independent Director Dr. Muhammad Akram Sheikh
14. The frequency of meetings of the committee is disclosed
Mr. Zafar Iqbal separately in the Annual Report.
Ms. Nazrat Bashir
Non-Executive Directors Mr. Mohammad Naeem Mukhtar 15. The Board has set up an effective internal audit function who are
Sheikh Mukhtar Ahmad considered suitably qualified and experienced for the purpose
Mr. Muhammad Waseem Mukhtar and are conversant with the policies and procedures of
Mr. Abdul Aziz Khan the Bank.
Executive Director Mr. Tahir Hassan Qureshi, CEO
16. The statutory auditors of the Bank have confirmed that they
Female Director Ms. Nazrat Bashir
have been given a satisfactory rating under the Quality
3. The directors have confirmed that none of them is serving as a Control Review program of the Institute of Chartered
director on more than seven listed companies including Accountants of Pakistan and registered with
Allied Bank Limited. Audit Oversight Board of Pakistan, that they and all their
partners are in compliance with International Federation
4. The Bank has prepared a code of conduct and has ensured of Accountants (IFAC) guidelines on code of ethics as
that appropriate steps have been taken to disseminate it adopted by the Institute of Chartered Accountants of
throughout the Bank along with its supporting policies and Pakistan and that they and the partners of the firm involved in the
procedures. audit are not a close relative (spouse, parent, dependent
and non-dependent children) of the chief executive officer,
5. The Board has developed a vision and mission statement, chief financial officer, head of internal audit, company
overall corporate strategy and significant policies of the Bank. secretary or director of the Bank.
The Board has ensured that complete record of particulars of
the significant policies along with their date of approval or 17. The statutory auditors or the persons associated with
updating is maintained by the Bank. them have not been appointed to provide other services
except in accordance with the Companies Act, 2017, these
6. All the powers of the Board have been duly exercised Regulations or any other regulatory requirement and the
and decisions on relevant matters have been taken by auditors have confirmed that they have observed IFAC
the Board / Shareholders as empowered by the relevant guidelines in this regard.
provisions of the Act and these Regulations.
18. We confirm that all requirements of regulations 3, 6, 7, 8, 27, 32,
33 and 36 of the Regulations have been complied with;
7. The meetings of the Board were presided over by the
and
Chairman and, in his absence, by a director elected by the
Board for this purpose. The Board has complied with the
19. Explanation for non-compliance with requirements, other
requirements of Act and the Regulations with respect to
frequency, recording and circulating minutes of meeting of than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below:
the Board.
Chairman of HR&RC is a non-executive director. Due to
his acumen and vast experience of Human Resource
8. The Board have a formal policy and transparent procedures
management the Board considered him as a most
for remuneration of directors in accordance with the Act
appropriate choice for this position. He is the Chairman
and these Regulations.
of Human Resources & Remuneration Committee of
Allied Bank since June 28, 2011 and has the capacity to
9. Appropriate arrangements were made for orientation of
run affairs of HR&RC effectively. His profile is separately
Directors on their election with a view to acquaint them
disclosed in the annual report.
with their duties and responsibilities. Five members of
the Board of Directors (Including the CEO) are Certified
Directors from The Pakistan Institute of Corporate
Governance (PICG) or Institute of Chartered Accountants Mohammad Naeem Mukhtar
of Pakistan (ICAP). Whereas three directors are exempted Chairman
from such requirement on account of their experience and
qualifications. Besides, a two days’ study tour in April 2019 for four
ABL Directors (three Independent and one Non- Executive Place & Dated:
Director) at Dubai was arranged to provide them with first- Lahore, February 07, 2020
hand knowledge of latest international banking techniques and
digital technology. The Directors visited Mashreq Bank,
Emirates NBD, Citibank Dubai and JP Morgan Chase in
this regard.
10. During the period under report the Board has approved
appointment of Chief Financial Officer, and the Company
Secretary including their remuneration and terms and
conditions of employment and complied with relevant
Annual
90 Report 2019
INDEPENDENT AUDITOR’S REVIEW REPORT
ON THE STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE
To the members of Allied Bank Limited

Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate
Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) prepared by the Board of Directors of Allied Bank Limited for the year ended 31
December 2019 in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Bank. Our responsibility is to review
whether the Statement of Compliance reflects the status of the Bank’s compliance with the provisions of the Regulations and report if it does
not and to highlight any non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the
Bank’s personnel and review of various documents prepared by the Bank to comply with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to
plan the audit and develop an effective audit approach. We are not required to consider whether the Board of Directors’ statement on internal
control covers all risks and controls or to form an opinion on the effectiveness of such internal controls, the Bank’s corporate governance
procedures and risks.
The Regulations require the Bank to place before the Audit Committee, and upon recommendation of the Audit Committee, place
before the Board of Directors for their review and approval, its related party transactions and also ensure compliance with the
requirements of section 208 of the Companies Act, 2017. We are only required and have ensured compliance of this requirement
to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit
Committee. We have not carried out procedures to assess and determine the Bank’s process for identification of related parties and that whether
the related party transactions were undertaken at arm’s length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not
appropriately reflect the Bank’s compliance, in all material respects, with the requirements contained in the Regulations as applicable to the
Bank for the year ended 31 December 2019.
Lahore KPMG Taseer Hadi & Co.

Date: March 03, 2020 Chartered Accountants

REMUNERATION
REPORT
Compensation Governance
Employee compensation plays an integral role in the successful delivery of Your Bank’s strategic objectives. Attracting and retaining the
capable employees is central to Your Bank’s compensation strategy. The cornerstone is the concept of pay for performance within a sound
risk management and governance framework and with due consideration of market factors and societal values. Bank regularly
reviews and aligns human resource policies encompassing all aspects of the remuneration to the ever evolving internal and
external dynamics.
The Human Resource and Remuneration Committee of the Board is entrusted with the overall governance of all areas of the
Human Resource including remuneration.
The key features of the Bank’s Human Resource Policy related to remuneration in line with the mission of the Bank, are as under:
• Maintain fair and competitive salary and benefit structure which is not only market comparable but also recognizes and rewards the
individual performance suitably.
• Attract and retain the right skillset and competence in line with the Bank’s strategic objective to become the leading Bank in
digital age.
• Encouraging prudent decision making by incorporating related risks in the remuneration structure.
• Reflect regulatory guidance in compensation programs.
• Aims to be recognized as the best place to work.
Total Remuneration Structure

As part of the compensation strategy, the Bank employs a total compensation philosophy, which comprises fixed pay, variable compensation and
benefits.
Element Purpose
Fixed Pay • Attract and retain employees by paying market competitive pay for the role, skills and experience required.
• This include base pay and allowances as part of monthly salary as per terms of employment.
Variable • Drive and reward performance based on annual financial and non-financial measures consistent with the medium to
Compensation long-term strategy, stakeholder interests and adherence to the Bank’s values.
• Awards vary with performance achievement and the Bank has the discretion to assess the extent to which
performance has been achieved.
• Awards are in monetary terms. A portion of the annual incentive award may be deferred and vests over a period of
three years. All deferred awards are subject to malus.
• This include annual performance award, cash award on passing IBP diploma and any other reward for target
achievement or extraordinary performance.
Benefits • Ensure market competitiveness and provide benefits in accordance with market practice.
• This include but not limited to medical benefits, education assistance and post-employment benefits.
Bank employees are graded into 12 salary grades, from MG1 to MG12, with MG1 being the senior most and MG 12, being the
junior most. The management of the Bank is further classified in the following four levels according to salary grades:
Management level Salary Grades

Executive Management MG1 to MG3
Senior Management MG4 to MG6
Middle Management MG7 to MG9
Junior Management MG10 to MG12
The above categories may include, from time to time, Material Risk Takers (MRTs) and Material Risk Controllers (MRCs). The
remuneration of employees categorized as such is based on risk-based pay structure which is referred to as ‘risk-based
employee’s remuneration pool’. The remuneration of employees other than such categories have pay structure which is referred to
as ‘general employee’s remuneration pool’
Classification of Material Risk Takers (MRT) and Material Risk Controllers (MRC)
Material Risk Takers (MRTs) and Material Risk Controllers (MRCs) of the Bank are identified as functions and designations having appropriate level
of authority and control within the bank either working as regular or contractual employees. No third-party employee is designated as
either MRT or MRC. Functions are identified as MRTs or MRCs based on designations or functions involved in critical business decision
making, i.e. Chief Executive Officer (CEO), direct reportees of CEO, members of critical management committees involved in business
decision making and risk management. Further, relevant Group Heads and other senior level positions managing critical areas,
and meeting the risk materiality and threshold criteria as approved by the Board are also designated as MRTs or MRCs
respectively.
Annual
92 Report 2019
Remuneration of Material Risk Takers (MRT) and Material Risk Controllers (MRC)
Fixed pay of MRTs and MRCs is decided based on fixed pay determination criteria for overall bank’s employees and includes same
components.Variable remuneration (performance bonus) is based upon performance score calculated against defined key performance indicators
and rating scores achieved by each individual. Furthermore, rating assigned to MRTs or MRCs through annual performance
appraisal process against their managerial capabilities and personal traits is then clubbed together against predefined weightages to
reach consolidated performance score which is used as basis for deciding variable remuneration which is adjusted against underlying risks specifically
for MRTs. MRCs are identified as functions and designations having appropriate level of authority and control duly governed by approved
organograms having clearly defined independent reporting lines from the function they oversee. Organizational hierarchy of the Bank
ensures segregation of roles and independence among Business, Operational support as well as Risk management.
Basis of deferral of payment

Quantum of associated risk is considered while deciding deferred portion of variable remuneration of MRTs. Percentage as per
following grid is withheld and deferred from variable remuneration of MRTs for a period of 3 years:
High Risk Medium Risk Low Risk
CEO, Chiefs & Executive Management 25 % 20 % 15 %

Senior Management 20 % 15 % 12.5 %
Middle Management 15 % 12.5 % 10 %
Assessment of Risk Factors

Risk Matrices encompassing Key Risk Indicators (KRIs) are used for assessment of major types of risks undertaken by identified MRTs. Percentage of
variable remuneration of identified MRTs which has been deferred is based on quantum of respective current and future risks undertaken,
assessed using Risk Matrices based on data for the current year.
Remuneration Framework for Chairman of the Board, Non-Executives Directors and

Shariah Board Members
Chairman of the Board and Non-executive Directors
The Bank’s Remuneration Policy related to the remuneration of Chairman and other Directors is governed by the State Bank of
Pakistan (SBP) Prudential Regulation as revised from time to time. The scale of remuneration to be paid to Chairman of the Board
and Non-executive Directors for attending the Board or its committee meetings is determined keeping in view responsibilities,
governance structure and expertise and is approved by the Shareholders on a pre or post facto basis in the General Meeting.
The salient features of the Directors Remuneration Framework are as under;
• No director is involved in deciding his own remuneration.

• No fee is paid if any of the directors does not attend a meeting. Similarly, fee is not paid for consideration of the proposals considered
through circulation.
• No consultancy or allied work is awarded to non-executive directors or to the firms, institutions, companies etc. in which they hold substantial
interest.
• The administrative expenses pertaining to the office, staff and security allocated to the Chairman of the Board are determined rationally.
• Directors may be provided with certain facilities incidental to the performance of their role as Board members depending on the need and as
approved by the Board and shareholders.
Shariah Board
Fixed remuneration is paid to Chairman Shariah Board as well as non-resident shariah board member in line with employment
contracts including monthly salary, medical benefit and fuel reimbursement.
No variable remuneration (performance bonus) is paid to Chairman Shariah Board and non-resident shariah board member.
Resident Shariah Board members are paid fixed remuneration which includes monthly salary and allowances as per terms of contract and post-
employment benefits. Variable remuneration (performance bonus) is paid on the basis of performance assessment carried out annually
through performance appraisal process.

SHARIAH
BOARD
Terms of Reference
The primary function of Shariah Board is to supervise and advise the management of the Bank on all shariah related matters,
develop comprehensive Shariah compliance framework and is responsible for all Shariah related decision. The Shariah Board
approves all Islamic Banking related policies, procedures, services and related agreements and contracts in conformity with the
rules and principles of Shariah. The Shariah board is responsible to review Internal Shariah Audit review report, external Shariah
Audit, SBP Shariah Inspection and Shariah compliance reviews and prescribes appropriate remedial measures. Shariah Board is
also responsible for training and development of the staff members. Shariah Board meetings are held at-least quarterly it also meets with Board of Directors
at-least on quarterly basis.
Process of appointment and nomination

The appointment of members of the Shariah Board is approved by the Board of Directors, of the Bank, upon recommendation of
the Human Resource and Remuneration Committee. The appointment is subject to prior clearance of SBP and pursuant to Fit and Proper Criteria (FAPC)
and regulation of SBP.
PROFILE OF SHARIAH ADVISORS

Mufti Muhammad Iftikhar Baig Mufti Mahmood Ahmad Mufti Tayyab Amin
Chairman Shariah Board Member Shariah Board Resident Shariah Board Member
He is serving Allied Bank Limited since He is serving as member Shariah Board of the Bank He is serving as Resident Shariah Board
February 18, 2013 and as Chairman since August 17, 2015. He graduated as a Member (RSBM) of the Bank since
Shariah Board since August 17, 2018. He is a Shariah scholar in Shahadatul-Almiah September 03, 2018. He earned his Al-
qualified Mufti from the Jamia Darul-Uloom (Masters in Arabic and Islamic studies) from Aalamiyyah (a degree recognized by the HEC
Karachi, which is one of the most reputed Wifaqu-ul-Almadaris Alarabia. He has also Pakistan
and prestigious religious institution in the earned his Master’s in Arabic from University as a Masters in Arabic & Islamiyyat) and
country. He is also a Law graduate and in the of Punjab, Lahore (Takhassus-Fi-Alifta) in specialization in Islamic Jurisprudence
process of completing his Ph.D thesis on Islamic Fiqh and Fatawa from Jamia Darul- from Jamia Darul-Uloom, Karachi, which is
the subject ‘Shariah Compliant Solution Uloom, one of the most reputed and prestigious
regarding Foreign Trade’. His previous Karachi. He has also completed his M Phil in religious institution in the country. Prior to
experience includes Shariah Advisory Islamic Banking and is in the process of joining the bank, he has worked as
services in local and international banks. He completing his Ph.D thesis on Shariah advisor for three years at First
regularly delivers lectures on Islamic “Comparison between Conventional and Elite Mudharabah and six years at First
Economics and Finance at different forums and Islamic Law of Punjab Mudharbah.
educational institutions. Contracts”. He has experience of eight years He regularly delivers lectures on Islamic Economics
as a Shariah consultant with Islamic Micro- and Finance at different forums and educational
Finance and other organizations. He is a Mufti and institutions.
lecturer in renowned Islamic university - Al
None of the members of Shariah Board of the Bank are member of Shariah Board of any other financial institution.
No. of Meetings Attended: Four Shariah Board meetings were held in 2019 last year and all Shariah Board members have
attended all the meetings.
REPORT OF
SHARIAH BOARD
For the year ended December 31, 2019
In the name of Allah, the State Bank of Pakistan. Shariah Board Besides, we have also reviewed the
Beneficent, the Merciful is pleased to submit a report on the reports of the internal Shariah audit
overall Shariah compliance environment and external Shariah Audit of ABL-IBG
By the grace of Almighty Allah, the of ABL-IBG. operations conducted during the year.
year under review was the 6th year of Shariah Board asserts that it has
Islamic Banking Operations of Allied performed its duties independently Based on the above, we are of the view
Bank Limited (ABL-IBG). The Board of with courteous relationship among that:
Directors and Executive Management
are solely responsible to ensure that the the Shariah Board members and
The business affairs of ABL-
operations of ABL-IBG are conducted management of Bank.
To form basis of our opinion as IBG, especially with reference to
in compliance with Shariah principles transactions, relevant documentation
at all times. The scope of this report is expressed in this report, Shariah
compliance reviews, on test check and procedures, performed during the
to cover the affairs of ABL-IBG, from year 2019 are in conformity with the
Shariah perspective as described under basis, of each class of transactions, the
relevant documentation and process principles and guidelines of Shariah
Shariah Governance Framework of issued by Shariah Board (SB) and State
flows on sample basis was carried out.
Bank of Pakistan.
Annual
94 Report 2019
The Bank primarily used Ijarah,
Diminishing Musharakah, Salam and Musharkah (25.37%), Islamic Export banking training institutes.
Business Musharkah for its financing Re-Finance– Business Musharkah
activities during the year. The bank (7.93%). BOD and Shari’ah Board
under review period also maintained Besides, the investment portfolio Training/Orientation:
gradual shift from Trade based modes has also risen by 21.50% to Rs.
to Participative mode which is an 12,452 million as compared to 10,249
In order to enhance Islamic banking
encouraging development. million in last year, which mainly
knowledge and acumen, an orientation
constituting Government Ijarah Sukuk,
session for BOD was conducted by the
ABL-IBG has put a mechanism in place Corporate Sukuks and Bai-Muajjal with
Shariah Board. Moreover, the members
in the form of Internal Shariah Audit Government of Pakistan.
of Shariah Board participated in SBP
and Shariah Compliance reviews to designed program which was aimed
ensure Shariah compliance in its overall During the year, the SB approved
to provide exposure with respect
operations that will keep its focus on new products including Allied Aitebar
to International trade and treasury
continuous improvement for catering Business Finance, Islamic Financing
operation & derivative management.
to the large branch network over the Facility for Renewable Energy (IFRE)
coming years. The system within the and Low Cost Housing for Special
Bank is sound enough to ensure that Segment (IHFS) on assets side and Recommendations:
amounts realized from prohibited “Allied Aitebar Waseela e Hajj & Umrah
Account” on Liability side. Following are some areas, which require
sources, if any, are not made a part of
continuous focus:
the income. The Bank recovered charity
of Rs. 0.075 million and accordingly an Liability Review: The total deposits of
ABL-IBG have increased by 39.61% 1. Bank’s increased focus on
amount of Rs. 0.06 million was granted
during the year reaching to Rs. 34,389 customers’ awareness regarding
to approved charitable institutions.
million at December 31, 2019 as Islamic banking is well appreciated.
The Internal Shariah Audit Function compared to Rs. 24,632 million as of It is recommended that such
(ISAF) plays a vital role in last year. programs should also be continued
achieving the objective of ensuring in future for Ulama/Shariah scholars
Shariah Other Key Activities: SB also reviewed as well.
compliance by evaluating the adherence various policies and manuals during the
year related to Tractor Finance, Istisna 2. Bank’s policy of appointing
to Shariah guidelines prescribed by
Finance, Home Musharakah Policy, new staff members for Islamic
SB, Resident Shariah Board Member
Islamic Export Refinance Scheme, Forward banking branches with inclination
(RSBM) and Shariah guidelines of
Cover, Business Muaharakah Manual, /commitment to the
Islamic banking division of SBP, in every
Allied Aitebar Express Account Allied ideology of Islamic banking
activity under taken by the ABL-IBG, on
Aitebar Institutions Account, Allied should be continued.
sample basis. ISAF submits periodical
Aitebar Premium Account and Allied
reports to RSBM /Shariah Board for
Aitebar Notice Period Certificates. 3. The Bank is actively pursuing
information, review and determination of
training of its human resources
appropriate corrective actions. Profit Distribution Review: SCD also about various aspects of Islamic
conducted review of the process of Banking & Finance through training
Shariah Compliance Department profit distribution on monthly basis and sessions/seminars. However
(SCD) of the Bank is working under ensured that the distribution is in line continuous focus should be
the guidance of SB with adequate with instructions of SB and SBP. maintained to improve the level
resources. The main objective of Moreover, internal Shariah audit of of awareness through Islamic
this department is to facilitate and pool management has been conducted Banking refresher, certification and
ensure Shariah compliance in all the on quarterly basis, which has further Shariah documentation courses.
new researches, conducting Islamic improved the process of pool Moreover, enhanced training for
banking trainings, Shariah-compliance management, profit and loss distribution and IB Treasury operations should also
review of each class of transactions, strengthened the compliance of Shariah be conducted. This will ensure
relevant documentation and process guidelines. enhanced capacity building as well
flows. Moreover, SCD has conducted the
review of branches to evaluate the as address the possible Shariah
Shariah Board Meetings: Shariah non-compliance risk.
Shariah knowledge of staff.
Board had held four meetings during
the year 2019 wherein multiple issues We pray to almighty ALLAH to provide
Review and Development: were discussed upon, reviewed and us guidance to adhere to the Shariah
resolved. principles in day-to-day operations,
ABL-IBG has completed yet another to absolve our mistakes and for the
successful year. Upon achieving a
branch network of 117 dedicated
Staff Training: success of Islamic banking in Pakistan.
Islamic branches and 10 Islamic
In order to enhance the Islamic banking
Banking windows, further expansion Mufti Tayyab Amin
knowledge and expertise, training
in outreach has been made through Resident Shari’ah Board Member
on Islamic Banking concepts as well
addition of 50 Windows at selected
as on Islamic baking products were
conventional branches during 2019. imparted to the staff of the Islamic Banking
Similarly, significant growth in assets, Group and other staff involved in Mufti Mahmood Ahmad
Investments, liabilities, trade and other management of Islamic Banking Member Shari’ah Board
business avenues have been registered. operations and affairs. Management
Development Center of ABL, arranged
Asset Review: During the year, 27 training sessions and more than Mufti Muhammad Iftikhar Baig
financing portfolio has increased by 1070 employees attended these Chairman Shari’ah Board
82.16% to Rs. 12,615 million as sessions. Moreover, 54 employees
compared to 6,925 million in last year, attended training session conducted Date of Report: February 07, 2020
which mainly constitutes of Business by NIBAF and other reputed Islamic
Musharkah (53.52%), Diminishing

2019 31
Annual
96 Report 2019
INFORMATION TECHNOLOGY (IT)
GOVERNANCE
BOARD OF IT Governance framework ensures
DIRECTORS e-VIsion
Committee
that Your Bank’s significant
investment in IT infrastructure is duly
aligned with the long-term strategies
and objectives of Your Bank; while
Chief ensuring conformity with industry’s
Executive MANCO ITSC best practices.
Officer
IT Governance of the Bank is regulated

by the IT Governance Policy approved by
the Board of Directors which focuses on
ensuring that:
• IT strategic plan fits with the
Chief Risk
Management Information Security & Governance current and evolving needs
of Your Bank and customers.
• IT based policies and
procedures conform to the
Banks, statutory and regulatory
requirements.
Chief • ITG designs, specifies and
Compliance Technology Compliance
maintains systems for
optimal utilization by Your
Bank.
• IT acquisitions follow the
necessary approvals ensuring
Chief that there is appropriate
Information balance between cost, risks,
Technology short term and long term
benefits.
Core-Banking & BSDI • Roles and responsibilities are
clearly defined for smooth
delivery of business
ACOB Digital Banking & Business Intelligence
requirements and services.
IT Governance of Your Bank

comprises monitoring by:
IT System & Infrastructure
e-Vision Committee of Board
supervises the IT Governance in
Your Bank and provides strategic
direction for adoption/upgrading of
evolving technologies in order to
provide
Chief Audit and new customer centric products and

Risk Review IT Operations services and to improve internal
control environment. The Committee
reviews the strategic plan of Your
Software Quality Assurance & Bank to improve IT infrastructure and
IT Compliance
automation of processes and systems
including alternate delivery channels.
Information The Committee extends
System Audit assistance to the Board with
insights regarding evolving
technologies in the field of
e-banking and digital platforms. It also
oversees performance of Information
Technology Group of Your Bank.
Annual
98 Report 2019
IT Steering Committee (ITSC) of Your Bank is entrusted to review initiatives and prioritize projects for their
implementation along with recommendation for required infrastructure and monitor their performance. ITSC reviews
and recommends the annual and long term Strategic IT plan before its recommendation to MANCO and Board’s e-Vision
Committee for review and approval of the Board of Directors. ITSC assists MANCO in implementing IT and Digital
strategies approved by Board of Directors and also plays an advisory role in all technology related matters. ITSC also
reviews the result of vulnerability and IT risk assesment exercises and ascertains measures taken to mitigate identified
risks. Chief ITG is the chairman of ITSC.
Information Technology Group (ITG) is headed by Chief ITG, reporting to Chief Executive Officer of Your Bank. ITG
is responsible for development and delivery of technology driven services in line with directions of the Board and its
committees under the strategic guidance of ITSC. Chief ITG is responsible to:
» Develop and implement IT policies and procedures in line with best practices.
» Ensure maintenance of Bank’s IT infrastructure including online business services for smooth transactions
processing.
» Validate IT processes through testing and oversee quality control throughout the IT infrastructure.
» Devise security policies and ensure that arrangements for disaster recovery plan are in place.
» Keep the e-Vision Committee and MANCO informed of emerging trends and developments in IT and put forth
necessary recommendations.
» Maintain a requisite professional IT staff strength with sufficient knowledge, skills, experience and professional
qualifications to meet the expectations along with regular training to keep up with the latest technologies and
concepts.
ITG of Your Bank is strengthened by the following functions which are headed by committed professionals, providing
innovative and efficient solutions to achieve organizational objectives.
Software
Core-Banking Digital Banking IT System
IT Quality& IT
& & Business & Operations
BSDI Intelligence Infrastructure Assurance
Compliance
Information Security & Governance functioning under the umbrella of Risk Management Group, is primarily
responsible to develop and implement information security guidelines through a set of policies, procedures and
frameworks and conduct Technical Risk Assessment as per policy guidelines. The function is also mandated to develop
information security policies in line with regulatory requirements and based on best industry practices. This function also
manages the information security awareness campaign across the Bank.
Technology Compliance under Compliance Group performs technology compliance review of Information Security
Policies and Procedures to ensure that they are compliant with SBP guidelines/regulations. Furthermore, it also ensures
compliance against the recommendations of SBP inspection report, external auditors’ management letter and internal
audit report of Audit and Risk Review Group (A&RRG).
Information System Audit function under A&RRG is entrusted to perform systems audit across the Bank; testing
desired functionality and integrity while providing recommendations where necessary.

WHISTLE
BLOWING POLICY (WBP)
Preamble
Protection of Whistleblowers
The purpose of WBP is to create a channel whereby Your Bank’s
staff is encouraged to report, without any fear, any malicious All matters are dealt with confidentiality and the identification of the
activity or conduct by any other employee, which may cause Whistleblower is not disclosed except for inevitable situations,
financial or reputational loss to the Bank. where disclosure of identity of the Whistleblower is essential.
Your Bank stands committed to protect Whistle blowers for
It provides assurance to the Whistleblowers about total whistle blowing and any subsequent harassment or
confidentiality and protection of their legitimate personal interests. victimization of the whistleblower is not tolerated. If any
It also provides incentives for the Whistleblowers on reporting Whistleblower feels that at his / her existing place of posting,
of suspicious activities. he / she might be subjected to victimization or harassment by
the alleged officials after blowing the whistle, the management may
Objectives consider transferring him / her to another suitable place on his /
her request.
The intended objectives of this policy are: Indemnity from disciplinary action will be provided to the
• Develop a culture of openness, accountability and whistleblower employee, against actions/involvement in the
integrity; activity against which whistle is blown, based on the merits of
• Provide an environment whereby employees of the Bank the respective case.
blow whistle where they know or suspect any
immoral, unethical, fraudulent act of any current or former Incentives for Whistle Blowing
employees, vendors, contractors, service providers and
customers which may cause financial or reputational risk to the On the recommendation of the ACOB, the Whistle blower
Bank; will be suitably awarded according to the significance of the
• Create awareness amongst employees and stakeholders regarding information he / she had provided and impact of losses averted
the Whistle Blowing Function; and as a result.
• Enable management to be informed at an early stage about
aforementioned activities or misconduct, if any, and take Process of Whistle Blowing
appropriate actions.
Your Bank has established the following communication
Scope channels for whistle blowing complaints:
• A dedicated e-mail address for whistle blowing (whistle.
The scope of this policy includes, without limitation all types of [email protected]) accessible by the Chairman ACOB.
unlawful acts / orders, fraud, corruption, misconduct, collusive • Whistle blowing forms available on the Your Bank’s
practices or any other activity which undermines the Bank’s corporate website.
operations, financial position, reputation and mission. • Post / courier addressed to Chairman ACOB, Allied Bank
Limited, Head Office, 3 Tipu Block, New Garden Town,
Independence of Whistle Blowing Unit Lahore.
An operationally independent Whistle Blowing Unit has been

established under supervision of Audit Committee of Board Number of instances reported to ACOB
(ACOB), for handling and monitoring allegations, complaints
and concerns raised by the whistleblower under the WBP. Number of whistle blowing incidences reported to ACOB in
Year 2019: Eighteen (18).
INVESTOR GRIEVANCE
Your Bank has put in place comprehensive guidelines for investors and shareholders to address their grievances. The guidelines conform to the
Bank’s internal policy to address the investor grievances as well as statutory requirements as stipulated under SECP SRO 634
(1) / 2014.
• For all shares related issues, shareholders are advised to contact Shares Registrar of the Bank with contact details available on Bank’s corporate
website.
• In order to facilitate the shareholders who, intend to register a complaint, the contact details of the focal person of Shares Department is
given on the Bank’s corporate website for this purpose.
• In addition, if shareholders grievances are not resolved by the Shares Registrar of the Bank, as well as Shares Department, they may escalate their
complaints to the Company Secretary of the Bank.
• If any complaint still remains unsatisfied, the same can be forwarded to Securities Exchange Commission of Pakistan (SECP); using links of
SECP website which are available in investor grievance section of the Bank’s corporate website.
• Furthermore, queries with respect to financial results of Your Bank can be directed to ‘Investor Relations’ department, which is headed by Chief
Financial Officer, vide using email address [email protected] (which is available on corporate website as well).
Annual
100 Report 2019
CORPORATE SOCIAL
RESPONSIBILITY (CSR) POLICY
OUR PHILOSOPHY
CSR vision of Your Bank “To be a socially responsible corporate citizen” has evolved into its CSR policy which clearly outlines Corporate
Social Responsibility objectives of Your Bank. CSR Policy stipulates that CSR is a concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.
POLICY OBJECTIVES
Objective of the policy is to provide guidelines to align business objectives and the entity’s roles as responsible corporate citizen.
Your Bank recognizes its obligations as responsible corporate citizen and aims to achieve following broader objectives by implementation of its
CSR Plan:
• Establish a WORKPLACE environment to maintain balanced work life with healthcare facilities along with high ethical standards, equal
employment opportunities, aided social interaction among employees and encouraged employment of disabled.
• Our working style should have positive impact on ENVIRONMENT promoting green banking, use of renewable energy sources, reducing carbon
omissions, promoting trees and plants and change of working style, on best effort basis, from paper based to computer based and promoting
green culture.
• Make our COMMUNITY feel our presence not only by our business interactions but also by sharing and caring, especially during the
times of adversities and natural calamities.
• Strengthen CUSTOMER RELATIONS by ensuring satisfaction and privacy.
• Protecting Human rights, ensuring transparency, taking anti-corruption measures, adopting best business practices and improving
stakeholder relations through GOVERNANCE.
• Our BRAND and slogans such as, “Aap kai dil main hamara account” should be known as community caring organization and not just for the
profit. Bank’s contributions towards these areas have been mentioned in Corporate Sustainability Report.
Bank’s contributions towards these areas have been mentioned in Corporate Sustainability Report.
Allied Bank
Limited 101
CORPORATE SUSTAINABILITY
REPORT
Allied Bank Limited (the Bank) being a socially responsible citizen remains committed towards Corporate Social Responsibility
(CSR) which forms an integral part of the Bank’s long-term strategy.
Your Bank echoes a commitment of making a positive impact on our society and works to sustain the trust of the customers and communities in
which we operate.
OUR PHILOSOPHY OF CSR

The Bank has been meticulously observing globally recognized environmental and social practices through its approved CSR
policy. The key CSR objectives of the policy have been aligned with the rolling strategic plan of the Bank and ensuring to adhere
closely to the global sustainable development goals (SDGs).
Under this CSR Policy, Your Bank focuses on these four key areas to achieve following objectives:
Customer Relation: First Choice Bank for the Customers.

Workplace: Build an engaged, healthy and inclusive workplace, with an emphasized focus on achieving an equitable gender
employment ratio.
Environment: Contribute towards sustainable growth; with no adverse impact on the environment.
Society: Contribute towards wider social development including health, education and general community welfare.
In line with the aforementioned CSR objectives during the year, the Bank’s contributions towards these key areas are as follows:
• Deposit Protection – Rs. 937M
Customer Relations Rs. 943M

• 1,515 Biometric & Anti-Skimming enabled ATM
• 96.6% ATM Uptime
• 99% Resolution against 35,023 Customer
Complaints Received
• 3.87 Days Average Turnaround Time
Workplace Rs. 435M
• Best Place to Work Award

• 10% increase in female employees
• Education Assistance – 341 employees
• Trainings Facilitated – 11,000+
SR
S N A P SC H OT
Environment Rs. 204M
• Consumption of Fossil Fuel ↓13%

• Consumption of Paper ↓14%
• Solar Locations – 59
• Inverter Branches – 1,060
• 3 Business Processes Automated
• Contribution to National Exchequer,

Rs. Society
Donations & Sponsorships – Rs. 83 million

• Taxes Paid – Rs. 18,554 million
• Zakat Submission – Rs. 398 million
CUSTOMER RELATIONS banking of the future. and hassle-free banking services with
Concentrating on technology driven seamless customer experience. The
Business thrives for the constant support 24/7 banking solutions, the expansion self-service branch offers digital account
and commitment of its customers. The in Bank’s ATM network was maintained opening through tablets, Interactive
Bank in line with its vision “to become during the year with an addition of 127 Teller Machine (ITM) where customers
first choice Bank for the customers”, ATMs. In order to augment services can do banking transactions through
constantly aspires service excellence and security all ATMs are equipped teller assistance over video conferencing
and enhanced user experiences of our with biometric access facility to allow facility and instant card issuance for
valued customers. A goal as critical transactions without use of cards. accountholders at the branch. Your Bank
as such can only be achieved through All ATMs are equipped with anti- ensured 99%+ ATM uptime during the
persistent interactions, getting to know skimming devices to enhance security occasions of Eid-ul-Fitr and Eid-ul Adha
the customer and their needs while of transactions.Recognizing the impact holidays; processing around 2.2 million
providing dynamic solutions to cater to of digitalization and understanding transactions involving Cash Withdrawals
their evolving needs. the banking needs of millennials, Your of approximately Rs. 25.2 billion. Your
Customers are at the core of the Bank has introduced its first Self- Bank installed Electronic Queue
continuous technological transmutation Service branch at Lahore University Management Systems in Top 100
which is geared towards reshaping of Management Sciences (LUMS), Flagship branches with total cost Rs.
which offers full-scale, rapid, secure 42.58 million, facilitating the customers
Annual
102 Report 2019
to conduct transactions conveniently. In
continuation of ABL’s journey towards
digitalization, 75 Self Service Kiosks
worth Rs. 19 million are installed in
selected Branches.
In order to receive objective feedback
on customer experience of services
provided by the Bank, Your Bank arranged
for video mystery shopping of Top 100
flagship branches through an external
research company.
The Bank further strengthened customer
relations through the following initiatives:
CUSTOMER AWARENESS
AND FINANCIAL
LITERACY SEMINARS
exercises including Vulnerability
an aim of financial inclusion of unbanked
With the objective of providing non- Assessment (VA), Penetration Testing
segments of the society. These
financial services, Your Bank organized (PT) and Technical Risk Assessment
sessions, attended by 10,000+ citizens,
following seminars and programs to (TRA); ensuring a controlled environment
enhanced the awareness levels, which
promote financial inclusion and credit for customers’ related information;
was appreciated by all the participants.
expansion throughout the year: augmented by re-issuance of EMV
During the year, Your Bank ranked top
chip-based cards for secured POS
amongst the participating Banks in
• In line with SBP’s vision to promote transactions.
Panjgur and selected districts of Karachi
SME, 8 awareness seminars on Information
for highest account opening ratio; the
Middle Market & SME Policy were Security Awareness
efforts lauded by SBP
organized in Gujranwala, Peshawar, campaigns were
Faisalabad, Sahiwal, Bahawalpur shared with the
and Larkana. All the events were CUSTOMER PROTECTION valued customers
well-attended by the business AND QUALITY vide emails and
SMS respectively
communities of the respective ASSURANCE to educate and enhance awareness
territories.
of Bank’s customers about latest
Your Bank is constantly aspiring to cyber security threats. Phishing email
• Focused interactive seminars on achieve excellence in services to earn
“Awareness Program on Islamic simulations were also conducted on
customers loyalty. bank’s staff to gauge the phishing index of the
Banking” were arranged, one Your Bank spent Rs.937 million towards
at Gujranwala and another at organization.
deposit protection insurance in order Through Customer Relationship
Bahawalpur with the objective to comply with SBP initiative to provide
of acquainting the business Management (CRM) system; Your Bank
protection to small depositors across continued to improve the resolution rate
community as well as Ulemas, the banking industry.
in particular, about the possible and timelines to further strengthen the
In this Digital era, complaint handling mechanism.
alternatives of banking solutions customer information
within their Shariah interpretation is more vulnerable
and thereby providing avenues than ever before.
of taking due advantage of it and Cognizant to this
play a key role in the country’s fact,
economics. Your Bank continued to
The Bank’s Human Resource Group safeguard Data and Information
in coordination with the SBP, arranged Technology assets including compliance
496 National Financial Literacy Program of PCI DSS and Customer Security
(NFLP) sessions in the rural districts with Program (CSP) by SWIFT.
Your Bank conducted assessment
Allied Bank
Limited 103
With the objective to engage customers
myABL Personal Internet Your Bank’s unique initiative of
and nourish relationships, Your Bank
Banking has remained the facilitation of small obligors
maintains profiles on Facebook, Twitter &
most convenient and widely towards an Enterprise
Instagram and actively interacts with the
used Online Banking channel Resource Planning (ERP)
customers on a variety of topics.
for ABL customers during the year 2019. based automated book keeping and
This engagement is providing significant boost
With improved customer experience and accounting system, with off-the-shelf
to the Bank’s presence on the social
well-organized customer onboarding features enabling enhanced control over
media platforms, especially with the
campaign, Bank succeeded in doubling financial decision-making processes, was
millennial segment of the society.
the myABL userbase. maintained during the year.
myABL Business Internet During the year ERP was implemented
966K 11%↑ Banking (BIB) is the dedicated for two obligors thus enhancing the total
Digital Banking platform number to 4.
6K 8%↑ exclusively designed and
developed for Business and
6K 100+%↑ Institutional Customers. This user-
WORKPLACE
friendly and device-responsive facility
Building an Health and Medical
CONTRIBUTION continued to grow during 2019, enabling

engaged,
Facility Expenditure
customers to execute wide range of

TOWARDS FINANCIAL online banking transactions from their healthy and
INCLUSION
Rs. 250M
workstation/offices. inclusive team

The Bank has an ATM/ is a cornerstone
Branch Locator and Discount to accomplish
During the year under review, Your Bank Rs. 22M Rs. 124M
Offer services on the Bank’s the business

continued to endeavor towards financial
Corporate Website and strategies of
the Bank while Financial Assistance for Education & Training
Marriage & Burial Grants Expense
inclusion in rural areas and providing Facebook that has rich, engaging and
quality financial services at grass root level. user-friendly interface with simple meeting the ever-evolving external
Your Bank has opened 2 branches in navigation. challenges in the ‘digital era’.
Baluchistan Province and 9 branches in With an easy to use map- In recognition of its efforts towards
Khyber Pakhtunkhawa (KPK); based interface, customers nurturing the best human capital and
increasing the total number of rural can find their nearest ATMs or creating an inclusive environment, Your Bank
branches to 278. Another 3 branches Branches or they can search received the award of ‘Best Place to
were opened in Un-Banked areas of for a specific branch based on available Work’ under the category of ‘Financial
Karora, Fateh Pur Kamal and Gadari. facilities and can view Discount Offers Services’ for the Year 2019 from Pakistan
In order to play an effective role in the available on Debit, Credit, Prepaid cards Society of Human Resource
development of agrarian economy of and Masterpass QR, which is a world Management.
the country, the Bank is also extending renowned Mastercard product offering. The
Your Bank is constantly working towards
agricultural financing across the country and Bank has also been actively engaged in
hiring the most dynamic and capable
offers vast range of agricultural finance facilitating various institutions for Cash
staff while simultaneously investing in
products through Agri designated Management Solution. The Bank has
relevant trainings to further enhance their
branches. The Bank also continued merged all its cash management
talent and providing the best facilities
supporting Prime Minister Youth Business solutions under Payment Hub wherein
and culture to thrive.
Loan Scheme to eligible small borrowers Conventional, Batch Mode processing
Employees’ engagement plays an
under this segment. or API Based integration is offered. The
important role in creating a great
Bank has added 61 new clients the year
workplace culture which is vital for
DIGITAL INNOVATION for Cash Management Services.
shaping the future of an organization.
Accordingly, Rs.8 million was spent on
The Bank is continuously striving to
deliver enhanced user experience
through innovative digital banking
products and services. The face of
the banking industry has drastically
changed in the last few years, wherein
digital disruption, consistent innovation
and dynamic products from Fintechs
are continuously pushing the traditional
banking industry to focus on augmenting
customer experience through adopting
latest technologies and excellence
in services on both conventional and
digital channels. As a forward-thinking
advocator, Your Bank has responded to these
market disruptions by expanding in-
house capabilities and also have
partnered with Fintechs for new digital
offerings.
Annual
104 Report 2019
staff cricket tournaments held at Lahore,
Karachi, Islamabad and Multan; which
Adhering to responsibility towards BUSINESS ETHICS AND
eligible ex-employees, during the year,
were well participated by staff and their family from the platform of “Post-retirement ANTI-CORRUPTION
members who thoroughly enjoyed the Medical Fund”, Your Bank contributed MEASURES
festive environment. Rs.116 million towards the health of 666
ex-employees. Your Bank nurtures a culture of excellence,
EQUAL OPPORTUNITY Your Bank ensures that maximum safety
standards are met at all premises. For
good governance, transparency,
integrity and accountability. Controls and
EMPLOYER AND training and awareness of the employees Compliance being an integral function,
EMPLOYMENT OF on how to act during any emergency Your Bank encourages high business
SPECIAL PERSONS in the building, 12 safety drills were ethics while promoting positive
conducted at major buildings in Lahore,
compliance culture. Your Bank is
Karachi, Islamabad, Faisalabad,
Continuous focus was maintained committed to the best industry practices
Peshawar and Multan.
towards increasing the diversity of for compliance with all regulatory
Your Bank prioritized to arrange emergency
Bank’s human capital; reinforcing the lights, fire and smoke detection equipment, frameworks including
inclusive culture of Your Bank. Your alarm systems, portable fire extinguishers, anti-money laundering practices, so
Bank aims to ensure that employees periodic evacuation/safety drills and that the interests of all stakeholders are
of all backgrounds are treated equally emergency exit doors and incurred Rs. 7 protected.
and have an equal opportunity to be million during the year 2019 in order to Code of Ethics and Conduct signed by
successful. augment staff safety at the workplace. all employees acts as a guide for them
Over the years, the Bank has generated in discharging their duties and sets
out the standards of good practice.
direct and indirect employment which is EDUCATION AND Management’s Central Administration
currently exceeding 11,000+ employees,
who are mainly employed from diverse WELLBEING OF THE Action Committee (CAAC) takes
areas of Pakistan; thereby positively STAFF action on any violation of policies and
impacting the broad-based economy procedures, act of fraud and forgery,
and society at large. Learning is one of the keys to success. breach of discipline, code of conduct,
ABL being equal opportunity employer, Investing in education helps the ethics and business practices. Appeal
encourages employment of special workforce to excel in their current roles of the staff against whom CAAC
persons and currently 47 special – and thrive in the future. Cognizant of has already taken disciplinary action
persons are honorably earning their this fact, Your Bank spent Rs. 97 million on is reviewed by Human Resource
livelihood while contributing towards the trainings to 10,844 staff members and Committee.
growth of the Bank and society. Rs.30 million towards employee’s
Simultaneously 2034 - females, education.
During the year, Your Bank through its
representing 17.44% of total permanent
platform of “Staff Welfare Fund” spent ENVIRONMENT
staff members, are diligently performing their
Rs.22 million to assist 56 employees by
duties. A special function was held to Your Bank plays a positive role in the
financially enabling them in important social
celebrate the International Women Day. events like marriage ceremony development of a healthier environment
of their daughters or to meet the burial to meet the social obligations and
OCCUPATIONAL HEALTH expense of their departed loved ones. contribute towards more sustainable
AND SAFETY Keeping in view the religious sentiments future growth. Your Bank is promoting
of our employees, Your Bank sponsored its green banking, paperless culture,
Your Bank aims to provide safe and clerical, non-clerical and executive staff renewable energy sources and reduction
healthy environment to all employees at totaling 37 to perform Hajj by spending of carbon emissions.
work. Rs.24 million.
During the year 2019, the Bank spent
Rs.134 million under the approved
medical expense policy to over 2,370
staff members.
Allied Bank
Limited 105
GREEN BANKING Assessment (TNA) session on Green Bank and the education sector being
AND ENVIRONMENT Banking by the experts from Frankfurt an essential part of it has been a major
PROTECTION School of Finance & Management & beneficiary to whom the bank has been
donating regularly. In pursuance of this
GIZ, Germany. The workshop agenda
included inherent risks in solar systems, objective, Your Bank contributed
As a responsible corporate citizen, Your Bank
key financial performance indicators, Rs. 30 million to The Lahore University of
is taking genuine leaps forward in setting
evaluating bankability, solar experiences Management Sciences (LUMS) towards
out a series of targets to assist in the
and market outlook. the development of Hostel.
transition to a low-carbon economy.
Your Bank, under the Clean & Green Staff of Your Bank carried out a Corporate
During the year, Your Bank invested
Pakistan Campaign, organized a tree Social Responsibility activity at the
Rs. 204 million toward energy saving
plantation campaign with the slogan Family Educational Services Foundation
solutions through installation of solar
“Aek Bashar Do Shajar”. Plants were (FESF) – Deaf Reach School. This
panels and inverters. Your Bank’s total solar
selected on the basis of environmental interactive session was concluded with
locations stand at 59 while inverter-
benefits keeping in view the soil and the distribution of goody bags
based locations increased to 1,060.
characteristics of a particular area and to every student and a donation from
Administrative measures including
over 16,000 saplings of local trees, the Bank’s staff to the FESF. FESF is a
maintenance of electrical equipment
native to climate, were planted on non-profit educational organization
carried out during the year resulted in
different locations. active in Pakistan since 1984, working to
reduced consumption in electricity and
meet the need for the hearing impaired
reduction in consumption on fossil fuel
COMMUNITY in Pakistan. The program’s approach
by 13%.
focused on education and skills training
During the year, Your Bank continued its efforts
for deaf children and youth, development
to automate the existing manual processes; Bank as a trusted member of the
of teachers’ and language interpreters’
resultantly 3 processes were shifted community is playing an active role in
skills and job placements.
towards paperless banking. following CSR activities and community
The Bank donated Rs.31 million and
As part of Green Banking efforts, the engagements:
spent Rs.10 Million on sponsorships to
Bank arranged Training Need
various educational institutions including
EDUCATION above.
Education is the only way to create a

civilized society and forms the basis of
HEALTH
nation building. Your Bank is supporting
Limited Healthcare access for the
leading educational institutions at all
under-privileged population is another
the levels (schooling, higher education,
key area of concern within the country.
vocational and professional education
During the year, Your Bank contributed
institutions/universities) which play
Rs.22 million in the shape of direct
pivotal role in the enlightenment of our
donations and sponsorships, towards six
future generations.
healthcare institutions thereby playing
Recognizing the importance of
its role in easing the predicament of
information technology, Your Bank
underprivileged patients.
continued its policy to donate its used
Cognizant of the importance of Blood
but working personal computers to
donation to save the life, Your Bank in
educational institutions; especially
cooperation with Shaukat Khanum
targeting under privileged segments
Memorial Cancer Hospital, organized a
of the society. Your Bank donated a total
voluntary blood donation camp at the
of 40 computers to 4 educational
Head Office for the Bank’s employees, which
institutions during 2019.
was well participated by the Bank’s staff.
Community service is one of the main
objectives under the CSR Plan of the
Annual
106 Report 2019
GENERAL WELFARE
During the year, Your Bank spent Rs.22
million on general welfare of the
community. These included contributions
in shape of donations towards poor
feeding, rehabilitation of special persons
and sports activities and sponsorships
for organizing social events, conferences
and awareness programs.
CONTRIBUTION TO
NATIONAL EXCHEQUER
Your Bank is one of the leading
institutions in its contribution towards
the national exchequer. During the
year, Your Bank paid Rs. 8,905 million as
Income Tax (inclusive of Super Tax), Rs. 604 million on account of Federal Rs. 397 Million Zakat from 72,722
deposited Rs. 8,648 million as Excise duty and Sales Tax to the national account holders and deposited to the
withholding tax agent and contributed exchequer. Further, the Bank collected national exchequer.
Contribution to national exchequer
Income Tax Zakat Collection

FED & Sales Tax Witholding Tax
(incl. Super Tax)
Rs. 8,905 million Rs. 604 million Rs. 8,648 million Rs. 397 million
Your Bank is one of the leading institutions in its contribution towards the national exchequer. During the year, Your Bank paid Rs.
8,905 million as Income Tax (inclusive of Super Tax), deposited Rs. 8,648 million as withholding tax agent and contributed Rs. 604
million on account of Federal Excise duty and Sales Tax to the national exchequer. Further, the Bank collected Rs. 397 Million
Zakat from 72,722 account holders and deposited to the national exchequer.

OUR COMMITTMENT TO
SUSTAINABILE DEVELOPMENT
GOALS
The bank has been making

Community services, especially for Education is the cornerstone to
contributions to combat hunger in
the health sector is one of the building the country’s future and
Pakistan with monthly provision
main objectives under the CSR enabling a secure future to our
of sacrificial meat for the poor
Plan of the Bank. children.
feeding. In 2019, Rs. 4 million was
• Indus Hospital and Liver • In our drive to promote
spent on this activity.
Foundation Trust were the main educational growth in this
beneficiaries to whom donation has sector, the Bank donated Rs.
been made. 30 million for the construction
• ABL has been regularly engaged in of Hostel at Lahore University of
blood donation drives, a Blood Management Sciences.
Donation Drive was conducted • The Bank also financially assisted
at ABL. Government College of Science
• The Bank has also donated to Lahore in the uplifting of their
LABARD and Tamir Welfare, Laboratories and Classrooms.
which are dedicated to the
well being of differently abled
persons.
Your Bank is devoted to equitable

The Bank places the utmost Renewable energy in Pakistan is development of the economy.
importance on gender equality a relatively underdeveloped Our business activity at its core
in its work environment. There is sector. Reliance on fossil fuel is contributing to economy in
continuous growth in number of has drastic effects on the climate. form of a better workplace,
female staff. To reduce the effects, pursuance generation employment,
of clean energy sources is contribution to the national
The Bank also contributed to essential. exchequer and financial services for
Mashal Association, a welfare • During the year, one location economy.
dedicated to the uplift of under has been switched to solar • The Bank also focuses on
privileged women & girls. increasing the total number enabling its employees to earn
to 59, whereas 243 locations better in the current inflationary
have been switched to inverter economy. There are 47 special
technology. persons serving respectfully in
the Bank.
• The bank has also spent Rs. 30
million on the education of
clerical and non-clerical staff.
Annual
108 Report 2019
The country’s economy cannot
Your Bank’s Green Banking Policy Climate change has been
achieve optimal growth without the
lays the foundation to promote recognized the world over as an
development of the SME sector.
environment friendly imminent threat to our lives and
• In order to create a healthy
practices. Our objective is global mobilization is required to
competitive environment and
to manage environmental combat such threats.
foster innovation, the Bank
risks, socially adverse actions • A tree plantation campaign was
has assisted in implementation
and reduce carbon footprint organized by the Bank under
of ERP solutions for 2 SME
while espousing paperless the Clean & Green Pakistan
Obligors during 2019.
environment. Campaign where a total of
• Additionally, multiple awareness
• The Bank achieved reduction of 16,942 saplings were planted.
seminars have been conducted
21% in paper consumption Main objectives of the plantation
to involve further potential SMEs
through process automation. were to control soil erosion
and increase the proportion of
• The Bank further achieved in waterlogged areas and
small scale business
13% reduction in fossil rehabilitation of waste lands.
fuel consumption through
conversion to clean or efficient
energy alternatives during the
year.
The Bank is ideally positioned

to partner with relevant
organizations in order
to promote sustainable
development of various sectors
of the economy.
• The Bank has entered into a
partnership with Karandaaz
Pakistan which has been
established to promote access
to finance for micro, small and
medium sized business. This
approach further increases the
Bank’s involvement in financial
inclusion of SMEs and their
business growth.
Allied Bank
Limited 109
UNCONSOLIDATED FINANCIAL STATE
for the year ended December 31, 201
Annual
110 Report 2019
Independent Auditor’s Report
Report on the Audit of the Unconsolidated Financial Statements
Opinion
We have audited the annexed unconsolidated financial statements of Allied Bank Limited (“the Bank”), which comprise the
unconsolidated statement of financial position as at 31 December 2019 and the unconsolidated profit and loss account, the
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity and the unconsolidated
cash flow statement for the year then ended, along with unaudited certified returns received from the branches except for forty two
branches which have been audited by us and notes to the unconsolidated financial statements including a summary of significant
accounting policies and other explanatory information and we state that we have obtained all the information and explanations
which, to the best of our knowledge and belief, were necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the unconsolidated statement of
financial position, the unconsolidated profit and loss account, the unconsolidated statement of comprehensive income, the
unconsolidated statement of changes in equity and the unconsolidated cash flow statement together with the notes forming part
thereof conform with the accounting and reporting standards as applicable in Pakistan, and, give the information required by the
Banking Companies Ordinance, 1962 and the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give
a true and fair view of the state of the Bank’s affairs as at 31 December 2019 and of the profit, other comprehensive income, the
changes in equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Unconsolidated Financial
Statements section of our report. We are independent of the Bank in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the
Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the unconsolidated
financial statements of the current year. These matters were addressed in the context of our audit of the unconsolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Following are the Key Audit Matters:
S. No. Key Audit Matters How the matter was addressed in our audit
1 Provision against Loans and Advances
Refer to note 9 and the accounting policies in notes 2.4.2 Our audit procedures in respect of provision against
and 4.5 to the unconsolidated financial statements. advances, amongst others, included the following:
The Bank makes provision against advances on a time • Assessing the design and operating effectiveness
based criteria that involves ensuring all non-performing of key controls to identify loss events and for
loans and advances are classified in accordance with the determining provision required against non-
ageing criteria specified in the Prudential Regulations performing advances, including:
(PRs) issued by the State Bank of Pakistan (SBP).
– Controls over correct classification of non–
In addition to the time based criteria the PRs require a performing advances on time based criteria;
subjective evaluation of the credit worthiness of borrowers
to determine the classification of advances. – Controls over monitoring of advances with higher
risk of default and migration of these advances on a
The Bank’s advances to the customers represent 32.75% timely basis to watch list or to non-performing
of its total assets as at 31 December 2019 and are stated advances category on subjective criteria;
at Rs. 485,016 million which is net of provision of Rs.
15,152 million at the year end. – Controls over accurate computation and recording
of provisions; and
The determination of provision against advances was
identified as a key audit matter in our audit as it involves – Controls over the governance and approval process
a considerable degree of management judgment and related to provision.
estimation in complying with the above criteria.
• Testing on a sample basis, credit exposures
identified by the management as displaying
indicators of impairment, assessed the number of
days overdue and assessed appropriateness of
amount reported for provision in accordance with
the Prudential Regulations;
• Checking on a sample basis, the accuracy of

specific provision made against non–performing
advances and of general provision by recomputing
the provision amount in accordance with the criteria
prescribed under the PRs;
• Examining the credit history, account movement,

financial ratios, report on security maintained in
respect of advances where the management has
not identified indicators displaying impairment, on
a sample basis and challenging the management’s
assessment based on our view of the credit from
the review of credit file.
2 Valuation of Investments
Refer to note 8 and the accounting policies in notes 2.4.2, Our procedures in respect of valuation of investments,
2.4.3 and 4.4 to the unconsolidated financial statements. amongst others, included the following:
As at 31 December 2019, the Bank has investments • Obtaining an understanding of and testing the
classified as “Available-for-sale”, “Held for trading”, “Held design and operation effectiveness of the controls
to maturity” and “Investment in subsidiary” amounting to relating to the valuation of investments;
Rs. 757,957 million which in aggregate represent 51.17%
of the total assets of the Bank. • Checking on a sample basis, the valuation of
investments to supporting documents, externally
Investments are carried at cost or fair value in accordance quoted market prices and break-up values;
with the Bank’s accounting policy relating to their
recognition. Provision against investment is made based • Evaluating the Bank’s assessment of available for
on impairment policy of the Bank which includes both sale and held to maturity investments for any
objective and subjective factors. additional impairment in accordance with the
Bank’s accounting policies and performed an
We identified assessing the valuation of investments as a independent assessment of the assumptions; and
key audit matter because of its significance to the
unconsolidated financial statements and because • Considering the Bank’s disclosures of investments,
assessing the key impairment assumptions involves a to the guidelines laid down by the State Bank of
significant degree of management judgement. Pakistan regarding forms and disclosures.
Information Other than the Unconsolidated Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information included in the Bank’s Annual
Report but does not include the unconsolidated financial statements and our auditors’ report thereon.
Our opinion on the unconsolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the unconsolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the unconsolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
Responsibilities of Management and the Board of Directors for the Unconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the unconsolidated financial statements in accordance with
accounting and reporting standards as applicable in Pakistan, the requirements of Banking Companies Ordinance, 1962 and the
Companies Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to enable the preparation
of unconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the unconsolidated financial statements, management is responsible for assessing the Bank’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.
The Board of directors is responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Unconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in
Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these unconsolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the unconsolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide
Annual
112 Report 2019
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control.
c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the unconsolidated financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Bank to cease to continue as a going concern.
e) Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including the
disclosures, and whether the unconsolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide to the Board of Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit
of the unconsolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements:
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Bank as required by the Companies Act, 2017 (XIX of 2017) and the returns
referred above from the branches have been found adequate for the purpose of our audit;
b) the unconsolidated statement of financial position, the unconsolidated profit and loss account, the unconsolidated
statement of comprehensive income, the unconsolidated statement of changes in equity and the unconsolidated cash flow
statement together with the notes thereon have been drawn up in conformity with the Banking Companies Ordinance, 1962
and the Companies Act, 2017(XIX of 2017) and are in agreement with the books of account;
c) investments made, expenditure incurred and guarantees extended during the year were in accordance with the objects and
powers of the Bank and the transactions of the Bank which have come to our notice have been within the powers of the
Bank; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Bank and
deposited in the Central Zakat Fund established under section 7 of that Ordinance.
We confirm that for the purpose of our audit we have covered more than sixty per cent of the total loans and advances of the
Bank. The engagement partner on the audit resulting in this independent auditor’s report is Mr. Kamran Iqbal Yousafi.
KPMG Taseer Hadi & Co.

Chartered Accountants
Date: 03 March 2020

Lahore
Unconsolidated Statement of Financial Position
as at December 31, 2019
December 31, December 31, Note December 31, December 31,

2019 2018 2019 2018
US $ in ‘000 Rupees in ‘000
ASSETS
774,593 640,555 Cash and balances with treasury banks 5 119,943,828 99,188,414
3,891 16,630 Balances with other banks 6 602,582 2,575,055
87,873 347,310 Lendings to financial institutions 7 13,606,921 53,780,195
4,894,858 4,334,767 Investments - net 8 757,956,993 671,228,285
3,132,214 2,830,636 Advances - net 9 485,015,881 438,317,184
401,134 325,343 Fixed assets 10 62,114,648 50,378,537
12,716 11,295 Intangible assets 11 1,969,051 1,749,054
- - Deferred tax assets - -
257,746 215,581 Other assets - net 12 39,911,348 33,382,185
9,565,025 8,722,117 1,481,121,252 1,350,598,909
LIABILITIES
50,880 50,068 Bills payable 14 7,878,626 7,752,959
1,720,714 1,458,744 Borrowings 15 266,448,386 225,882,986
6,774,681 6,357,704 Deposits and other accounts 16 1,049,043,032 984,475,183
- - Liabilities against assets subject to finance lease - -
- - Sub-ordinated debt - -
38,091 30,710 Deferred tax liabilities - net 17 5,898,310 4,755,428
235,729 131,920 Other liabilities 18 36,502,065 20,427,520
8,820,095 8,029,146 1,365,770,419 1,243,294,076
744,930 692,971 NET ASSETS 115,350,833 107,304,833
REPRESENTED BY
73,948 73,948 Share capital 19 11,450,739 11,450,739
143,820 130,945 Reserves 22,270,225 20,276,515
166,671 149,032 Surplus on revaluation of assets - net of tax 20 25,808,658 23,077,174
360,491 339,046 Unappropriated profit 55,821,211 52,500,405
744,930 692,971 115,350,833 107,304,833
CONTINGENCIES AND COMMITMENTS 21
The annexed notes 1 to 46 and annexures I to III form an integral part of these unconsolidated financial statements.
Mehmud ul Hassan Tahir Hassan Qureshi Zafar

Chief Financial Officer President and Chief Iqbal
Executive Director
Dr. Muhammad Akram Mohammad Naeem
Sheikh Director Mukhtar Chairman
Annual
114 Report 2019
Unconsolidated Profit and Loss Account

2019 2018 2019 2018
791,988 473,202 Mark-up / return / interest earned 23 122,637,434 73,274,161

523,934 265,802 Mark-up / return / interest expensed 24 81,129,964 41,158,720
268,054 207,400 Net mark-up / interest income 41,507,470 32,115,441
NON MARK–UP / INTEREST INCOME

32,886 28,160 Fee and commission income 25 5,092,354 4,360,541
11,787 18,021 Dividend income 1,825,206 2,790,528
12,866 9,714 Foreign exchange income 1,992,194 1,504,189
- - Income from derivatives - -
10,196 15,381 Gain on securities - net 26 1,578,881 2,381,713
2,600 1,630 Other income 27 402,545 252,469
70,335 72,906 Total non-markup / interest income 10,891,180 11,289,440
338,389 280,306 Total income 52,398,650 43,404,881
NON MARK–UP / INTEREST EXPENSES

182,015 158,344 Operating expenses 28 28,184,528 24,519,149
(4,968) (7,252) Workers welfare fund - net 29 (769,220) (1,122,970)
1,260 529 Other charges 30 195,045 81,963
178,307 151,621 Total non-markup / interest expenses 27,610,353 23,478,142
160,082 128,685 Profit before provisions 24,788,297 19,926,739
3,531 (7,038) Provisions / (reversals) and write offs - net 31 546,658 (1,089,688)
- - Extra-ordinary / unusual items - -
156,551 135,723 PROFIT BEFORE TAXATION 24,241,639 21,016,427
65,411 52,542 Taxation 32 10,128,728 8,135,909
91,140 83,181 PROFIT AFTER TAXATION 14,112,911 12,880,518
In US $ In Rupees
0.08 0.07 Basic and diluted earnings per share 33 12.32 11.25
Unconsolidated Statement of Comprehensive Income
December 31, December 31, December 31, December 31,

2019 2018 2019 2018
91,140 83,181 Profit after taxation for the year 14,112,911 12,880,518
Other comprehensive income
Items that may be reclassified to profit and loss

account in subsequent periods:
3,761 6,512 Effect of translation of net investment in foreign branches 582,419 1,008,347
Movement in surplus / (deficit) on revaluation of
14,487 (34,276) investments - net of tax 2,243,212 (5,307,574)
18,248 (27,764) 2,825,631 (4,299,227)
Items that will not be reclassified to profit and loss

Re–measurement (loss) / gain on defined benefit

(3,246) 2,935 obligations - net of tax (502,598) 454,522
Movement in deficit on revaluation of
- (881) fixed assets - net of tax - (136,403)
Movement in surplus on revaluation of
4,977 3,638 non-banking assets - net of tax 770,648 563,393
1,731 5,692 268,050 881,512
111,119 61,109 Total comprehensive income 17,206,592 9,462,803

Executive Director
Annual
116 Report 2019
Unconsolidated Cash Flow Statement

2019 2018 2019 2018
156,552 135,723 Profit before taxation 24,241,639 21,016,427
(11,787) (18,021) Less: Dividend income (1,825,206) (2,790,528)
144,765 117,702 22,416,433 18,225,899
Adjustments:
21,443 20,074 Depreciation 3,320,430 3,108,403
10,398 - Depreciation on right of use assets 1,610,134 -
6,333 - Interest expense on lease liability 980,709 -
1,579 2,590 Amortization 244,545 401,074
4,471 (6,065) Net provision / (reversals) and write offs 31 692,374 (939,121)
(37) - Unrealized gain on revaluation of 'held-for-trading' securities (5,767) -
(4,968) (7,252) Reversal against workers' welfare fund - net (769,220) (1,122,970)
(1,733) (225) Gain on sale of fixed assets (268,304) (34,903)
(208) - (Gain) / loss on sale of non-banking assets / other assets (32,266) 27
37,278 9,122 5,772,635 1,412,510
182,043 126,824 28,189,068 19,638,409
259,437 (291,198) Lendings to financial institutions 40,173,274 (45,091,280)
(128,271) 160,326 Held-for-trading securities (19,862,396) 24,826,109
(299,963) (423,005) Advances (46,448,602) (65,501,244)
(50,513) 26,919 Other assets (excluding advance taxation) (7,821,787) 4,168,416
(219,310) (526,958) (33,959,511) (81,597,999)
812 (533) Bills payable 125,667 (82,508)
263,129 14,129 Borrowings 40,744,817 2,187,802
416,977 650,539 Deposits and other accounts 64,567,849 100,734,474
54,939 3,814 Other liabilities (excluding current taxation) 8,507,210 590,535
735,857 667,949 113,945,543 103,430,303
698,590 267,815 108,175,100 41,470,713
(59,599) (50,315) Income tax paid (9,228,776) (7,791,213)
638,991 217,500 Net cash flow generated from operating activities 98,946,324 33,679,500

(436,075) (417,567) Net investments in 'available-for-sale' securities (67,525,173) (64,659,309)
20,256 377,214 Net realizations from 'held-to-maturity' securities 3,136,581 58,410,682
11,790 18,403 Dividend received 1,825,661 2,849,652
(47,846) (44,636) Investments in fixed assets and intangible assets (7,408,881) (6,911,838)
2,406 300 Proceeds from sale of fixed assets 372,579 46,490
(445,708) (59,774) Net cash flow used in investing activities (69,016,814) (9,255,976)

(11,862) - Payment of lease liability against right of use assets (1,836,761) -
(58,964) (56,927) Dividend paid (9,130,391) (8,815,003)
(70,826) (56,927) Net cash flow used in financing activities (10,967,152) (8,815,003)
(15,205) (28,270) Effect of exchange rate changes on opening cash and cash equivalents (2,354,435) (4,377,475)
107,252 72,529 Increase in cash and cash equivalents during the year 16,607,923 11,231,046
670,816 583,082 Cash and cash equivalents at beginning of the year 103,874,280 90,288,799
778,068 655,611 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 34 120,482,203 101,519,845
Unconsolidated Statement of Changes in Equity
Revenue
Capital reserve Surplus on revaluation
reserve Un-
of
Share Exchange Non- appropriated Total
capital translation Statutory General Investments Fixed banking profit
reserve reserve assets assets
reserve
Rupees in
‘000
Balance as at January 01, 2018 11,450,739 230,954 17,743,162 6,000 10,493,343 16,004,075 1,575,633 49,212,447 106,716,353
Profit after taxation for the year ended December 31, 2018 - - - - - - - 12,880,518 12,880,518
Other Comprehensive Income - net of tax

Deficit on revaluation of investments - net of tax - - - - (5,307,574) - - (5,307,574)
Deficit on revaluation of fixed assets - net of tax - - - - - (136,403) - - (136,403)
Surplus on revaluation of non-banking assets - net of tax - - - - - - 563,393 - 563,393
Remeasurement gain on defined benefit
obligation - net of tax - - - - - - - 454,522 454,522
Effect of translation of net investment in foreign branches - 1,008,347 - - - - - - 1,008,347
- 1,008,347 - - (5,307,574) (136,403) 563,393 454,522 (3,417,715)
Transfer to statutory reserve - - 1,288,052 - - - - (1,288,052) -

Transferred from surplus in respect of incremental
depreciation of fixed assets to un-appropriated
profit - net of tax - - - - - (112,263) - 112,263 -
depreciation of non-banking assets to unappropriated
profit - net of tax - - - - - - (1,157) 1,157 -
Surplus realised on disposal of revalued
non-banking assets - net of tax - - - - - - (1,873) 1,873 -
Transactions with owners recognized directly in equity

Final cash dividend for the year ended
December 31, 2017 (Rs. 1.75 per ordinary share) - - - - - - - (2,003,879) (2,003,879)
First interim cash dividend for the year ended
December 31, 2018 (Rs. 2 per ordinary share) - - - - - - - (2,290,148) (2,290,148)
Second interim cash dividend for the year ended
Third interim cash dividend for the year ended
- - - - - - - (8,874,323) (8,874,323)
Balance as at December 31, 2018 11,450,739 1,239,301 19,031,214 6,000 5,185,769 15,755,409 2,135,996 52,500,405 107,304,833
Other Comprehensive Income – net of tax

Surplus on revaluation of investments - net of tax - - - - 2,243,212 - - - 2,243,212
Remeasurement loss on defined benefit
obligation - net of tax - - - - - - - (502,598) (502,598)
Effect of translation of net investment in foreign branches - 582,419 - - - - - - 582,419
- 582,419 - - 2,243,212 - 770,648 (502,598) 3,093,681
profit - net of tax - - - - - (106,684) - 106,684 -
fixed assets - net of tax - - - - - (9,729) - 9,729 -
profit - net of tax - - - - - - (2,224) 2,224 -
non-banking assets - net of tax - - - - - - (163,739) 163,739 -

- - - - - - - (9,160,592) (9,160,592)

Executive Director
Annual
118 Report 2019
Notes to the Unconsolidated Financial
Statements
1 STATUS AND NATURE OF BUSINESS
Allied Bank Limited (“the Bank”), incorporated in Pakistan, is a scheduled bank, engaged in commercial banking and related
services. The Bank is listed on Pakistan Stock Exchange Limited. The Bank operates a total of 1,393 (2018: 1,343)
branches in Pakistan including 117 (2018: 117) Islamic banking branches, 1 branch (2018: 1) in Karachi Export Processing
Zone and 1 Wholesale banking branch (2018: 1) in Bahrain. The long term credit rating of the Bank assigned by the
Pakistan Credit Rating Agency Limited (PACRA) is ‘AAA’. Short term rating of the Bank is ‘A1+’.
Ibrahim Holdings (Private) Limited is the parent company of the Bank and it’s registered office is in
Pakistan. The Bank is the holding company of ABL Asset Management Company Limited.
The registered office of the Bank is situated at 3 - Tipu Block, Main Boulevard, New Garden Town, Lahore.
2 BASIS OF PRESENTATION
These unconsolidated financial statements represent separate financial statements of the Bank. The consolidated financial
statements of the Bank are being issued separately.
In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes,
the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-related modes
of financing include purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up
in price on deferred payment basis. The purchases and sales arising under these arrangements are not reflected in these
unconsolidated financial statements as such but are restricted to the amount of facility actually utilized and the appropriate
portion of mark-up thereon.
The financial results of the Islamic banking branches have been consolidated in these financial statements for reporting
purposes, after eliminating inter-branch transactions / balances. Key financial figures of the Islamic banking branches are
disclosed in Annexure II to these financial statements.
These unconsolidated financial statements have been presented in Pakistan Rupees (PKR), which is the currency of the
primary economic environment in which the Bank operates and functional currency of the Bank, in that environment as well.
The amounts are rounded to nearest thousand.
The US Dollar amounts reported in the statement of financial position, profit and loss account, statement of comprehensive
income and statement of cash flow are stated as additional information, solely for the convenience of the users of financial
statements. For the purpose of translation to US Dollar, spot rate of Rs. 154.8476 per US Dollar has been used for 2019 and
2018, as it was the prevalent rate on reporting date.
2.1 STATEMENT OF COMPLIANCE
These unconsolidated financial statements have been prepared in accordance with the accounting and reporting standards
as applicable in Pakistan. The accounting and reporting standards comprise of:
– International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)
as are notified under the Companies Act, 2017;
– Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are
notified under the Companies Act, 2017;
– Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and
– Directives issued by the State Bank of Pakistan (SBP) & the Securities and Exchange Commission of Pakistan (SECP).
2.1.1 Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the directives
issued by the SBP and the SECP differ with the requirements of IFRS and IFAS the requirements of the Banking
Companies Ordinance, 1962, the Companies Act, 2017 and the said directives, shall prevail.
2.1.2 The SBP, vide BSD Circular Letter No. 10, dated August 26, 2002 has deferred the applicability of International Accounting
Standard 39 ‘Financial Instruments: Recognition and Measurement’ (IAS 39) and International Accounting Standard 40
‘Investment Property’ (IAS 40) for banking companies till further instructions. Further, according to a notification of Securities
and Exchange Commission of Pakistan (SECP) dated April 28, 2008, International Financial Reporting Standard 7
‘Financial Instruments Disclosure’ (IFRS 7), has not been made applicable for banks. Accordingly, the requirements of
these standards have not been considered in the preparation of these unconsolidated financial statements. However,
investments have been classified and disclosed in accordance with the requirements prescribed by SBP through various
circulars.
2.1.3 The Securities and Exchange Commission of Pakistan (SECP) vide SRO 56 (1) / 2016 dated January 28, 2016, has notified
that the requirements of International Financial Reporting Standard 10 ‘Consolidated Financial Statements’ (IFRS 10) and
section 228 of the Companies Act, 2017 will not be applicable with respect to the investment in mutual funds established
under Trust structure.
2.1.4 The State Bank of Pakistan through BPRD Circular No. 04 of 2015 dated February 25, 2015 has deferred applicability of
Islamic Financial Accounting Standard 3 ‘Profit & Loss Sharing on Deposits’ (IFAS-3) issued by the Institute of Chartered
Accountants of Pakistan and notified by the Securities & Exchange Commission of Pakistan (SECP), vide their SRO No.
571 of 2013 dated June 12, 2013 for Institutions offering Islamic Financial Services (IIFS). The standard will result in certain
new disclosures in the financial statements of the Bank.
2.2 STANDARDS, INTERPRETATIONS OF AND AMENDMENTS TO THE PUBLISHED APPROVED ACCOUNTING

STANDARDS THAT ARE EFFECTIVE IN THE CURRENT YEAR
The Bank has adopted IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 16 “Leases’ from January 01, 2019.
The impact of the adoption of theses standards and the new accounting policies are explained in note 4.
There are certain other new and amended standards, interpretations and amendments that are mandatory for the Bank’s
accounting periods beginning on or after January 1, 2019 but are considered not to be relevant or do not have any
significant effect on the Bank’s operations and therefore not detailed in these financial statements.

STANDARDS THAT ARE NOT YET EFFECTIVE
The following standards, amendments and interpretations of accounting and reporting standards as applicable in Pakistan
will be effective for accounting periods beginning on or after January 01, 2020:
– Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business combinations for
which the acquisition date is on or after the beginning of annual period beginning on or after January 01, 2020). The
IASB has issued amendments aiming to resolve the difficulties that arise when an entity determines whether it has
acquired a business or a group of assets. The amendments clarify that to be considered a business, an acquired
set of activities and assets must include, at a minimum, an input and a substantive process that together
significantly contribute to the ability to create outputs. The amendments include an election to use a concentration
test. The standard is effective for transactions in the future and therefore would not have an impact on past financial
statements.
– IFRS 9 ‘Financial Instruments’ and amendment – Prepayment Features with Negative Compensation – for Banks
and DFIs, the effective date of the standard has been extended to annual periods beginning on or after January 01,
2021 vide SBP BPRD circular no. 4 dated October 23, 2019. IFRS 9 replaces the existing guidance in IAS 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 IAS 39. According to SBP circular referred to above, the Banks/DFIs are
required to have a parallel run of IFRS 9 from January 01, 2020 and are also required to prepare pro-forma financial
statements which includes the impact of IFRS 9 from the year ended December 31, 2019.
– Amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors (effective for annual periods beginning on or after January 01, 2020). The amendments are
intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying
concept of materiality in IFRS Standards. In addition, the IASB has also issued guidance on how to make materiality
judgments when preparing their general purpose financial statements in accordance with IFRS Standards.
– On March 29, 2018, the International Accounting Standards Board (the IASB) has issued a revised Conceptual
Framework for Financial Reporting which is applicable immediately contains changes that will set a new direction for
IFRS in the future. The Conceptual Framework primarily serves as a tool for the IASB to develop standards and to
assist the IFRS Interpretations Committee in interpreting them. It does not override the requirements of individual
IFRSs and any inconsistencies with the revised Framework will be subject to the usual due process – this means
that the overall impact on standard setting may take some time to crystallise. The companies may use the
Framework as a reference for selecting their accounting policies in the absence of specific IFRS requirements. In
these cases, companies should review those policies and apply the new guidance retrospectively as of January 01,
2020, unless the new guidance contains specific scope outs.
– Interest Rate Benchmark Reform which amended IFRS 9, IAS 39 and IFRS 7 is applicable for annual financial
periods beginning on or after January 01, 2020. The G20 asked the Financial Stability Board (FSB) to undertake a
fundamental review of major interest rate benchmarks. Following the review, the FSB published a report setting out
its recommended reforms of some major interest rate benchmarks such as IBORs. Public authorities in many
jurisdictions have since taken steps to implement those recommendations. This has in turn led to uncertainty about
the long-term viability of some interest rate benchmarks. In these amendments, the term ‘interest rate benchmark
reform’ refers to the market-wide reform of an interest rate benchmark including its replacement with an alternative
benchmark rate, such as that resulting
Annual
120 Report 2019
from the FSB’s recommendations set out in its July 2014 report ‘Reforming Major Interest Rate Benchmarks’ (the
reform). The amendments made provide relief from the potential effects of the uncertainty caused by the reform.
– IFRS 14 Regulatory Deferral Accounts - (effective for annual periods beginning on or after 1 July 2019) provides
interim guidance on accounting for regulatory deferral accounts balances while IASB considers more
comprehensive guidance on accounting for the effects of rate regulation. In order to apply the interim standard, an
entity has to be rate regulated
– i.e. the establishment of prices that can be charged to its customers for goods or services is subject to oversight
and/or approved by an authorized body. The term ‘regulatory deferral account balance’ has been chosen as a
neutral descriptor for expense (income) or variance account that is included or is expected to be included by the
rate regulator in establishing the rate(s) that can be charged to customers and would not otherwise be recognized
as an asset or liability under other IFRSs.
2.4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of these financial statements in conformity with the approved accounting standards requires the use of
certain critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, income and
expenses. It also requires the management to exercise its judgment in the process of applying the Bank’s accounting
policies. Estimates, underlying assumptions and judgments are continually evaluated and are based on historical
experience, including expectations of future events that are believed to be reasonable under the circumstances. The areas
where various assumptions and estimates are significant to the Bank’s financial statements or where judgment was
exercised in application of accounting policies are as follows:
2.4.1 Classification of investments
– In classifying investments as ‘held-for-trading’ the Bank has determined securities which are acquired with the
intention to trade by taking advantage of short term market / interest rate movements and are to be sold within 90
days.
– In classifying investments as ‘held-to-maturity’ the Bank follows the guidance provided in SBP circulars on
classifying non-derivative financial assets with fixed or determinable payments and fixed maturity. In making this
judgment, the Bank evaluates its intention and ability to hold such investments to maturity.
– The investments, other than those in subsidiary, which are not classified as ‘held-for-trading’ or ‘held-to-maturity’ are
classified as ‘available-for-sale’
2.4.2 Provision against non–performing loans and advances and debt securities classified as investments
The Bank reviews its loan portfolio and debt securities classified as investments to assess amount of non-performing loans
and advances and debt securities and provision required there-against. While assessing this requirement various factors
including the delinquency in the account, financial position of the borrower and the requirements of the Prudential
Regulations are considered. The amount of general provision is determined in accordance with the requirements set out in
Prudential Regulations.
2.4.3 Valuation and impairment of ‘available–for–sale’ equity investments
The Bank determines that ‘available-for-sale’ equity investments are impaired when there has been a significant or
prolonged decline in the fair value below its cost. This determination of what is significant and prolonged requires judgment.
In making this judgment, the Bank evaluates among other factors, the normal volatility in share price. In addition,
impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and
sector performance, changes in technology and operational and financing cash flows.
2.4.4 Income taxes
In making the estimates for income taxes currently payable by the Bank, the management looks at the current income tax
laws and the decisions of appellate authorities. In determination of deferred taxes, estimates of the Bank’s future taxable
profits are taken into account.
2.4.5 Fair value of derivatives
The fair values of derivatives which are not quoted in active markets are determined by using valuation techniques. The
valuation techniques take into account the relevant interest rates in effect at the reporting date and the rates contracted.
2.4.6 Depreciation / amortization
In making estimates of the depreciation / amortization, the management uses method which reflects the pattern in which
economic benefits are expected to be consumed by the Bank and estimates the useful life. The method applied and useful
lives estimated are reviewed at each financial year end and if there is a change in the expected pattern or timing of
consumption of the future economic benefits embodied in the assets, the estimate would be changed to reflect the change
in pattern. Such a change is accounted for as change in accounting estimates in accordance with International Accounting
Standard 8 - Accounting Policies, ‘Changes in Accounting Estimates and Errors’.
2.4.7 Defined benefits plan
Liability is determined on the basis of actuarial advice using the Projected Unit Credit Method. The actuarial assumptions
used to determine the liability and related expense are disclosed in note 36.
2.4.8 Fair value hierarchy of assets and liabilities
The fair value of the assets and liabilities is the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The Bank categorizes fair value measurements within the
following fair value hierarchy:
a) Level 1
These are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Bank can access at
the measurement date.
b) Level 2
These are inputs other than quoted prices included within Level 1 that are observable for asset or liability, either
directly or indirectly.
c) Level 3
These are input for the assets or liability that are not based on observable market data (unobservable Inputs).
3 BASIS OF MEASUREMENT
These unconsolidated financial statements have been prepared under the historical cost convention except for the following
which are stated at revalued amounts / fair values / present values:
– Investments (Note 4.4);

– Certain operating fixed assets (Note 4.6);
– Staff retirement and other benefits (Note 4.8);
– Non-banking assets acquired in satisfaction of claims (Note 4.9); and
– Derivative financial instruments (Note 4.16.2).
4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted in the preparation of these unconsolidated financial statements have been applied
consistently to all periods presented in these unconsolidated financial statements of the Bank, except for the change
explained in note 4.1. Significant accounting policies are enumerated as follows:
4.1 Change in accounting policy
IFRS 16 ‘Leases’
The Bank applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application
is recognised in retained earnings at 01 January 2019. Accordingly, the comparative information presented for 2018 is not
restated
– i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The details of the changes in
accounting policies are disclosed below. Additionally, the disclosure requirements in IFRS 16 have not generally been
applied to comparative information.
Previously, the Bank determined at contract inception whether an arrangement was or contained a lease under IFRIC 4
Determining whether an Arrangement contains a Lease. The Bank now assesses whether a contract is or contains a lease
based on the definition of a lease, as per IFRS 16.
On transition to IFRS 16, the Bank elected to apply the practical expedient to grandfather the assessment of which
transactions are leases. The Bank applied IFRS 16 only to contracts that were previously identified as leases. Contracts
that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease under IFRS
16. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after 01
January 2019.
As a Lessee
As a lessee, the Bank previously classified leases as operating or finance leases based on its assessment of whether the
lease transferred substantially all of the risks and rewards incidental to ownership of the underlying asset to the Bank.
Under IFRS 16, the Bank recognises right-of-use assets and lease liabilities for most of these leases – i.e. these leases are
on-balance sheet.
At commencement or on modification of a contract that contains a lease component, the Bank allocates the consideration in
the contract to each lease component on the basis of its relative stand-alone price.
Previously, the Bank classified property leases as operating leases under IAS 17. On transition, for these leases, lease
liabilities were measured at the present value of the remaining lease payments, discounted at the Bank’s incremental
borrowing rate as at 01 January 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted
by the amount of any prepaid or accrued lease payments. The Bank has applied this approach to all other leases.
The Bank used practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS
17. In particular, the Bank excluded initial direct costs from the measurement of the right-of-use asset at the date of initial
application and used hindsight when determining the lease term.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Bank by the end of the lease term. In
that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the
same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurement of the lease liability.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Bank presents right-of-use assets in ‘property and equipment’ and lease liabilities in ‘other liabilities’ in the statement of
financial position.
Impact on financial statements
The impact on transition is summarised below:

January 01, December 31,
2019 2019
Rupees in ‘000
Right-of-use assets presented in property and equipment 8,774,405 8,020,323

Lease liabilities 8,479,326 8,555,677
Decrease in other assets 295,080 -
The impact of IFRS 16 on profit or loss for the year refer is summarized below:
Right-of-use assets: Rupees in ‘000
Balance as at January 01, 2019 8,774,405

Depreciation charge for the period (1,610,134)
Addition to right-of-use assets 856,276
Derecognition of right-of-use assets (224)
8,020,323
Lease liabilities: Rupees in ‘000

Interest on lease liabilities 980,709
Addition to lease liabilities 852,494
Derecognition of lease liabilities (860)
Payment of lease liabilities (1,755,992)
8,555,677
When measuring lease liabilities for leases that were classified as operating leases, the Bank discounted lease payments
using its incremental borrowing rate at 01 January 2019.
Operating lease commitments at 31 December 2018 as

disclosed under IAS 17 6,018,458
Discounted using the incremental borrowing rate at 01

January 2019 (773,390)
Extension options reasonably certain to be exercised 3,234,257
Lease liabilities recognised at 01 January 2019 8,479,325
IFRS 15 ‘Revenue from contracts with customers’
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It
replaces IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognized
when a customer obtains control of the goods or services. Determining the timing of the transfer of control at a point in time
or over time requires judgement.
The Bank has adopted IFRS 15 on January 01, 2019 retrospectively in accordance with IAS 8 without practical expedient.
The timing or amount of the Bank’s income from contract with customers was not impacted by IFRS 15. The application of
IFRS 15 has no impact on the financial position and/or financial performance of the Bank. Accordingly, there was no
adjustment in retained earnings on application of IFRS 15 as at January 01, 2019.
4.2 Cash and cash equivalents
For the purpose of cash flow statement, cash and cash equivalents include cash and balances with treasury banks and
balances with other banks (net of overdrawn nostro balances) in current and deposit accounts.
4.3 Lendings to / borrowings from financial institutions
The Bank enters into transactions of borrowing (re-purchase) from and lending (reverse re-purchase) to financial
institutions, at contracted rates for a specified period of time. These are recorded as under:
a. Sale under re–purchase agreements
Securities sold subject to a re-purchase agreement are retained in the financial statements as investments and the
counter party liability is included in borrowings from financial institutions. The differential in sale and re-purchase
value is accrued on a prorata basis and recorded as mark-up expense.
b. Purchase under resale agreements
Securities purchased under agreement to resell (reverse re-purchase) are included in lendings to financial
institutions. The differential between the contracted price and resale price is amortized over the period of the
contract and recorded as mark-up income.
Securities held as collateral are not recognized in the financial statements, unless these are sold to third parties, in
which case the obligation to return them is recorded at fair value as a trading liability under borrowings from financial
institutions.
In Bai Muajjal, the Bank sells Shariah Compliant instruments including sukuks on credit to other financial institutions. The
credit price is agreed at the time of sale and such proceeds are received at the end of the credit period. Expected profit
expense is recognized on accrual basis.
In Musharaka / Mudaraba, the Bank invests in the Shariah compliant business pools of the financial institutions at the
agreed profit and loss sharing ratio. Expected profit is recognized on accrual basis.
Other borrowings including borrowings from SBP are recorded at the proceeds received. Mark-up on such borrowings is
charged to the profit and loss account on a time proportion basis.
Lendings are stated net of provision. Return on such lending is accrued to the profit and loss account on a time proportion
basis except mark-up on impaired/ delinquent lendings, which is recognized on receipt basis.
4.4 Investments
4.4.1 The Bank at the time of purchase classifies its investment portfolio as mentioned in note 2.4.1.
4.4.2 Investments are initially recognized at fair value which, in case of investments other than ‘held-for-trading’, includes
transaction cost associated with the investments. Transaction cost on ‘held-for-trading’ investments are expensed as
incurred.
All ‘regular way’ purchases and sales of investments are recognized on the trade date, i.e., the date that the Bank commits
to purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that require settlement
within the time frame generally established by regulation or convention in the market place.
4.4.3 In accordance with the requirements of the SBP, quoted securities, other than those classified as ‘held-to-maturity’ and
investments in subsidiaries, are carried at market value. Investments classified as ‘held-to-maturity’ are carried at amortized
cost.
Unrealized surplus / (deficit) arising on revaluation of the Bank’s ‘held-for-trading’ investment portfolio is taken to the profit
and loss account. Surplus / (deficit) arising on revaluation of quoted securities classified as ‘available-for-sale’ is kept in a
separate account shown in the statement of financial position. The surplus / (deficit) arising on these securities is taken to
the profit and loss account when actually realized upon disposal or when the investment is considered to be impaired.
Unquoted equity securities are valued at the lower of cost and break-up value. The break-up value of these securities is
calculated with reference to the net assets of the investee company as per the latest available audited financial statements.
A decline in the carrying value is charged to the profit and loss account. A subsequent increase in the carrying value, upto
the cost of the investment, is credited to the profit and loss account. Investments in other unquoted securities are valued at
cost less impairment, if any.
Provision for diminution in the value of securities (except for debentures, participation term certificates, sukuks and term
finance certificates) is made after considering impairment, if any, in their value. Provision for diminution in value of
debentures, participation term certificates, sukuks and term finance certificates are made in accordance with the
requirements of Prudential Regulations issued by SBP.
4.4.4 Investments in subsidiaries are stated at cost less impairmen
4.5 Advances
a. Loans and advances
Loans and advances are stated net of general and specific provisions. Specific provision against loans is
determined in accordance with the requirements of the Prudential Regulations and other directives issued by SBP
and charged to the profit and loss account. General provision is maintained in accordance with the requirements of
Prudential Regulations issued by SBP and charged to the profit and loss account. Advances are written off when
there are no realistic prospects of recover
b. Net investment in finance lease
Leases, where the Bank transfers substantially all the risks and rewards incidental to the ownership of an asset to
the lessee are classified as finance leases. A receivable is recognized at an amount equal to the present value of
the minimum lease payments, including un-guaranteed residual value, if any. Finance lease receivables are
included in advances to the customers.
c. Islamic financing and related assets
The Bank provides Islamic financing and related assets mainly through Murabaha, Ijarah, Diminishing Musharakah,
Business Musharakah and Salam. The purchases and sales arising under these arrangements are not reflected in
these financial statements as such but are restricted to the amount of facility actually utilised and the appropriate
portion of profit thereon. The profit on such financings is recognised in accordance with the principles of Islamic
Shariah. The Bank determines specific and general provisions against Islamic financing and related assets in
accordance with the requirements of the Prudential Regulations issued by the SBP. The net provision made /
reversed during the year is charged to profit and loss account and accumulated provision is netted off against
Islamic financing and related assets. Islamic financing and related assets are written off when there are no realistic
prospects of recovery.
4.6 Fixed assets and depreciation
a. Tangible assets
Property and equipment owned by the Bank, other than land which is not depreciated, are stated at cost or revalued
amount less accumulated depreciation and impairment losses, if any. Land is carried at revalued amount.
Depreciation is calculated using the straight line method, except buildings which are depreciated using the reducing
balance method, to write down the cost of property and equipment to their residual values over their estimated
useful lives. The rates at which the fixed assets are depreciated are disclosed in note 10.2. The residual values,
useful lives and
depreciation methods are reviewed and adjusted, if required. Adjustments in residual values, useful lives and
depreciation methods are treated as change in accounting estimates.
Depreciation on additions is charged from the month the assets are available for use, while no depreciation is
charged in the month in which the assets are disposed off.
When an asset or class of assets is revalued, any increase in the carrying amount arising on revaluation is recorded
through other comprehensive income and credited to the revaluation reserve in equity. However, the increase shall
be recognized in the profit and loss account to the extent it reverses previously recognised revaluation
decrease/impairment loss of the same asset in the profit and loss account, net of amortization or depreciation had
no revaluation decrease/ impairment been required for the asset in prior years. A decrease resulting from a
revaluation is initially charged directly against any related revaluation surplus held in respect of that asset and the
remaining portion being charged as an expense.
The surplus on revaluation of fixed assets to the extent of incremental depreciation (net of deferred tax) charged on
the related assets is transferred directly to un-appropriated profit.
Revaluation of entire class of assets is carried out by independent professionally qualified valuers with sufficient
regularity (every third year) to ensure that the carrying amount of the entire class of assets does not differ materially
from their fair value.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in the profit
and loss account in the year the asset is derecognized, except that the related surplus on revaluation of fixed assets
(net of deferred tax) is transferred directly to unappropriated profit.
Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits
associated with the item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the profit and loss account.
b. Intangible assets
Intangible assets are carried at cost less any accumulated amortization and impairment losses, if any. The cost of
intangible assets is amortized over their estimated useful lives, using the straight line method. Amortization is
charged from the month the assets are available for use at the rate stated in note 11.2. The useful lives are
reviewed and adjusted, if appropriate, at each reporting date.
c. Capital work–in–progress
Capital work-in-progress is stated at cost less impairment losses, if any.
4.7 Taxation
a. Current
Provision for current taxation is based on taxable income for the year determined in accordance with the prevailing
laws for taxation. The charge for current tax is calculated using the prevailing tax rates or tax rates expected to
apply to the profits for the year.
b. Prior
The taxation charge for prior years represents adjustments to the tax charge relating to prior years, arising from
assessments/changes in laws and changes in estimates made during the current year.
c. Deferred
Deferred tax is recognized using the balance sheet liability method on all temporary differences, at the reporting
date between the amounts attributed to assets and liabilities for financial reporting purpose and amounts used for
taxation purposes. Deferred tax is calculated at the rates that are expected to apply to the periods when the
difference will reverse, based on tax rates that have been enacted or substantially enacted at the reporting date.
Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available
against which the assets can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realized.
The Bank also recognizes a deferred tax asset / liability on deficit / surplus on revaluation of fixed assets, non-
banking assets and securities which is adjusted against the related deficit / surplus in accordance with the
requirements of IAS-12 ‘Income Taxes’.
4.8 Staff retirement and other benefits
4.8.1 Staff retirement schemes
a. For employees who opted for the 2002 scheme introduced by the management
An approved pension scheme (defined benefit scheme) under which the benefits on the basis of frozen basic salary,
service length and age as on June 30, 2002 are payable to all employees whose date of joining the Bank is on or
before July 01, 1992, i.e., who have completed ten years of continuous service as on June 30, 2002.
During the year, the pensioners were given a voluntary option to settle their monthly pension with a lump sum
payment. Those who will not opt for the lump sum option, will continue to receive monthly pension (defined benefit
scheme).
An approved gratuity scheme (defined benefit scheme) under which the benefits are payable as under:
i. For members whose date of joining the Bank is on or before July 01, 1992, their services would be calculated
starting from July 01, 2002 for gratuity benefit purposes.
ii. For members whose date of joining the Bank is after July 01, 1992 their services would be taken at actual for
the purpose of calculating the gratuity benefit. This rule will be applicable upon retirement or in service death
only, in case of resignation gratuity will be payable from July 01, 2002, even if he or she had joined the Bank
before July 01, 2002.
A contributory provident fund scheme to which equal contributions are made by the bank and the employees
(defined contribution scheme).
b. For employees who did not opt for 2002 scheme
An approved pension scheme (defined benefit scheme) under which the benefits on the basis of frozen basic salary
as on June 30, 2002 are payable to all employees opting continuation of the previous scheme and whose date of
joining the Bank is on or before July 01, 1992, i.e., who had completed ten years of continuous service as on June
30, 2002.
In the light of decision of Honorable Supreme Court of Pakistan in SMC No. 20/2016 dated 13th February 2018
read with Order dated 3rd April 2018 passed in CRP No.72/2018 and Order dated 7th August 2018 in Crl.O.No. 98
and 99 of 2018 and after consultation with Bank’s legal counsel, the monthly pension of eligible pensioners has
been fixed with indexation levels for eligible pensioners effective from February 13, 2018.
c. Post-retirement medical benefits
The Bank provides post-retirement medical benefits to eligible retired employees. Provision is made annually to
meet the cost of such medical benefits on the basis of actuarial valuation carried out using the Projected Unit Credit
Method.
Annual contributions towards the defined benefit schemes are made on the basis of actuarial valuation carried out
using the Projected Unit Credit Method. Actuarial gains / losses arising from experience adjustments and changes
in actuarial assumptions are recognized in Other Comprehensive Income in the period of occurrence.
4.8.2 Other long term benefit
a. Employees’ compensated absences
Employees’ entitlement to annual leave is recognized when they accrue to employees, upto a maximum of 60 days.
A provision is made for estimated liability for annual leaves as a result of services rendered by the employee against
un- availed leaves, as per terms of service contract, up to the reporting date, based on actuarial valuation using
Projected Unit Credit Method. Actuarial gains / losses arising from experience adjustments and changes in actuarial
assumptions are recognized in Profit and Loss account in the period of occurrence.
b. Compensation to certain class of employees
Bank has revised its retirement policy by reducing the retirement age to 58 years for class of employees effective
January 01, 2018. Consequent to the revision, these employees shall be compensated with gross salary along with
employer’s contribution on provident fund and gratuity for the remaining period up to 60 years in addition to already
defined post- employment benefits, payable at the time of retirement, if any.
4.9 Non–banking assets acquired in satisfaction of claims
Non-banking assets (NBA) acquired in satisfaction of claims are carried at revalued amounts less accumulated depreciation
(excluding land). Revaluation by independent professionally qualified valuers, is carried out with sufficient regularity to
ensure that their net carrying value does not differ materially from their fair value. Surplus arising on revaluation of NBA is
credited to the ‘surplus on revaluation of assets’ account through statement of comprehensive income and any deficit
arising on revaluation is taken to profit and loss account directly. Legal fees, transfer costs and direct costs of acquiring title
to property are charged to profit and loss account and not capitalised.
4.10 Deposits
Deposits are initially recorded at the amount of proceeds received. Mark-up accrued on deposits is recognized separately
as part of other liabilities and is accrued to the profit and loss account on time proportion basis. Deposits mobilized under
Islamic Banking operations are generated under two modes i.e. ‘Qard’ and ‘Modaraba’. Deposits taken on Qard basis are
classified as ‘Current accounts’ and Deposits generated on Modaraba basis are classified as ‘Saving deposits / Fixed
deposits’.
4.11 Impairment
a. Available–for–sale equity securities
The Bank determines that ‘available-for-sale’ equity investments are impaired when there has been a significant or
prolonged decline in the fair value of these investments below their cost. The determination of what is significant or
prolonged requires judgment. In making this judgment, the Bank evaluates, among other factors, the normal
volatility in share price in the case of listed equity securities. In addition, impairment may be appropriate when there
is evidence of deterioration in the financial condition of the investee, industry and sector performance and changes
in technology.
b. Non–financial assets
The carrying amount of the Bank’s assets (other than deferred tax assets) are reviewed at each reporting date to
determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the
relevant asset is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its
recoverable amount. Impairment losses are recognized in the profit and loss account except for an impairment loss
on revalued assets which is adjusted against the related revaluation surplus to the extent that the impairment loss
does not exceed the revaluation surplus. An impairment loss is reversed if the reversal can be objectively related to
an event occurring after the impairment loss was recognized.
4.12 Provisions
Provisions are recognized when the Bank has a present obligation (legal or constructive) as a result of past events and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the amount can be made.
Provision against identified losses on non-funded exposure is recognized when intimated and reasonable certainty exists for
the Bank to settle the obligation. The loss is charged to the profit and loss account net of expected recovery and is
classified under other liabilities.
Provisions are reviewed at the reporting date and are adjusted to reflect the current best estimate.
4.13 Acceptances
Acceptances comprise of undertakings by the Bank to pay bills of exchange drawn on customers. Acceptances are
recognised as financial liability in the statement of financial position with a contractual right of reimbursement from the
customer as a financial asset. Therefore, commitments in respect of acceptances have been accounted for as financial
assets and financial liabilities.
4.14 Dividend distribution and appropriations
Bonus and cash dividend and other appropriations (except for the appropriations required by law), declared / approved
subsequent to the reporting date are considered as non-adjusting event and are not recorded in financial statements of the
current year. These are recognized in the period in which these are declared / approved.
4.15 Foreign currencies
a) Foreign currency transactions
Transactions in foreign currencies are translated into rupees at the foreign exchange rates ruling on the transaction
date. Monetary assets and liabilities in foreign currencies are expressed in rupee terms at the rates of exchange
ruling on the reporting date. Foreign bills purchased are valued at spot rate and forward foreign exchange contracts
are valued at forward rates applicable to their respective maturities.
b) Foreign operations
The assets and liabilities of foreign operating branches are translated to Pakistan Rupee (PKR) at exchange rates
prevailing at reporting date. The results of foreign operations are translated at the average exchange rate for the
period.
c) Translation gains and losses

Translation gains and losses arising on revaluation of net investments in foreign operations are taken to equity
under “Exchange Translation Reserve” through Other Comprehensive Income and on disposal are recognised in
profit and loss account. Regular translation gains and losses are taken to profit and loss account.
d) Commitments
Commitments for outstanding forward contracts disclosed in these financial statements are translated at forward
rates applicable to their respective maturities. Contingent liabilities / commitments for letters of credit and letters of
guarantee denominated in foreign currencies are expressed in rupee terms at the rates of exchange prevailing on
the reporting date.
4.16 Financial instruments
4.16.1 Financial assets and liabilities
Financial assets and financial liabilities are recognised at the time when the Bank becomes a party to the contractual
provision of the instrument. Financial assets are de-recognised when the contractual right to future cash flows from the
asset expires or is transferred along with the risk and reward of the asset. Financial liabilities are de-recognised when
obligation specific in the contract is extinguished. Any gain or loss on de-recognition of the financial asset and liability is
recognised in the profit and loss account of the current period. The particular recognition and subsequent measurement
methods adopted for significant financial assets and financial liabilities are disclosed in the individual policy statements
associated with them.
4.16.2 Derivative financial instruments
Derivative financial instruments are initially recognized at fair value on the date on which the derivative contract is entered
into and are subsequently re-measured at fair value using appropriate valuation techniques. All derivative financial
instruments are carried as assets when fair value is positive and liabilities when fair value is negative. Any change in the fair
value of derivative financial instruments is taken to the profit and loss account.
4.17 Off setting
Financial assets and financial liabilities are off set and the net amount is reported in the financial statements when there is a
legally enforceable right to off set and the Bank intends to either settle on a net basis, or to realize the assets and to settle
the liabilities simultaneously
4.18 Revenue recognition
Revenue is recognized to the extent that the economic benefits will flow to the Bank and the revenue can be reliably
measured. These are recognised as follows:
a. Advances and investments
Mark-up / return on regular loans / advances and investments is recognized on a time proportion basis. Where debt
securities are purchased at premium or discount, the same is amortized through the profit and loss account using
the effective interest rate method.
Interest or mark-up recoverable on classified loans, advances and investments is recognized on receipt basis.
Interest / return / mark-up on classified rescheduled / restructured loans and advances and investments is
recognized as permitted by the regulations of the SBP.
Dividend income is recognized when the right to receive the dividend is
established. Gains and losses on sale of investments are recognized in the profit
and loss account.
b. Lease financing
Financing method is used in accounting for income from lease financing. Under this method, the unearned lease
income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is
deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return
on the outstanding net investment in lease. Unrealised income on classified leases is recognized on receipt basis.
Gains / losses on termination of lease contracts and other lease income are recognized when realized.
Profit on Business Musharakah financing is booked on accrual basis and is adjusted upon declaration of profit by
Musharakah partners.
Ijarah and Diminishing Musharakah income is recognised on an accrual basis as and when the rental becomes
due. Murabaha and Salam income is recognised on deferred income basis.

d. Fees, brokerage and commission
Fee, Commission and Brokerage income is recognized on an accrual basis except where, in the opinion of
management, it would not be prudent to do so.
4.19 Business Segment reporting
A segment is a distinguishable component of the Bank that is subject to risks and rewards that are different from those of
other segments. A business segment is one that is engaged either in providing certain products or services, whereas a
geographical segment is one engaged in providing certain products or services within a particular economic environment.
Segment information is presented as per the Bank’s functional and management reporting structure. The Bank’s primary
segment reporting is based on following business segments:
a. Corporate & investment banking
This segment offers a wide range of financial services to medium and large sized public and private sector entities
and also covers overseas operation of the Bank. These services include, providing and arranging tenured financing,
corporate advisory, underwriting, cash management, trade products, corporate finance products and customer
services on all bank related matters.
b. Trading and sales (Treasury)
This segment undertakes the Bank’s treasury and money market activities.
c. Commercial & retail banking
Commercial and retail banking provides services to commercial and retail customers including agriculture sector. It
includes loans, deposits and other transactions with commercial and retail (conventional and Islamic) customers.
d. Islamic Banking
Islamic banking provides shariah compliant services to customers including loans, deposits and other transactions.
e. Others
Others includes functions which cannot be classified in any of the above segments.
4.20 Geographical Segment Reporting
Geographically the Bank operates in Pakistan, Middle East and China.
4.21 Earnings per share
The Bank presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares
outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if
any.
Note December 31, December 31,
2019 2018
Rupees in ‘000
5 CASH AND BALANCES WITH TREASURY BANKS In hand
Local currency 14,654,097

13,645,304 16,280,019
15,271,580
Foreign currencies 1,008,793 1,008,439
Remittances in transit 1,528,644 591,133
With State Bank of Pakistan (SBP) in

Local currency current accounts 5.1 51,250,399 38,599,518
Foreign currency current account 5.2 91,812 81,311
Foreign currency deposit accounts (non-remunerative) 5.1 5,515,729 4,722,714
Foreign currency deposit accounts (remunerative) 5.3 16,509,764 14,128,800
73,367,704 57,532,343
With National Bank of Pakistan in

Local currency current accounts 30,059,400 24,610,744
Prize Bonds 333,983 174,175

119,943,828 99,188,414
5.1 Deposits with SBP are maintained to comply with the cash reserve requirement, under section 22 of the Banking
Companies Ordinance, 1962 and SBP statutory requirements issued from time to time.
5.2 This represents US Dollar settlement account maintained with SBP.
5.3 This represents special cash reserve maintained with SBP. The return on this account is declared by SBP on a monthly
basis and carries mark-up at the rate of 0.7% to 1.51% (2018: 0.56% to 1.35%) per annum.

2019 2018
Rupees in ‘000
6 BALANCES WITH OTHER BANKS
In Pakistan
In deposit accounts - 2,000,000
Outside Pakistan
In current accounts 6.1 300,295 268,512
In deposit accounts 6.1 302,287 306,543
602,582 2,575,055
6.1 These are nostro balances placed with other banks.

2019 2018
Rupees in ‘000
7 LENDINGS TO FINANCIAL INSTITUTIONS
Call money lendings - 5,500,000

Repurchase agreement lendings (Reverse Repo) 7.1 & 7.7 2,052,491 44,455,680
Musharaka lendings 7.2 1,000,000 2,500,000
Bai muajjal receivable from:
– State Bank of Pakistan 7.3 2,704,142 -
– other financial institutions 7.4 7,850,288 1,024,515
Certificates of investment 7.5 70,000 70,000
Letters of placement - 300,000
13,676,921 53,850,195
Less: Provision held against lendings to financial institutions 7.5 & 7.8 (70,000) (70,000)
Lendings to financial institutions – net of provision 13,606,921 53,780,195
7.1 These are short-term local currency lendings to financial institutions against government securities as shown in note 7.7
below. These carry mark-up at the rate of 13.45% to 13.50% (2018: 10.10% to 10.40%) per annum, maturing on various
dates, latest by January 20, 2020.
7.2 These represent local currency lendings by Islamic banking business under Musharaka agreement at expected profit of
12.15% (2018: 9.50% to 9.70%) per annum, maturing on various dates, latest by February 6, 2020.
7.3 This represent local currency lending by Islamic banking business under Bai Muajjal agreement with the State Bank of
Pakistan at expected profit of 10.53% (2018: Nil) per annum, maturing on February 07, 2020.
7.4 This represent local currency lending by Islamic banking business under Bai Muajjal agreement with various Islamic banks
at expected profit of 12.15% to 12.60% (2018: 9.80%) per annum, maturing on various dates, latest by January 17, 2020.
7.5 This represents local currency classified certificates of investment and related provisioning, amounting to Rs. 70 million
(2018: Rs. 70 million).
December 31, December 31,

2019 2018
Rupees in ‘000
7.6 Particulars of lending
In local currency 13,676,921 53,850,195

In foreign currencies - -
13,676,921 53,850,195
December 31, 2019 December 31, 2018
Held by Further Further

Bank Held by
given as Tota given as Total
Bank
collateral l collateral
Rupees in ‘000
7.7 Securities held as collateral against

lending to financial institutions
Market Treasury Bills - - - 33,500,000 - 33,500,000

Pakistan Investment Bonds 2,200,000 - 2,200,000 11,000,000 - 11,000,000
2,200,000 - 2,200,000 44,500,000 - 44,500,000
Classified Provision Classified Provision
Lending Held Lending Held
Rupees in ‘000
7.8 Category of classification
Domestic
Other Assets Especially Mentioned - - - -
Substandard - - - -
Doubtful - - - -
Loss 70,000 70,000 70,000 70,000
70,000 70,000 70,000 70,000
December 31,2019 December 31,2018
Cost / Provision for Surplus / Carrying Cost /

Provision for Surplus / Carrying
Note Amortized diminution (Deficit) Value Amortized
diminution (Deficit) Value
cost cost
Rupees in ‘000
8 INVESTMENTS
8.1 Investments by type:
Held-for-trading securities
Federal Government Securities 19,862,396 - 5,767 19,868,163 - - - -
19,862,396 - 5,767 19,868,163 - - - -
Available-for-sale securities
Federal Government Securities* 677,300,056 (15,961) 1,689,073 678,973,168 610,683,028 (21,248) (1,608,458) 609,053,322
Shares 24,349,646 (3,202,822) 9,686,372 30,833,196 25,390,405 (2,266,130) 9,572,003 32,696,278
Non Government Debt Securities 13,633,213 (21,071) (37,667) 13,574,475 11,732,046 (21,071) (47,874) 11,663,101
Foreign Securities 1,037,692 - - 1,037,692 1,037,692 - - 1,037,692
Open Ended Mutual Funds 63,834 - 91,424 155,258 63,834 - 62,436 126,270
8.4 716,384,441 (3,239,854) 11,429,202 724,573,789 648,907,005 (2,308,449) 7,978,107 654,576,663
Held–to–maturity securities
Federal Government Securities 13,015,041 - - 13,015,041 16,151,622 - - 16,151,622
Non Government Debt Securities 344,260 (344,260) - - 346,090 (346,090) - -
8.5 13,359,301 (344,260) - 13,015,041 16,497,712 (346,090) - 16,151,622
Subsidiaries 500,000 - - 500,000 500,000 - - 500,000
Total Investments 750,106,138 (3,584,114) 11,434,969 757,956,993 665,904,717 (2,654,539) 7,978,107 671,228,285
8.2 Investments by segments:
Federal Government Securities:

Market Treasury Bills 542,565,953 - 176,506 542,742,459 543,454,942 - (21,792) 543,433,150
Pakistan Investment Bonds 154,349,214 - 784,365 155,133,579 64,695,276 - (1,397,373) 63,297,903
GOP Ijarah Sukuks 876,511 - (8,765) 867,746 3,350,848 - (16,997) 3,333,851
GOP Sukuks (US$) 3,869,387 (15,961) 59,871 3,913,297 9,756,796 (21,248) (191,642) 9,543,906
Foreign Currency Bonds (US$) 6,215,907 - 682,863 6,898,770 5,576,788 - 19,346 5,596,134
GOP Ijarah Sukuks - Bai Muajjal Placement 2,300,521 - - 2,300,521 - - - -
710,177,493 (15,961) 1,694,840 711,856,372 626,834,650 (21,248) (1,608,458) 625,204,944
Shares:
Listed Companies 21,940,832 (3,168,936) 9,686,372 28,458,268 22,646,719 (2,103,351) 9,572,003 30,115,371
Unlisted Companies 2,408,814 (33,886) - 2,374,928 2,743,686 (162,779) - 2,580,907
Units of open-ended mutual funds 63,834 - 91,424 155,258 63,834 - 62,436 126,270
24,413,480 (3,202,822) 9,777,796 30,988,454 25,454,239 (2,266,130) 9,634,439 32,822,548
Non Government Debt Securities

Listed 5,417,804 (103,498) (37,667) 5,276,639 3,139,909 (105,329) (47,874) 2,986,706
Unlisted 8,559,669 (261,833) - 8,297,836 8,938,227 (261,832) - 8,676,395
13,977,473 (365,331) (37,667) 13,574,475 12,078,136 (367,161) (47,874) 11,663,101
Foreign Securities
Equity securities 1,037,692 - - 1,037,692 1,037,692 - - 1,037,692
Subsidiaries
ABL - Asset Management Company 500,000 - - 500,000 500,000 - - 500,000
* Provision for diminution against federal government securities represents expected credit loss provisioning under IFRS 9 on
portfolio pertaining to overseas branch.
2019 2018
Rupees in ‘000
8.2.1 Investments given as collateral
Market Treasury Bills 145,442,739 158,411,120

Pakistan Investment Bonds 48,417,010 10,077,521
GOP Foreign Currency Sukuks (US$) 2,957,611 4,451,600
GOP Foreign Currency Bonds (US$) - 710,569
Total Investments given as collateral 196,817,360 173,650,810
8.3 Provision for diminution in value of investments
8.3.1 Opening balance 2,654,539 2,705,403

Exchange adjustments 3,163 1,556
Charge / reversals
Charge for the year 1,118,302 112,795
Reversals for the year (139,161) (3,776)
979,141 109,019
Reversal on disposals (52,729) (161,439)
Closing Balance 3,584,114 2,654,539

NPI Provision NPI Provision
Rupees in ‘000
8.3.2 Particulars of provision against debt securities
Category of classification
Domestic
Other assets especially mentioned - - - -
Substandard - - - -
Doubtful - - - -
Loss 365,331 365,331 367,161 367,161
365,331 365,331 367,161 367,161
Overseas
Not past due but impaired* 3,869,387 15,961 9,756,796 21,248
Overdue by:
Upto 90 days - - - -
91 to 180 days - - - -
181 to 365 days - - - -
> 365 days - - - -
- - - -
Total 4,234,718 381,292 10,123,957 388,409
* Provision represents expected credit loss provisioning in overseas branch.
The State Bank of Pakistan (SBP) has not granted any relaxation in any classification / provisioning during the year ended
December 31, 2019.
2019 2018
Cost
Rupees in ‘000
8.4 Quality of Available for Sale Securities
Federal Government Securities – Government guaranteed

GOP Sukuks (US$) 3,869,387 9,756,796
Foreign Currency Bonds (US$) 6,215,907 5,576,788
GOP Ijarah Sukuks 876,511 3,350,848
677,300,056 610,683,028
Shares
Listed Companies
Power Generation and Distribution 8,159,528 8,991,081
Oil & Gas Exploration Companies 5,093,606 5,093,607
Fertilizer 3,827,631 3,701,965
Commercial Banks 2,900,903 2,900,903
Oil & Gas Marketing Companies 1,043,460 1,043,460
Real Estate Investment Trust 455,851 455,851
Chemical 268,289 268,289
Leasing Companies 89,322 89,322
Close-end Mutual Funds 51,603 51,603
Investment Banks 50,000 50,000
Cement 638 638
21,940,831 22,646,719

Cost Breakup value Cost Breakup
value
Rupees in ‘000
Unlisted Companies
Security General Insurance Ltd. 1,075,653 2,527,369 1,075,653 1,830,648
Habib Allied Holding Ltd. 1,035,922 1,241,538 1,035,922 1,241,939
Nishat Hotels And Properties Ltd. 566,982 1,025,523 944,970 816,078
Atlas Power Limited 355,000 1,070,210 355,000 849,650
Pakistan Mortgage Refinance Co. Ltd. 200,000 202,984 200,000 200,459
1 Link Private Limited 50,000 - 50,000 -
Central Depository Company 40,300 61,068 40,300 58,408
ISE Towers REIT Management Company Limited 30,346 43,979 30,346 42,765
First Women Bank Limited 21,200 72,287 21,200 72,287
LSE Financial Services Limited 8,440 19,155 8,440 18,318
SME Bank Limited 5,250 - 5,250 -
Arabian Sea Country Club Ltd. 5,000 351 5,000 351
Eastern Capital Limited 5,000 - 5,000 -
SWIFT 1,770 6,431 1,770 6,777
National Institutional Facilitation
Technologies Private Limited 1,527 51,641 1,527 59,076
Pakistan Agricultural Storage and Services Corporation 1,000 295,078 1,000 242,002
Pakistan Corporate Restructuring Company 43,117 43,117 - -
3,446,507 6,660,731 3,781,378 5,438,758
2019 2018
Rupees in ‘000
Listed
– AAA 1,497,900 383,308
– AA+, AA, AA– 2,716,405 2,618,458
– A+, A, A– 500,000 32,813
4,714,305 3,034,579
Unlisted
– AAA 3,250,000 3,750,000
– AA+, AA, AA– 4,209,436 3,080,965
– A+, A, A– 1,438,401 1,845,431
– Unrated 21,071 21,071
8,918,908 8,697,467
Open Ended Mutual Funds
HBL Growth Fund – Class B Segment 38,834 38,834

Allied Finergy Fund 25,000 25,000
63,834 63,834
Foreign Securities
Equity Securities – Unlisted

Habib Allied Holding Limited 1,035,922 1,035,922
SWIFT 1,770 1,770
1,037,692 1,037,692
8.5 Particulars relating to Held to Maturity securities are as follows:

GOP Ijarah Sukuks - Bai Muajjal Placement 2,300,521 -
13,015,042 16,151,622
Listed
– Unrated 103,499 105,329
Unlisted
– Unrated 240,761 240,761
8.5.1 The market value of Pakistan Investment Bonds classified as held-to-maturity as at December 31, 2019 amounted to Rs.
10,848.5 million (December 31, 2018: Rs. 15,579.4 million).
Subsidiary
Asset
Management
Company
Rupees in ‘000
8.6 Details regarding subsidiary company:
Country of incorporation Pakistan

Percentage holding 100%
Assets 2,793,765
Liabilities 433,044
Revenue 783,478
Profit after taxation 375,852
Total comprehensive income 375,743
Performing Non Performing Total

December December December December December December
Note 31,2019
31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in
‘000
9 ADVANCES
Loans, cash credits, running finances, etc. 9.1 467,845,262 428,894,557 14,450,873 14,569,294 482,296,135 443,463,851
Islamic financing and related assets A-II. 3 12,615,228 6,925,320 - - 12,615,228 6,925,320
Bills discounted and purchased 3,853,892 1,982,031 1,403,045 1,495,347 5,256,937 3,477,378
Advances – gross 9.2 484,314,382 437,801,908 15,853,918 16,064,641 500,168,300 453,866,549
Provision against advances

Specific 9.3 & 9.4 - - (15,112,624) (15,533,497) (15,112,624) (15,533,497)
General 9.4 (39,795) (15,868) - - (39,795) (15,868)
(39,795) (15,868) (15,112,624) (15,533,497) (15,152,419) (15,549,365)
Advances – net of provision 484,274,587 437,786,040 741,294 531,144 485,015,881 438,317,184
Later than Over five Later than Over five

Not later Total Not later Total
one and years one and years
than one than one
less than less than
year year
five years five years
Rupees in ‘000
9.1 Includes net investment in finance lease

as described below
Lease rentals receivable 606,329 1,331,279 85,114 2,022,722 631,223 1,504,537 116,221 2,251,981
Residual value 50,138 510,411 147,989 708,538 42,542 460,880 188,280 691,702
Minimum lease payments 656,467 1,841,690 233,103 2,731,260 673,765 1,965,417 304,501 2,943,683
Financial charges for future periods (108,826) (206,316) (19,224) (334,366) (66,148) (133,067) (130,661) (329,876)
Present value of minimum lease payments 547,641 1,635,374 213,879 2,396,894 607,617 1,832,350 173,840 2,613,807

2019 2018
Rupees in ‘000
9.2 Particulars of advances (Gross)
9.2.1 In local currency 484,420,108 443,642,116

In foreign currencies 15,748,192 10,224,433
500,168,300 453,866,549
9.3 Advances include Rs. 15,853.918 million (2018: Rs. 16,064.641 million) which have been placed under non-performing
status as detailed below:
Non Non
Performing Specific Performing Specific
Loans Provision Loans Provision
Rupees in ‘000
Category of Classification Domestic
Other Assets Especially Mentioned 35,436 449 38,425 2,231

Substandard 809,938 202,107 436,938 109,035
Doubtful 196,952
15,853,918 98,476
15,112,624 334,094
16,064,641 167,047
15,533,497
Loss 14,811,592 14,811,592 15,255,184 15,255,184
Note Specific General Total Specific General Total
Rupees in ‘000
9.4 Particulars of provision against advances
Opening balance 15,533,497 15,868 15,549,365 16,702,236 11,701 16,713,937

Exchange adjustments - (896) (896) - - -
Charge for the year 589,752 24,823 614,575 500,412 4,167 504,579
Reversals 9.5 (1,008,707) - (1,008,707) (1,637,415) - (1,637,415)
(418,955) 24,823 (394,132) (1,137,003) 4,167 (1,132,836)
Amounts written off 9.6 (1,918) - (1,918) (31,736) - (31,736)
Closing balance 15,112,624 39,795 15,152,419 15,533,497 15,868 15,549,365
9.4.1 In local currency 14,748,991 16,820 14,765,811 15,207,403 15,717 15,223,120

In foreign currencies 363,633 22,975 386,608 326,094 151 326,245
15,112,624 39,795 15,152,419 15,533,497 15,868 15,549,365
9.4.2 No benefit of forced sale value of the collaterals held by the Bank has been taken while determining the provision against
non- performing loans as allowed under BSD circular No. 01 dated October 21, 2011.
9.5 This includes reversal of provision on account of a non performing loan, classified as loss, settled against Debt Property
Swap amounting to Rs. 311.2 million (2018: Rs. 29.2 million).
2019 2018
Rupees in ‘000
9.6 Particulars of write–offs
9.6.1 Against provisions 1,918 31,736

Directly charged to Profit and Loss account - -
1,918 31,736
9.6.2 Write–offs of Rs. 500,000 and above – Domestic 9.7 1,918 31,736
Write–offs of below Rs. 500,000 - -
1,918 31,736
9.7 Details of loan write–off of Rs. 500,000/– and above
In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962, the Statement in respect of written-
off loans or any other financial relief of five hundred thousand rupees and above allowed to a person(s) during the year
ended December 31, 2019 is given in Annexure-’I’. However, these write-offs do not affect the Bank’s right to recover debts
from these customers.

2019 2018
Rupees in ‘000
10 FIXED ASSETS
Capital work–in–progress 10.1 2,991,144 2,338,494

Property and equipment 10.2 51,103,181 48,040,043
Right-of-Use Assets 4.1 8,020,323 -
62,114,648 50,378,537
10.1 CAPITAL WORK-IN-PROGRESS
Civil works 2,219,464 1,855,180

Equipment 6,546 -
Advances to suppliers 765,134 483,314
2,991,144 2,338,494
December 31,2019
Electrical, Building
Building on Building on Furniture
Freehold Leasehold office and Improvements
Freehold Leasehold and
Land Land computer (Rented
Land Land fixture
equipment Vehicles Premises) Total
Rupees in ‘000
10.2 Property and Equipment
At January 1, 2019
Cost / Revalued amount 17,564,604 10,962,212 7,120,644 4,558,168 1,929,172 13,546,580 1,155,158 4,076,878 60,913,416
Accumulated depreciation - - (340,664) (228,787) (1,035,342) (8,125,715) (636,528) (2,506,337) (12,873,373)
Net book value 17,564,604 10,962,212 6,779,980 4,329,381 893,830 5,420,865 518,630 1,570,541 48,040,043
Year ended December 2019

Opening net book value 17,564,604 10,962,212 6,779,980 4,329,381 893,830 5,420,865 518,630 1,570,541 48,040,043
Additions 1,547,674 354,505 795,815 296,857 223,379 1,870,492 427,830 810,629 6,327,181
Disposals cost - - - (89,780) (14,449) (140,182) (346,079) (553) (591,043)
Disposals accumulated depreciation - - - 16,432 12,855 127,550 326,274 553 483,664
Disposals - - - (73,348) (1,594) (12,632) (19,805) - (107,379)
Depreciation charge - - (361,282) (221,432) (194,807) (1,597,130) (218,320) (563,571) (3,156,542)
Exchange rate adjustments - - - - - (122) - - (122)
Closing net book value 19,112,278 11,316,717 7,214,513 4,331,458 920,808 5,681,473 708,335 1,817,599 51,103,181
At December 31, 2019

Net book value 19,112,278 11,316,717 7,214,513 4,331,458 920,808 5,681,473 708,335 1,817,599 51,103,181
Rate of depreciation (percentage) - - 5% 5% 10% 14.28% -50% 20% 20% -
December 31,2018
Land Land fixture Total
equipment Vehicles Premises)
Rupees in ‘000
At January 1, 2018
Cost / Revalued amount 15,281,070 11,068,636 6,260,977 4,261,641 1,675,822 11,631,268 824,980 3,501,922 54,506,316
Accumulated depreciation - - - - (874,675) (7,194,647) (535,393) (1,997,095) (10,601,810)
Net book value 15,281,070 11,068,636 6,260,977 4,261,641 801,147 4,436,621 289,587 1,504,827 43,904,506

Additions 2,380,971 58,138 859,667 296,527 271,228 2,344,493 359,000 575,046 7,145,070
Disposals cost - - - - (17,878) (429,181) (28,822) (90) (475,971)
Disposals accumulated depreciation - - - - 17,173 422,683 24,524 90 464,470
Disposals - - - - (705) (6,498) (4,298) - (11,501)
Exchange rate adjustments - - - - (78) (113) - - (191)
Other adjustments / transfers (97,437) (164,562) - - - - - - (261,999)

Net book value 17,564,604 10,962,212 6,779,980 4,329,381 893,830 5,420,865 518,630 1,570,541 48,040,043
Rate of depreciation (percentage) - - 5% 5% 10% 14.28% -50% 20% 20% -
10.3 Bank arranged for valuation of all Land and Buildings as at December 31, 2017 from four independent valuers {Sadruddin
Associates (Pvt.) Ltd, Unicorn International Surveyors, Indus Surveyors (Pvt.) Limited and Harvester Services (Pvt). Ltd.}.
The revalued amounts of properties have been determined on the basis of market value. Had there been no revaluation, the
carrying amount of revalued assets would have been as follows:
Rupees in ‘000
– Land (Freehold and leasehold) 16,670,183

– Building 8,393,866
10.4 Fair value of property and equipment excluding land and buildings is not expected to be materially different from their
carrying amount.

2019 2018
Rupees in ‘000
10.5 Incremental depreciation charged during the year

transferred to unappropriated profit 20.1 164,129 172,713
10.6 Restriction / discrepancy in the title of property

having a net book value of 63,370 57,694
10.7 The cost of fully depreciated

assets that are still in use:
Furniture and fixtures 510,781 342,011

Electrical, office and computer equipments 5,317,286 4,497,694
Vehicles 108,035 327,935
Leasehold Improvements 1,738,160 1,342,260
2019 2018
Rupees in ‘000
10.8 The carrying amount of property and equipment

that have retired from active use 283,457 349,670
10.9 The sale of fixed assets (otherwise than a regular auction) to related parties are disclosed in Annexure III.
11 INTANGIBLE ASSETS
Capital work in progress 11.1 644,315 337,076

Intangible Assets 11.2 1,324,736 1,411,978
1,969,051 1,749,054
11.1 Capital work in progress
Softwares 617,519 180,132

Advances for softwares to suppliers 26,796 156,944
644,315 337,076
December 31, 2019

Computer
software Others Total
Rupees in ‘000
11.2 Intangible Assets
At January 1, 2019
Cost 3,141,857 - 3,141,857

Accumulated amortisation and impairment (1,729,879) - (1,729,879)
Net book value 1,411,978 - 1,411,978
Opening net book value 1,411,978 - 1,411,978

Additions:
Directly purchased 157,303 - 157,303
Disposals cost (735) - (735)
Disposals accumulated depreciation 735 - 735
- - -
Amortisation charge (244,545) - (244,545)
Closing net book value 1,324,736 - 1,324,736
Cost 3,298,425 - 3,298,425

Net book value 1,324,736 - 1,324,736
Rate of amortisation (percentage) 5% to 14.28% 5% to 14.28%
Useful life 7 to 20 Years 7 to 20 Years
December 31, 2018
Computer
Rupees in ‘000
At January 1, 2018
Cost 2,689,905 - 2,689,905

Net book value 1,361,099 - 1,361,099

Additions:
Directly purchased 451,952 - 451,952
Cost 3,141,857 - 3,141,857

Net book value 1,411,978 - 1,411,978
Rate of amortisation (percentage) 14.28% 14.28%
Useful life 7 Years 7 Years

2019 2018
Rupees in ‘000
11.3 The cost of fully amortized assets that are still in use:
Intangible assets – software 323,406 306,326
11.4 During 2019, the Bank conducted a review of useful life of its intangible assets, which resulted in change in estimate of
expected usage of certain softwares. The softwares, which management had previously intended to use for 7 years, are
now expected to remain in usage for 20 years from the date of purchase. As a result, the expected useful life of the
softwares increased and their estimated residual value decreased. The effect of these changes on actual and expected
amortization expense, included in ‘Operating expenses’, was as follows.
2019 2020 2021 2022 2023

Rupees in ‘000
Decrease in annual amortization expense (188,617) (45,731) (23,808) (21,867) (14,135)

2019 2018
Rupees in ‘000
12 OTHER ASSETS
Income / Mark–up accrued in local currency – net of provision 20,573,788 11,777,626
Income / Mark–up accrued in foreign currency – net of provision 245,676 293,994
Advances, deposits, advance rent and other prepayments 888,144 883,302
Advance taxation (payments less provisions) 3,817,847 4,626,194
Non–banking assets acquired in satisfaction of claims 12.1 1,609,193 1,947,348
Mark to market gain on forward foreign exchange contracts - 2,698,766
Acceptances 5,182,716 4,183,083
Due from the employees’ retirement benefit schemes
Benevolent fund 36.4 - 115,915
Pension fund 36.4 4,440,411 4,560,065
Fraud and forgeries 524,357 502,115
Stationery and stamps in hand 286,343 190,398
Overdue FBN / FBD 97,601 72,441
Home Remittance Cell agent receivable 93,978 111,098
Receivable from SBP – customers encashments 6,033 12,572
Charges receivable 32,329 23,043
Suspense Account 1,387 7,898
Others 96,535 3,572
37,896,338 32,009,430
Less: Provision held against other assets 12.2 (862,460) (787,203)
Other assets (net of provision) 37,033,878 31,222,227
Surplus on revaluation of non–banking assets acquired
in satisfaction of claims 2,877,470 2,159,958
Other assets – net 39,911,348 33,382,185
12.1 Market value of non–banking assets acquired

Full-scope revaluation was carried out at December 31, 2019 through two independent valuers approved by Pakistan
Banks’ Association (A-1 Warda Engineering Services & Sadruddin Associates Private Limited). The revalued amounts of
properties have been determined on the basis of market rates depending upon physical verification and general appearance
of the site.

2019 2018
Rupees in ‘000
12.1.1 Non banking assets acquired in satisfaction of claims
Opening balance 4,107,306 3,584,030

Additions 361,584 52,482
Revaluation 884,674 600,425
Disposals / Transfers (847,050) (109,969)
Depreciation (19,851) (19,662)
Closing balance 4,486,663 4,107,306
2019 2018
Rupees in ‘000
12.1.2 Gain / Loss on Disposal of Non banking assets acquired in satisfaction of claims
Disposal proceeds 879,316 3,542

Less:
Cost (847,050) (3,629)
Impairment / Depreciation - 60
(847,050) (3,569)
(loss) / Gain 32,266 (27)
12.2 Provision held against other assets

Provision against fraud and forgeries 524,357 507,977
Overdue Foreign Bills Negotiated / Discounted 24,295 24,295
Suspense account 6,453 -
Others 154,444 22,382
862,460 787,203
12.2.1 Movement in provision held against other assets
Opening balance 787,203 747,062

Charge for the year 213,529 96,695
Reversals (112,865) (12,000)
Written off / adjusted (25,407) (44,554)
Closing balance 862,460 787,203
13 CONTINGENT ASSETS
There were no contingent assets of the Bank as at December 31, 2019 and December 31,
2018.
14 BILLS PAYABLE
In Pakistan 7,878,626 7,752,959
15 BORROWINGS
Secured
Borrowings from State Bank of Pakistan
Repurchase agreement borrowings 15.1 & 15.8 170,120,570 157,248,800
Under export refinance scheme 15.2 22,523,266 17,913,692
Under long term financing facility 15.3 21,426,590 13,894,674
Under financing scheme for renewable energy 15.4 426,031 158,952
214,496,457 189,216,118
Repurchase agreement borrowings from Financial Institutions 15.5 & 15.8 26,585,287 14,559,563
Unsecured
Call borrowings 15.6 24,602,435 11,861,797
Trading liability - 9,987,849
Overdrawn nostro accounts 64,207 243,624
Musharaka borrowing 15.7 700,000 -
Other borrowings - 14,035
25,366,642 22,107,305
266,448,386 225,882,986
15.1 This represents local currency borrowing from the SBP against government securities, carrying mark-up at the rate of
13.31% (2018: 10.21%) per annum, maturing on January 03, 2020.
15.2 The Bank has entered into various agreements for financing with the State Bank of Pakistan (SBP) for extending export
finance to customers. As per agreements, the Bank has granted to SBP the right to recover the outstanding amount from
the Bank at the date of maturity of the finance by directly debiting the current account maintained by the Bank with the SBP.
The borrowing carries mark-up at the rate of 1.00% to 2.00% (2018 1.00% to 2.00%) per annum. These borrowings are
repayable within six months from the deal date.
15.3 This represents Long Term Financing facility availed by the Bank for further extending the same to its customers, for a
maximum period of 10 years. The borrowing carries mark-up at the rate of 1.50%, 2.50% and 3.00% (2018: 4.50%, 3.50%
and 3.00%) per annum for financing up-to 3 years, 5 years & 10 years respectively.
15.4 These represent borrowings from the SBP availed by the Bank for financing power projects / facilities using alternative /
renewable energy (solar, wind, hydro, biogas, bio-fuels, bagasse cogeneration, and geothermal as fuel) for a maximum
period of 12 years under Category I and for a maximum period of 10 years under Category II and III. The borrowing carries
mark-up at the rate of 3% for Category I, 4% for Category II and 3% for Category III.
15.5 These represent borrowings in local and foreign currency from local and foreign interbank markets against government
securities, carrying mark-up at the rate of 13% to 13.20% (2018: 10% to 10.21%) per annum for local currency borrowings,
and at the rate of 2.45% to 2.65% (2018: 3.37% to 3.99%) per annum for foreign currency borrowings. These borrowings
are maturing on various dates, latest by January 31, 2020.
15.6 These represent unsecured borrowings in local and foreign currency from the local and foreign interbank markets, carrying
mark- up at the rate of 12.25% to 12.50% (2018: 8.10% to 10.10%) per annum for local currency borrowings, and at the
rate of 2.40% to 3% (2018: 2.35% to 4.27%) per annum for foreign currency borrowings. These borrowings are maturing on
various dates, latest by April 13, 2020.
15.7 This represents unsecured local currency borrowing by Islamic banking business under Musharaka agreement at profit of
8% (2018: Nil) per annum, maturing on January 02, 2020.
15.8 Note 8.2.1 includes the carrying amount of investments given as collateral.

2019 2018
Rupees in ‘000
15.9 Particulars of borrowings with respect to currencies

266,448,386 225,882,986

In Local In Foreign Total In Local In Foreign Total
Currency Currencies Currency Currencies
Rupees in ‘000
16 DEPOSITS AND OTHER
ACCOUNTS
Customers
Current deposits 327,547,304 20,719,488 348,266,792 292,438,272 18,841,868 311,280,140
Savings deposits 403,489,789 21,019,875 424,509,664 365,456,206 24,707,235 390,163,441
Term deposits 107,203,269 63,293,352 170,496,621 120,847,788 50,092,266 170,940,054
Others 19,207,173 30,890 19,238,063 31,335,721 32,615 31,368,336
857,447,535 105,063,605 962,511,140 810,077,987 93,673,984 903,751,971
Financial Institutions
Current deposits 39,711,458 41,039 39,752,497 20,552,284 27,949 20,580,233
Savings deposits 33,722,513 - 33,722,513 54,634,073 - 54,634,073
Term deposits 10,011,200 40,261 10,051,461 4,950,750 52,735 5,003,485
Others 3,005,421 - 3,005,421 505,421 - 505,421
86,450,592 81,300 86,531,892 80,642,528 80,684 80,723,212
943,898,127 105,144,905 1,049,043,032 890,720,515 93,754,668 984,475,183
2019 2018
Rupees in ‘000
16.1 Composition of deposits
Individuals 457,188,412 384,786,399

Private Sector 270,915,027 287,469,596
Government (Federal and Provincial) 125,409,058 117,892,648
Public Sector Entities 108,998,643 113,603,058
Non–Banking Financial Institutions 77,158,043 72,932,722
Banking Companies 9,373,849 7,790,760
1,049,043,032 984,475,183
16.2 This includes deposits eligible to be covered under insurance arrangements amounting to Rs. 628,087 million (December
31, 2018: 585,901 million).
16.3 Net outstanding value against prepaid cards is Rs. 128.403 million as at reporting date (December 31, 2018: 140.858 million).
December 31, 2019

Recognised
Recognised in in other
At January 1, profit and loss comprehensive At December
2019 account Income 31, 2019
Rupees in ‘000
17 DEFERRED TAX LIABILITIES
Deductible Temporary Differences on

Provision against:
– Investments 19,093 - - 19,093
– Other assets 38,959 - - 38,959
– Off balance sheet obligations 14,824 - - 14,824
– Advances 46,313 68,871 - 115,184
– Post retirement medical benefits 42,980 - - 42,980
– Workers welfare fund 790,207 (269,227) - 520,980
952,376 (200,356) - 752,020
Taxable Temporary Differences on
– Surplus on revaluation of fixed assets (1,154,147) 62,682 - (1,091,465)
– Surplus on revaluation of investments (2,792,338) - (1,207,883) (4,000,221)
– Surplus on revaluation on non banking assets (23,962) - (112,827) (136,789)
– Actuarial gains (338,631) - 270,629 (68,002)
– Accelerated tax depreciation / amortization (1,385,520) 44,873 - (1,340,647)
– Excess of investment in finance lease over
written down value of leased assets (13,206) - - (13,206)
(5,707,804) 107,555 (1,050,081) (6,650,330)
(4,755,428) (92,801) (1,050,081) (5,898,310)
December 31, 2018
Recognised
Rupees in ‘000

Provision against:
– Investments 19,093 - - 19,093
– Other assets 38,959 - - 38,959
– Advances 46,869 (556) - 46,313
– Workers welfare fund 1,183,246 (393,039) - 790,207
1,345,971 (393,595) - 952,376
– Surplus on revaluation of investments (5,650,262) - 2,857,924 (2,792,338)
– Surplus on revaluation on non banking assets (25,789) - 1,827 (23,962)
– Actuarial gains (93,888) - (244,743) (338,631)
– Accelerated tax depreciation / amortization (1,295,641) (89,879) - (1,385,520)
(8,287,775) (35,037) 2,615,008 (5,707,804)
(6,941,804) (428,632) 2,615,008 (4,755,428)

2019 2018
Rupees in ‘000
18 OTHER LIABILITIES
Mark-up / return / interest payable in local currency 4,323,269 2,366,943

Mark-up / return / interest payable in foreign currencies 519,548 343,307
Accrued expenses 1,544,570 1,032,259
Retention money payable 342,559 306,416
Unearned commission and income on bills discounted 115,745 123,294
Acceptances 5,182,716 4,183,083
Unclaimed dividends 330,514 291,816
Dividend payable 23,558 32,055
Branch adjustment account 41,140 280,134
Unrealized loss on forward foreign exchange contracts 2,714,153 -
Provision for:
Gratuity 36.4 606,906 444,655
Employees' medical benefits 36.4 1,365,237 1,332,925
Employees' compensated absences 36.4 668,547 606,216
Early retirement 337,527 -
Payable to defined contribution plan 84,946 3,306
Provision against off-balance sheet obligations 18.1 313,043 306,342
Security deposits against lease 712,112 693,151
ATM / Point of Sale settlement account 1,243,494 932,311
Charity fund balance 15 3
Home Remittance Cell overdraft 490,972 701,908
With-holding tax payable 2,345,071 688,375
Sundry deposits 2,451,078 2,427,652
Workers welfare fund payable 29 1,488,514 2,257,734
Present value of lease liability 8,555,677 -
Others 701,154 1,073,635
36,502,065 20,427,520
2019 2018
Rupees in ‘000
18.1 Provision against off–balance sheet obligations

Charge for the year 6,701 -
Reversals - -
Net reversal 6,701 -
The above provision includes provisions made against letters of guarantee issued by the
Bank.
19 SHARE CAPITAL
19.1 Authorized capital

2019 2018 2019 2018
No. of shares Rupees in ‘000
1,500,000,000 1,500,000,000 Ordinary shares of Rs.10/– each 15,000,000 15,000,000
19.2 Issued, subscribed and paid–up capital
Fully paid–up Ordinary shares of Rs. 10/– each

2019 2018 2019 2018
406,780,094 406,780,094 Fully paid in cash 4,067,801 4,067,801

720,745,186 720,745,186 Issued as bonus shares 7,207,452 7,207,452
1,127,525,280 1,127,525,280 11,275,253 11,275,253
18,348,550 Ordinary shares of Rs. 10 each, determined
pursuant to the Scheme of Amalgamation in accordance
with the swap ratio stipulated therein less 9,200,000
ordinary shares of Rs. 10 each, held by Ibrahim
9,148,550 9,148,550 Leasing Limited on the cut–off date (September 30, 2004) 91,486 91,486

pursuant to the Scheme of Amalgamation of First Allied
Bank Modaraba with Allied Bank Limited in accordance
8,400,000 8,400,000 with the share swap ratio stipulated therein. 84,000 84,000
1,145,073,830 1,145,073,830 11,450,739 11,450,739
Ibrahim Holdings (Private) Limited (holding company of the Bank), holds 972,510,410 (84.93%) [2018: 967,911,610
(84.53%)] ordinary shares of Rs. 10 each respectively, as at reporting date.
2019 2018
Rupees in ‘000
20 SURPLUS ON REVALUATION OF ASSETS – NET OF TAX
Surplus arising on revaluation of:

– fixed assets 20.1 15,638,996 15,755,409
– non–banking assets acquired in satisfaction of claims 20.2 2,740,681 2,135,996
– available–for–sale securities 8.1 7,428,981 5,185,769
Surplus on revaluation of assets – net of tax 25,808,658 23,077,174
20.1 Surplus on revaluation of fixed assets
Surplus as at January 1, 2019 16,909,555 17,213,064
Surplus on revaluation during the year - 37,226

Surplus related to transfer / adjustments (14,966) (168,022)
Transferred to unappropriated profit in respect of incremental

depreciation charged during the year – net of deferred tax (106,684) (112,263)
Related deferred tax liability (57,445) (60,450)
10.5 (164,129) (172,713)
Surplus on revaluation as at December 31, 2019 16,730,460 16,909,555
Less: Related deferred tax liability on :
Revaluation surplus as at January 1, 2019 (1,154,146) (1,208,989)
Deferred tax liability on revaluation surplus 5,237 (5,607)
Deferred tax on incremental depreciation transferred to profit and loss account 57,445 60,450
(1,091,464) (1,154,146)
15,638,996 15,755,409
20.2 Surplus on revaluation of non–banking assets acquired in satisfaction of claims
Surplus on revaluation during the year 884,673 599,769

Surplus realised on disposal /transfer (163,739) (39,099)

Related deferred tax liability (1,198) (976)
(3,422) (2,133)
Revaluation surplus as at January 1, 2019 (23,962) (25,789)
Deferred tax liability on revaluation surplus (114,025) (5,412)
Deferred tax on surplus on disposal/transfer - 6,263
Deferred tax on incremental depreciation transferred to profit and loss account 1,198 976
(136,789) (23,962)
2,740,681 2,135,996
2019 2018
Rupees in ‘000
21 CONTINGENCIES AND COMMITMENTS
Guarantees 21.1 32,308,285 28,018,148

Commitments 21.2 423,987,452 342,770,483
Other contingent liabilities 21.3 8,923,603 8,738,009
465,219,340 379,526,640
21.1 Guarantees
Financial guarantees 4,594,077 4,434,872

Performance guarantees 5,508,570 6,656,657
Other guarantees 22,205,638 16,926,619
32,308,285 28,018,148
21.2 Commitments
Documentary credits and short term trade related transactions:

letters of credit 60,392,362 68,457,757
Commitments in respect of:

forward foreign exchange contracts 21.2.1 358,881,918 207,509,971
forward government securities transactions 21.2.2 513,938 57,768,858
operating leases - 6,018,458
Commitments for acquisition of:

fixed assets 4,199,234 2,895,671
intangible assets - 119,768
423,987,452 342,770,483
21.2.1 Commitments in respect of forward foreign

exchange contracts
Purchase 220,381,401 137,056,586

Sale 138,500,517 70,453,385
358,881,918 207,509,971
21.2.2 Commitments in respect of forward government
securities transactions
Purchase 464,217 57,768,858

Sale 49,721 -
513,938 57,768,858
21.3 Other contingent liabilities
21.3.1 Claims against the Bank not acknowledged as debt 8,923,603 8,738,009
21.3.2 The income tax assessments of the Bank have been finalized upto and including tax year 2019 for local, Azad Kashmir and
Gilgit Baltistan operations. While finalizing income tax assessments upto tax year 2019, income tax authorities made certain
add backs with aggregate tax impact of Rs.25,455 million (2018: 24,332 million). As a result of appeals filed by the Bank
before appellate authorities, most of the add backs have been deleted. However, the Bank and Tax Department are in
appeals / references before higher forums against unfavorable decisions. Pending finalization of appeals / references no
provision has been made by the Bank on aggregate sum of Rs.25,455 million (2018: 24,332 million). The management is
confident that the outcome of these appeals / references will be in favor of the Bank.
Tax Authorities have conducted proceedings of withholding tax audit under section 161/205 of Income Tax Ordinance, 2001
for tax year 2003 to 2006 and tax year 2008 to 2018 and created an arbitrary demand of Rs. 1,700 million (2018: 1,536
million). The Bank’s appeals before CIR(A)/Appellate Tribunal Inland Revenue (ATIR) are pending for adjudication. The
management is confident that these appeals will be decided in favor of the Bank; therefore, no provision has been made
against the said demand of Rs. 1,700 million (2018: 1,536 million).
Tax authorities have also issued orders under Federal Excise Act, 2005 / Sales Tax Act, 1990 and Sindh Sales Tax on
Services Act, 2011 for the year 2008 to 2017 thereby creating arbitrary aggregate demand of Rs. 963 million (2018: 900
million). The Bank’s appeals before CIR(A) / Appellate Tribunal Inland Revenue (ATIR) are pending for adjudication. The
management is confident that aforesaid demand will be deleted by appellate authorities and therefore no provision has
been made against the said demand of Rs. 963 million (2018: 900 million).
21.3.3 As a result of default by Fateh Textile Mills to terms of compromise decree passed in August 2002 by the Honourable High
Court of Sindh, 16,376,106 shares of ABL were sold in accordance with section 19 (3) of the Financial Institutions
(Recovery of Finances) Ordinance, 2001, after complying with the due and complete transparent process. Sealed bids were
invited from interested parties. The bidding process was scheduled for July 23, 2004 and the Rs. 25 per share was fixed
reserve price. On the bid date, the highest offer for these shares was received at a rate of Rs. 25.51 per share. The bid was
approved and the successful bidder had deposited an amount of Rs. 417.75 million with the Bank.
Fateh Textile Mills Limited filed suit in the High Court of Sindh challenging the above sale of shares. The High Court had not
granted a stay order against the said sale. The sale of shares was, therefore; concluded.
21.3.4 While adjudicating foreign exchange repatriation cases of exporter namely: Fateh Textile Mills Limited, the Foreign
Exchange Adjudicating Court (FEAC) of the State Bank of Pakistan (SBP) has arbitrarily adjudicated penalties against
various banks including Rs. 2,173 million in aggregate against Allied Bank Limited (the Bank). Against the said judgments,
the Bank had filed appeals before the Appellate Board and Constitutional Petitions (CP) in the High Court of Sindh, Karachi.
The Honorable High Court granted relief to the Bank by way of interim orders. Meanwhile, alongwith other banks, Bank filed
a further CP whereby vires of section 23C of the FE Regulations Act, 1947 was sought to be declared ultra vires. On
November 8, 2018, the Honorable court was pleased to order that the Appellate Board shall not finally decide the appeals.
Subsequently, the earlier CP was disposed of vide order dated January 15, 2019 with a direction to the Appellate Board to
first decide the stay application of the Bank and till then, the Foreign Exchange Regulation Department has been restrained
from taking any coercive action against the Bank. Based on merits of the appeals, the management is confident that these
appeals shall be decided in favor of the Bank and therefore no provision has been made against the impugned penalty.
22 DERIVATIVE INSTRUMENTS
The Bank at present does not offer structured derivative products such as Interest Rate Swaps, Forward Rate Agreements
or FX Options. However, the Bank buys and sells derivative instruments such as:
– Forward Exchange Contracts

– Foreign Exchange Swaps
– Equity Futures
– Forward Contracts for Government Securities
Forward Exchange Contracts
Forward Exchange Contract (FEC) is a product which is offered to the obligor who transact internationally. These obligor
use this product to hedge themselves from unfavorable movements in a foreign currency, however, by agreeing to fix the
exchange rate, they do not benefit from favorable movements in that currency.
An FEC is a contract between the Obligor and the Bank in which both agree to exchange an amount of one currency for
another currency at an agreed forward exchange rate for settlement over more than two business days after the FEC is
entered into (the day on which settlement occurs is called the value date). FEC is entered with those Obligors whose credit
worthiness has already been assessed, and they have underlined trade transactions.
If the relevant exchange rate moves un-favorably, Obligor will benefit from that movement because the Bank must
exchange currencies at the FEC rate. In order to mitigate this risk of adverse exchange rate movement, the Bank hedges its
exposure by taking opposite forward position in inter-bank FX.
Foreign Exchange Swaps
A Foreign Exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency
on one day and then re-exchange those currencies at a later date. Exchange rates and forward margins are determined in
the “inter-bank” market and fluctuate according to supply and demand.
An FX Swap prevents the Bank from gaining any benefit resulting from a favorable exchange rate movement in the relevant
currency pair between the time Bank enters into the transaction deal and when settlement occurs. Cancellation of the swap
may also result in exposure to market movements. The key advantage of an FX swap is that it provides the Bank with
protection against unfavorable currency movements between the time it enters into the transaction and settlement. The term
and amounts for FX Swap can also be tailored to suit the Bank’s particular needs.
Equity Futures
An equity futures contract is a standardized contract, traded on a futures counter of the stock exchange, to buy or sell a
certain underlying script at a certain date in the future, at a specified price.
The Bank may use equity futures as a hedging instrument to hedge its equity portfolio, in both ‘held-for-trading’ and
‘available-for- sale’, against equity price risk. Only selected shares are allowed to be traded on futures exchange. Equity
futures give flexibility to the Bank either to take delivery on the future settlement date or to settle it by adjusting the notional
value of the contract based on the current market rates. Maximum exposure limit to the equity futures is 10% of Tier I
Capital of the Bank, based on prevailing SBP regulations.
The accounting policies used to recognize and disclose derivatives are given in Note 4.15.2. The risk management
framework of derivative instruments is given in note 43.

2019 2018
Rupees in ‘000
23 MARK–UP / RETURN / INTEREST EARNED

On:
Loans and advances 49,549,601 29,696,524
Investments 64,070,753 37,204,167
Lendings to financial institutions 8,639,234 6,185,232
Balances with banks 377,846 188,238
122,637,434 73,274,161
24 MARK–UP / RETURN / INTEREST EXPENSED

On:
Deposits 58,822,780 30,129,853
Borrowings 15,225,536 9,524,346
Cost of foreign currency swaps against foreign currency deposits 6,100,939 1,504,521
Interest expense on lease liability 980,709 -
81,129,964 41,158,720
25 FEE AND COMMISSION INCOME

On:
Card related fees (debit and credit cards) 1,644,627 1,328,622
Branch banking customer fees 1,376,300 1,228,557
Commission on remittances including home remittances 691,815 590,077
Investment banking fees 578,270 524,226
Commission on trade 346,940 362,470
Commission on cash management 153,897 120,102
Commission on guarantees 134,569 103,085
Commission on bancassurance 119,076 78,936
Credit related fees 42,775 20,270
Consumer finance related fees 4,085 4,196
5,092,354 4,360,541
26 GAIN ON SECURITIES
Realised – net 26.1 1,573,114 2,381,713

Unrealised – held for trading 8.1 5,767 -
1,578,881 2,381,713
26.1 Realised gain / (loss) on:
Federal government securities 583,191 1,775,998

Shares 990,608 606,868
Non Government debt securities (685) (1,153)
1,573,114 2,381,713
2019 2018
Rupees in ‘000
27 OTHER INCOME
Recovery of written off mark–up and charges 12,198 172,074
Gain on sale of fixed assets – net 268,304 34,903
Other assets disposal 79,258 34,463
Rent on property 7,135 5,582
Fee for attending Board meetings 3,384 2,845
Gain on disposal of islamic financing and related assets - net - 2,629
Gain / (loss) on sale of non-banking assets 27.1 32,266 (27)
402,545 252,469
27.1 This includes gain on sale of two non-banking assets amounting to Rs. 18 million and Rs. 14.266 million respectively (2018: loss of Rs. 0.027 million).

2019 2018
Rupees in ‘000
28 OPERATING EXPENSES
Total compensation expense 28.1 13,458,144 12,261,402
Property expense:
Depreciation 28.2 3,880,133 2,068,320
Rent and taxes 28.2 294,992 1,736,688
Utilities cost 1,225,114 996,508
Security (including guards) 888,206 717,501
Repair and maintenance (including janitorial charges) 735,836 558,166
Insurance 69,922 64,293
7,094,203 6,141,476
Information technology expenses:
Network charges 689,087 631,926
Depreciation 668,223 541,863
Amortization 244,545 401,074
Software maintenance 546,047 353,806
Hardware maintenance 346,507 297,826
Others 9,232 8,521
2,503,641 2,235,016
Other operating expenses:
Marketing, advertisement and publicity 730,917 642,873
Insurance 28.3 1,148,296 567,053
Outsourced service costs 35.1 625,208 534,151
Cash in Transit service charge 521,405 415,560
Stationery and printing 463,995 333,162
Travelling and conveyance 232,428 178,971
Legal and professional charges 118,999 140,230
Postage and courier charges 204,440 126,877
Donations 28.5 55,253 113,238
NIFT clearing charges 123,966 106,097
Communication 89,261 87,952
Directors fees and allowances 30,260 18,182
Fees and allowances to Shariah Board 6,059 6,991
Training and development 96,671 101,430
Auditors Remuneration 28.4 19,633 17,727
Others 443,429 365,102
2019 2018
Rupees in ‘000
28.1 Total compensation expense
Salaries 8,733,678 8,031,521

Fees And Allowances etc. 1,476,956 1,440,423
Bonus and Awards
Variable 979,147 570,583
Fixed 568,546 526,326
Charge For Defined Benefit Plan 455,260 768,712
Contribution To Defined Contribution Plan 318,753 310,235
Conveyance expense 289,602 199,580
Medical expense 189,264 113,576
Insurance 86,675 80,194
Education Subsidy 29,793 30,200
Hajj Expenses 24,494 23,531
Staff Uniform 12,219 13,175
Executive Club Membership 5,291 11,335
Verification Charges Educational Documents 3,821 1,282
Recruitment Charges 4,631 2,275
Others 2,048 1,218
Sub–Total 13,180,178 12,124,166
Voluntary Retirement Scheme 277,966 137,236

Grand Total 13,458,144 12,261,402
28.1.1 The Bank announced the Voluntary Retirement Scheme (VRS) for its employees. Forty eight (48) employees (2018: 53) of
the Bank opted for retirement under this scheme.
28.2 Adoption of IFRS 16 ‘Leases’ resulted in increase in depreciation expense of Rs. 1,610.1 million and decrease of rent and
registration charges of Rs. 1,869.4 million.
28.3 Includes Deposit protection cost of Rs. 937.4 million (December 31, 2018: 410.6 million).

2019 2018
Rupees in ‘000
28.4 Auditors’ remuneration
Audit fee 6,110 6,110

Fee for other statutory certifications 5,859 4,752
Annual audit overseas business unit* 2,341 2,150
Half year review 2,535 2,535
Special certifications and miscellaneous services 605 -
Sales tax 631 628
Out–of–pocket expenses 1,552 1,552
19,633 17,727
*This includes audit fee amounting to Bahraini Dinar 5,500 (2018: 5,500) and Chinese Yuan 3,000 relating to Wholesale
Bahrain Branch and China Representative Office respectively.
28.5 None of the directors, executives and their spouses had any interest in the donees, except Mr. Mohammad Naeem Mukhtar
(Chairman/ Non-Executive Sponsor Director) is director in National Management Foundation (LUMS). Further, spouse of a
key management personnel also holds key position in RAAST Welfare Society.
2019 2018
Rupees in ‘000
Acumen Fund Pakistan - 10,000

Anjuman Himayat-i-Islam 28.5.1 4,454 5,065
Bakhtawar Amin Memorial Trust Hospital - 1,000
Government College of Science, Lahore 599 -
Chaman (Center for Mentally Challenged Children) - 1,000
Lahore Businessmen Association For Rehabilitation Of The Disabled 5,000 -
Children Hospital Faisalabad - 1,730
Diamer - Bhasha and Mohmand Dam Fund - 14,283
Fountain House Mental Health Association - 500
Liver Foundation Trust 1,000 1,000
Namal Education Foundation - 30,000
National Management Foundation (LUMS) 30,000 30,000
Mashal Association 200 -
Punjab Food Authority - 337
RAAST Welfare Society 1,000 1,000
Rising Sun Institution for Special Children - 200
Shaukat Khanum Memorial Trust - 1,000
Sundas Foundation - 1,000
Tamir Welfare Organization 3,000 2,500
Tehzeeb Social Welfare Organization - 250
The Indus Hospital 10,000 10,000
University of Turbat - 2,373
55,253 113,238
28.5.1 This represents charitable expenses on account of sadqa & feeding to under privileged.
29 WORKERS WELFARE FUND
Supreme Court of Pakistan vide order dated November 10, 2016 held that the amendments made in the law through
Finance Act 2008, introduced by the Federal Government for the levy of Worker Welfare Fund (WWF) were unlawful.
Federal Board of Revenue filed review petition against the subject order, which is currently pending for adjudication.
WWF provision from 2014 to 2019 has been maintained conservatively based on tax advisor’s opinion in view of provincial
levy of WWF by the provinces with effect from 2014, including levy by Sindh which is under litigation.
Punjab Government has promulgated Punjab Workers Welfare Fund Act 2019 (PWWF) with effect from December 13,
2019, therefore, WWF provision related to Punjab and pertaining to the period from 2014 till the date of promulgation of
PWWF is reversed from the provision maintained for WWF from 2014 to 2019.

2019 2018
Rupees in ‘000
30 OTHER CHARGES
Penalties imposed by State Bank of Pakistan 120,914 38,143

Education cess 54,187 23,267
Depreciation – non–banking assets 19,851 19,662
Other assets written off 93 891
195,045 81,963
2019 2018
Rupees in ‘000
31 PROVISIONS AND WRITE OFFS – NET
Provision for diminution in the value of investments 8.3.1 979,141 109,019

Reversal against loans and advances 9.4 (394,132) (1,132,836)
Provision against other assets 12.2.1 100,664 84,696
Provision against off balance sheet obligations 6,701 -
Bad debts written off directly - -
692,374 (939,121)
Recovery of written off bad debts (145,716) (150,567)
546,658 (1,089,688)

2019 2018
Rupees in ‘000
32 TAXATION
Current – for the year including super tax 9,201,094 7,707,277

– for prior year 834,833 -
10,035,927 7,707,277
Deferred – current 92,801 428,632
10,128,728 8,135,909
32.1 Relationship between tax expense and accounting profit
Accounting profit for the year 24,241,639 21,016,427
Tax on income @ 35% (2018: 35%) 8,484,574 7,355,749

Super Tax @ 4% 964,348 790,490
Prior year Super Tax @ 4% 834,833 -
Others (155,027) (10,330)
Tax charge for the year 10,128,728 8,135,909
33 EARNINGS PER SHARE – BASIC AND DILUTED
Profit after taxation 14,112,911 12,880,518
Number of Shares
Weighted average number of ordinary shares outstanding during the year 1,145,073,830 1,145,073,830
Rupees
Earnings per share – basic and diluted 12.32 11.25
There is no dilution effect on basic earnings per share.

2019 2018
Rupees in ‘000
34 CASH AND CASH EQUIVALENTS
Cash and balances with treasury banks 5 119,943,828 99,188,414

Balances with other banks 6 602,582 2,575,055
Overdrawn nostro accounts 15 (64,207) (243,624)
120,482,203 101,519,845
Numbers
35 STAFF STRENGTH
Permanent 11,207 10,930

Temporary / on contractual basis / trainee 458 276
Bank’s own staff strength at the end of the year 11,665 11,206
Average number of employees 11,436 11,141
35.1 In addition to the above, 501 (2018: 376) employees of outsourcing services companies were assigned to the Bank as at the
end of the year to perform services other than guarding and janitorial services. Further, 7 (2018: 8) employees were posted
abroad. The rest were working domestically.
36 DEFINED BENEFIT PLANS
36.1 General description
The Bank operates a funded gratuity scheme for all employees who opted for the staff retirement benefit scheme introduced
by the management with effect from July 1, 2002. For those employees who did not opt for the new scheme, the Bank
continues to operate a funded pension scheme.
The Bank also provides post retirement medical benefits (unfunded scheme) to eligible retired employees.
36.2 Number of employees and beneficiaries under the schemes
The number of employees covered under the following defined benefit scheme / plans are:

2019 2018
Numbers
– Pension fund 632 922

– Gratuity fund 11,245 10,674
– Benevolent fund - 76
– Post retirement medical benefits 11,183 10,623
– Employees’ compensated absences 11,183 10,623
In addition, the number of beneficiaries covered under the following

defined benefit scheme / plans are:
– Pension fund 2,330 2,236

36.3 Principal actuarial assumptions
The actuarial valuations were carried out for December 31, 2019 based on the Projected Unit Credit Method, using the
following significant assumptions:
Sources of estimation December 31, December 31,

2019 2018
Withdrawal rate
Pension fund Low Low
Gratuity fund Moderate High
Benevolent fund - High
Post retirement medical benefits High High
Employees’ compensated absences High High
Mortality rate Adjusted SLIC Adjusted SLIC

2001–2005 2001–2005
Discount rate Yield on investments in Government Bonds 11.25% 13.25%
Expected rate of return on plan assets

Pension fund Yield on investments in Government Bonds 11.25% 13.25%
Gratuity fund Yield on investments in Government Bonds 11.25% 13.25%
Benevolent fund Yield on investments in Government Bonds - 13.25%
Expected rate of salary increase Rate of salary increase 9.25% 11.25%
The expected return on plan assets is based on the market expectations and depends on the asset portfolio of the Bank, at
the beginning of the period, for returns over the entire life of the related obligation.
36.4 Reconciliation of (receivable from) / payable to defined benefit plans / other long term benefits

Note Pension
Gratuity Benevolent Post Employees’ Pension Gratuity Benevolent Post Employees’
fund
fund fund retirement compensated fund fund fund retirement compensated
medical absences medical absences
Rupees in ‘000 Rupees in ‘000
Present value of defined benefit obligations 36.6 1,661,826 3,351,328 - 1,365,237 668,547 1,585,703 2,827,757 9,206 1,332,925 606,216
Fair value of plan’s / scheme’s assets 36.7 (6,102,237) (2,744,422) - - - (6,145,768) (2,383,102) (241,036) - -
Net (asset) / liability (4,440,411) 606,906 - 1,365,237 668,547 (4,560,065) 444,655 (231,830) 1,332,925 606,216
Benefit of the surplus not available to
the Bank - - - - - - - 115,915 - -
36.5 Movement in (receivable from) / payable to defined benefit plans

Note Pension
fund Gratuity Benevolent Post Employees’ Pension Gratuity Benevolent Post Employees’
Opening balance (4,560,065) 444,655 (115,915) 1,332,925 606,216 (3,692,032) 511,919 (112,061) 1,240,250 570,128
(Reversal) / charge for the year 36.9 (466,025) 462,416 (28,157) 192,559 185,679 (121,245) 390,919 (18,490) 144,612 244,446
Other comprehensive (income) / losses 727,746 90,737 - (44,640) - (746,788) (72,143) 14,636 105,031 -
Contribution to the fund / benefits paid (142,067) (390,902) 144,072 (115,607) (123,348) - (386,040) - (156,968) (208,358)
Closing balance (4,440,411) 606,906 - 1,365,237 668,547 (4,560,065) 444,655 (115,915) 1,332,925 606,216
36.6 Movement in defined benefit obligations
December 31, 2019

Pension Gratuity Benevolent Post Employees’
fund fund fund retirement compensated
medical absences
Rupees in
‘000
Opening balance 1,585,703 2,827,757 9,206 1,332,925 606,216

Current service cost - 400,530 - 21,879 38,186
Interest cost 178,867 357,867 - 168,954 72,152
Benefits paid (471,523) (253,741) (9,206) (115,607) (123,348)
VRS / settlement loss 147,596 2,970 - 1,726 15,391
Re–measurement loss / (gain) 221,183 15,945 - (44,640) 59,950
Closing balance 1,661,826 3,351,328 - 1,365,237 668,547
December 31, 2018

medical absences
Rupees in
‘000
Opening balance 1,979,453 2,531,300 8,036 1,240,250 570,128

Interest cost 148,404 195,575 579 95,846 38,441
Benefits paid (361,231) (321,380) (2,041) (156,968) (208,358)
Past Service Cost– Supreme Court 172,111 - - - -
Past Service Cost– Change in retirement age 4,285 33,851 - 22,975 18,252
VRS / settlement loss / (gain) 6,952 7,672 - (3,450) 17,215
Re–measurement (gain) / loss (364,271) 73,576 2,632 105,031 137,850
Closing balance 1,585,703 2,827,757 9,206 1,332,925 606,216
36.7 Movement in fair value of plan assets
December 31, 2019

medical absences
Rupees in
‘000
Opening balance 6,145,768 2,383,102 241,036 - -

Expected return on plan assets 792,488 298,951 - - -
Bank’s contribution 142,067 390,902 - - -
Benefits paid (471,523) (253,741) (241,036) - -
Re–measurement loss (506,563) (74,792) - - -
Closing balance 6,102,237 2,744,422 - - -
December 31, 2018

medical absences
Rupees in
‘000
Opening balance 5,671,485 2,019,381 232,158 - -

Expected return on plan assets 452,997 153,342 19,069 - -
Bank’s contribution - 386,040 - - -
Benefits paid (361,231) (321,380) (2,041) - -
Re–measurement gain / (loss) 382,517 145,719 (8,150) - -
Closing balance 6,145,768 2,383,102 241,036 - -
36.8 Composition of plan assets
December 31, 2019

medical absences
Rupees in
‘000
Equity securities 4,880,641 738,956 - - -

Cash and cash equivalents 1,221,596 2,005,466 - - -
6,102,237 2,744,422 - - -
36.8.1 Fair value of Bank’s financial instruments

included in plan assets
Shares of ABL 2,649,848 582,681 - - -

Term deposit receipts 1,047,174 1,895,966 - - -
Bank balances with ABL 174,422 109,500 - - -
3,871,444 2,588,147 - - -
December 31, 2018

medical absences
Rupees in
‘000
Equity securities 5,333,723 655,028 29,796 - -

Cash and cash equivalents 812,045 1,728,074 211,240 - -
6,145,768 2,383,102 241,036 - -

Shares of ABL 3,277,428 655,028 29,796 - -

Term deposit receipts 664,594 1,693,708 193,345 - -
Bank balances with ABL 147,451 34,366 17,895 - -
4,089,473 2,383,102 241,036 - -
36.8.3 Investment in term deposit receipts are subject to credit risk and interest rate risks, while equity securities are subject to price risk.
These risks are regularly monitored by Trustees of the employee funds.
36.9 Charge for defined benefit plan
December 31, 2019

medical absences
Rupees in ‘000

Interest cost - - - 168,954 72,152
Net interest (613,621) 58,916 - - -
VRS loss / (gain) 147,596 2,970 - 1,726 15,391
Re–measurement loss recognised - - - - 59,950
(466,025) 462,416 - 192,559 185,679
December 31, 2018
medical absences
Rupees in
‘000

Interest cost - - - 95,846 38,441
Net interest (304,593) 42,233 (18,490) - -
VRS loss 6,952 7,672 - (3,450) 17,215
Re-measurement loss recognised - - - - 137,850
(121,245) 390,919 (18,490) 144,612 244,446
36.10 Re–measurements recognized in other comprehensive income
December 31, 2019

medical absences
Rupees in ‘000
Re-measurement gain / (loss) on obligations -

Experience adjustments (221,183) (15,945) - 44,640 -
Re-measurement gain / (loss) on assets (506,563) (74,792) - - -
Re-measurement gain / (loss) in OCI (727,746) (90,737) - 44,640 -
December 31, 2018

medical absences
Rupees in
‘000
Re-measurement gain / (loss) on obligations - 364,271 (73,576) (2,632) (105,031) -

Experience adjustments
Re-measurement gain / (loss) on assets 382,517 145,719 (8,150) - -
Asset ceiling adjustment - - (3,854) -
Re-measurement gain / (loss) in OCI 746,788 72,143 (14,636) (105,031) -

2019 2018
Rupees in ‘000
36.11 Actual return / (loss) on plan assets
– Pension fund 285,925 835,514

– Gratuity fund 224,159 299,061
– Benevolent fund - 10,919
36.12 Five year data of defined benefit plan and experience adjustments
Pension fund
2019 2018 2017 2016 2015
Rupees in ‘000
Present value of defined benefit obligation 1,661,826 1,585,703 1,979,453 2,001,618 1,971,233
Fair value of plan assets (6,102,237) (6,145,768) (5,671,485) (6,616,345) (5,770,403)
(4,440,411) (4,560,065) (3,692,032) (4,614,727) (3,799,170)
Experience adjustments on plan obligations / assets
Re–measurement gain / (loss) on obligation (221,183) 364,271 (94,595) (172,722) (152,852)
Re–measurement gain / (loss) on assets (506,563) 382,517 (1,191,876) 660,173 (854,480)
Gratuity fund
2019 2018 2017 2016 2015
Rupees in ‘000
606,906 444,655 511,919 255,291 561,455
Re–measurement gain / (loss) on obligation (15,945) (73,576) (20,492) 36,036 (167,783)
Re–measurement gain / (loss) on assets (74,792) 145,719 (230,025) 26,301 (168,935)
Benevolent fund
2019 2018 2017 2016 2015
Rupees in ‘000
Present value of defined benefit obligation - 9,206 8,036 8,776 12,355

Fair value of plan assets - (278,393) (232,158) (221,007) (205,166)
- (269,187) (224,122) (212,231) (192,811)
Re–measurement (loss) / gain on obligation - (2,632) (1,111) 931 (4,376)
Re–measurement (gain) / loss on assets - (8,150) (3,976) 1,136 (10,841)
Post retirement medical

2019 2018 2017 2016 2015
Rupees in ‘000
Fair value of plan assets - - - - -
1,365,237 1,332,925 1,240,250 1,298,380 1,217,945
Experience adjustments on plan obligations
Re–measurement (loss) / gain on obligation 44,640 (105,031) 62,068 (97,990) (243,936)
Employees’ compensated absences

2019 2018 2017 2016 2015
Rupees in ‘000
Present value of defined benefit obligation 668,547 606,216 570,128 698,964 761,498
668,547 606,216 570,128 698,964 761,498
Re–measurement (loss) / gain on obligation (59,950) (137,850) 71,640 11,662 (45,712)
36.13 Expected contributions to be paid to the funds in the next financial year
The Bank contributes to the gratuity fund as per actuarial expected charge for the next financial year. No contributions are
being made to pension fund due to surplus of fair value of plan’s assets over present value of defined obligation. Based on
actuarial advice, management estimates that the charge / (reversal) in respect of defined benefit plans for the year ending
December 31, 2020 would be as follows:
medical absences
Rupees in ‘000
Expected (reversal) / charge for the next year (499,546) 401,961 - 127,086 108,310
36.14 Sensitivity analysis
+1% -1% +1% Salary -1% Salary +10% -10% 1Year 1Year
Description Discount Discount Increase Increase Withdrawal Withdrawal Mortality age Mortality age
Rate Rate Rate Rate Rate Rate set back set forward
Rupees in ‘000
Pension fund 1,613,770 1,715,331 1,661,826 1,661,826 1,661,894 1,661,765 1,662,587 1,661,069
Gratuity fund 3,146,615 3,582,223 3,600,668 3,127,017 3,351,328 3,351,328 3,350,060 3,352,591
Benevolent fund - - - - - - - -
Post retirement medical 1,272,317 1,470,835 1,399,106 1,330,036 1,405,845 1,329,438 1,360,812 1,369,967
Leave compensated absences 625,368 717,204 717,674 624,241 660,538 676,907 666,953 670,135
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation
calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the
defined benefit obligation recognized within the statement of financial position.
December 31, 2019
medical absences
Rupees in
‘000
36.15 Maturity Profile
The weighted average duration of the obligation (in years) 3.06 6.5 - 5.40 5.40
36.16 Funding Policy
The Bank endeavours to ensure that liabilities under the various employee benefit schemes are covered by the Fund on any
valuation date having regards to the various actuarial assumptions such as projected future salary increase, expected future
contributions to the fund, projected increase in liability associated with future service and the projected investment income
of the Fund.
36.17 Risk associated with defined benefit plans
The defined benefit plans may expose the bank to actuarial risks such as longevity risk, investment risk, salary increase risk
and withdrawal rate risk as described below;
Longevity risks:
The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan level over
the entire retiree population.
Investment risks:
The risk arises when the actual performance level of investment levels is lower than expectation and thus creating a
shortfall in the funding objectives.
Salary increase risk:

The most common type of retirement benefit is one where the final benefit is linked with final salary. The risk arises when
the actual increases are higher than expectations and impact the liability accordingly.
Withdrawal Rate:
The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation. The
movement of the liability can go either way.
37 DEFINED CONTRIBUTION PLAN
The Bank operates an approved contributory provident fund for 10,089 (2018: 10,158) employees where contributions are
made by the Bank and employees at 8.33% per annum (2018: 8.33% per annum) of the basic salary every month.
38 COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
December 31, 2019

Directors
Members Key Man- Other Material
Non-Execu- President
Chairman Shariah agement Risk Takers /
tives / CEO
Board Personnel Controllers
Rupees in ‘000
Fees and allowances etc. - 27,400 - - - -

Managerial remuneration - - - - - -
- Fixed (including Eid bonus) - - 2,842 14,200 96,537 186,385
- Total Variable - - - 22,000 114,000 84,501
of which
a. Cash Bonus / awards - - - 22,000 114,000 84,501
b. Bonus and awards in Shares - - - - - -
Charge for defined benefit plans - - 294 1,590 19,303 35,936

Contribution to defined contribution plan - - 219 1,183 8,042 15,526
Rent and house maintenance - - 1,574 8,520 57,922 107,860
Utilities - - 525 2,840 19,307 35,965
Medical - - 525 2,840 20,335 35,965
Conveyance - - 813 3,000 50,475 58,203
Others - - 284 349 12,805 41,375
Total - 27,400 7,076 56,522 398,726 601,716
Number of persons 1 6 3 1 18 75
December 31, 2018

Directors
Members Key Man-
u- President /
Non-Exec
Chairman Shariah agement
tives CEO
Board Personnel
Rupees in
‘000
Fees and allowances etc. - 16,500 - - -

Managerial remuneration - - - - -
- Fixed (including Eid bonus) - - 3,107 12,900 90,933
- Total Variable - - - 20,000 110,100
of which
a. Cash Bonus / awards - - - 20,000 110,100
b. Bonus and awards in Shares - - - - -
Charge for defined benefit plans - - 309 1,399 19,796

Contribution to defined contribution plan - - 237 1,075 7,575
Rent and house maintenance - - 1,708 7,740 54,560
Utilities - - 569 2,580 18,187
Medical - - 569 2,687 18,390
Conveyance - - 1,095 3,000 50,677
Others - - 420 374 8,935
Total - 16,500 8,014 51,755 379,153
Number of persons 1 6 4 1 17
38.2 Remuneration paid to Directors for participation in Board and Committee Meetings
December 31,
2019 Board
Human Committees Strategic Total
Board Audit
Sr. Name of Director Resource E-Vision Planning and Amount
Committee Board Risk
Management
No. Meetings Remuneration Monitoring
of Board Committee Paid
Committee Committe
Rupees in e
‘000
1 Mohammad Naeem Mukhtar - - - - - - -

2 Sheikh Mukhtar Ahmad - - - - - - -
3 Muhammad Waseem Mukhtar 1,750 1,150 1,400 - - 2,400 6,700
4 Abdul Aziz Khan 1,250 - 1,150 1,150 - 2,150 5,700
5 Dr. Muhammad Akram Sheikh 1,750 1,400 1,400 1,150 - - 5,700
6 Zafar Iqbal 1,750 1,400 - - 1,000 - 4,150
7 Nazrat Bashir 1,750 - - - 1,000 2,400 5,150
8,250 3,950 3,950 2,300 2,000 6,950 27,400
December 31,
2018 Board
Human Committees Strategic Total
Board Audit
Sr. Name of Director Resource E-Vision Planning and Amount
Committee Board Risk
Management
No. Meetings Remuneration Monitoring
Committee Committe
Rupees in e
‘000
1 Mohammad Naeem Mukhtar - - - - - - -

2 Sheikh Mukhtar Ahmad - - - - - - -
3 Muhammad Waseem Mukhtar 1,050 300 750 450 - 1,650 4,200
4 Abdul Aziz Khan 1,050 - 750 600 - 1,500 3,900
5 Dr. Muhammad Akram Sheikh 1,050 750 150 300 600 - 2,850
6 Zafar Iqbal 1,050 750 - - 150 - 1,950
7 Nazrat Bashir 450 - - - 150 300 900
8 Mubashir A. Akhtar 600 450 - - 450 1,200 2,700
5,250 2,250 1,650 1,350 1,350 4,650 16,500
38.3 Remuneration paid to Shariah Board Members

Resident
Items Chairman Non-Resident Resident Non-Resident
Member Chairman Member
Member(s) Member(s)
Rupees in ‘000
Salaries and allowances 3,979 1,162 1,355 3,672 2,979 1,053
Total Number of Persons 1 1 1 1 1 1
38.4 Deferred cash bonus / remuneration for MRTs for the year 2019 is Rs. 15,828,450.
39 FAIR VALUE OF FINANCIAL INSTRUMENTS
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:
December 31, 2019
Carrying Value Fair Value

On–Balance sheet Financial Instruments Held to
Maturity Held for Available Financing Other Other
Trading for Sale and financial financial Total Level 1 Level 2 Level 3 Total
receivables assets liabilities
Rupees in ‘000
Financial assets – measured at fair value
Investments
Shares / Open Ended Mutual Funds - - 28,613,526 - - - 28,613,526 28,458,268 155,258 - 28,613,526
Federal Government Securities - 19,868,163 678,973,168 - - - 698,841,331 - 698,841,331 - 698,841,331
Non Government Debt Securities - - 4,176,639 - - - 4,176,639 - 4,176,639 - 4,176,639
Financial assets – not measured at fair value

Cash and balances with treasury banks - - - - 119,943,828 - 119,943,828 - - - -
Balances with other banks - - - - 602,582 - 602,582 - - - -
Lendings - - - 13,606,921 - - 13,606,921 - - - -
Advances - - - 485,015,881 - - 485,015,881 - - - -
Other assets - - - - 35,112,658 - 35,112,658 - - - -
Investments ( HTM, unlisted ordinary shares, Term
finance certificate, sukuks, subsidiaries ) 13,015,041 - 13,310,456 - - - 26,325,497 - - - -
13,015,041 19,868,163 725,073,789 498,622,802 155,659,068 - 1,412,238,863 28,458,268 703,173,228 - 731,631,496
Financial liabilities – measured at fair value
Trading Liability - - - - - - - - - - -
Financial liabilities – not measured at fair value
Bills payable - - - - - 7,878,626 7,878,626 - - - -

Borrowings - - - - - 266,448,386 266,448,386 - - - -
Deposits and other accounts - - - - - 1,049,043,032 1,049,043,032 - - - -
Other liabilities - - - - - 36,147,882 36,147,882 - - - -
- - - - - 1,359,517,926 1,359,517,926 - - - -
Off–balance sheet financial
instruments – measured at fair value
Forward foreign exchange contracts - - - - 358,881,918 - 358,881,918 - 358,881,918 - 358,881,918
Forward government securities transactions 513,938 513,938 513,938 513,938
- - - - 359,395,856 - 359,395,856 - 359,395,856 - 359,395,856
December 31, 2018

On–Balance sheet Financial Instruments Held to Held for Available Financing Other Other
Maturity Trading for Sale and financial financial Total Level 1 Level 2 Level 3 Total
receivables assets liabilities
Rupees in ‘000
Investments
Shares / Open Ended Mutual Funds - - 30,241,640 - - - 30,241,640 30,115,370 126,270 - 30,241,640
Federal Government Securities - - 609,053,323 - - - 609,053,323 - 609,053,323 - 609,053,323

Balances with other banks - - - - 2,575,055 - 2,575,055 - - - -
Lending to Financial institutions - - - 53,780,195 - - 53,780,195 - - - -
Advances - - - 438,317,184 - - 438,317,184 - - - -
Other asset - - - - 28,988,381 - 28,988,381 - - - -
Investments (HTM, unlisted ordinary shares,
Term finance certificate, sukuks, subsidiaries ) 16,151,622 - 12,794,995 - - - 28,946,617 - - - -
16,151,622 - 655,076,664 492,097,379 130,751,850 - 1,294,077,515 30,115,370 612,166,299 - 642,281,669
Trading Liability - 9,987,849 - - - - 9,987,849 - 9,987,849 - 9,987,849

Bills payable - - - - - 7,752,959 7,752,959 - - - -
Borrowings - - - - - 215,895,137 215,895,137 - - - -
Deposits and other accounts - - - - - 984,475,183 984,475,183 - - - -
- 9,987,849 - - - 1,227,971,517 1,237,959,366 - 9,987,849 - 9,987,849
Forward government securities transactions 57,768,858 57,768,858 57,768,858 57,768,858
- - - - 265,278,829 - 265,278,829 - 265,278,829 - 265,278,829
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Rupees in ‘000
39.1 Fair value of non-financial assets

Fixed assets - 41,974,966 - 41,974,966 - 39,636,178 - 39,636,178
Non-banking assets - 4,486,663 - 4,486,663 - 4,107,306 - 4,107,306
39.2 Valuation Techniques used in determination of Fair Valuation of Financial Instruments within Level 2
Item Valuation approach and input used
Federal Government Securities Marked to Market on the basis of PKRV rates.

Non–Government Debt Securities Marked to Market on the basis of MUFAP rates.
Foreign exchange contracts Marked to Market on the basis of SBP rates.
Open ended mutual funds Marked to Market on the basis of MUFAP rates.
40 SEGMENT INFORMATION
40.1 Segment Details with respect to Business Activities
December 31, 2019
Corporate & Commercial Trading &

Islamic
Investment
Banking and Retail Sale Other Total
Banking
Banking (Treasury)
Rupees in ‘000
Profit & Loss

Net mark-up/return/profit 45,813,790 (54,926,966) 49,983,718 1,203,117 (566,190) 41,507,469
Inter segment revenue - net (45,178,102) 95,831,440 (47,548,684) - (3,104,654) -
Non mark-up / return / interest income 4,419,600 3,339,124 2,611,642 161,154 359,661 10,891,181
Total Income 5,055,288 44,243,598 5,046,676 1,364,271 (3,311,183) 52,398,650
Segment direct expenses (582,516) (15,889,959) (114,760) (1,285,405) (9,737,713) (27,610,353)

Total expenses (582,516) (15,889,959) (114,760) (1,285,405) (9,737,713) (27,610,353)
Provisions (1,292,941) (205,842) - (12) 952,137 (546,658)
Profit before tax 3,179,831 28,147,797 4,931,916 78,854 (12,096,759) 24,241,639
- -
Balance Sheet
Cash & Bank balances 59,821 51,303,207 61,984,899 2,045,240 5,153,243 120,546,410
Investments 47,128,653 - 697,876,038 12,452,302 500,000 757,956,993
Net inter segment Lending (413,717,279) 972,381,940 (557,387,800) 161,300 (1,438,161) -
Lendings to financial institutions 4,753,821 - 2,052,492 11,554,430 (4,753,822) 13,606,921
Advances - performing 437,660,414 25,631,709 - 12,615,228 8,407,030 484,314,381

Advances - non-performing 511,117 461,688 - - 14,881,113 15,853,918
Provision against advances (127,779) (205,889) - (20) (14,818,730) (15,152,418)
Advances - net 438,043,752 25,887,508 - 12,615,208 8,469,413 485,015,881
Others 7,072,635 8,706,936 7,215,579 2,752,910 78,246,987 103,995,047
Total Assets 83,341,403 1,058,279,591 211,741,208 41,581,390 86,177,660 1,481,121,252
Borrowings 63,149,483 2,415,660 203,936,638 1,700,000 (4,753,395) 266,448,386

Deposits & other accounts - 1,012,571,004 - 34,389,411 2,082,617 1,049,043,032
Others 2,413,361 16,402,958 1,917,549 2,143,144 27,401,989 50,279,001
Total liabilities 65,562,844 1,031,389,622 205,854,187 38,232,555 24,731,211 1,365,770,419
Equity/Reserves 17,778,559 26,889,969 5,887,021 3,348,835 61,446,449 115,350,833
Total Equity & liabilities 83,341,403 1,058,279,591 211,741,208 41,581,390 86,177,660 1,481,121,252
Contingencies & Commitments 78,732,154 12,055,398 359,395,856 1,907,886 13,128,046 465,219,340

December 31, 2018
Corporate &
Investment Commercial Trading & Islamic
and Retail Sale Other Total
Banking Banking
Banking (Treasury)
Rupees in ‘000
Profit & Loss

Net mark-up/return/profit 27,917,656 (28,096,467) 31,526,565 655,849 111,838 32,115,441
Inter segment revenue - net (27,412,947) 56,996,482 (27,126,100) - (2,457,435) -
Non mark-up / return / interest income 4,610,156 2,879,344 3,460,206 79,343 260,391 11,289,440
Total Income 5,114,865 31,779,359 7,860,671 735,192 (2,085,206) 43,404,881
Segment direct expenses (540,139) (13,782,024) (108,445) (1,083,994) (7,963,540) (23,478,142)

Total expenses (540,139) (13,782,024) (108,445) (1,083,994) (7,963,540) (23,478,142)
Provisions / (reversal) 234,885 3,418 - (8) 851,393 1,089,688
Profit before tax 4,809,611 18,000,753 7,752,226 (348,810) (9,197,353) 21,016,427
Balance Sheet
Cash & Bank balances 79,354 44,090,551 47,880,283 4,157,592 5,555,689 101,763,469
Investments 53,748,130 - 606,731,062 10,249,093 500,000 671,228,285
Net inter segment Lending (402,000,239) 893,698,327 (529,115,678) 1,705,552 35,712,038 -
Lendings to financial institutions 3,610,409 - 50,255,680 3,524,515 (3,610,409) 53,780,195
Advances - performing 394,258,308 28,081,086 - 6,925,320 23,966,763 453,231,477
Advances - non-performing 415,941 183,631 - - - 599,572
Provision against advances (116,635) (103,416) - (8) (15,293,806) (15,513,865)
Advances - net 394,557,614 28,161,301 - 6,925,312 8,672,957 438,317,184
Others 4,772,402 7,977,518 2,236,843 1,641,756 68,881,257 85,509,776
Total Assets 54,767,670 973,927,697 177,988,190 28,203,820 115,711,532 1,350,598,909
Borrowings 42,470,266 3,912,691 183,088,196 - (3,588,167) 225,882,986

Deposits & other accounts - 957,686,063 - 24,632,633 2,156,487 984,475,183
Others 2,326,844 12,328,943 (3,680,842) 319,683 21,641,279 32,935,907
Total liabilities 44,797,110 973,927,697 179,407,354 24,952,316 20,209,599 1,243,294,076
Equity/Reserves 9,970,560 - (1,419,164) 3,251,504 95,501,933 107,304,833
Total Equity & liabilities 54,767,670 973,927,697 177,988,190 28,203,820 115,711,532 1,350,598,909
Contingencies & Commitments 83,808,051 12,033,029 265,278,829 582,318 17,824,413 379,526,640

40.2 GEOGRAPHICAL SEGMENT ANALYSIS
December 31, 2019
Domestic Middle
Operations East China Total
Rupees in
‘000
Profit & Loss

Net mark–up/return/profit 41,133,593 373,877 - 41,507,470
Inter segment revenue – net (134,330) 134,330 - -
Non mark–up / return / interest income 10,722,859 168,321 - 10,891,180
Total Income 51,722,122 676,528 - 52,398,650
Segment direct expenses (27,484,843) (91,819) (33,691) (27,610,353)

Total expenses (27,484,843) (91,819) (33,691) (27,610,353)
Provisions 528,487 18,171 - 546,658
Profit before tax 23,708,792 566,538 (33,691) 24,241,639
Balance Sheet
Cash & Bank balances 120,521,423 24,987 - 120,546,410
Investments 753,181,351 4,775,642 - 757,956,993
Net inter segment lendings - 4,748,676 - 4,748,676
Lendings to financial institutions 8,858,245 - - 8,858,245
Advances – performing 469,626,834 14,687,548 - 484,314,382
Advances - non-performing 15,853,918 - - 15,853,918
Provision against advances (15,152,419) - - (15,152,419)
Advances - net 470,328,333 14,687,548 - 485,015,881
Others 103,773,102 221,945 - 103,995,047
Total Assets 1,456,662,454 24,458,798 - 1,481,121,252
Borrowings 241,166,918 20,532,792 - 261,699,710

Subordinated debt - - - -
Deposits & other accounts 1,048,500,756 542,276 - 1,049,043,032
Net inter segment borrowing 4,748,676 - - 4,748,676
Others 50,185,782 93,219 - 50,279,001
Total liabilities 1,344,602,132 21,168,287 - 1,365,770,419
Equity 112,060,322 3,290,511 - 115,350,833
Total Equity & liabilities 1,456,662,454 24,458,798 - 1,481,121,252
Contingencies and commitments 464,677,824 541,516 - 465,219,340

December 31, 2018
Domestic Middle
Rupees in
‘000
Profit & Loss

Inter segment revenue – net - 262,892 - 262,892
Non mark–up / return / interest income 11,461,765 (172,326) - 11,289,439
Total Income 42,771,002 633,878 - 43,404,880

Inter segment expense allocation - - - -
Total expenses (23,349,830) (97,631) (30,680) (23,478,141)
Provisions (1,109,600) 19,912 - (1,089,688)
Balance Sheet

Investments 660,984,862 10,243,423 - 671,228,285
Advances - non-performing 599,572 - - 599,572
Advances - net 436,928,716 1,388,468 - 438,317,184
Others 85,384,347 125,429 - 85,509,776
Total Assets 1,335,200,009 15,398,900 - 1,350,598,909
Borrowings 209,636,299 12,637,580 - 222,273,879

Deposits & other accounts 983,988,816 486,367 - 984,475,183
Others 32,910,962 24,945 - 32,935,907
Equity 105,054,825 2,250,008 - 107,304,833

41 RELATED PARTY TRANSACTIONS
Note
The Bank has related party relationships with its parent, subsidiary, companies with common directorship, directors, employee benefit plans and key management personnel
including their associates.
s to
Contributions to the accounts in respect of staff retirement benefits are made in accordance with actuarial valuation / terms of the contribution plan. Remuneration of the key
the
management personnel are in accordance with the terms of their employment. Other transactions are at agreed terms. Unc
onso
Parent Directors
Key
management Subsidiaries Associates*
Joint
venture
Other
related Parent Directors
Key
Joint
venture
Othe
related lidat
ed
personnel parties personnel parties
Rupees in ‘000
Balances with other banks Fina

In current accounts - - - - - - - - - - - - - -
ncial
In deposit accounts - - - - - - - - - - - - - - Stat
Lendings to financial institutions
- - - - - - - - - - - - - -
eme
Opening balance
Addition during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
nts
for the
Repaid during the year - - - - - - - - - - - - - -
year
Transfer in / (out) – net - - - - - - - - - - - - - -
ended
Closing balance - - - - - - - - - - - - - -
Dece
Investments
mber
Opening balance - - - 500,000 351 - 25,000 - - - 500,000 351 - -
31,
Investment made during the year - - - - - - - - - - - - -
2019
Investment redeemed / disposed off during the year - - - - - - - - - - - - -
Transfer in / (out) – net - - - - (351) - - - - - - - - 25,000
Closing balance - - - 500,000 - - 25,000 - - - 500,000 351 - 25,000
Provision for diminution in value of investments - - - - - - - - - - - 4,649 - -
Advances
All Opening balance - 8,704 264,404 - - - 593 - 17,029 252,674 - - - (57)
ie Addition during the year - 25,719 97,754 - - - 9,129 - 13,304 112,248 - - - 8,011
d Repaid during the year - (29,659) (165,274) - - - (9,147) - (21,629) (102,179) - - - (7,361)
Ba Transfer in / (out) – net - - - - - - - - - 1,661 - - -

Closing balance - 4,764 196,884 - - - 575 - 8,704 264,404 - - - 593
nk
Li
Provision held against advances - - - - - - - - - - - - - -
mi
te
17
1
17
2
Note
ReAn Key Other Key Othe
s to
Joint Joint
Parent Directors management Subsidiaries Associates* related Parent Directors management Subsidiaries Associates* related
venture venture
ponu personnel parties personnel parties
rt al Rupees in ‘000
the
20
19
Other Assets
Unc
Interest / mark-up accrued - 7,860 69,367 - - - - - 13,143 66,580 - - - - onso
Receivable from staff retirement fund
Other receivable
-
-
-
- -
- -
7,348
-
-
-
-
3,705,491
-
-
-
-
-
-
- 1,824
- -
- -
- 4,204,441
-
lidat
Provision against other assets - - - - - - - - - - - - - - ed
Borrowings Fina
Opening balance
Borrowings during the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ncial
Settled during the year - - - - - - - - - - - - - - Stat
eme
Transfer in / (out) - net - - - - - - - - - - - - - -
Closing balance - - - - - - - - - - - - - -
Subordinated debt
nts
Opening balance - - - - - - - - - - - - - -
for the
Issued / Purchased during the year - - - - - - - - - - - - - -
year
Redemption / Sold during the year - - - - - - - - - - - - - -
ended
Closing balance - - - - - - - - - - - - - -
Dece
mber
Deposits and other accounts
31,
Opening balance 1,784 24,424 70,387 12,116 82,381 - 18,296,520 1,202 262,709 61,889 38,653 85,690 - 9,246,496
2019
Received during the year 8,594,379 1,824,926 524,039 970,413 7,718,711 - 247,373,312 9,623,398 99,342 622,197 1,006,553 8,614,444 - 226,189,869
Withdrawn during the year (8,593,314) (1,492,156) (559,794) (958,301) (7,677,777) - (248,754,026) (9,622,816) (337,996) (616,342) (1,033,090) (8,617,739) - (217,149,184)
Transfer in / (out) - net - - - - - - - - 369 2,643 - (14) - 9,339
Closing balance 2,849 357,194 34,632 24,228 123,315 - 16,915,806 1,784 24,424 70,387 12,116 82,381 - 18,296,520
Other Liabilities
Interest / mark-up payable - - - - 599 - 116,987 - 2,506 625 1,570 757 - 651,581
Payable to staff retirement fund - - - - - - - - - - - - - -
Other liabilities - - - - - - - - - - - - - -
Contingencies and Commitments
Other contingencies - - - - - - - - - - - - - -
41.1 RELATED PARTY TRANSACTIONS
Note
December 31, 2019 December 31, 2018 s to
Parent Directors
Key
personnel
Joint
venture
Other
related
parties
Parent Directors
Key
personnel
Joint
venture
Othe
related
parties
the
Rupees in ‘000 Unc
Income onso
Mark-up / return / interest earned
Fee and commission income
-
1
422
21
18,179
97 7,857
- -
16
-
- 667
- -
2
513
10
13,475
101
-
9,458
-
83
-
- 423
-
lidat
Dividend income - - - - - - - - - - - - - - ed
Net gain / ( loss) on sale of securities - - 14 - - - 465 - - - - - - (262)
Rental Income - - - 7,135 - - - - - - 5,581 - - - Fina
Other Income - - - 5,905 - - - - - - - - - -
ncial
Expense Stat
eme
Mark-up / return / interest paid - 14,749 559 4,607 5,108 - 884,506 - 2,506 625 1,570 757 - 651,581
Directors meeting fee - 27,400 - - - - - - 16,500 - - - - -
Remuneration
Other expenses**
-
-
53,749
-
371,381
-
-
- 31,211
- -
- -
- -
-
49,281
-
351,782
-
-
- 32,006
- -
-
-
-
nts
Rent expense*** - - - - 14,191 - - - - - - 11,896 - -
for the
Charge in respect of staff retirement benefit funds - - - - - - 60,868 - - - - - - 546,795
year
Insurance premium paid - 167 879 - - - - - 99 244 - - - -
ended
Insurance claims settled - - - - - - - - - - - - - -
Dece
mber
31,
2019
All
ie
d
Ba
nk
Li
mi
te
17
3
Notes to the Unconsolidated Financial
Statements
Shares held by the holding company, outstanding at the end of year are included in note 19 to these unconsolidated financial statements.
* Associated companies are as per IAS 24 ‘Related Party Disclosures’.
**Other expenses mainly include donation of Rs. 30 million to National Management Foundation for construction of hostel building.
***Rent expense of ABL Branch with associated company (Ibrahim Fibres Limited) was carried out on terms other than that of arm’s
length with prior permission of State Bank of Pakistan.
During the year ended December 31, 2019; certain movable assets having cumulative net book value of Rs. 36,000 were disposed
off for Rs. 269,000 to the Key Management Personnel of the Bank.

2019 2018
Rupees in ‘000
42 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS
Minimum Capital Requirement (MCR):

Paid–up capital (net of losses) 11,450,739 11,450,739
Capital Adequacy Ratio (CAR):

Eligible Common Equity Tier 1 (CET 1) Capital 80,480,270 75,040,687
Eligible Additional Tier 1 (ADT 1) Capital - -
Total Eligible Tier 1 Capital 80,480,270 75,040,687
Eligible Tier 2 Capital 22,351,157 21,171,279
Total Eligible Capital (Tier 1 + Tier 2) 102,831,427 96,211,966
Risk Weighted Assets (RWAs):

Credit Risk 345,902,918 317,173,241
Market Risk 44,703,919 38,020,880
Operational Risk 83,485,603 77,614,260
Total 474,092,440 432,808,381
Common Equity Tier 1 Capital Adequacy ratio 16.98% 17.34%

Tier 1 Capital Adequacy Ratio 16.98% 17.34%
Total Capital Adequacy Ratio 21.69% 22.23%
In order to strengthen the solvency of Banks / Development Financial Institutions (DFI), SBP through its BSD Circular No.
07 of 2009 dated April 15, 2009 has asked the Banks to raise their minimum paid up capital to Rs. 10 billion free of losses.
Further, SBP through its BPRD Circular # 6 of 2013 dated August 15, 2013 has asked Banks to maintain the minimum
Capital Adequacy Ratio (CAR) of 12.50% on standalone as well as on consolidated basis till December 31, 2019. A phase
in arrangement was put in place whereby the banks were required to maintain the following ratios on an ongoing basis,
which has been completed as on December 31, 2019.
2015 2016 2017 2018 2019
Common Equity Tier–1 – CET1 6.00% 6.00% 6.00% 6.00% 6.00%

Additional Tier–1 1.50% 1.50% 1.50% 1.50% 1.50%
Tier 1 7.50% 7.50% 7.50% 7.50% 7.50%
Total Capital 10.00% 10.00% 10.00% 10.00% 10.00%
*Capital Conservation Buffer – CCB 0.25% 0.65% 1.275% 1.90% 2.50%
Total Capital plus CCB 10.25% 10.65% 11.275% 11.90% 12.50%
* Consisting of CET1 only.
The paid up capital and CAR of the Bank stands at Rs. 11.451 billion and 21.69% of its total risk weighted assets as at
December 31, 2019, respectively. The Bank has complied with all externally imposed capital requirements as at year end.
Standardized Approach is used for calculating the Credit and Market risk, whereas, Basic Indicator Approach is used for
Operational Risk in the Capital Adequacy Calculation.
Annual
174 Report 2019
2019 2018
Rupees in ‘000
Leverage Ratio (LR):

Eligible Tier-1 Capital 80,480,270 75,040,687
Total Exposures 1,798,987,646 1,633,878,538
Leverage Ratio 4.47% 4.59%
Liquidity Coverage Ratio (LCR):

Total High Quality Liquid Assets 460,376,621 397,968,465
Total Net Cash Outflow 274,294,059 262,615,154
Liquidity Coverage Ratio 167.84% 151.54%
Net Stable Funding Ratio (NSFR):

Total Available Stable Funding 1,007,506,800 913,354,244
Total Required Stable Funding 703,906,177 491,398,752
Net Stable Funding Ratio 143.13% 185.87%
42.1 The link to the full disclosure is available at https://www.abl.com/investor-relations/
43 RISK MANAGEMENT
The principal risks associated with ABL’s business are credit risk, market risk, liquidity risk, reputational risk and operational
risk. The Risk Management Framework (henceforth to be referred to as ‘The Framework’) provides principles for identifying,
assessing, and monitoring risk within the Bank. The Framework specifies the key elements of the risk management process
in order to maximize opportunities, minimize adversities and to achieve improved outputs based on informed decision
making.
The Bank performs risk measurement, monitoring and control functions through use of various risk procedures and models.
To give it a formal structure, all the policies and guidelines are approved by the Board and relevant management
committees.
Risk management functions have been segregated by business specialization, i.e., Credit Risk, Credit Administration,
Technical Appraisal and Enterprise Risk which inter alia includes Risk Architecture, Reputational Risk, Operational Risk and
Market & Liquidity Risk. All these functions are operating in tandem to improve and maintain the health of the Bank’s assets
and liabilities.
Categories of Risk
Credit Risk This risk is defined as the possibility of loss due to unexpected default or a deterioration of credit
worthiness of a business partner.
Credit Risk includes Country Risk i.e., the risks that counterparty is unable to meet its foreign
currency obligations as a result of adverse economic conditions or actions taken by governments
in the relevant country.
Market Risk The risk of loss generated by adverse changes in the price of financial assets or contracts
currently held by the Bank (this risk is also known as price risk).
Liquidity Risk The risk that the Bank is unable to meet its payment obligations when they fall due and to replace
funds when they are withdrawn; the consequences of which may be the failure to meet
obligations to repay depositors and fulfill commitments to lend.
Operational Risk Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people,
and systems or from external events. The definition excludes reputational risk.
Reputational Risk The risk of failing to meet the standards of performance or behaviour required or expected by
stakeholders in commercial activities or the way in which business is conducted.
Information Security & Information Security Governance Risk Management involves the identification of an organization’s
Governance Risk information assets and the development, documentation, and implementation of policies,
standards, procedures and guidelines that ensure confidentiality, integrity, and availability.
Strategic Risk Risk of an adverse impact on strategic goals. Strategic risk mainly arises from strategic
decisions, improper implementation of those decisions, or lack of responsiveness of Bank to
industry, economic or technological changes.
Risk Responsibilities
– The Board of Directors are accountable for overall supervision of the risk management process. The Board is
responsible for determining the manner in which risk authorities are set, as well as the approval of all risk policies
and ensuring that these are properly implemented. Further, the Board shall also seek appointment of senior
management personnel capable of managing the risk activities conducted by the Bank.
– The Board Risk Management Committee (BRMC) is responsible for ensuring that the overall risk strategy and
appetite of the Bank is appropriately defined in the Strategic Plan and recommend the same to the Board of
Directors.
– The CEO and Group Chiefs are accountable for the management of risk collectively through their membership of
Asset & Liability Committee (ALCO) and Risk Management Committee (RMC). Independent supervision of risk
management activities is provided by the Audit Committee.
– The Risk Management Group is headed by a Group Chief responsible to set–up and implement the Risk
Framework of the Bank.
Risk Management Group Organization
Technical Appraisal, Information security and Enterprise Risk which interalia includes Risk Architecture, Operational Risk
and Market & Liquidity Risk. All these functions are operating in tandem to monitor the health of assets and liabilities, while
ensuring risk mitigants against cyber and information system threats.
43.1 Credit Risk
Credit risk, the potential default of one or more debtors, is a major source of risk for the Bank. The Bank is exposed to credit
risk through its lending and investment activities. The Bank’s credit risk function is divided into Corporate and Financial
Institutions Risk and Commercial, SME and Consumer Risk. The functions operate within an integrated framework of credit
policies, guidelines and processes. The credit risk management activities are governed by the Credit Policy of the Bank that
defines the respective roles and responsibilities, the credit risk management principles and the Bank’s credit risk strategy.
The policy is supported by a comprehensive Credit Procedures Manual.
The Bank manages three principal sources of credit risk:
i) Sovereign credit risk on its public sector advances

ii) Counterparty credit risk on its private sector advances
iii)Counterparty credit risk on interbank limits
Sovereign Credit Risk
When the Bank lends to public sector borrowers, it prefers obtaining a full sovereign guarantee or the equivalent from the
Government of Pakistan (GOP). However, certain public sector enterprises have a well defined cash flow stream and
appropriate business model, based on which the lending is secured through collaterals other than GOP guarantee.
Counterparty credit risk on its private sector advances
Each borrower’s credit worthiness is analyzed on the Credit Application Package that incorporates a formalized and
structured approach for credit analysis and directs the focus of evaluation towards a balanced assessment of credit risk with
identification of proper mitigates. These risks include Industry Risk, Business Risk, Financial Risk, Security Risk and
Account Performance Risk.
Financial analysis is further strengthened through use of separate financial spread sheet templates that have been
designed for manufacturing / trading concerns, financial institutions and insurance companies.
Counter Party Credit Risk on Interbank Limits
In the normal course of its business, the Bank’s Treasury utilizes products such as Reverse REPO and call lending to meet
the needs of interbank borrowers and manage its exposure to fluctuations in market, interest and currency rates. Further,
these products are also used to temporarily invest Bank’s liquidity prior to disbursement. All of these financial instruments
involve, to varying degrees, the risk that the counterparty in the transaction may be unable to meet its obligation to the
Bank.
Reflecting a preference for minimizing exposure to counterparty credit risk, the Bank maintains eligibility criteria that link the
exposure limits to counterparty credit ratings by external rating agencies.
A. Country Risk
The Bank has in place a Country Risk Management Framework which has been approved by the Board. This framework
focuses on providing detailed roles and responsibilities with respect to country risk assessment as well as limit setting,
exposure management and reporting of cross border exposure undertaken by the Bank. The Bank utilizes S&P, Fitch and
Moody’s country ratings as well as other macroeconomic and external risk factors in assigning a country risk limit. The
Financial Institutions Division is responsible for monitoring of country exposure limits.
Credit Administration
Credit Administration is involved in minimizing losses that could arise due to security and documentation deficiencies. The
Credit Administration Function constantly monitors the security and documentation risks inherent in the existing credit
portfolio through four regional credit administration departments located all over the country.
Gross lendings Non–performing lendings Provision held

31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
43.1.1 Lendings to financial institutions
Credit risk by public / private sector
Public/ Government 2,704,142 - - - - -

Private 10,972,779 53,850,195 70,000 70,000 70,000 70,000
13,676,921 53,850,195 70,000 70,000 70,000 70,000
Gross lnvestments Non–performing lnvestments Provision held

31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
43.1.2 Investment in debt securities
Credit risk by industry sector
Basic metals (iron, steel) 500,000 500,000 - - - -

Financial 5,631,006 6,081,881 - - - -
Hotel, restaurant & clubs 470,000 248,085 - - - -
Power, gas, water & sanitary 5,411,136 4,881,010 - - - -
Chemicals 1,600,000 - - - - -
Sugar 10,487 10,487 10,487 10,487 10,487 10,487
Textile – Spinning 51,345 51,345 51,345 51,345 51,345 51,345
Textile – Weaving 200,000 200,000 200,000 200,000 200,000 200,000
Government 710,177,493 626,834,650 3,869,387 9,756,796 15,961 21,248
Others 103,498 105,329 103,498 105,329 103,498 105,329
724,154,965 638,912,787 4,234,717 10,123,957 381,291 388,409
Public/ Government 713,427,493 630,584,650 3,869,387 9,756,796 15,961 21,248

Private 10,727,472 8,328,137 365,330 367,161 365,330 367,161
724,154,965 638,912,787 4,234,717 10,123,957 381,291 388,409
Gross advances Non–performing advances Provision held
31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
43.1.3 Advances
Agriculture, Forestry and Hunting 79,583,981 78,511,776 654,964 624,049 511,318 596,596
Basic metals (iron, steel) 5,243,108 7,220,441 413,828 151,863 214,278 151,863
Cement / clay & ceramics 19,359,961 16,781,544 74,089 74,089 74,089 74,089
Chemical & pharmaceutical 25,230,941 23,965,746 372,744 376,479 372,744 376,479
Construction 6,701,913 6,958,964 190,283 120,529 176,038 120,529
Education 130,146 124,885 123 123 123 123
Financial 31,875,767 22,710,967 56,154 72,454 56,154 72,454
Footwear & leather garments 2,823,053 2,212,093 111,740 116,953 106,841 108,133
Furniture & sports goods 1,978,284 1,118,853 265,984 265,990 265,984 265,990
Grains, food & beverages 10,952,503 12,750,666 1,853,302 1,917,020 1,853,302 1,766,367
Health & social welfare 27,029 52,122 2,688 3,478 2,688 3,478
Hotel, restaurant & clubs 1,000,000 1,000,000 7,564 7,664 7,564 7,664
Individuals 10,060,120 10,034,356 368,240 361,566 337,085 361,501
Machinery & equipment 5,790,537 4,200,452 1,097,134 1,157,834 1,097,134 1,157,834
Manufacture of transport equipment 2,176,982 844,246 139,822 140,522 139,822 140,522
Paper & paper boards 7,046,681 5,632,472 208,574 210,574 208,574 210,574
Petroleum products 3,934,730 13,291,165 176,351 13,228 94,073 13,228
Power, gas, water & sanitary 156,149,658 140,719,800 637,015 637,015 637,015 637,015
Printing, publishing & allied 206,458 1,121,462 10,056 10,056 10,056 10,056
Real estate, renting, and business activities 8,331,917 5,485,741 - - - -
Rubber & plastic 288,680 295,588 230,563 233,068 230,563 233,068
Sugar 6,897,513 7,365,203 51,066 51,066 51,066 51,066
Textile –Manufacture of made up & ready
made garments 30,431,729 25,684,060 3,002,600 3,003,575 3,002,601 3,003,575
Textile – Finishing 15,189,368 16,456,503 2,872,372 2,884,586 2,872,372 2,884,586
Textile – Spinning 18,024,943 18,618,930 1,261,119 1,141,751 1,157,244 1,141,751
Textile – Weaving 3,210,115 1,664,289 38,482 38,632 38,482 38,632
Transport, storage & communication 16,154,933 12,439,987 126,459 428,077 46,546 127,149
Wholesale & retail trade 9,199,116 9,220,564 967,415 977,027 885,681 948,802
Others 22,168,134 7,385,384 663,187 1,045,374 663,187 1,030,374
500,168,300 453,868,259 15,853,918 16,064,642 15,112,624 15,533,498

Public/ Government 204,243,892 177,970,051 134,430 135,181 134,430 135,181
Private 295,924,408 275,898,208 15,719,488 15,929,461 14,978,194 15,398,317
500,168,300 453,868,259 15,853,918 16,064,642 15,112,624 15,533,498
2019 2018
Rupees in ‘000
43.1.4 Contingencies and Commitments
Agriculture, Forestry and Hunting 517,460 1,748,522

Basic metals (iron, steel) 2,865,799 2,298,302
Cement/clay & ceramics 3,578,271 2,491,703
Chemical & pharmaceutical 2,844,113 1,168,652
Construction 3,942,101 3,532,782
Education 61,193 55,461
Financial 367,806,904 272,292,661
Footwear & leather garments 341,512 248,281
Furniture & sports goods 112,737 25,375
Grains, food and beverages 1,055,823 58,426
Health & social welfare 337,057 1,993,444
Hotel, restaurant & clubs 960 960
Individuals 7,391,727 11,027,620
Machinery & equipment 16,099,059 38,708,740
Manufacture of transport equipment 188,471 87,725
Paper & paper boards 626,468 275,184
Petroleum products 23,298,418 17,777,157
Power, gas, water & sanitary 12,693,725 9,569,562
Printing, publishing & allied 67,631 136,729
Real estate, renting and business activities - 6,018,458
Rubber & plastic 35,037 106,775
Sugar 59,430 26,740
Textile - Manufacture of madeup & ready made garments 227,892 275,109
Textile - Finishing 4,891,277 1,589,863
Textile - Spinning 1,368,295 56,195
Textile - Weaving 1,618,571 65,702
Transport, storage & communication 3,015,015 5,315,605
Wholesale & retail trade 342,676 957,570
Others 9,831,718 1,617,337
465,219,340 379,526,640

Public/ Government 63,282,369 89,704,889
Private 401,936,971 289,821,751
465,219,340 379,526,640
43.1.5 Concentration of Advances
The Bank’s top 10 exposures on the basis of total (funded and non-funded) exposures aggregating to Rs. 222,105.62 million
(December 31, 2018: Rs. 220,201.42 million) are as following:

2019 2018
Rupees in ‘000
Funded 191,393,656 184,180,778

Non Funded 30,711,963 36,020,642
Total Exposure 222,105,619 220,201,420
The sanctioned limits against these top 10 exposures aggregated to Rs. 265,900.73 million (December 31, 2018: Rs.
255,278.34 million).
43.1.6 Advances – Province/Region–wise Disbursement & Utilization
During the year ended December 31,

2019
Disbursements Utilization
KPK AJK
including including
Punjab Sind Balochistan Islamabad
FATA Gilgit–
Baltistan
Rupees in ‘000
Province/Region
Punjab 691,256,822 683,293,584 4,672,048 3,172,039 3,810 104,071 11,270
Sindh 1,110,838,731 74,993,563 1,034,704,724 35,148 9,290 1,075,242 20,764
KPK including FATA 1,621,529 243,216 - 1,378,313 - - -
Balochistan 618,127 - - 618,127 -
Islamabad 16,733,824 - - - - 16,733,824 -
AJK including Gilgit–Baltistan 881,289 - - - - - 881,289
Total 1,821,950,322 758,530,363 1,039,376,772 4,585,500 631,227 17,913,137 913,323
During the year ended December 31,

2018
KPK AJK
including including
Punjab Sind Balochistan Islamabad
FATA Gilgit–
Baltistan
Rupees in ‘000
Province/Region
Punjab 591,723,087 522,554,625 34,494,817 - - 34,673,645 -
Sindh 802,485,680 42,048,213 656,714,012 4,851,487 - 98,871,968 -
KPK including FATA 1,429,676 686,026 - 743,650 - - -
Balochistan 525,809 - - - 525,809 - -
Islamabad 8,766,970 - - - - 8,766,970 -
Total 1,405,482,809 565,288,864 691,208,829 5,595,137 525,809 142,312,583 551,587
43.2 Market Risk
Market Risk is the risk of loss in earnings and capital due to adverse changes in interest rates, foreign exchange rates,
equity prices and market conditions. Thus market risk can be further described into Interest Rate Risk, Foreign Exchange
Risk and Equity Position Risk.
Market Risk performs risk measurement, monitoring and control functions through use of various risk procedures and
models. To give it a formal structure, all the policies and guidelines are approved by the Board and relevant management
committees. The Bank appointed services of a foreign risk advisory firm for assistance in establishment of Market Risk
Management Framework.
The Bank uses three types of risk management tools to measure the Bank’s Market Risk: Value-at Risk (VaR), Expected
Shortfall (ES) and Stress Testing. In addition, control limits are utilized to maintain the risks within acceptable levels.
The Bank maintains adequate regulatory capital to cover all interest rate risks falling under the “Trading Book” as well as
“Banking Book”, as defined by Basel capital accord. The Bank uses Standardized Approach in determining credit risk,
market risk and operational risk exposures in the capital adequacy calculation. In Market risk exposures, Maturity method is
used to calculate charge on Interest rate risk and FX risk.
In its pursuit of automation, the Bank has successfully implemented Oracle Financial Services Analytical Application
(OFSAA) Market Risk Module to automate the risk monitoring and reporting activities pertaining to Market Risk, which
allows for more efficient risk monitoring and increased focus on risk analysis to help in making more informed decisions.
43.2.1 Market Risk Pertaining to the Trading Book
Trading Book
The Trading Book of the Bank consists of positions in financial instruments held either with trading intent or in order to
hedge other elements of the trading book. To be eligible for trading book, financial instruments must be held with the intent
of trading and free of any restrictive covenants on their tradability. In addition, positions need to be frequently and
accurately valued and the portfolio should be actively monitored and managed accordingly.
The Bank’s trading book includes securities classified as ‘Held–For–Trading’, ‘Open Ended Mutual Fund’ and non strategic
listed equity placed in ‘Available–For–Sale’. These positions are exposed to all forms of market risk, therefore, are managed
actively.
Risk Pertaining to Banking Book Investment Portfolio
All investments excluding trading book are considered as part of banking book. Banking book includes:
i) Available–for–sale securities – (other than non–strategic listed equity)

ii) Held–to–maturity securities
Treasury investments parked in the banking book include:
i) Government securities
ii) Capital market investments
iii)Investments in bonds, debentures, etc.
Due to the diversified nature of investments in banking book, it is subject to interest rate risk, equity price risk and FX risk.
Interest Rate Risk – Banking Book
Government securities (PIBs, Sukuks & T-Bills), Bonds, Debentures, etc. and other money market investments are subject
to interest rate risk. To capture the risk associated with these securities, extensive modelling is being done with respect to
duration analysis. Stress testing and scenario models are also in place to capture the sensitivity of the portfolio to adverse
movement in interest rates. For prudent risk management, all money market investments are marked to market to assess
changes in the market value of investments due to interest rate movements.
Stress Testing
The Bank also conducts Stress Testing of the Bank’s investment portfolio to ascertain the impact of various scenarios on the
capital adequacy and sustainability of the Bank. The exercise assumes various stress conditions, with respect to Market
Risk (Rise or Fall in Interest Rates, leading to interest rate risk), Equity Price Risk resulting from Stock Market movements,
FX Rate Risk leading from adverse movements in exchange rates and Liquidity Risk (ability to meet short-term obligations if
there is a run on deposits). Stress testing is also conducted on various macro-economic scenarios to test the resilience of
the Bank.
Banking Trading Banking Trading
book Total book Total
book book
Rupees in ‘00
43.2.2 Balance sheet split by trading and banking books
Cash and balances with treasury banks 119,943,828 - 119,943,828 99,188,414 - 99,188,414
Balances with other banks 602,582 - 602,582 2,575,055 - 2,575,055
Lendings to financial institutions 13,606,921 - 13,606,921 53,780,195 - 53,780,195
Investments 721,486,859 36,470,134 757,956,993 655,534,517 15,693,768 671,228,285
Advances 485,015,881 - 485,015,881 438,317,184 - 438,317,184
Fixed assets 62,114,648 - 62,114,648 50,378,537 - 50,378,537
Intangible assets 1,969,051 - 1,969,051 1,749,054 - 1,749,054
Deferred tax assets - - - - - -
Other assets 39,911,348 - 39,911,348 33,382,185 - 33,382,185
1,444,651,118 36,470,134 1,481,121,252 1,334,905,141 15,693,768 1,350,598,909
43.2.3 Foreign Exchange Risk
Foreign Exchange Risk is the risk of loss arising from fluctuations in exchange rates. The Bank’s FX Risk is largely
mitigated by following a matched funding policy whereas for any mismatched exposures, the Bank utilizes appropriate
derivative instruments such as Forwards and Swaps.
The majority of the Bank’s net foreign currency exposure is in US Dollars and the Bank uses system-based monitoring of it’s
intra-day Net Open Position for effective risk management. The Bank carefully monitors the net foreign currency exposure
and the effect of exchange rate fluctuations by conducting sensitivity analysis and stress testing, as well as utilizing the
currency forwards and swaps to hedge the related exposure.
The Bank maintains adequate regulatory capital to cover against foreign exchange risks.
The bank undertakes foreign exchange exposures in the shape of FX Forwards and Swaps in order to hedge its foreign
currency deposits and advances, after incorporating the impact of it’s NOSTRO and Cash Reserve balances.
Foreign
Currency Foreign Off–balance Net foreign Foreign Foreign Off–balance Net foreign
Assets Currency sheet items currency Currency Currency sheet items currency
Laibilities exposure Assets Laibilities exposure
Pakistani Rupee 1,422,889,052 1,227,520,873 (80,271,378) 115,096,801 1,299,889,605 1,125,939,797 (66,414,629) 107,535,179
United States Dollar 56,981,096 130,223,325 73,575,765 333,536 50,030,348 109,211,476 58,937,581 (243,547)
Great Britain Pound Sterling 892,579 4,561,262 3,611,463 (57,220) 283,035 5,309,004 5,026,143 174
Japanese Yen 14,613 1,110 (22,808) (9,305) 4,317 975 (2,521) 821
Euro 310,246 3,435,978 3,105,506 (20,226) 326,332 2,826,096 2,502,163 2,399
Other currencies 33,666 27,871 1,452 7,247 65,272 6,728 (48,737) 9,807
58,232,200 138,249,546 80,271,378 254,032 50,709,304 117,354,279 66,414,629 (230,346)
1,481,121,252 1,365,770,419 - 115,350,833 1,350,598,909 1,243,294,076 - 107,304,833

Banking
Trading Banking Trading
book
book book book
Rupees in ‘000
After tax Impact of 1% change in foreign exchange rates on:

– Profit and loss account - 1,651,213 - (1,497,249)
– Other comprehensive income - - - -
43.2.4 Equity position Risk
Equity risk is the potential for incurring losses due to adverse changes in stock prices. The Bank holds a diversified portfolio
of equity investments in order to minimize non-systematic risk while retaining acceptable systematic risk. ALCO ensures that
equity price risk is mitigated through prudent portfolio management.
The Bank maintains adequate regulatory capital to cover against equity price risks. Equity investments classified as “Held-
For- Trading” as well as listed non-strategic equity investments classified as “Available-For-Sale” are part of the “Trading
Book” and subject to market risk change as specified by the Basel Framework. Un-listed and listed strategic equity
investment are part of “Banking Book” and are therefore subject to credit risk charge as specified by the Basel Framework.

Banking
book
book book book
Rupees in ‘000
After tax Impact of 5% change in equity prices on

– Profit and loss account - - - -
– Other comprehensive income (517,535,673) (539,564,082) (606,660,345) (510,047,451)
43.2.5 Yield / Interest Rate Risk in the Banking Book (IRRBB)–Basel II Specific
Interest rate / Rate of return risk is the current or prospective risk of losses, to both the Bank’s capital and earnings, arising
from movements in interest rates / rates of return. The losses may be due to earnings deterioration or capital erosion. The
Bank has a robust system in place to monitor Interest rate risk and ALCO regularly analyses the interest rate scenario and
devises strategies to minimize adverse impact of interest rate risk to the Bank’s equity and profits.
Interest rate risk is measured through “duration” of an instrument. To assess the interest rate risk at Balance Sheet and
Income Statement level, gap analysis on “re-pricing schedule” is utilized. Re-pricing schedule is a distribution of interest-
sensitive assets, liabilities, and Off-Balance Sheet positions into a number of predefined time bands according to their
maturity (if fixed-rate) or time remaining to their next re-pricing (if floating-rate), and is calculated in compliance with SBP
instructions. For non-contractual assets and liabilities, an ALCO approved methodology is utilized to place these assets and
liabilities in the re-pricing schedule. This methodology is based on the results of a behavioural analysis which statistically
models the historical trends of the last 5 years.
Government securities (PIBs & T-Bills, Sukuks), Bonds, Debentures, etc. and other money market investments are subject
to interest rate / rate of return risk. To capture the risk associated with these securities, extensive modelling is being done
with respect to duration analysis. Stress testing and scenario-based models are also in place to capture the sensitivity of the
portfolio to adverse movement in interest rates. For prudent risk management, all money market investments are marked to
market to assess changes in the market value of investments due to interest rate movements. Yield/ Interest rate sensitivity
position for on-balance sheet instruments is based on the earlier of contractual re-pricing or maturity date and for off-
balance sheet instruments is based on settlement date.
Yield Risk is the risk of decline in earnings due to adverse movement of the yield curve. Interest rate risk is the risk that the
value of the financial instrument will fluctuate due to changes in the market interest rates.
In accordance with BSD Circular No.03 of 2011, issued by the SBP, the Group is required to report interest rate sensitivity
gap of assets and liabilities on the basis of an objective and systematic behavioural study approved by ALCO committee.

book book book book
Rupees in ‘000
After tax Impact of increase in interest rates by 1%

– Profit and loss account - (153,019) - -
– Other comprehensive income (2,014,326) - (1,284,209) -
18
4
43.2.6 Mismatch of Interest Rate Sensitive Assets and Liabilities
Note
ReAn
ponu December 31, 2019 s to
rt al Effective
Yield/
Total
Non–interest
bearing the
20
Unc
Interest financial
rate instruments
19 Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5
onso
Upto 1 Above
to 3 to 6 Months to to 2 to 3 to 5 to 10
Month 10 Years
Months Months 1 Year years years years years
Rupees in ‘000 lidat

On–balance sheet financial instruments Assets ed
Cash and balances with treasury banks 119,943,828 16,509,764 - - - - - - - - 103,434,064
Fina
Balances with other banks
Lending to financial institutions 10.70%
602,582
13,606,921
-
9,902,779
-
3,704,142
-
-
-
-
-
-
-
-
-
-
-
-
-
-
602,582
-
ncial
Investments
Advances
11.97%
11.54%
757,956,993
485,015,881
1,412,238,863
273,486,166
199,689,195
299,087,158
499,587,904 133,195,835
435,987,135
11,271,561
95,709,661
106,981,222
55,989,298
24,414,511
80,403,809
58,286,547
548,136
58,834,683
9,452,969
1,168,105
10,621,074
10,765,765
5,108,162
15,873,927
7,091,383
18,140,328
25,231,711
-
4,778,872
32,526,146
2,263,076
4,778,872 173,938,526
Stat
Other assets
Liabilities
35,112,658 - - - - - - - - - 35,112,658
eme
Bills payable
Borrowings 9.48%
7,878,626
266,448,386
-
220,053,947
-
17,002,396
-
7,539,422
-
140,611
-
400,733
-
199,152
-
3,137,791
-
17,974,334
-
-
7,878,626
- nts
Deposits and other accounts 6.24% 1,049,043,032 125,035,940 235,893,774 312,174,543 42,431,719 14,219,030 1,965,574 1,734,959 370,974 - 315,216,519 for the
Liabilities against assets subject to finance lease - - - - - - - - - - -
Subordinated debt - - - - - - - - - - -
year
Other liabilities 36,147,882 - - - - - - - - - 36,147,882 ended
1,359,517,926 345,089,887 252,896,170 319,713,965 42,572,330 14,619,763 2,164,726 4,872,750 18,345,308 - 359,243,027 Dece
On–balance sheet gap 52,720,937 154,498,017 183,090,965 (212,732,743) 37,831,479 44,214,920 8,456,348 11,001,177 6,886,403 4,778,872 (185,304,501)
mber
Off–balance sheet financial instruments 31,
Documentary credits and short–term 2019
trade–related transactions 92,700,647 10,620,023 19,877,017 37,388,266 10,648,056 12,520,902 577,593 196,028 - 872,762 -
Commitments in respect of purchase of:

– forward foreign exchange contracts 220,381,401 71,170,538 59,117,691 85,699,466 4,393,706 - - - - - -
– forward government securities transactions 464,217 464,217 - - - - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
220,845,618 71,634,755 59,117,691 85,699,466 4,393,706 - - - - - -

– forward foreign exchange contracts 138,500,517 46,693,645 38,926,182 52,880,690 - - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
138,550,238 46,743,366 38,926,182 52,880,690 - - - - - - -
Other commitments 38,311,885 16,914,205 5,340,939 8,850,528 7,206,213 - - - - - -
Off–balance sheet gap 213,307,912 52,425,617 45,409,465 79,057,570 22,247,975 12,520,902 577,593 196,028 - 872,762 -
Total Yield/Interest Risk Sensitivity Gap 266,028,849 206,923,634 228,500,430 (133,675,173) 60,079,454 56,735,822 9,033,941 11,197,205 6,886,403 5,651,634 (185,304,501)
Cumulative Yield/Interest Risk Sensitivity Gap 266,028,849 206,923,634 435,424,064 301,748,891 361,828,345 418,564,167 427,598,108 438,795,313 445,681,716 451,333,350
Note
December 31, 2018 s to
Effective
Yield/
Total
Non–interest
bearing the
Unc
Interest financial
rate instruments
Over 1 Over 3 Over 6 Over 1 Over 2 Over 3 Over 5
onso
Upto 1 Above
to 3 to 6 Months to to 2 to 3 to 5 to 10
Month 10 Years
Months Months 1 Year years years years years
Rupees in ‘000 lidat

On–balance sheet financial instruments Assets ed
Fina
2,575,055
53,780,195
-
50,993,095
-
2,787,100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,575,055
-
ncial
Investments
Advances
7.94%
7.35%
671,228,285
438,317,184
1,294,077,514
230,869,328
40,861,309
336,852,532
324,040,190
237,269,509
564,096,799
19,584,532
96,023,436
115,607,968
31,803,113
35,017,394
66,820,507
893,744
1,246,393
2,140,137
5,816,244
3,497,541
9,313,785
7,291,693
7,318,886
14,610,579
16,569,201
11,972,215
28,541,416
-
4,824,548
34,360,240
285,953
4,824,548 151,269,243
Stat
Other assets
Liabilities
28,988,381 - - - - - - - - - 28,988,381
eme
Bills payable
Borrowings 5.89%
7,752,959
225,882,986
-
173,702,776
-
27,973,227
-
10,161,557
-
40
-
282,296
-
641,607
-
1,556,729
-
11,564,754
-
-
7,752,959
- nts
Deposits and other accounts 3.51% 984,475,183 121,296,471 229,412,178 295,508,730 53,568,188 19,398,720 825,194 876,633 534,810 80,108 262,974,151 for the
Subordinated debt - - - - - - - - - - -
year
Other liabilities 19,841,044 - - - - - - - - - 19,841,044 ended
1,237,952,172 294,999,247 257,385,405 305,670,287 53,568,228 19,681,016 1,466,801 2,433,362 12,099,564 80,108 290,568,154 Dece
On–balance sheet gap 56,125,342 41,853,285 306,711,394 (190,062,319) 13,252,279 (17,540,879) 7,846,984 12,177,217 16,441,852 4,744,440 (139,298,911)
mber
Off–balance sheet financial instruments 31,
Documentary credits and short–term 2019
trade–related transactions 96,475,905 12,705,839 6,870,608 32,410,166 21,944,400 20,200,564 1,085,634 77,339 7,500 1,173,855 -

– forward foreign exchange contracts 137,056,586 46,875,838 55,520,667 34,407,428 252,653 - - - - - -
– forward government securities transactions 57,768,858 54,219,284 3,549,574 - - - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
194,825,444 101,095,122 59,070,241 34,407,428 252,653 - - - - - -

All – forward government securities transactions - - - - - - - - - - -
ie – derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
d 70,453,385 33,140,303 16,724,966 20,561,418 26,698 - - - - - -
Ba
nk Other commitments 27,762,282 13,998,922 4,536,571 2,459,295 1,850,964 807,808 807,808 1,615,617 1,685,297 - -
Li Off–balance sheet gap 248,610,246 94,659,580 53,752,454 48,715,471 24,021,319 21,008,372 1,893,442 1,692,956 1,692,797 1,173,855 -
mi
te
18 Cumulative Yield/Interest Risk Sensitivity Gap 304,735,588 136,512,865 496,976,713 355,629,865 392,903,463 396,370,956 406,111,382 419,981,555 438,116,204 444,034,499
5
Notes to the Unconsolidated Financial Statements
December December
Reconciliation to total assets December 31, Reconciliation to total liabilities December 31,
31, 31,
2018 2018
2019
2019
(Rupees in ‘000) (Rupees in ‘000) (Rupees in ‘000) (Rupees in ‘000)
Balance as per balance sheet 1,481,121,252 1,350,598,909 Balance as per balance sheet 1,365,770,419 1,243,294,076
Less: Non financial assets Less: Non financial liabilities

Fixed assets 64,083,699 52,127,591 Deferred tax liabilities 5,898,310 4,755,428
Other assets 4,798,690 4,393,804 Other liabilities 354,183 586,476
68,882,389 56,521,395 6,252,493 5,341,904
Total financial assets 1,412,238,863 1,294,077,514 Total financial liabilities 1,359,517,926 1,237,952,172
43.3 Operational Risk
The Bank, like all financial institutions, is exposed to different types of operational risks, including the potential losses arising
from internal activities or external events caused by breakdowns in information, communication, physical safeguards,
business continuity, supervision, transaction processing, settlement systems and the execution of legal, fiduciary and agency
responsibilities.
In accordance with the BoD approved Operational Risk Policy, Bank maintains a system of internal controls designed to
keep operational risk at appropriate levels, in view of the bank’s financial strength and the characteristics of the activities and
market in which it operates. These internal controls are periodically updated to conform to industry best practice.
Further, detailed data of operational losses is being maintained, in conformance with regulatory guidelines. Major
Operational Risk events are also analyzed from the control breaches perspective and mitigating controls are assessed on
design and operating effectiveness. Quarterly updates on Operational Risk events are presented to senior management and
Board’s Risk Management Committee & BoD.
The Bank has a BoD approved BCP policy and Business Continuity Plan applicable to all its functional areas. The Bank
updates functional BCPs on annual basis or at any process change.
The Bank is also implementing internationally accepted Integrated Framework on Internal Control issued by the Committee
of Sponsoring Organizations of the Tread way Commission (COSO), with a view to consolidate and enhance the existing
internal control processes.
The Bank with permission of SBP is conducting a parallel run for Alternate Standardized Approach (ASA) for Basel II –
Operational Risk Capital Charge Reporting, which signifies readiness of the Bank to move to advance approach.
43.4 Liquidity Risk
Liquidity Risk is the risk that the Bank is unable to fund its current obligations and operations in the most cost efficient
manner. The Bank’s BoD has delegated the responsibility to ALCO for ensuring that Bank’s policy for liquidity management
is adhered to on a continual basis. ALCO uses gap analysis based on “maturity schedule” to assess the Bank’s liquidity risk
and devise strategies accordingly. The Bank also has various limits and triggers in place to monitor liquidity risk on a
periodic basis, whille it also utilizes stress testing & scenario analysis to assess adequacy of Bank’s liquid assets. The Bank
also complies with SBP’s instructions on Liquidity Standards as prescribed under the Basel III Framework.
The Bank has in place a robust Liquidity Crisis Contingency Plan in place to deal with any liquidity crisis in the most efficient
and effective manner.
Liquidity Management Framework
Daily liquidity management is carried out centrally by the Asset and Liability Management (“ALM”) Desk in Treasury Group
which regulates the day to day liquidity needs of the Bank. Funding and liquidity management strategies are regularly
discussed during Asset and Liability Committee “ALCO” meetings. Such discussions include analysis on composition of
deposits and tenure, funding gaps and concentration, monitoring of short and long–term liquidity ratios (including LCR and
NSFR). The Bank utilizes internal Management Action Triggers and Limits which act as early warning indicators and
safeguards to ensure sufficient liquidity buffers at all times. Additionally, external and internal liquidity stress tests are
performed to evaluate available liquidity under a range of adverse scenarios and to identify potential vulnerabilities in
portfolios. The Bank also has in place contingency funding plans that identify specific management action that can be
invoked in times of liquidity crisis.
Liquidity Risk Mitigation Techniques
The Bank uses the following tools to identify and mitigate Liquidity Risk:
• Gap Analysis
• Liquidity Ratio
• Liquidity Stress Testing
• Liquidity Contingency Plan
• Risk Control Limits
Annual
186 Report 2019
43.4.1 Maturities of Assets and Liabilities – based on contractual maturity of the assets and liabilities of the Bank
Note
December 31, 2019
s to
the
Upto Over 3
Total Upto Upto Upto Upto Upto Over 3 Over 6 Up to Uptp Upto 3 years Over
1 Day 7 Days 14 Days 1 Month 2 Months 3 Months to 6 Months to 9 Months 1 year 2 years to 5 years 5 years
Rupees in ‘000
Unc
Assets onso
Cash and balances with treasury banks

119,943,828
602,582
119,943,828
602,582
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
lidat
Lending to financial institutions 13,606,921 - 3,425,999 5,065,760 1,411,020 3,704,142 - - - - - - - - ed
Investments – net
Advances – net
757,956,993
485,015,881
32,526,146
79,624,296
178,403,209
547,774 1,187,531
- 79,249,756
13,862,657
139,548,347
7,893,474
91,671,218
16,933,799
867,746
36,596,571
55,989,298
53,828,814
-
86,266,196
59,246,823
47,305,243
10,175,613
48,805,745
13,925,985
60,437,040
96,352,852
31,726,741
Fina
Fixed assets 62,114,648 17,185 103,109 120,294 292,141 532,729 532,729 1,598,188 1,598,188 1,598,188 3,352,692 3,306,222 3,033,557 46,029,426 ncial
Intangible assets
Deferred tax assets

1,969,051
-
756
-
4,535
-
5,291
-
12,850
-
23,432
-
23,432
-
70,295
-
70,295
-
70,295
-
281,180
-
281,180
-
562,361
-
563,149
-
Stat
Other assets – net 39,911,348 596,785 3,580,707 4,177,492 10,145,337 4,005,541 2,554,371 3,964,817 1,404,106 1,194,215 642,806 640,952 2,762,041 4,242,178 eme
1,481,121,252 233,311,578 186,065,333 10,556,368 104,973,761 155,707,665 111,715,549 43,097,617 112,890,701 89,128,894 110,828,744 63,209,712 80,720,984 178,914,346
nts
Liabilities
for the
Bills payable 7,878,626 7,878,626 - - - - - - - - - - - - year
Borrowings 266,448,386 2,071 198,180,537 1,284,249 15,167,424 5,174,127 11,828,269 12,959,088 6,219 134,392 400,733 199,152 3,137,791 17,974,334 ended
Deposits and other accounts 1,049,043,032 868,560,834 12,905,548 9,854,157 20,993,265 25,220,982 30,861,262 46,929,499 9,073,189 19,856,144 716,644 1,965,574 1,734,959 370,975 Dece
Liabilities against assets subject to finance lease - - - - - - - - - - - - - -
mber
Subordinated debt - - - - - - - - - - - - - -
31,
2019
Deferred tax liabilities – net 5,898,310 38,451 230,705 269,156 653,666 581,039 328,947 75,154 362,993 62,071 491,239 231,376 218,208 2,355,305
Other liabilities 36,502,065 551,860 3,311,162 3,863,023 9,381,627 2,007,265 975,964 1,479,030 1,096,849 1,061,118 2,016,077 1,539,754 2,633,810 6,584,526
1,365,770,419 877,031,842 214,627,952 15,270,585 46,195,982 32,983,413 43,994,442 61,442,771 10,539,250 21,113,725 3,624,693 3,935,856 7,724,768 27,285,140
Net assets 115,350,833 (643,720,264) (28,562,619) (4,714,217) 58,777,779 122,724,252 67,721,107 (18,345,154) 102,351,451 68,015,169 107,204,051 59,273,856 72,996,216 151,629,206
Share capital 11,450,739
All Reserves 22,270,225
ie Unappropriated profit 55,821,211
d Surplus on revaluation of assets net of tax 25,808,658
Ba 115,350,833
nk
Li
mi
te
18
7
18
8
Note
ReAn
ponu December 31, 2018
s to
the
Upto Over 3
rt al Total
1 Day
Upto
7 Days
Upto
14 Days
Upto
1 Month
Upto
2 Months
Upto
3 Months
Over 3
to 6 Months
Over 6
to 9 Months
Upto
1 year
Upto
2 years
Upto 3 years
to 5 years
Over
5 years
20
19
Rupees in ‘000
Unc
Assets onso

99,188,414
2,575,055
99,188,414
2,575,055
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
lidat
Lending to financial institutions 53,780,195 - 48,468,580 500,000 2,024,515 2,787,100 - - - - - - - - ed
Investments – net
Advances – net
671,228,285
438,317,184
34,360,240
70,461,195
220,417,989
2,033,096 194,526
- 8,071,443
13,015,494
317,394,215
6,728,176
32,888
10,881,528
16,947,301
30,015,383
25,667,744
16,467,670
6,135,369
101,842,831
1,135,813
58,047,337
7,051,206
46,898,309
8,471,835
50,431,751
25,542,242
31,299,888
Fina
Fixed assets 50,378,537 13,826 82,959 96,785 235,050 428,620 428,621 1,285,861 1,285,861 1,285,862 2,777,178 2,750,793 2,137,177 37,569,944 ncial
Intangible assets 1,749,054 671 4,029 4,700 11,414 20,814 20,814 62,441 62,441 62,441 249,765 249,765 499,530 500,229
Stat
eme
Deferred tax assets - - - - - - - - - - - - - -
Other assets – net 33,382,185 346,336 2,078,016 2,424,352 5,887,713 1,900,406 5,647,584 4,119,201 1,404,043 1,378,006 586,758 586,758 2,732,176 4,290,836
1,350,598,909 206,945,737 273,084,669 3,220,363 29,245,629 329,259,331 17,011,435 52,430,187 44,887,759 110,704,509 62,796,851 57,536,831 64,272,469 99,203,139
nts
Liabilities
for the
Bills payable 7,752,959 7,752,959 - - - - - - - - - - - - year
Borrowings 225,882,986 - 159,079,594 3,277,502 6,624,376 14,289,234 12,434,236 16,132,619 - 40 282,296 641,607 1,556,729 11,564,753 ended
Deposits and other accounts 984,475,183 809,687,661 10,413,217 14,158,732 30,324,819 27,831,940 13,976,360 37,210,046 12,590,619 23,771,946 2,193,097 825,194 876,633 614,919 Dece
Liabilities against assets subject to finance lease - - - - - - - - - - - - - -
mber
31,
2019
Deferred tax liabilities – net 4,755,428 6,272 37,629 43,900 106,615 1,359,344 43,166 214,988 255,541 166,219 176,080 197,040 146,666 2,001,968
Other liabilities 20,427,520 364,185 2,185,108 2,549,293 6,183,946 718,160 685,178 1,015,410 898,464 883,536 1,044,424 773,156 895,342 2,231,318
1,243,294,076 817,811,077 171,715,548 20,029,427 43,239,756 44,198,678 27,138,940 54,573,063 13,744,624 24,821,741 3,695,897 2,436,997 3,475,370 16,412,958
Net assets 107,304,833 (610,865,340) 101,369,121 (16,809,064) (13,994,127) 285,060,653 (10,127,505) (2,142,876) 31,143,135 85,882,768 59,100,954 55,099,834 60,797,099 82,790,181
Reserves 20,276,515
Unappropriated profit 52,500,405
Surplus on revaluation of assets net of tax 23,077,174
107,304,833
43.4.2 Maturities of assets and liabilities – based on expected maturities of the assets and liabilities of the Bank
December 31, 2019

Upto
Total Over 1 to Over 3 Over 6 Months Over 1 to Over 2 to Over 3 to Over 5 to Above
1 Month
3 Months to 6 Months to 1 Year 2 Years 3 Years 5 Years 10 Years 10 Years
Rupees in ‘000
Assets
Cash and balances with treasury banks 119,943,828 33,818,371 10,456,036 6,768,479 4,526,963 2,496,978 2,774,287 - - 59,102,714
Balances with other banks 602,582 602,582 - - - - - - - -
Lending to financial institutions 13,606,921 9,902,779 3,704,142 - - - - - - -
Investments – net 757,956,993 259,295,601 231,219,565 867,746 55,989,298 67,547,808 18,476,599 13,925,985 108,719,391 1,915,000
Advances – net 485,015,881 25,890,266 27,701,487 39,002,766 142,911,817 67,716,835 69,217,337 80,848,632 26,990,835 4,735,906
Fixed assets 62,114,648 532,729 1,065,458 1,598,188 3,196,376 3,352,692 3,306,222 3,033,557 3,885,367 42,144,059
Intangible assets 1,969,051 23,432 46,864 70,295 140,590 281,180 281,180 562,361 563,149 -
Deferred tax assets - - - - - - - - - -
Other assets – net 39,911,348 18,500,321 6,559,912 3,964,817 2,598,321 642,806 640,952 2,762,041 4,242,178 -
1,481,121,252 348,566,081 280,753,464 52,272,291 209,363,365 142,038,299 94,696,577 101,132,576 144,400,920 107,897,679
Liabilities
Bills payable 7,878,626 7,878,626 - - - - - - - -

Borrowings 266,448,386 214,634,281 17,002,396 12,959,088 140,611 400,733 199,152 3,137,791 17,974,334 -
Deposits and other accounts 1,049,043,032 125,035,940 149,008,992 96,457,612 64,513,767 36,301,078 41,501,940 1,734,959 370,974 534,117,770
Subordinated debt - - - - - - - - - -
Deferred tax liabilities – net 5,898,310 1,191,978 909,986 75,154 425,064 491,239 231,376 218,208 746,915 1,608,390
Other liabilities 36,502,065 17,107,672 2,983,229 1,479,030 2,157,967 2,016,077 1,539,754 2,633,810 6,584,526 -
1,365,770,419 365,848,497 169,904,603 110,970,884 67,237,409 39,209,127 43,472,222 7,724,768 25,676,749 535,726,160
Net assets 115,350,833 (17,282,416) 110,848,861 (58,698,593) 142,125,956 102,829,172 51,224,355 93,407,808 118,724,171 (427,828,481)

Reserves 22,270,225
of assets net of tax 25,808,658
115,350,833
December 31, 2018

Upto
1 Month 3 Months to 6 Months to 1 Year 2 Years 3 Years 5 Years 10 Years 10 Years
Rupees in ‘000
Assets
Balances with other banks 2,575,055 2,575,055 - - - - - - - -
Investments – net 671,228,285 229,565,085 317,427,104 16,947,301 31,803,113 9,798,775 14,898,089 8,471,835 40,401,983 1,915,000
Advances – net 438,317,184 22,695,395 21,999,270 32,819,525 121,876,130 75,463,863 64,314,835 67,848,278 26,482,007 4,817,881
Fixed assets 50,378,537 428,620 857,241 1,285,861 2,571,723 2,777,178 2,750,793 2,137,177 2,391,543 35,178,401
Other assets – net 33,382,185 10,736,417 7,547,990 4,119,201 2,782,049 586,758 586,758 2,732,176 4,290,836 -
1,350,598,909 344,353,570 360,852,359 60,142,769 163,262,700 90,849,366 84,808,042 81,688,996 74,066,598 90,574,509
Liabilities
Bills payable 7,752,959 7,752,959 - - - - - - - -

Borrowings 225,882,986 168,981,472 26,723,469 16,132,619 40 282,296 641,607 1,556,729 11,564,754 -
Deposits and other accounts 984,475,183 121,296,471 173,849,475 83,725,237 70,017,278 35,847,810 35,073,079 876,633 534,810 463,254,390
Subordinated debt - - - - - - - - - -
Deferred tax liabilities – net 4,755,428 194,416 1,402,510 214,988 421,760 176,080 197,040 146,666 280,666 1,721,302
Other liabilities 20,427,520 11,282,532 1,403,338 1,015,410 1,782,000 1,044,424 773,156 895,342 2,231,318 -
1,243,294,076 309,507,850 203,378,792 101,088,254 72,221,078 37,350,610 36,684,882 3,475,370 14,611,548 464,975,692
Net assets 107,304,833 34,845,720 157,473,567 (40,945,485) 91,041,622 53,498,756 48,123,160 78,213,626 59,455,050 (374,401,183)

Reserves 20,276,515
of assets net of tax 23,077,174
107,304,833
Allied Bank Limited

189
43.5 Derivative Risk
Market & Liquidity Risk Division under Risk Management Group is responsible for assessing and monitoring the derivative
risk emanating from Bank’s exposures.
The Bank’s Treasury Group buys and sells derivative instruments, for hedging and market making purposes, such as:

– Equity Futures
The Bank’s Risk Management Group, ALCO & BRMC monitor the risk emanating from the Bank’s portfolio of derivatives
exposures on a periodic basis and uses Off-Balance Sheet gap analysis to implement prudent asset liability management of
the Bank’s derivatives exposures.
44 NON ADJUSTING EVENT AFTER THE REPORTING DATE
44.1 The Board of Directors of the Bank in its meeting held on February 7, 2020 has proposed a final cash dividend in respect of
2019 of Rs. 2.00 per share (2018: cash dividend Rs. 2.00 per share). This appropriation will be approved in the forthcoming
Annual General Meeting. The unconsolidated financial statements of the Bank for the year ended December 31, 2019 do
not include the effect of these appropriations which will be accounted for in the unconsolidated financial statements for the
year ending December 31, 2020.
45 GENERAL
45.1 Captions as prescribed by BPRD circular no.2 of 2018 issued by SBP, in respect of which there are no amounts, have not
been reproduced in these financial statements, except for caption of the statement of financial position and profit and loss
account.
45.2 Comparative figures have been re-classified, re-arranged or additionally incorporated in these financial statements wherever
necessary to facilitate comparison and better presentation in accordance with new format prescribed by SBP vide BPRD
circular no. 2 of 2018.
46 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue on February 7, 2020 by the Board of Directors of the Bank.
Mehmud ul Hassan Tahir Hassan Qureshi Zafar Iqbal

Chief Financial Officer President and Chief Executive Director
Dr. Muhammad Akram Sheikh Mohammad Naeem Mukhtar

Director Chairman
Annual
190 Report 2019
An
STATEMENT SHOWING WRITTEN OFF LOANS OR ANY OTHER FINANCIAL RELIEF ne
OF FIVE HUNDRED THOUSAND OR ABOVE FROM (JANUARY 1, 2019 TO DECEMBER 31, 2019) xu
Amount in Million re
Sr.
No.
NAME AND ADDRESS OF BORROWER NAME OF INDIVIDUALS/PARTNERS/ DIRECTORS FATHER’S NAME
OUTSTANDING LIABILITIES AT THE BEGINNING OF THE
PERIOD
PRINCIPAL
WRITTEN–OFF
INTEREST/ MARK–
UP WRITTEN–OFF
OTHER FINANCIAL
RELIEF PROVIDED
TOTAL
9+10+11
I
NAME OF NIC NOS. PRINCIPAL INTEREST/ OTHER TOTAL
DIRECTORS MARK–UP
1 2 3 4 5 6 7 8 9 10 11 12
1 RAJA RICE, RAMESH KUMAR 43206-8363288-9 MEHRAJ GOPI KIRISHAN 4.996 - 3.978 8.974 - - 1.110 1.110
H.No. 1809//99, Hindu Mohallah, Shahdadkot
2 RANA TEXTILE MILLS, RANA ZAHID TOUSIF 33100-0672286-7 RANA TOUSIF ALI KHAN 37.314 - 28.311 65.625 - - 25.519 25.519
Rafhan Mills Road, near Rafhan Mills, Samana RANA ARIF TAUSEEF 33100-0708556-3 RANA TAUSEEF ALI KHAN
Pul, Faisalabad. RANA ASIF TAUSEEF 33100-0672190-5 RANA TAUSEEF ALI KHAN
MRS.LUBNAZAHID 33102-1723085-2 W.O RANA ZAHID TAUSEEF
MRS.RIZWANA ARIF 33100-0670508-4 RANA ARIF TAUSEEF
RANA USMAN ZAHID 33100-0672287-1 ZAHID TAUSEEF
RANA ATIF TOUSEEF 33100-0695537-3 RANA TOUSEEF ALI KHAN
3 RIZWAN STEEL FURNANCE, MALIK NOMAN SAJID 34101-2638290-9 MUHAMMAD NAZIR 13.498 - 5.410 18.908 - - 4.308 4.308
Dewan Road, Opposite Station, Eminabad, Gujranwala. MUHAMMAD RIZWAN SAJID 34101-2638295-7 MUHAMMAD NAZIR
4 ZAIGHAM & CO., HASSAN ARIF 34101-1774125-3 MUHAMMAD ARIF 4.999 - 1.562 6.561 - - 0.530 0.530
Ghallah Mandi, Qila Didar Singh HASSNAIN ARIF 34101-2316997-3 MUHAMMAD ARIF
5 NISAR AHMAD & BROTHERS (PVT) LTD., HAJI NISAR AHMAD 31203-4612123-3 MUHAMMAD SHAFI 0.287 - 2.477 2.764 - - 1.994 1.994
Vehari Road, Hasilpur, MUSHTAQ AHMAD 31203-6414142-9 MUHAMMAD SHAFI
Multan MUHAMMAD AJMAL 31203-1699839-3 ABDUL GHAFOOR
MUHAMMAD RAFI RAZA 31203-1313546-7 NISAR AHMAD
6 WASEEM CONSTRUCTION & PROPERTY DEVEL- MUREED ABBAS ALIAS 36302-4593265-9 RANA FAIZ BAKHSH 2.998 - 2.162 5.160 - - 1.178 1.178
OPERS, GHULAM MUSTAFA
543-D, Shah Rukan-e-Alam Colony, Multan
7 ASKARI ENTERPRISES, MAJ.(Rtd) IMTIAZ ALI 37405-0301030-9 GUL MUHAMMAD 3.327 - 2.601 5.928 - - 2.601 2.601
16/60, Ist Floor, Rafia Plaza, Street Near JS Bank,
Rawalpindi
8 QAISER ABBAS QAISER ABBAS 38404-0983040-5 GHULAM JILANI 3.500 - 1.178 4.678 - - 0.950 0.950
Aqil Shah, Tehsil
Shahpur, Distt: Sargodha
9 FRIENDS ENTERPRISES BASHIR AHMED CHUADHRY 42501-1432103-9 ABDUL HAMEED 4.998 - 3.400 8.398 - - 0.650 0.650
C-92, Steel Town, Gulshan-e-Hadeed, Ph-II, Karachi
10 SURRIYA TEXTILE (PVT) LTD. MUHAMMAD RAFI 35202-3244950-5 MUHAMMAD ISMAIL 18.016 - 12.294 30.310 - - 7.324 7.324
4th Floor, Namco Centre, Campbell Street New Challi, MUHAMMAD TARIQ RAFI 42301-0838522-7 MUHAMMAD RAFI
Karachi. MUHAMMAD ARIF RAFI 35202-1504108-3 MUHAMMAD RAFI
MUHAMMD ANJUM RAFI 35202-2434949-9 MUHAMMAD RAFI
MUHAMMAD ABDULA RAFI 35200-1416576-7 MUHAMMAD RAFI
11 ALI TRDERS LIAQAT ALI 54400-4039117-5 CH. ABDUL HAMEED 2.278 - 1.911 4.189 - - 1.911 1.911
Office No.25, Regal Plaza, Jinnah Road, Quetta
All 12 FAQEER TRADERS

Dad Road Daharki
ALLAH DINO 45101-0054843-1 HAJI KHETOOR MEHAR 1.758 - 4.361 6.119 - - 4.247 4.247
ie 13 KAMRAN RAZA KAMRAN RAZA 42201-0393207-9 ANWAR ALI 0.293 - 2.933 3.226 - - 2.051 2.051
d House No.32, Hijaz Apartment Manik Jee Street, Post
Office Soldier Bazar, Karachi.
Ba 14 MIRZA ASHIQ HUSSAIN MIRZA ASHIQ HUSSAIN 41303-7883647-5 MIRZA QAMBAR ALI BAIG 2.600 - 2.215 4.815 - - 1.352 1.352
nk Bunglow No. 26 & 27 GMB Colony Qasimabad,
Hyderabad
Li 15 ASRAR ALAM SHAIKH ASRAR ALAM SHAIKH 42301-4519983-7 ABDUL AZIZ 9.899 - 6.456 16.355 - - 6.355 6.355
mi B-8, Phase-Vi, Darakshan Villas DHA, Karachi
te
19
1
19
2
Sr. OUTSTANDING LIABILITIES AT THE BEGINNING OF THE PRINCIPAL INTEREST/ MARK– OTHER FINANCIAL TOTAL
NAME AND ADDRESS OF BORROWER NAME OF INDIVIDUALS/PARTNERS/ DIRECTORS FATHER’S NAME
No. PERIOD WRITTEN–OFF UP WRITTEN–OFF RELIEF PROVIDED 9+10+11
ReAn NAME OF NIC NOS. PRINCIPAL INTEREST/ OTHER TOTAL
ponu DIRECTORS MARK–UP
rt al 1 2 3 4 5 6 7 8 9 10 11 12
20 16 USMAN DAL MILLS

Chak No.41/NB,
KHUSHI MUHAMMAD
ABID NAEEM
38403-8259911-3
38403-1003145-3
SAKHI MUHAMMAD
KHUSHI MUHAMMAD
3.467 - 3.432 6.899 - - 1.911 1.911
near New Satellite Town,

19 Sargodha
17 MIAN TRADER IMRAN ASLAM 34603-9690226-5 MUHAMMAD ASLAM CH 2.555 - 0.924 3.479 - - 0.729 0.729
Agency Chowk, Fateh Garh,
Sialkot
18 REHMAN WOOLEN INDUSTRIES (PVT) LTD., MIAN MUHAMMAD IJAZ 35202-0523905-7 ABDUL GHANI 1.918 - 33.036 34.954 1.918 - 33.036 34.954
Plot No.107, Phase III, Industrial Estate, Gadoon MIAN MUHAMMAD NAWAZ 35202-1866065-7 ABDUL GHANI
Amazai, Distt: Swabi
19 AL AZAM CORPORATION MUHAMMAD NADEEM 31104-0988167-1 KARAM ELAHI 0.145 - 0.878 1.023 - - 0.573 0.573
Grain Market, Opp Haq Cotton, Shop No.27, Haroon MUHAMMAD IMRAN 31104-1676357-1 MUHAMMAD AZAM
Abad
20 SAMPHY PHARMA ANJUM ALI 17301-8517754-7 MUHAMMAD BASHIR 1.596 - 0.967 2.563 - - 0.563 0.563
Suit No.B-6, M.A Plaza, Al-Falah Street Behind Amin SHOAIB UL HASAN 17301-1315226-7 GHAYAS UD DIN
Hotel G.T Road Peshawar ABDUL WAHEED 17301-7342848-7 ABDUL SAMAD KHAN
21 AFGHAN ENGINEERING WORKS HUMA TASNEEM 41303-9166136-0 W/O TASNEEM AHMED 1.500 - 0.900 2.400 - - 0.624 0.624
Plot No. 907, Pathan Goth Auto Bhan Road, Latifabad,
Hyderabad
22 SHAHID TRADERS SHAHID KHAN 38403-2049842-1 MANZOOR KHAN 4.100 - 2.126 6.226 - - 1.226 1.226
No.07 Ikram Colony, Kot Farid Rpad, Sargodha
23 CHIMERA (PVT) LIMITED TAHIR SALEEM ANWAR 35202-2713059-9 MUHAMMAD ANWAR 311.224 - 225.679 536.903 - - 158.902 158.902
32-1/A, Lawrence Road, Lahore KHAN 35202-3418643-7 KHAN MUHAMMAD
AMIR SALEEM ANWAR 35200-6304912-5 ANWAR KHAN
KHAN MUHAMMAD ANWAR
NASIR SALEEM ANWAR KHAN
KHAN
24 TARIQ SANITARY TARIQ SHAHZAD 33100-2330673-7 HAJI KHAIR DIN 9.999 - 6.469 16.468 - - 3.968 3.968
143- Railway Road, Faisalabad
25 FAISAL ZULFIQAR TRADERS ZULFIQAR ALI 36104-0430224-5 NOOR DIN 1.797 - 1.537 3.334 - - 0.894 0.894
Chak No.134/116-L, Mohsin Wala, Mian Channu.
26 NAYA SAWERA ZARI SERVICE TARIQ MEHMOOD 31202-0202485-5 MUSHTAQ AHMAD 1.200 - 0.952 2.152 - - 0.501 0.501
Noor Pur Road, Head Rajkan
27 ASHIQ & SONS TRADERS SULEMAN RAZA 36302-1410957-7 ASHIQ ALI 7.146 - 2.963 10.109 - - 2.110 2.110
1787/10, Mohallah Iqbal Nagar Near Raees T.B. MASOOD ASHIQ 36302-2923110-1
Hospital Road, Multan.
28 BURNI GLASS WORKS ABDUL KARIM 41304-9044307-7 ABDUL RASHEED 2.076 - 1.914 3.990 - - 1.914 1.914
A-11, SITE, Hyderabad
29 ASAD & CO. COTTON SUPPLIERS, MUHAMMAD AYOUB 36101-2873800-1 MUHAMMAD KHAN 5.100 - 2.459 7.559 - - 0.509 0.509
Chak No.160/WB, High Way Road, Tehsil Mailsi. MUHAMMAD IJAZ 36602-6498435-5 MUHAMMAD KHAN
MEHMOOD AHMAD 36101-0601293-9 MUHAMMAD KHAN
MUHAMMAD RIAZ 36602-2932745-7 MUHAMMAD JAMAL
FIAZ AHMAD 36602-3388719-1 MUHAMMAD JAMAL
30 MIPA RICE MILLS (PVT) LTD., MUHAMMAD ASGHAR 36302-0286622-9 BARKAT ALI 93.140 - 41.595 134.735 - - 36.595 36.595
Near Munir Abad, Bahawalpur Road, Multan. IMTIAZ FATIMA 36302-0854756-0 MUHAMMAD ASGHAR
557.724 - 407.080 964.804 1.918 - 306.135 308.053

Annexure II
The Bank is
ISLAMIC BANKING BUSINESS operating 117
(2018: 117)
Islamic
Banking
Branches and
60 (2018: 10)
Islamic
Banking
Windows at
the end of the
year.
Stateme
nt of
Financial
Position
As at
December 31,
2019
Note
December 31,
December 31
2019
2018
Rupees in ‘00
ASSETS
Cash and balances with t
Balances with other bank
Due from financial institut
Investments
Islamic financing and rela
Fixed assets
Intangible assets
Due from Head Office
Other assets
Total
Assets
27,297,342
LIABILITIE
S
Bills payable
Due to financial institution
Deposits and other accou
Due to Head Office
Subordinated debt
Other liabilities
NET ASSETS
REPRESENTED BY
Islamic Banking Fund
Reserves
Surplus/ (Deficit) on reval
Accumulated Losses
Allied Bank 193
Limited
CONTINGENCIES AND COMMITMENTS
Annual
194 Report 2019
ISLAMIC BANKING BUSINESS Annexure II
Profit and Loss Account Note

December 31, December
31,
2019 2018
Rupees
in ‘000
Profit / return earned

Profit / return expensed
Net Profit / return
OTHER INCOME
Dividend income
Foreign exchange (loss) / gain
Income / (loss) from derivatives
Loss on securities
Other Income
Total other income
TOTAL INCOME
OTHER EXPENSES
Operating expenses
Workers welfare fund
Other charges
Total other expenses
PROFIT/ (LOSS) BEFORE PROV

Provisions and write offs - net
PROFIT/ (LOSS) BEFORE TAXA

Taxation
PROFIT/ (LOSS) AFTER TAXATI
ISLAMIC BANKING BUSINESS
Notes to the Annexure II

In Local In Foreign In Foreign
In Local
Currency Total Currency Total
Currencies Currencies
Rupees in ‘000
1 DUE FROM FINANCIAL INSTITUTIONS
Bai Muajjal Receivable from other

Financial Institutions 7,850,288 - 7,850,288 1,024,515 - 1,024,515
Bai Muajjal Receivable from
State Bank of Pakistan 2,704,142 - 2,704,142 - - -
Musharaka Lending 1,000,000 - 1,000,000 2,500,000 - 2,500,000
11,554,430 - 11,554,430 3,524,515 - 3,524,515
Cost/
Amortised Provision Cost/ Provision
Surplus / Carrying Surplus / Carrying
for Amortised for
(Deficit) Value (Deficit) Value
cost diminution cost diminution
Rupees in ‘000
2 INVESTMENTS BY SEGMENTS
Federal Government
Securities:
- Ijarah Sukuks 876,500 - (8,765) 867,735 3,350,837 - (16,997) 3,333,840
- Other Federal Securities 2,300,521 - - 2,300,521 - - - -
3,177,021 - (8,765) 3,168,256 3,350,837 - (16,997) 3,333,840
- Listed 2,222,735 - 15,910 2,238,645 172,579 - (842) 171,737

- Unlisted 7,045,401 - - 7,045,401 6,743,516 - - 6,743,516
9,268,136 - 15,910 9,284,046 6,916,095 - (842) 6,915,253
Total Investments 12,445,157 - 7,145 12,452,302 10,266,932 - (17,839) 10,249,093

2019 2018
Rupees in ‘000
3 ISLAMIC FINANCING AND RELATED ASSETS
Ijarah 3.1 294,553 268,514

Istisna 504,728 -
Murabaha 3.2.1 114,409 73,116
Islamic Export Re-finance - Business Musharakah 1,000,000 -
Diminishing Musharaka 3,200,020 2,628,167
Finance against Dishonored Bills 309,737 -
Salam - 20,643
Business Musharakah - Financings 6,752,116 3,626,407
Staff Ijarah 348,929 272,629
Staff - Diminishing Musharakah 90,736 35,874
Gross Islamic financing and related assets 12,615,228 6,925,350
Less: provision against Islamic financings

- Specific - -
- General 20 8
20 8
Islamic financing and related assets - net of provision 12,615,208 6,925,342
Allied Bank 195

Limited
December 31, 2019
Cost Accumulated Depreciation

Book Value as at
31 Dec 2019
As at Jan 01, 2019 Additions / As at Dec 31, 2019 As at Jan 01, 2019 Charge for the year As at Dec 31, 2019
(deletions)
Rupees in
‘000
3.1 Ijarah
Vehicles 331,241 97,842 429,083 82,182 68,691 150,873 278,210

Equipment 22,230 - 22,230 2,775 3,112 5,887 16,343
Total 353,471 97,842 451,313 84,957 71,803 156,760 294,553
December 31, 2018

Cost Accumulated Depreciation
Book Value
as at 31 Dec
2018
As at Jan 01, Additions / As at Dec 31, As at Jan 01, Charge for As at Dec 31,
2018 (deletions) 2018 2018 the year 2018
Rupees in ‘000
Vehicles 198,603 132,638 331,241 53,777 28,405 82,182 249,059

Equipment 1,600,000 (1,577,770) 22,230 107,132 (104,357) 2,775 19,455
Total 1,798,603 (1,445,132) 353,471 160,909 (75,952) 84,957 268,514

Later than Later than
Not later than Over Five Not later than Over Five
1 year& years Total 1 year& years Total
1 year 1 year
less less
than 5 years Rupees in than 5 years
‘000
Future Ijarah payments receivable
Ijarah rental receivables 5,952 222,937 1,124 230,013 7,722 178,212 - 185,934

2019 2018
Rupees in ‘000
3.2 Murabaha
Murabaha financing 3.2.2 102,282 74,796

Inventory for Murabaha - -
Advances for Murabaha 13,664 -
115,946 74,796
3.2.1 Murabaha receivable - gross 3.2 115,946 74,796

Less: Deferred murabaha income 3.2.4 (1,537) (1,680)
Profit receivable shown in other assets - -
Murabaha financings 114,409 73,116
3.2.2 The movement in Murabaha financing during the year is as follows:

Sales during the year 140,959 135,644
Adjusted during the year (113,473) (79,535)
3.2.3 Murabaha sale price 140,959 135,644

Murabaha purchase price (134,855) (131,154)
6,104 4,490
2019 2018
Rupees in ‘000
3.2.4 Deferred murabaha income

Opening balance 1,680 50
Arising during the year 6,104 3,464
Less: Recognised during the year (6,247) (1,834)
4 DUE FROM/ (DUE TO) HEAD OFFICE
Pak Account Daily settlement with Head Office 161,300 799,045

In Local In Foreign In Local In Foreign
Currencies Total Currency Currencies Total
Currency
Rupees in ‘000
5 DEPOSITS
Customers
Savings deposits 11,707,652 46,487 11,754,139 9,331,462 31,623 9,363,085
Term deposits 1,518,756 - 1,518,756 1,237,301 - 1,237,301
Others 2,089,570 - 2,089,570 2,667,097 - 2,667,097
20,900,886 477,097 21,377,983 17,456,515 436,004 17,892,519
Current deposits 5,057 - 5,057 3,822 - 3,822
Term deposits 4,810,000 - 4,810,000 - - -
Others - - - - - -
13,011,428 - 13,011,428 6,740,113 - 6,740,113
33,912,314 477,097 34,389,411 24,196,628 436,004 24,632,632

2019 2018
Rupees in ‘000
- Individuals 8,929,921 6,893,387

- Government 3,954,561 4,713,978
- Public Sector Entities 2,438 100
- Banking Companies 3,645,353 1,518,173
- Non-Banking Financial Institutions 9,366,078 5,221,940
- Private Sector 8,491,060 6,285,054
34,389,411 24,632,632
5.2 This includes deposits eligible to be covered under insurance arrangements amounting to 15,833 million.
Rs.

2019 2018
Rupees in ‘000
6 CHARITY FUND
Opening Balance 3 2
Additions during the period:

Received from customers on account of delayed payment 64 933
Dividend purification amount - -
Other Non-Shariah compliant income - 46
Profit on charity saving account 5 9
Others 3 -
72 988
Payments / utilization during the period:
Education 60 500
Health - 485
60 985
Closing Balance 12 3
6.1 During the year charity exceeding Rs 0.5 million and charity to related party is Nil. (2018:
Nil)
7 ISLAMIC BANKING BUSINESS UNAPPROPRIATED PROFIT
Opening Balance (906,202) (557,392)

Add: Islamic Banking profit / (loss) for the period 78,854 (348,810)
Less: Taxation - -
Less: Reserves - -
Less: Transferred / Remitted to Head Office - -
Closing Balance (827,348) (906,202)
-Guarantees 200,370 96,846

-Commitments 1,660,217 485,472
-Other contingent liabilities 47,299 -
1,907,886 582,318
9 PROFIT/RETURN EARNED OF FINANCING, INVESTMENTS AND PLACEMENT
Profit earned on:

Investments 1,819,319 689,782
Financings 938,926 382,297
Placements 202,090 185,100
2,960,335 1,257,179
10 PROFIT ON DEPOSITS AND OTHER DUES EXPENSED
Deposits and other accounts 1,336,705 297,719

Profit paid on Musharaka borrowings 228,213 46,739
Other expenses (IFRS-16) 154,017 -
Due to Financial Institutions 7,364 256,159
Cost of foreign currency swap on foreign currency deposits 28,268 -
Profit paid on Mudaraba borrowings 1,574 -
Other profit expenses 1,077 713
1,757,218 601,330
11 POOL MANAGEMENT
Allied Bank Limited – Islamic Banking operating in general and specific pools for deposits and inter-bank funds accepted /
acquired under Mudaraba, Musharkah and Wakala modes.
1– General Pool for Local Currency Depositors (Mudaraba)

2- General Pool for FCY (USD, GBP and EURO) depositors
(Mudaraba) 3- Specific Pools (Mudaraba)
4- Treasury related FI Pools (Mudaraba / Musharakah /
Wakala) 5- Islamic Export Refinance Pool (Musharakah)
1– General Pool for Local Currency Depositors (Modaraba)
Under this pool category, The Bank acts as Manager (Mudarib) and accepts funds in local currency from general depositors
(Rab-ul-Maal) on the principals of mudarba and invests the same in Shariah compliant modes of financings, investments
and placements. The Bank may commingle its own equity in this pool, Bank prioritizes the funds received from depositors
over the funds generated from own sources.
The profit of General Pool is calculated after deducting the directly incurred expenses, if any, from the income earned on all
the remunerative assets managed by the pool. No provision against any non-performing asset of the pool are passed on to
the pool except on the actual loss / write-off of such non-performing asset as per SBP guidelines. The profit of the pool is
shared between equity and other members of the pool at gross level (before charging of mudarib fee) as per the investment
ratios. After charging of agreed mudarib fee, The profit of the pool is shared among the members of the pool on profit
weightages i.e. announced before start of profit calculation period.
2– General pool for Foreign Currency (USD, GBP and EURO) depositors (Mudaraba)
FCY pools are being maintained in USD, GBP, EURO currencies. All FCY deposits are parked in these pool(s) and return is
shared among FCY deposit holders on the principals of mudarba according to the weightages of respective pool.
3– Specific Pools (Mudaraba)
Specific pool(s) are created where the customers desire to invest in high yield assets. Profit rates of these pool(s) are
usually different from the general pool depending on the assets. In case of loss in special pool, the loss will be borne by the
Special pool members. The distributable profit is calculated as direct costs from the gross return earned on the pool. From
the net return, profit is paid to the Mudarib in the ratio of the Mudarib’s equity in the pool to the total pool. Specific pool
deposits are invested in assets yielding relatively higher rate of return, as relative high risk investments are involved in
these pools, hence bearing relative more risk than the general pool depositors.
4– Treasury related FI Pools (Mudaraba/Musharka/Wakala)
Treasury Pools are created, to manage liquidity, on the basis of Musharaka / Mudaraba / Wakala modes, wherein ABL–IBG
and Financial Institutions share actual return earned by the pool according to pre–defined profit sharing ratio.
5- Islamic Export Refinance Pool (Musharkah)
Islamic Export Refinance Pool is created with SBP, to manage export refinance customers, on the basis of Musharakah,
wherein ABL-IBG and State Bank of Pakistan share actual return earned by the pool according to pre-defined profit sharing
ratio.
The risk characteristic of each pool mainly depends on the assets and liability profile of each pool. As per the Bank’s policy,
relatively low risk / secured financing and placement transactions and assets are allocated to general depositors pool of
PKR, USD, GBP. and Euro. The general pools are usually exposed to general credit risk, asset ownership risk and profit
rate risk of the underlying assets involved in pool.
Following are the considerations attached with risk & reward of Modaraba based pools:
• Period, return, safety, security and liquidity of investment

• Risk annexed to investments / financings
• Change in deposit base due to early withdrawals of deposits
• SBP rules, guidelines
• Sharia Non compliance risk
The deposits and funds accepted under the above mentioned pools are invested in diversified sectors and avenues of the
economy / business along with investment in Government of Pakistan backed Ijarah Sukuks & other Shariah Compliant
assets.
Details of Disposal of Fixed Assets to Related Party

2019 2018
Rupees in ‘000
11.1 Avenues / sectors where Mudaraba based deposits have been deployed
Production & Transmission of Energy 4,164,902 2,971,679

Manufacturing 736,066 748,676
Chemicals & Allied Products 2,498,502 50,918
Petroleum and Gas 845,275 1,812,676
Leather / Leather products 2,349 3,061
Financial Institutions 768,812 429,185
Agriculture & Food Products 19,064 22,839
Transportation & Logistics 90,303 28,647
Auto & Allied Products 152,807 13,588
Cotton Processing - 20,643
Metal products - Steel Foundries 484,328 499,996
Cement 1,000,000 -
Textile - Knitting 850,000 -
Retail Chain 500,000 -
Communication 24,626 -
Others 478,194 323,442
Total Gross Financing & Related Assets 12,615,228 6,925,350
GOP Ijarah Sukuk 3,168,257 3,333,840

Power/Energy Generation 5,411,046 4,880,168
Financial Institutions 1,287,000 1,287,000
Chemicals 1,616,000 -
Hotel Business 470,000 248,085
Steel Processing 500,000 500,000
Total Investments & Placements 12,452,303 10,249,093
Total Invested Funds 25,067,531 17,174,443
11.2 Profit / (loss) distribution to general depositor’s pool
Remunerative Profit rate and Profit rate Profit Mudarib share Profit rate return Percentage of Amount of
Depositor’s Pool weightage return sharing distributed to Mudarib share Mudarib Share
announcement earned on ratio remunerative transferred transferred
period earning deposits through Hiba through Hiba
assets (Savings and
Fixed)
Rupees in ‘000’ Rupees in ‘000’
General Pool Monthly 11.70% 50% : 50% 727,426 6.61% 25.11% 182,662
Foreign Currency Pool - EUR Monthly 5.24% 1% : 99% 143 0.001 0.95% 1.36
Foreign Currency Pool - GBP Monthly 5.24% 1% : 99% 74 0.001 0.93% 0.69
Foreign Currency Pool - USD Monthly 5.24% 1% : 99% 1990 0.001 0.07% 17.93
Details of Disposal of Fixed Assets to Related Party
Annexure III
The particulars of disposal of fixed assets to related parties are given below:
Original Accumulated Book Sale

Description Mode of Disposal Particulars of purchaser*
Cost depreciation value proceeds
Rupees in ‘000
Electrical and Computer Equipments 162 162 - 24 As Per Bank Policy Ahmed Faheem Khan
85 85 - 8 As Per Bank Policy Tahir Hassan Qureshi
473 473 - 47 As Per Bank Policy Owais Shahid
170 170 - 17 As Per Bank Policy Aizid Gill
205 205 - 21 As Per Bank Policy Imran Maqsood
65 65 - 6 As Per Bank Policy Saira Shahid Hussain
85 85 - 9 As Per Bank Policy Muhammad Raffat
85 85 - 9 As Per Bank Policy Sohail Aziz
125 125 - 12 As Per Bank Policy Mujahid Ali
178 146 32 41 As Per Bank Policy Muhammad Farhanullah Khan
164 164 - 16 As Per Bank Policy Shahid Aamir
420 416 4 42 As Per Bank Policy Muhammad Idrees
171 171 - 17 As Per Bank Policy Muhammad Mohsin
2,388 2,352 36 269
*They are Key Management Personnel of the Bank during the year ended December 31, 2019.
Allied Bank 201

Limited
CONSOLIDATED
FINANCIAL
STATEMENTS
Directors’ Report on Consolidated Financial Statements
On behalf of the Board of Directors, we are pleased to present the consolidated annual report of Allied Bank Limited (holding
company) and ABL Asset Management Company Limited (subsidiary company)
The operating results and appropriations, as recommended by the Board are given below:
2019 2018 Growth

Rs. In Million
Profit after tax for the year

14,489 13,032 11%
Accumulated profits brought forward
53,985 50,546 7%
Effect of re–measurement of defined benefit plans–net of tax
(503) 454 (211)%
Transferred from surplus on revaluation of fixed assets – net of
116 112 4%
tax
166 3 5433%
Transferred from surplus on revaluation of non–banking assets – net of
tax 68,253 64,147 6%
Profit available for appropriation
Final cash dividend for the year ended December 31, 2018 at Rs. 2 per
share (2018: Year ended December 31, 2017 at Rs. 1.75 per share) (2,290) (2,004) 14%
First Interim cash dividend for the year ended December 31, 2019 at Rs. 2.00 per
share (2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary share) (2,290) (2,290) 0%
Second Interim cash dividend for the year ended December 31, 2019 at Rs. 2.00 per share
(2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary (2,290) (2,290) 0%
share)
Third Interim cash dividend for the year ended December 31, 2019 at Rs. 2.00 per share
(2018: Year ended December 31, 2018 at Rs. 2.00 per ordinary (2,290) (2,290) 0%
share)
Transfer to statutory reserves (1,411) (1,288) 10%
Accumulated profits carried forward 57,682 53,985 7%
Earnings Per Share (EPS) (Rs.) 12.65 11.38 11%
Pattern of shareholding
Pattern of shareholding as at December 31, 2019 is included in the Annual Report.
For and on behalf on the Board
Mohammad Naeem Mukhtar Tahir Hassan Qureshi

Chairman Board of Directors Chief Executive Officer
Lahore
Dated: February 07, 2020
Annual
204 Report 2019
Report on the Audit of the Consolidated Financial
Statements
Opinion
We have audited the annexed consolidated financial statements of Allied Bank Limited and its subsidiary (the Group), which
comprise the consolidated statement of financial position as at 31 December 2019 and the consolidated profit and loss account, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow
statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies and other explanatory information.
In our opinion, consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31
December 2019, and of its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with the accounting and reporting standards as applicable in Pakistan.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the
Code), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Following are the Key Audit Matters:
1 Provision against Loans and Advances
Refer to note 9 and the accounting policies in notes 2.4.2 Our audit procedures in respect of provision against
and 4.5 to the consolidated financial statements. advances, amongst others, included the following:
The Group makes provision against advances on a time • Assessing the design and operating effectiveness
based criteria that involves ensuring all non-performing of key controls to identify loss events and for
loans and advances are classified in accordance with the determining provision required against non-
ageing criteria specified in the Prudential Regulations performing advances, including:
(PRs) issued by the State Bank of Pakistan (SBP).
– Controls over correct classification of non-
In addition to the time based criteria the PRs require a performing advances on time based criteria;
subjective evaluation of the credit worthiness of borrowers
to determine the classification of advances. – Controls over monitoring of advances with higher
risk of default and migration of these advances on a
The Group’s advances to the customers represent 32.7% timely basis to watch list or to non-performing
of its total assets as at 31 December 2019 and are stated advances category on subjective criteria;
at Rs. 485,052 million which is net of provision of Rs.
15,152 million at the year end. – Controls over accurate computation and recording
of provisions; and
The determination of provision against advances was
identified as a key audit matter in our audit as it involves – Controls over the governance and approval process
a considerable degree of management judgment and related to provision.
estimation in complying with the above criteria.
• Testing on a sample basis, credit exposures
identified by the management as displaying
indicators of impairment, assessed the number of
days overdue and assessed appropriateness of
amount reported for provision in accordance with
the Prudential Regulations;
• Checking on a sample basis, the accuracy of

specific provision made against non-performing
advances and of general provision by recomputing
the provision amount in accordance with the criteria
prescribed under the PRs;
Report on the Audit of the Consolidated Financial Statements
• Examining the credit history, account movement,

financial ratios, report on security maintained in
respect of advances where the management has
not identified indicators displaying impairment, on
a sample basis and challenging the management’s
assessment based on our view of the credit from
the review of credit file.
2 Valuation of Investments
Refer to note 8 and the accounting policies in notes 2.4.2, Our procedures in respect of valuation of investments,
2.4.3 and 4.4 to the consolidated financial statements. amongst others, included the following:
As at 31 December 2019, the Group has investments • Obtaining an understanding of and testing the
classified as “Available-for-sale”, “Held for trading”, “Held design and operation effectiveness of the controls
to maturity” amounting to Rs. 759,654 million which in relating to the valuation of investments;
aggregate represent 51.21% of the total assets of the
Group.
• Checking on a sample basis, the valuation of
Investments are carried at cost or fair value in accordance investments to supporting documents, externally
with the Group’s accounting policy relating to their quoted market prices and break-up values;
recognition. Provision against investment is made based
on impairment policy of the Group which includes both • Evaluating the Group’s assessment of available
objective and subjective factors. for sale and held to maturity investments for any
additional impairment in accordance with the
We identified assessing the valuation of investments as a Group’s accounting policies and performed an
key audit matter because of its significance to the independent assessment of the assumptions; and
consolidated financial statements and because assessing
the key impairment assumptions involves a significant • Considering the Group’s disclosures of investments,
degree of management judgement. to the guidelines laid down by the State Bank of
Pakistan regarding forms and disclosures.
Information Other than the Consolidated Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information included in the Group’s
Annual Report but does not include the consolidated financial statements and our auditors’ report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and the Board of Directors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with
accounting and reporting standards as applicable in Pakistan and the Companies Act, 2017 and for such internal control as
management determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The Board of directors is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs as applicable in
Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Report on the Audit of the Consolidated Financial
Statements
b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going concern.
e) Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide to the Board of Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit
of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mr. Kamran Iqbal Yousafi.
KPMG Taseer Hadi & Co.

Chartered Accountants
Date: 03 March 2020

Lahore
Allied Bank 207

Limited
Consolidated Statement of Financial Position

2019 2018 2019 2018
ASSETS
774,537 640,485 Cash and balances with treasury banks 5 119,935,126 99,177,561
3,891 16,630 Balances with other banks 6 602,582 2,575,055
87,873 347,310 Lendings to financial institutions 7 13,606,921 53,780,195
4,905,820 4,343,544 Investments - net 8 759,654,427 672,587,309
3,132,445 2,830,888 Advances - net 9 485,051,568 438,356,170
401,944 325,480 Fixed assets 10 62,240,062 50,399,773
12,760 11,341 Intangible assets 11 1,975,898 1,756,127
- - Deferred tax assets - -
260,365 217,963 Other assets - net 12 40,316,857 33,751,113
9,579,635 8,733,641 1,483,383,441 1,352,383,303
LIABILITIES
50,880 50,068 Bills payable 14 7,878,626 7,752,959
1,720,714 1,458,744 Borrowings 15 266,448,386 225,882,986
6,774,524 6,357,626 Deposits and other accounts 16 1,049,018,804 984,463,067
- - Liabilities against assets subject to finance lease - -
- - Sub-ordinated debt - -
38,182 30,684 Deferred tax liabilities - net 17 5,912,375 4,751,359
238,388 133,958 Other liabilities 18 36,913,696 20,743,121
8,822,688 8,031,080 1,366,171,887 1,243,593,492
756,947 702,561 NET ASSETS 117,211,554 108,789,811
REPRESENTED BY
73,948 73,948 Share capital 19 11,450,739 11,450,739
143,820 130,945 Reserves 22,270,225 20,276,515
166,671 149,032 Surplus on revaluation of assets - net of tax 20 25,808,658 23,077,174
372,508 348,636 Unappropriated profit 57,681,932 53,985,383
756,947 702,561 117,211,554 108,789,811
CONTINGENCIES AND COMMITMENTS 21
The annexed notes 1 to 46 form an integral part of these consolidated financial statements.
Consolidated Profit and Loss Account

2019 2018 2019 2018
791,995 473,210 Mark-up / return / interest earned 23 122,638,580 73,275,474

523,954 265,792 Mark-up / return / interest expensed 24 81,132,992 41,157,150
268,041 207,418 Net mark-up / interest income 41,505,588 32,118,324
NON MARK–UP / INTEREST INCOME

36,831 32,169 Fee and commission income 25 5,703,136 4,981,220
12,289 18,266 Dividend income 1,902,872 2,828,478
12,866 9,714 Foreign exchange income 1,992,194 1,504,189
- - Income from derivatives - -
11,389 14,978 Gain on securities - net 26 1,763,512 2,319,341
2,554 1,594 Other income 27 395,412 246,888
75,929 76,721 Total non-markup / interest income 11,757,126 11,880,116
343,970 284,139 Total income 53,262,714 43,998,440
NON MARK–UP / INTEREST EXPENSES

184,657 160,748 Operating expenses 28 28,593,691 24,891,410
(5,002) (7,221) Workers welfare fund - net 29 (774,603) (1,118,156)
1,260 529 Other charges 30 195,045 81,963
180,915 154,056 Total non-markup / interest expenses 28,014,133 23,855,217
163,055 130,083 Profit before provisions 25,248,581 20,143,223
3,531 (7,038) Provisions / (reversals) and write offs - net 31 546,658 (1,089,688)
- - Extra-ordinary / unusual items - -
159,524 137,121 PROFIT BEFORE TAXATION 24,701,923 21,232,911
65,956 52,963 Taxation 32 10,213,160 8,201,094
93,568 84,158 PROFIT AFTER TAXATION 14,488,763 13,031,817
In US $ In Rupees
0.08 0.07 Basic and diluted earnings per share 33 12.65 11.38

Executive Director
Allied Bank 209

Limited
Consolidated Statement of Comprehensive Income

2019 2018 2019 2018
93,568 84,158 Profit after taxation for the year 14,488,763 13,031,817
Other comprehensive income
Items that may be reclassified to profit and loss

14,487 (34,276) Movement in deficit on revaluation of investments - net of tax 2,243,212 (5,307,574)
18,248 (27,764) 2,825,631 (4,299,227)
Items that will not be reclassified to profit and loss

Re–measurement (loss) / gain on defined benefit

(3,246) 2,935 obligations - net of tax (502,707) 454,522
Movement in surplus / (deficit) on revaluation of
- (881) fixed assets - net of tax - (136,403)
Movement in surplus on revaluation of
4,977 3,638 non-banking assets - net of tax 770,648 563,393
1,731 5,692 267,941 881,512
113,547 62,086 Total comprehensive income 17,582,335 9,614,102
Consolidated Cash Flow Statement

2019 2018 2019 2018
159,524 137,121 Profit before taxation 24,701,923 21,232,911
(12,289) (18,266) Less: Dividend income (1,902,872) (2,828,478)
147,235 118,855 22,799,051 18,404,433
Adjustments:
20,556 20,118 Depreciation 3,183,010 3,115,251
10,447 - Depreciation on right of use assets 1,617,769 -
6,383 - Interest expense on lease liability 988,344 -
1,593 2,609 Amortization 246,646 404,071
4,471 (6,065) Net provision / (reversals) and write offs 31 692,374 (939,121)
1,230 403 Unrealized gain on revaluation of 'held-for-trading' securities 190,398 62,372
(5,002) (7,221) Reversal against workers' welfare fund - net (774,603) (1,118,156)
(1,733) (225) Gain on sale of fixed assets (268,306) (34,903)
(208) (35) (Gain) / loss on sale of non-banking assets / other assets (32,266) (5,485)
37,737 9,584 5,843,366 1,484,029
184,972 128,439 28,642,417 19,888,462
259,437 (291,198) Lendings to financial institutions 40,173,274 (45,091,280)
(129,264) 160,326 Held-for-trading securities (20,016,175) 24,826,109
(300,084) (422,971) Advances (46,467,284) (65,496,094)
(50,856) 26,958 Other assets (excluding advance taxation) (7,874,969) 4,174,455
(220,767) (526,885) (34,185,154) (81,586,810)
812 (533) Bills payable 125,667 (82,508)
263,129 14,129 Borrowings 40,744,817 2,187,802
416,820 650,524 Deposits and other accounts 64,543,621 100,732,013
54,052 3,756 Other liabilities (excluding current taxation) 8,369,824 581,670
734,813 667,876 113,783,929 103,418,977
699,018 269,430 108,241,192 41,720,629
(60,123) (50,787) Income tax paid (9,309,899) (7,864,272)
638,895 218,643 Net cash flow generated from operating activities 98,931,293 33,856,357

(436,075) (417,567) Net investments in 'available-for-sale' securities (67,525,173) (64,659,309)
20,256 377,214 Net realizations from 'held-to-maturity' securities 3,136,581 58,410,682
12,292 18,403 Dividend received 1,903,327 2,849,652
(48,176) (45,847) Investments in fixed assets and intangible assets (7,459,934) (7,099,357)
2,406 300 Proceeds from sale of fixed assets 372,634 46,526
(445,536) (60,985) Net cash flow used in investing activities (68,990,146) (9,443,459)
(12,001) - Payment of lease liability against right of use assets (1,858,363) -

(58,964) (56,927) Dividend paid (9,130,391) (8,815,003)
(70,965) (56,927) Net cash flow used in financing activities (10,988,754) (8,815,003)
(15,205) (28,270) Effect of exchange rate changes on opening cash and cash (2,354,435) (4,377,475)
equivalents
107,189 72,461 Increase in cash and cash equivalents during the year 16,597,958 11,220,420
670,824 583,080 Cash and cash equivalents at beginning of the year 103,875,543 90,288,572
778,013 655,541 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 34 120,473,501 101,508,992

Executive Director
Allied Bank 211

Limited
Consolidated Statement of Changes in Equity
Revenue
Capital reserve Surplus on revaluation
reserve Un-
of
Share Exchange Non- appropriated Total
capital translation Statutory General Investments Fixed banking profit
reserve reserve assets assets
reserve
Rupees in
‘000
Balance as at January 01, 2018 11,450,739 230,954 17,743,162 6,000 10,493,343 16,004,075 1,575,633 50,546,126 108,050,032
Other Comprehensive Income - net of tax
Deficit on revaluation of investments - net of tax - - - - (5,307,574) - - (5,307,574)
Deficit on revaluation of fixed assets - net of tax - - - - - (136,403) - - (136,403)
Remeasurement gain on defined benefit obligation
- net of tax - - - - - - - 454,522 454,522
Effect of translation of net investment in foreign branches - 1,008,347 - - - - - - 1,008,347
- 1,008,347 - - (5,307,574) (136,403) 563,393 454,522 (3,417,715)

profit - net of tax - - - - - (112,263) - 112,263 -
profit - net of tax - - - - - - (1,157) 1,157 -
non-banking assets - net of tax (1,873) 1,873 -

December 31, 2017 (Rs. 1.75 per ordinary share) - - - - - - - (2,003,879) (2,003,879)
- - - - - - - (8,874,323) (8,874,323)
Other Comprehensive Income – net of tax

Surplus on revaluation of investments - net of tax - - - - 2,243,212 - - - 2,243,212
Remeasurement loss on defined benefit obligation - net of - - - - - - - (502,707) (502,707)
tax
Effect of translation of net investment in foreign branches - 582,419 - - - - - - 582,419
- 582,419 - - 2,243,212 - 770,648 (502,707) 3,093,572
profit - net of tax - - - - - (106,684) - 106,684 -
fixed assets - net of tax - - - - - (9,729) - 9,729 -
profit - net of tax - - - - - - (2,224) 2,224 -
non-banking assets - net of tax (163,739) 163,739
- - - - - - - (9,160,592) (9,160,592)
Notes to the Consolidated Financial
Statements
1 STATUS AND NATURE OF
BUSINESS The “Group” consist of:
Holding Company
Allied Bank Limited (“the Bank”), incorporated in Pakistan, is a scheduled bank, engaged in commercial banking and related
services. The Bank is listed on Pakistan Stock Exchange Limited. The Bank operates a total of 1,393 (2018: 1,343)
branches in Pakistan including 117 (2018: 117) Islamic banking branches, 1 branch (2018: 1) in Karachi Export Processing
Zone and 1 Wholesale banking branch (2018: 1) in Bahrain. The long term credit rating of the Bank assigned by the
Pakistan Credit Rating Agency Limited (PACRA) is ‘AAA’. Short term rating of the Bank is ‘A1+’.
Ibrahim Holdings (Private) Limited is the parent company of the Bank and it’s registered office is in
Pakistan. The Bank is the holding company of ABL Asset Management Company Limited.
The registered office of the Bank is situated at 3 - Tipu Block, Main Boulevard, New Garden Town, Lahore.
Subsidiary Company
ABL Asset Management Company Limited (“the Company”) is a public unlisted company, incorporated in Pakistan as a
limited liability company on 12 October 2007 under the repealed Companies Ordinance, 1984 (now the Companies
Act,2017). The Company has obtained licenses from the Securities and Exchange Commission of Pakistan (SECP) to carry
on Asset Management Services and Investment Advisory Services as a Non-Banking Finance Company (NBFC) under
Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 as amended through S.R.O.1131[I] 2007 (“the
NBFC Rules”), and S.R.O. 1233 (I) / 2019 The Company received certificate of commencement of business on 31 December
2007. The Company has also obtained license to carry out business as Pension Fund Manager, under the Voluntary
Pension System Rules, 2005. The registered office of the Company is situated at Plot no. 14, Main Boulevard, DHA Phase
VI, Lahore. The Company is a wholly owned subsidiary of Allied Bank Limited (“the holding Company”).
The management quality rating of the Company, as assigned by JCR-VIS Crediting Rating Company Limited, is AM2++
(Stable) in December 2019.
– ABL Income Fund Launched on September 20, 2008

– ABL Stock Fund Launched on June 28, 2009
– ABL Cash Fund Launched on July 30, 2010
– ABL Islamic Income Fund Launched on July 30, 2010
– ABL Government Securities Fund Launched on November 30, 2011
– ABL Islamic Stock Fund Launched on June 12, 2013
– ABL Pension Fund Launched on August 20, 2014
– ABL Islamic Pension Fund Launched on August 20, 2014
– ABL Islamic Financial Planning Fund Launched on December 22, 2015
– ABL Financial Planning Fund Launched on December 31, 2015
– ABL Islamic Dedicated stock fund Launched on December 19, 2016
– Allied Capital Protected Fund Launched on February 19, 2018
– ABL Islamic Asset Allocation Fund Launched on May 31, 2018
– Allied Finergy Fund Launched on November 30, 2018
– ABL Special Saving Fund Launched on September 19, 2019
– ABL Monthly Payout Fund To be launched
– ABL Islamic Cash Fund To be launched
2 BASIS OF PRESENTATION
a) These consolidated financial statements consists of holding company and its subsidiary company for the year ended
December 31, 2019
In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic
modes, the State Bank of Pakistan (SBP) has issued various circulars from time to time. Permissible forms of trade-
related modes of financing include purchase of goods by banks from their customers and immediate resale to them
at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under these
arrangements are not reflected in these consolidated financial statements as such but are restricted to the amount
of facility actually utilized and the appropriate portion of mark-up thereon.
Allied Bank 213

Limited
The financial results of the Islamic banking branches have been consolidated in these financial statements for
reporting purposes, after eliminating inter-branch transactions / balances.
These consolidated financial statements have been presented in Pakistan Rupees (PKR), which is the currency of
the primary economic environment in which the Group operates and functional currency of the Group, in that
enviornment as well. The amounts are rounded to nearest thousand.
The US Dollar amounts reported in the statement of financial position, profit and loss account, statement of
comprehensive income and statement of cash flow are stated as additional information, solely for the convenience
of the users of financial statements. For the purpose of translation to US Dollar, spot rate of Rs. 154.8476 per US
Dollar has been used for 2019 and 2018, as it was the prevalent rate on reporting date.
b) BASIS OF CONSOLIDATION
The assets and liabilities of subsidiary company have been consolidated on a line by line basis and the carrying
value of investment in subsidiary held by the bank is eliminated against the shareholders’ equity in the consolidated
financial statements.
2.1 STATEMENT OF COMPLIANCE
These consolidated financial statements have been prepared in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards comprise of:
– International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)
as are notified under the Companies Act, 2017;
– Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are
notified under the Companies Act, 2017;
– Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and
– Directives issued by the State Bank of Pakistan (SBP) & the Securities and Exchange Commission of Pakistan (SECP).
2.1.1 Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and the directives
issued by the SBP and the SECP differ with the requirements of IFRS and IFAS the requirements of the Banking
Companies Ordinance, 1962, the Companies Act, 2017 and the said directives, shall prevail.
2.1.2 The SBP, vide BSD Circular Letter No. 10, dated August 26, 2002 has deferred the applicability of International Accounting
Standard 39 ‘Financial Instruments: Recognition and Measurement’ (IAS 39) and International Accounting Standard 40
‘Investment Property’ (IAS 40) for banking companies till further instructions. Further, according to a notification of Securities
and Exchange Commission of Pakistan (SECP) dated April 28, 2008, International Financial Reporting Standard 7
‘Financial Instruments Disclosure’ (IFRS 7), has not been made applicable for banks. Accordingly, the requirements of
these standards have not been considered in the preparation of these consolidated financial statements. However,
investments have been classified and disclosed in accordance with the requirements prescribed by SBP through various
circulars.
2.1.3 The Securities and Exchange Commission of Pakistan (SECP) vide SRO 56 (1) / 2016 dated January 28, 2016, has notified
that the requirements of International Financial Reporting Standard 10 ‘Consolidated Financial Statements’ (IFRS 10) and
section 228 of the Companies Act, 2017 will not be applicable with respect to the investment in mutual funds established
under Trust structure.
2.1.4 The State Bank of Pakistan through BPRD Circular No. 04 of 2015 dated February 25, 2015 has deferred applicability of
Islamic Financial Accounting Standard 3 ‘Profit & Loss Sharing on Deposits’ (IFAS-3) issued by the Institute of Chartered
Accountants of Pakistan and notified by the Securities & Exchange Commission of Pakistan (SECP), vide their SRO No.
571 of 2013 dated June 12, 2013 for Institutions offering Islamic Financial Services (IIFS). The standard will result in certain
new disclosures in the financial statements of the Group.

STANDARDS THAT ARE EFFECTIVE IN THE CURRENT YEAR
The Group has adopted IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 16 “Leases’ from January 01, 2019.
The impact of the adoption of theses standards and the new accounting policies are explained in note 4.
There are certain other new and amended standards, interpretations and amendments that are mandatory for the Group’s
accounting periods beginning on or after January 1, 2019 but are considered not to be relevant or do not have any
significant effect on the Group’s operations and therefore not detailed in these financial statements.

STANDARDS THAT ARE NOT YET EFFECTIVE
The following standards, amendments and interpretations of accounting and reporting standards as applicable in Pakistan
will be effective for accounting periods beginning on or after January 01, 2020:
– Amendment to IFRS 3 ‘Business Combinations’ – Definition of a Business (effective for business combinations for
which the acquisition date is on or after the beginning of annual period beginning on or after January 01, 2020). The
IASB has issued amendments aiming to resolve the difficulties that arise when an entity determines whether it has
acquired a business or a group of assets. The amendments clarify that to be considered a business, an acquired
set of activities and assets must include, at a minimum, an input and a substantive process that together
significantly contribute to the ability to create outputs. The amendments include an election to use a concentration
test. The standard is effective for transactions in the future and therefore would not have an impact on past financial
statements.
– IFRS 9 ‘Financial Instruments’ and amendment – Prepayment Features with Negative Compensation – for Banks
and DFIs, the effective date of the standard has been extended to annual periods beginning on or after January 01,
2021 vide SBP BPRD Circular No. 4 dated October 23, 2019. IFRS 9 replaces the existing guidance in IAS 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 IAS 39. According to SBP circular referred to above, the Banks/DFIs are
required to have a parallel run of IFRS 9 from January 01, 2020 and are also required to prepare pro-forma financial
statements which includes the impact of IFRS 9 from the year ended December 31, 2019.
– Amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors (effective for annual periods beginning on or after January 01, 2020). The amendments are
intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying
concept of materiality in IFRS Standards. In addition, the IASB has also issued guidance on how to make materiality
judgments when preparing their general purpose financial statements in accordance with IFRS Standards.
– On March 29, 2018, the International Accounting Standards Board (the IASB) has issued a revised Conceptual
Framework for Financial Reporting which is applicable immediately contains changes that will set a new direction for
IFRS in the future. The Conceptual Framework primarily serves as a tool for the IASB to develop standards and to
assist the IFRS Interpretations Committee in interpreting them. It does not override the requirements of individual
IFRSs and any inconsistencies with the revised Framework will be subject to the usual due process – this means
that the overall impact on standard setting may take some time to crystallise. The companies may use the
Framework as a reference for selecting their accounting policies in the absence of specific IFRS requirements. In
these cases, companies should review those policies and apply the new guidance retrospectively as of January 01,
2020, unless the new guidance contains specific scope outs.
– Interest Rate Benchmark Reform which amended IFRS 9, IAS 39 and IFRS 7 is applicable for annual financial
periods beginning on or after January 01, 2020. The G20 asked the Financial Stability Board (FSB) to undertake a
fundamental review of major interest rate benchmarks. Following the review, the FSB published a report setting out
its recommended reforms of some major interest rate benchmarks such as IBORs. Public authorities in many
jurisdictions have since taken steps to implement those recommendations. This has in turn led to uncertainty about
the long-term viability of some interest rate benchmarks. In these amendments, the term ‘interest rate benchmark
reform’ refers to the market-wide reform of an interest rate benchmark including its replacement with an alternative
benchmark rate, such as that resulting from the FSB’s recommendations set out in its July 2014 report ‘Reforming
Major Interest Rate Benchmarks’ (the reform). The amendments made provide relief from the potential effects of the
uncertainty caused by the reform.
– IFRS 14 Regulatory Deferral Accounts - (effective for annual periods beginning on or after 1 July 2019) provides
interim guidance on accounting for regulatory deferral accounts balances while IASB considers more
comprehensive guidance on accounting for the effects of rate regulation. In order to apply the interim standard, an
entity has to be rate regulated
– i.e. the establishment of prices that can be charged to its customers for goods or services is subject to oversight
and/or approved by an authorized body. The term ‘regulatory deferral account balance’ has been chosen as a
neutral descriptor for expense (income) or variance account that is included or is expected to be included by the
rate regulator in establishing the rate(s) that can be charged to customers and would not otherwise be recognized
as an asset or liability under other IFRSs.
2.4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of these financial statements in conformity with the approved accounting standards requires the use of
certain critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, income and
expenses. It also requires the management to exercise its judgment in the process of applying the Group’s accounting
policies. Estimates, underlying assumptions and judgments are continually evaluated and are based on historical
experience, including expectations of future events that are believed to be reasonable under the circumstances. The areas
where various assumptions and estimates are significant to the Group’s financial statements or where judgment was
exercised in application of accounting policies are as follows:
2.4.1 Classification of investments
– In classifying investments as ‘held-for-trading’ the Group has determined securities which are acquired with the
intention to trade by taking advantage of short term market / interest rate movements and are to be sold within 90
days.
– In classifying investments as ‘held-to-maturity’ the Group follows the guidance provided in SBP circulars on
classifying non-derivative financial assets with fixed or determinable payments and fixed maturity. In making this
judgment, the Bank evaluates its intention and ability to hold such investments to maturity.
– The investments, other than those in subsidiary, which are not classified as ‘held-for-trading’ or ‘held-to-maturity’ are
classified as ‘available-for-sale’.
2.4.2 Provision against non-performing loans and advances and debt securities classified as investments
The Group reviews its loan portfolio and debt securities classified as investments to assess amount of non-performing loans
and advances and debt securities and provision required there-against. While assessing this requirement various factors
including the delinquency in the account, financial position of the borrower and the requirements of the Prudential
Regulations are considered. The amount of general provision is determined in accordance with the requirements set out in
Prudential Regulations.
2.4.3 Valuation and impairment of ‘available–for–sale’ equity investments
The Group determines that ‘available-for-sale’ equity investments are impaired when there has been a significant or
prolonged decline in the fair value below its cost. This determination of what is significant and prolonged requires judgment.
In making this judgment, the Bank evaluates among other factors, the normal volatility in share price. In addition,
impairment may be appropriate when there is evidence of deterioration in the financial health of the investee, industry and
sector performance, changes in technology and operational and financing cash flows.
2.4.4 Income taxes
In making the estimates for income taxes currently payable by the Group, the management looks at the current income tax
laws and the decisions of appellate authorities. In determination of deferred taxes, estimates of the Group’s future taxable
profits are taken into account.
2.4.5 Fair value of derivatives
The fair values of derivatives which are not quoted in active markets are determined by using valuation techniques. The
valuation techniques take into account the relevant interest rates in effect at the reporting date and the rates contracted.
2.4.6 Depreciation / amortization
In making estimates of the depreciation / amortization, the management uses method which reflects the pattern in which
economic benefits are expected to be consumed by the Group and estimates the useful life. The method applied and useful
lives estimated are reviewed at each financial year end and if there is a change in the expected pattern or timing of
consumption of the future economic benefits embodied in the assets, the estimate would be changed to reflect the change
in pattern. Such a change is accounted for as change in accounting estimates in accordance with International Accounting
Standard 8 – Accounting Policies, ‘Changes in Accounting Estimates and Errors’.
2.4.7 Defined benefits plan
Liability is determined on the basis of actuarial advice using the Projected Unit Credit Method. The actuarial assumptions
used to determine the liability and related expense are disclosed in note 36.
2.4.8 Fair value hierarchy of assets and liabilities
The fair value of the assets and liabilities is the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The Bank categorizes fair value measurements within the
following fair value hierarchy:
a) Level 1
These are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at
the measurement date.
b) Level 2
These are inputs other than quoted prices included within Level 1 that are observable for asset or liability, either
directly or indirectly.
c) Level 3
These are input for the assets or liability that are not based on observable market data (unobservable Inputs).
3 BASIS OF MEASUREMENT
These consolidated financial statements have been prepared under the historical cost convention except for the following
which are stated at revalued amounts / fair values / present values:
– Investments (Note 4.4);
– Certain operating fixed assets (Note 4.6);
– Staff retirement and other benefits (Note 4.8);
– Non-banking assets acquired in satisfaction of claims (Note 4.9); and
– Derivative financial instruments (Note 4.16.2).
4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted in the preparation of these consolidated financial statements have been applied
consistently to all periods presented in these consolidated financial statements of the Group, except for the change
explained in note 4.1. Significant accounting policies are enumerated as follows:
4.1 Changes in Accounting Policy
IFRS 16 ‘Leases’
The Group applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application
is
recognised in retained earnings at 01 January 2019. Accordingly, the comparative information presented for 2018 is not
restated
– i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The details of the changes in
accounting policies are disclosed below. Additionally, the disclosure requirements in IFRS 16 have not generally been
applied to comparative information.
Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IFRIC 4
Determining whether an Arrangement contains a Lease. The Group now assesses whether a contract is or contains a lease
based on the definition of a lease, as per IFRS 16.
On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which
transactions are leases. The Group applied IFRS 16 only to contracts that were previously identified as leases. Contracts
that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a lease under IFRS
16. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after 01
January 2019.
As a Lessee
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment of whether the
lease transferred substantially all of the risks and rewards incidental to ownership of the underlying asset to the Bank.
Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most of these leases – i.e. these leases
are on-balance sheet.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease component on the basis of its relative stand-alone price.
Previously, the Group classified property leases as operating leases under IAS 17. On transition, for these leases, lease
liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s incremental
borrowing rate as at 01 January 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted
by the amount of any prepaid or accrued lease payments. The Group has applied this approach to all other leases.
The Group used practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS
17. In particular, the Group excluded initial direct costs from the measurement of the right-of-use asset at the date of initial
application and used hindsight when determining the lease term.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term. In
that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the
same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurement of the lease liability.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in ‘property and equipment’ and lease liabilities in ‘other liabilities’ in the statement
of financial position.
Impact on financial statements
The impact on transition is summarised below:-

January 01, 2019 December 31, 2019
Rupees in ‘000’
Right-of-use assets presented in property and equipment 8,858,011 8,087,208

Lease liabilities 8,562,932 8,625,315
Decrease in other assets 295,080 -
Deferred tax assets - 799
The impact of IFRS 16 on profit or loss for the year refer

is summarized below:
Right-of-use assets: Rupees in ‘000

Depreciation charge for the period (1,626,855)
Addition to right-of-use assets 856,276
Derecognition of right-of-use assets (224)
8,087,208

Interest on lease liabilities 988,344
Addition to lease liabilities 852,494
Derecognition of lease liabilities (860)
Payment of lease liabilities (1,777,594)
8,625,315
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments
using its incremental borrowing rate at 01 January 2019.
Rupees in ‘000
Operating lease commitments at 31 December 2018 as
disclosed under IAS 17 6,040,047
Discounted using the incremental borrowing rate at 01
January 2019 (774,432)
Extension options reasonably certain to be exercised 3,297,316
Lease liabilities recognised at 01 January 2019 8,562,931
IFRS 15 ‘Revenue from contracts with customers’
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It
replaces IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognized
when a customer obtains control of the goods or services. Determining the timing of the transfer of control at a point in time
or over time requires judgement.
The Group has adopted IFRS 15 on January 01, 2019 retrospectively in accordance with IAS 8 without practical expedient.
The timing or amount of the Group’s income from contract with customers was not impacted by IFRS 15. The application of
IFRS 15 has no impact on the financial position and/or financial performance of the Group. Accordingly, there was no
adjustment in retained earnings on application of IFRS 15 as at January 01, 2019.
4.2 Cash and cash equivalents
For the purpose of cash flow statement, cash and cash equivalents include cash and balances with treasury banks and
balances with other banks (net of overdrawn nostro balances) in current and deposit accounts.
4.3 Lendings to / borrowings from financial institutions
The Group enters into transactions of borrowing (re-purchase) from and lending (reverse re-purchase) to financial
institutions, at contracted rates for a specified period of time. These are recorded as under:
a. Sale under re-purchase agreements
Securities sold subject to a re-purchase agreement are retained in the financial statements as investments and the
counter party liability is included in borrowings from financial institutions. The differential in sale and re-purchase
value is accrued on a prorata basis and recorded as mark-up expense.
b. Purchase under resale agreements
Securities purchased under agreement to resell (reverse re-purchase) are included in lendings to financial
institutions. The differential between the contracted price and resale price is amortized over the period of the
contract and recorded as mark-up income.
Securities held as collateral are not recognized in the financial statements, unless these are sold to third parties, in
which case the obligation to return them is recorded at fair value as a trading liability under borrowings from financial
institutions.
In Bai Muajjal, the Group sells Shariah Compliant instruments including sukuks on credit to other financial
institutions. The credit price is agreed at the time of sale and such proceeds are received at the end of the credit
period. Expected profit expense is recognized on accrual basis.
In Musharaka / Mudaraba, the Group invests in the Shariah compliant business pools of the financial institutions at
the agreed profit and loss sharing ratio. Expected profit is recognized on accrual basis.
Other borrowings including borrowings from SBP are recorded at the proceeds received. Mark-up on such
borrowings is charged to the profit and loss account on a time proportion basis.
Lendings are stated net of provision. Return on such lending is accrued to the profit and loss account on a time
proportion basis except mark-up on impaired/ delinquent lendings, which is recognized on receipt basis.
4.4 Investments
4.4.1 The Group at the time of purchase classifies its investment portfolio as mentioned in note 2.4.1.
4.4.2 Investments are initially recognized at fair value which, in case of investments other than ‘held-for-trading’, includes
transaction cost associated with the investments. Transaction cost on ‘held-for-trading’ investments are expensed
as incurred.
All ‘regular way’ purchases and sales of investments are recognized on the trade date, i.e., the date that the Group
commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of investments that
require settlement within the time frame generally established by regulation or convention in the market place.
4.4.3 In accordance with the requirements of the SBP, quoted securities, other than those classified as ‘held-to-maturity’
and investments in subsidiaries, are carried at market value. Investments classified as ‘held-to-maturity’ are carried
at amortized cost.
Unrealized surplus / (deficit) arising on revaluation of the Group’s ‘held-for-trading’ investment portfolio is taken to
the profit and loss account. Surplus / (deficit) arising on revaluation of quoted securities classified as ‘available-for-
sale’ is kept in a separate account shown in the statement of financial position. The surplus / (deficit) arising on
these securities is taken to the profit and loss account when actually realized upon disposal or when the investment
is considered to be impaired.
Unquoted equity securities are valued at the lower of cost and break-up value. The break-up value of these
securities is calculated with reference to the net assets of the investee company as per the latest available audited
financial statements. A decline in the carrying value is charged to the profit and loss account. A subsequent increase
in the carrying value, upto the cost of the investment, is credited to the profit and loss account. Investments in other
unquoted securities are valued at cost less impairment, if any.
Provision for diminution in the value of securities (except for debentures, participation term certificates, sukuks and
term finance certificates) is made after considering impairment, if any, in their value. Provision for diminution in value
of debentures, participation term certificates, sukuks and term finance certificates are made in accordance with the
requirements of Prudential Regulations issued by SBP.
4.5 Advances
a. Loans and advances
Loans and advances are stated net of general and specific provisions. Specific provision against loans is
determined in accordance with the requirements of the Prudential Regulations and other directives issued by SBP
and charged to the profit and loss account. General provision is maintained in accordance with the requirements of
Prudential Regulations issued by SBP and charged to the profit and loss account. Advances are written off when
there are no realistic prospects of recovery.
b. Net investment in finance lease
Leases, where the Group transfers substantially all the risks and rewards incidental to the ownership of an asset to
the lessee are classified as finance leases. A receivable is recognized at an amount equal to the present value of
the minimum lease payments, including un-guaranteed residual value, if any. Finance lease receivables are
included in advances to the customers.
The Group provides Islamic financing and related assets mainly through Murabaha, Ijarah, Diminishing
Musharakah, Business Musharakah and Salam. The purchases and sales arising under these arrangements are not
reflected in these financial statements as such but are restricted to the amount of facility actually utilised and the
appropriate portion of profit thereon. The profit on such financings is recognised in accordance with the principles of
Islamic Shariah. The Group determines specific and general provisions against Islamic financing and related assets
in accordance with the requirements of the Prudential Regulations issued by the SBP. The net provision made /
reversed during the year is charged to profit and loss account and accumulated provision is netted off against
Islamic financing and related assets. Islamic financing and related assets are written off when there are no realistic
prospects of recovery.
4.6 Fixed assets and depreciation
a. Tangible assets
Property and equipment owned by the Group, other than land which is not depreciated, are stated at cost or
revalued amount less accumulated depreciation and impairment losses, if any. Land is carried at revalued amount.
Depreciation is calculated using the straight line method, except buildings which are depreciated using the reducing
balance method, to write down the cost of property and equipment to their residual values over their estimated
useful lives. The rates at which the fixed assets are depreciated are disclosed in note 10.2. The residual values,
useful lives and depreciation methods are reviewed and adjusted, if required. Adjustments in residual values, useful
lives and depreciation methods are treated as change in accounting estimates.
Depreciation on additions is charged from the month the assets are available for use, while no depreciation is
charged in the month in which the assets are disposed off.
When an asset or class of assets is revalued, any increase in the carrying amount arising on revaluation is recorded
through other comprehensive income and credited to the revaluation reserve in equity. However, the increase shall
be recognized in the profit and loss account to the extent it reverses previously recognised revaluation
decrease/impairment loss of the same asset in the profit and loss account, net of amortization or depreciation had
no revaluation decrease/ impairment been required for the asset in prior years. A decrease resulting from a
revaluation is initially charged directly against any related revaluation surplus held in respect of that asset and the
remaining portion being charged as an expense.
The surplus on revaluation of fixed assets to the extent of incremental depreciation (net of deferred tax) charged on
the related assets is transferred directly to un-appropriated profit.
Revaluation of entire class of assets is carried out by independent professionally qualified valuers with sufficient
regularity (every third year) to ensure that the carrying amount of the entire class of assets does not differ materially
from their fair value.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in the profit
and loss account in the year the asset is derecognized, except that the related surplus on revaluation of fixed assets
(net of deferred tax) is transferred directly to unappropriated profit.
Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits
associated with the item will flow to the Bank and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the profit and loss account.
b. Intangible assets
Intangible assets are carried at cost less any accumulated amortization and impairment losses, if any. The cost of
intangible assets is amortized over their estimated useful lives, using the straight line method. Amortization is
charged from the month the assets are available for use at the rate stated in note 11.2. The useful lives are
reviewed and adjusted, if appropriate, at each reporting date.
c. Capital work-in-progress
Capital work-in-progress is stated at cost less impairment losses, if any.

4.7 Taxation
a. Current
Provision for current taxation is based on taxable income for the year determined in accordance with the prevailing
laws for taxation. The charge for current tax is calculated using the prevailing tax rates or tax rates expected to
apply to the profits for the year.
b. Prior
The taxation charge for prior years represents adjustments to the tax charge relating to prior years, arising from
assessments/changes in laws and changes in estimates made during the current year.
c. Deferred
Deferred tax is recognized using the balance sheet liability method on all temporary differences, at the reporting
date between the amounts attributed to assets and liabilities for financial reporting purpose and amounts used for
taxation purposes. Deferred tax is calculated at the rates that are expected to apply to the periods when the
difference will reverse, based on tax rates that have been enacted or substantially enacted at the reporting date.
Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available
against which the assets can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realized.
The Group also recognizes a deferred tax asset / liability on deficit / surplus on revaluation of fixed assets, non-
banking assets and securities which is adjusted against the related deficit / surplus in accordance with the
requirements of IAS-12 ‘Income Taxes’.
4.8 Staff retirement and other benefits
4.8.1 Staff retirement schemes
a. For employees who opted for the 2002 scheme introduced by the management
An approved pension scheme (defined benefit scheme) under which the benefits on the basis of frozen basic salary,
service length and age as on June 30, 2002 are payable to all employees whose date of joining the Group is on or
before July 01, 1992, i.e., who have completed ten years of continuous service as on June 30, 2002.
During the year, the pensioners were given a voluntary option to settle their monthly pension with a lump sum
payment. Those who will not opt for the lump sum option, will continue to receive monthly pension (defined benefit
scheme).
An approved gratuity scheme (defined benefit scheme) under which the benefits are payable as under:
I) For members whose date of joining the Group is on or before July 01, 1992, their services would be
calculated starting from July 01, 2002 for gratuity benefit purposes.
ii) For members whose date of joining the Group is after July 01, 1992 their services would be taken at actual
for the purpose of calculating the gratuity benefit. This rule will be applicable upon retirement or in service
death only, in case of resignation gratuity will be payable from July 01, 2002, even if he or she had joined
the Group before July 01, 2002.
A contributory provident fund scheme to which equal contributions are made by the Group and the employees
(defined contribution scheme).
b. For employees who did not opt for 2002 scheme
An approved pension scheme (defined benefit scheme) under which the benefits on the basis of frozen basic salary
as on June 30, 2002 are payable to all employees opting continuation of the previous scheme and whose date of
joining the Bank is on or before July 01, 1992, i.e., who had completed ten years of continuous service as on June
30, 2002.
In the light of decision of Honorable Supreme Court of Pakistan in SMC No. 20/2016 dated 13th February 2018
read with Order dated 3rd April 2018 passed in CRP No.72/2018 and Order dated 7th August 2018 in Crl.O.No. 98
and 99 of 2018 and after consultation with Bank’s legal counsel, the monthly pension of eligible pensioners has
been fixed with indexation levels for eligible pensioners effective from February 13, 2018.
c) Post-retirement medical benefits
The Group provides post-retirement medical benefits to eligible retired employees. Provision is made annually to
meet the cost of such medical benefits on the basis of actuarial valuation carried out using the Projected Unit Credit
Method.
Annual contributions towards the defined benefit schemes are made on the basis of actuarial valuation carried out
using the Projected Unit Credit Method. Actuarial gains / losses arising from experience adjustments and changes
in actuarial assumptions are recognized in Other Comprehensive Income in the period of occurrence.
4.8.2 Other long term benefit
a) Employees’ compensated absences
Employees’ entitlement to annual leave is recognized when they accrue to employees, upto a maximum of 60 days.
A provision is made for estimated liability for annual leaves as a result of services rendered by the employee against
un- availed leaves, as per terms of service contract, up to the reporting date, based on actuarial valuation using
Projected Unit Credit Method. Actuarial gains / losses arising from experience adjustments and changes in actuarial
assumptions are recognized in Profit and Loss account in the period of occurrence.
b) Compensation to certain class of employees
Bank has revised its retirement policy by reducing the retirement age to 58 years for class of employees effective
January 01, 2018. Consequent to the revision, these employees shall be compensated with gross salary along with
employer’s contribution on provident fund and gratuity for the remaining period up to 60 years in addition to already
defined post- employment benefits, payable at the time of retirement, if any.
4.9 Non-banking assets acquired in satisfaction of claims
Non-banking assets (NBA) acquired in satisfaction of claims are carried at revalued amounts less accumulated depreciation
(excluding land). Revaluation by independent professionally qualified valuers, is carried out with sufficient regularity to
ensure that their net carrying value does not differ materially from their fair value. Surplus arising on revaluation of NBA is
credited to the ‘surplus on revaluation of assets’ account through statement of comprehensive income and any deficit
arising on revaluation is taken to profit and loss account directly. Legal fees, transfer costs and direct costs of acquiring title
to property are charged to profit and loss account and not capitalised.
4.10 Deposits
Deposits are initially recorded at the amount of proceeds received. Mark-up accrued on deposits is recognized separately
as part of other liabilities and is accrued to the profit and loss account on time proportion basis. Deposits mobilized under
Islamic Banking operations are generated under two modes i.e. ‘Qard’ and ‘Modaraba’. Deposits taken on Qard basis are
classified as ‘Current accounts’ and Deposits generated on Modaraba basis are classified as ‘Saving deposits / Fixed
deposits’.
4.11 Impairment
a) Available-for-sale equity securities
The Group determines that ‘available-for-sale’ equity investments are impaired when there has been a significant or
prolonged decline in the fair value of these investments below their cost. The determination of what is significant or
prolonged requires judgment. In making this judgment, the Group evaluates, among other factors, the normal
volatility in share price in the case of listed equity securities. In addition, impairment may be appropriate when there
is evidence of deterioration in the financial condition of the investee, industry and sector performance and changes
in technology.
b) Non-financial assets
The carrying amount of the Group’s assets (other than deferred tax assets) are reviewed at each reporting date to
determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the
relevant asset is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its
recoverable amount. Impairment losses are recognized in the profit and loss account except for an impairment loss
on revalued assets which is adjusted against the related revaluation surplus to the extent that the impairment loss
does not exceed the revaluation surplus. An impairment loss is reversed if the reversal can be objectively related to
an event occurring after the impairment loss was recognized.
4.12 Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past events and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the amount can be made.
Provision against identified losses on non-funded exposure is recognized when intimated and reasonable certainty exists for
the Group to settle the obligation. The loss is charged to the profit and loss account net of expected recovery and is
classified under other liabilities.
Provisions are reviewed at the reporting date and are adjusted to reflect the current best estimate.
4.13 Acceptances
Acceptances comprise of undertakings by the Group to pay bills of exchange drawn on customers. Acceptances are
recognised as financial liability in the statement of financial position with a contractual right of reimbursement from the
customer as a financial asset. Therefore, commitments in respect of acceptances have been accounted for as financial
assets and financial liabilities.
4.14 Dividend distribution and appropriations
Bonus and cash dividend and other appropriations (except for the appropriations required by law), declared / approved
subsequent to the reporting date are considered as non-adjusting event and are not recorded in financial statements of the
current year. These are recognized in the period in which these are declared / approved.
4.15 Foreign currencies
a. Foreign currency transactions
Transactions in foreign currencies are translated into rupees at the foreign exchange rates ruling on the transaction
date. Monetary assets and liabilities in foreign currencies are expressed in rupee terms at the rates of exchange
ruling on the reporting date. Foreign bills purchased are valued at spot rate and forward foreign exchange contracts
are valued at forward rates applicable to their respective maturities.
b. Foreign operations
The assets and liabilities of foreign operating branches are translated to Pakistan Rupee (PKR) at exchange rates
prevailing at reporting date. The results of foreign operations are translated at the average exchange rate for the
period.
c. Translation gains and losses
Translation gains and losses arising on revaluation of net investments in foreign operations are taken to equity
under “Exchange Translation Reserve” through Other Comprehensive Income and on disposal are recognised in
profit and loss account. Regular translation gains and losses are taken to profit and loss account.
d. Commitments
Commitments for outstanding forward contracts disclosed in these financial statements are translated at forward
rates applicable to their respective maturities. Contingent liabilities / commitments for letters of credit and letters of
guarantee denominated in foreign currencies are expressed in rupee terms at the rates of exchange prevailing on
the reporting date.
4.16 Financial instruments
4.16.1 Financial assets and liabilities

Financial assets and financial liabilities are recognised at the time when the Group becomes a party to the contractual
provision of the instrument. Financial assets are de-recognised when the contractual right to future cash flows from the
asset expires or is transferred along with the risk and reward of the asset. Financial liabilities are de-recognised when
obligation specific in the contract is extinguished. Any gain or loss on de-recognition of the financial asset and liability is
recognised in the profit and loss account of the current period. The particular recognition and subsequent measurement
methods adopted for significant financial assets and financial liabilities are disclosed in the individual policy statements
associated with them.
4.16.2 Derivative financial instruments

Derivative financial instruments are initially recognized at fair value on the date on which the derivative contract is entered
into and are subsequently re-measured at fair value using appropriate valuation techniques. All derivative financial
instruments are carried as assets when fair value is positive and liabilities when fair value is negative. Any change in the fair
value of derivative financial instruments is taken to the profit and loss account.
4.17 Off setting

Financial assets and financial liabilities are off set and the net amount is reported in the financial statements when there is a
legally enforceable right to off set and the Group intends to either settle on a net basis, or to realize the assets and to settle
the liabilities simultaneously.
4.18 Revenue recognition
Revenue is recognized to the extent that the economic benefits will flow to the Group and the revenue can be reliably
measured. These are recognised as follows:
a. Advances and investments
Mark-up / return on regular loans / advances and investments is recognized on a time proportion basis. Where debt
securities are purchased at premium or discount, the same is amortized through the profit and loss account using
the effective interest rate method.
Interest or mark-up recoverable on classified loans, advances and investments is recognized on receipt basis.
Interest / return / mark-up on classified rescheduled / restructured loans and advances and investments is
recognized as permitted by the regulations of the SBP.
Dividend income is recognized when the right to receive the dividend is established.
Gains and losses on sale of investments are recognized in the profit and loss account.
b. Lease financing
Financing method is used in accounting for income from lease financing. Under this method, the unearned lease
income (excess of the sum of total lease rentals and estimated residual value over the cost of leased assets) is
deferred and taken to income over the term of the lease period so as to produce a constant periodic rate of return
on the outstanding net investment in lease. Unrealised income on classified leases is recognized on receipt basis.
Gains / losses on termination of lease contracts and other lease income are recognized when realized.
Profit on Business Musharakah financing is booked on accrual basis and is adjusted upon declaration of profit by
Musharakah partners.
Ijarah and Diminishing Musharakah income is recognised on an accrual basis as and when the rental becomes
due. Murabaha and Salam income is recognised on deferred income basis.
d. Fees, brokerage and commission
Fee, Commission and Brokerage income is recognized on an accrual basis except where, in the opinion of
management, it would not be prudent to do so.
4.19 Business Segment reporting
A segment is a distinguishable component of the Bank that is subject to risks and rewards that are different from those of
other segments. A business segment is one that is engaged either in providing certain products or services, whereas a
geographical segment is one engaged in providing certain products or services within a particular economic environment.
Segment information is presented as per the Bank’s functional and management reporting structure. The Group’s primary
segment reporting is based on following business segments:
a. Corporate & investment banking
This segment offers a wide range of financial services to medium and large sized public and private sector entities
and also covers overseas operation of the Group. These services include, providing and arranging tenured
financing, corporate advisory, underwriting, cash management, trade products, corporate finance products and
customer services on all Group related matters.
b. Trading and sales (Treasury)
This segment undertakes the Group’s treasury and money market activities.
c. Commercial & retail banking
Commercial and retail banking provides services to commercial and retail customers including agriculture sector. It
includes loans, deposits and other transactions with commercial and retail (conventional and Islamic) customers.
d. Islamic Banking
Islamic banking provides shariah compliant services to customers including loans, deposits and other transactions.
e. Others
Others includes functions which cannot be classified in any of the above segments.
4.20 Geographical Segment Reporting
Geographically the Group operates in Pakistan, Middle East and China.
4.21 Earnings per share
The Group presents basic and diluted earnings per share (EPS) for its shareholders. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares
outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, if
any.
Notes to the Consolidated Financial Statements

2019 2018
Rupees in ‘000
5 CASH AND BALANCES WITH TREASURY BANKS In hand
Local currency 14,645,395

13,636,602 16,269,166
15,260,727
Foreign currencies 1,008,793 1,008,439
Remittances in transit 1,528,644 591,133
With State Bank of Pakistan (SBP) in

Local currency current accounts 5.1 51,250,399 38,599,518
Foreign currency current account 5.2 91,812 81,311
Foreign currency deposit accounts (non-remunerative) 5.1 5,515,729 4,722,714
Foreign currency deposit accounts (remunerative) 5.3 16,509,764 14,128,800
73,367,704 57,532,343
With National Bank of Pakistan in

Local currency current accounts 30,059,400 24,610,744
Prize Bonds 333,983 174,175

119,935,126 99,177,561
5.1 Deposits with SBP are maintained to comply with the cash reserve requirement, under section 22 of the Banking
Companies Ordinance, 1962 and SBP statutory requirements issued from time to time.
5.2 This represents US Dollar settlement account maintained with SBP.
5.3 This represents special cash reserve maintained with SBP. The return on this account is declared by SBP on a monthly
basis and carries mark-up at the rate of 0.7% to 1.51% (2018: 0.56% to 1.35%) per annum.

2019 2018
Rupees in ‘000
6 BALANCES WITH OTHER BANKS
In Pakistan
In deposit accounts - 2,000,000
Outside Pakistan
In current accounts 6.1 300,295 268,512
In deposit accounts 6.1 302,287 306,543
602,582 2,575,055
6.1 These are nostro balances placed with other banks.
Allied Bank 225

Limited
Statements

2019 2018
Rupees in ‘000
7 LENDINGS TO FINANCIAL INSTITUTIONS
Call money lendings - 5,500,000

Repurchase agreement lendings (Reverse Repo) 7.1 & 7.7 2,052,491 44,455,680
Musharaka lendings 7.2 1,000,000 2,500,000
Bai muajjal receivable from:
– State Bank of Pakistan 7.3 2,704,142 -
– other financial institutions 7.4 7,850,288 1,024,515
Certificates of investment 7.5 70,000 70,000
Letters of placement - 300,000
13,676,921 53,850,195
Less: Provision held against lendings to financial institutions 7.5 & 7.8 (70,000) (70,000)
Lendings to financial institutions – net of provision 13,606,921 53,780,195
7.1 These are short-term local currency lendings to financial institutions against government securities as shown in note 7.7
below. These carry mark-up at the rate of 13.45% to 13.50% (2018: 10.10% to 10.40%) per annum, maturing on various
dates, latest by January 20, 2020.
7.2 These represent local currency lendings by Islamic banking business under Musharaka agreement at expected profit of
12.15% (2018: 9.50% to 9.70%) per annum, maturing on various dates, latest by February 6, 2020.
7.3 This represent local currency lending by Islamic banking business under Bai Muajjal agreement with the State Bank of
Pakistan at expected profit of 10.53% (2018: Nil) per annum, maturing on February 07, 2020.
7.4 This represent local currency lending by Islamic banking business under Bai Muajjal agreement with various Islamic banks
at expected profit of 12.15% to 12.60% (2018: 9.80%) per annum, maturing on various dates, latest by January 17, 2020.
7.5 This represents local currency classified certificates of investment and related provisioning, amounting to Rs. 70 million
(2018: Rs. 70 million).

2019 2018
Rupees in ‘000
7.6 Particulars of lending

In foreign currencies - -
13,676,921 53,850,195
Held by Further Further

Group Held by
given as Tota given as Total
Group
collateral l collateral
Rupees in ‘000
7.7 Securities held as collateral against

lending to financial institutions
Market Treasury Bills - - - 33,500,000 - 33,500,000

Pakistan Investment Bonds 2,200,000 - 2,200,000 11,000,000 - 11,000,000
2,200,000 - 2,200,000 44,500,000 - 44,500,000
Classified Provision Classified Provision
Lending Held Lending Held
Rupees in ‘000
7.8 Category of classification
Domestic
Other Assets Especially Mentioned - - - -
Substandard - - - -
Doubtful - - - -
Loss 70,000 70,000 70,000 70,000
70,000 70,000 70,000 70,000
Cost / Provision for Surplus / Carrying Cost /

Provision for Surplus / Carrying
Note Amortized diminution (Deficit) Value Amortized
diminution (Deficit) Value
cost cost
Rupees in ‘000
8 INVESTMENTS
8.1 Investments by type:
Held-for-trading securities
Federal Government Securities 19,862,396 - 5,767 19,868,163 - - - -
Open Ended Mutual Funds/Pension Funds 2,061,722 - 135,712 2,197,434 1,912,351 - (53,328) 1,859,023
21,924,118 - 141,479 22,065,597 1,912,351 - (53,328) 1,859,023
Available-for-sale securities
Federal Government Securities* 677,300,056 (15,961) 1,689,073 678,973,168 610,683,028 (21,248) (1,608,457) 609,053,323
Shares 24,349,646 (3,202,822) 9,686,372 30,833,196 25,390,404 (2,266,130) 9,572,004 32,696,278
Non Government Debt Securities 13,633,213 (21,071) (37,667) 13,574,475 11,732,046 (21,071) (47,874) 11,663,101
Foreign Securities 1,037,692 - - 1,037,692 1,037,692 - - 1,037,692
Open Ended Mutual Funds 63,834 - 91,424 155,258 63,834 - 62,436 126,270
8.4 716,384,441 (3,239,854) 11,429,202 724,573,789 648,907,004 (2,308,449) 7,978,109 654,576,664
Held–to–maturity securities
Federal Government Securities 13,015,041 - - 13,015,041 16,151,622 - - 16,151,622
Non Government Debt Securities 344,260 (344,260) - - 346,090 (346,090) - -
8.5 13,359,301 (344,260) - 13,015,041 16,497,712 (346,090) - 16,151,622
8.2 Investments by segments:
Federal Government Securities:

Market Treasury Bills 542,565,953 - 176,506 542,742,459 543,454,941 - (21,790) 543,433,151
Pakistan Investment Bonds 154,349,214 - 784,365 155,133,579 64,695,276 - (1,397,373) 63,297,903
GOP Ijarah Sukuks 876,511 - (8,765) 867,746 3,350,848 - (16,997) 3,333,851
GOP Sukuks (US$) 3,869,387 (15,961) 59,871 3,913,297 9,756,796 (21,248) (191,642) 9,543,906
Foreign Currency Bonds (US$) 6,215,907 - 682,863 6,898,770 5,576,788 - 19,346 5,596,134
GOP Ijarah Sukuks -
Bai Muajjal Placement 2,300,521 - - 2,300,521 - - - -
710,177,493 (15,961) 1,694,840 711,856,372 626,834,649 (21,248) (1,608,456) 625,204,945
Shares:
Listed Companies 21,940,832 (3,168,936) 9,686,372 28,458,268 22,646,719 (2,103,351) 9,572,003 30,115,371
Unlisted Companies 2,408,814 (33,886) - 2,374,928 2,743,686 (162,779) - 2,580,907
Units of open-ended mutual funds 2,125,556 - 227,136 2,352,692 1,976,185 - 9,108 1,985,293
26,475,202 (3,202,822) 9,913,508 33,185,888 27,366,590 (2,266,130) 9,581,111 34,681,571

Listed 5,417,804 (103,498) (37,667) 5,276,639 3,139,909 (105,329) (47,874) 2,986,706
Unlisted 8,559,669 (261,833) - 8,297,836 8,938,227 (261,832) - 8,676,395
13,977,473 (365,331) (37,667) 13,574,475 12,078,136 (367,161) (47,874) 11,663,101
Foreign Securities
Equity securities 1,037,692 - - 1,037,692 1,037,692 - - 1,037,692
*Provision for diminution against federal government securities represents expected credit loss provisioning under IFRS 9 on portfolio
pertaining to overseas branch.
2019 2018
Rupees in ‘000
8.2.1 Investments given as collateral

GOP Foreign Currency Sukuks (US$) 2,957,611 4,451,600
GOP Foreign Currency Bonds (US$) - 710,569
Total Investments given as collateral 196,817,360 173,650,810
8.3 Provision for diminution in value of investments
8.3.1 Opening balance 2,654,539 2,705,403

Exchange adjustments 3,163 1,556
Charge / reversals
Charge for the year 1,118,302 112,795
Reversals for the year (139,161) (3,776)
979,141 109,019
Reversal on disposals (52,729) (161,439)
Closing Balance 3,584,114 2,654,539

NPI Provision NPI Provision
Rupees in ‘000
8.3.2 Particulars of provision against debt securities
Category of classification
Domestic
Other assets especially mentioned - - - -
Substandard - - - -
Doubtful - - - -
Loss 365,331 365,331 367,161 367,161
365,331 365,331 367,161 367,161
Overseas
Not past due but impaired* 3,869,387 15,961 9,756,796 21,248
Overdue by:
Upto 90 days - - - -
91 to 180 days - - - -
181 to 365 days - - - -
> 365 days - - - -
- - - -
Total 4,234,718 381,292 10,123,957 388,409
* Provision represents expected credit loss provisioning in overseas branch.
The State Bank of Pakistan (SBP) has not granted any relaxation in any classification / provisioning during the year ended
December 31, 2019.
2019 2018
Cost
Rupees in ‘000
8.4 Quality of Available for Sale Securities

Details regarding quality of Available for Sale (AFS) securities are as follows:

GOP Sukuks (US$) 3,869,387 9,756,796
Foreign Currency Bonds (US$) 6,215,907 5,576,788
GOP Ijarah Sukuks 876,511 3,350,848
677,300,056 610,683,028
Shares
Listed Companies
Power Generation and Distribution 8,159,528 8,991,081
Oil & Gas Exploration Companies 5,093,606 5,093,607
Fertilizer 3,827,631 3,701,965
Commercial Banks 2,900,903 2,900,903
Oil & Gas Marketing Companies 1,043,460 1,043,460
Real Estate Investment Trust 455,851 455,851
Chemical 268,289 268,289
Leasing Companies 89,322 89,322
Close-end Mutual Funds 51,603 51,603
Investment Banks 50,000 50,000
Cement 638 638
21,940,831 22,646,719

Cost Breakup value Cost Breakup
value
Rupees in ‘000
Unlisted Companies
Security General Insurance Ltd. 1,075,653 2,527,369 1,075,653 1,830,648
Habib Allied Holding Ltd. 1,035,922 1,241,538 1,035,922 1,241,939
Nishat Hotels And Properties Ltd. 566,982 1,025,523 944,970 816,078
Atlas Power Limited 355,000 1,070,210 355,000 849,650
Pakistan Mortgage Refinance Co. Ltd. 200,000 202,984 200,000 200,459
1 Link Private Limited 50,000 - 50,000 -
Central Depository Company 40,300 61,068 40,300 58,408
ISE Towers REIT Management Company Limited 30,346 43,979 30,346 42,765
First Women Bank Limited 21,200 72,287 21,200 72,287
LSE Financial Services Limited 8,440 19,155 8,440 18,318
SME Bank Limited 5,250 - 5,250 -
Arabian Sea Country Club Ltd. 5,000 351 5,000 351
Eastern Capital Limited 5,000 - 5,000 -
SWIFT 1,770 6,431 1,770 6,777
National Institutional for Facilitation
Technologies Private Limited 1,527 51,641 1,527 59,076
Pakistan Agricultural Storage and Services Corporation 1,000 295,078 1,000 242,002
Pakistan Corporate Restructuring Company 43,117 43,117 - -
3,446,507 6,660,731 3,781,378 5,438,758
2019 2018
Cost
Rupees in ‘000
Listed
– AAA 1,497,900 383,308
– AA+, AA, AA– 2,716,405 2,618,458
– A+, A, A– 500,000 32,813
4,714,305 3,034,579
Unlisted
– AAA 3,250,000 3,750,000
– AA+, AA, AA– 4,209,436 3,080,965
– A+, A, A– 1,438,401 1,845,431
– Unrated 21,071 21,071
8,918,908 8,697,467
Open Ended Mutual Funds
HBL Growth Fund – Class B Segment 38,834 38,834

Allied Finergy Fund 25,000 25,000
63,834 63,834
Foreign Securities
Equity Securities – Unlisted

Habib Allied Holding Limited 1,035,922 1,035,922
SWIFT 1,770 1,770
1,037,692 1,037,692
8.5 Particulars relating to Held to Maturity securities are as follows:

GOP Ijarah Sukuks - Bai Muajjal Placement 2,300,521 -
13,015,042 16,151,622
Listed
– Unrated 103,499 105,329
Unlisted
– Unrated 240,761 240,761
8.5.1 The market value of Pakistan Investment Bonds classified as held-to-maturity as at December 31, 2019 amounted to Rs.
10,848.5 million (December 31, 2018: Rs. 15,579.4 million).
Subsidiary Asset
Management
Company
8.6 Details regarding subsidiary company:
Country of incorporation Pakistan

Percentage holding 100%
Assets 2,793,765
Liabilities 433,044
Revenue 783,478
Profit after taxation 375,852
Total comprehensive income 375,743
Performing Non Performing Total

Note 31,2019
31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in
‘000
9 ADVANCES
Loans, cash credits, running finances, etc. 9.1 467,880,949 428,933,543 14,450,873 14,569,294 482,331,822 443,502,837
Islamic financing and related assets A-II. 3 12,615,228 6,925,320 - - 12,615,228 6,925,320
Bills discounted and purchased 3,853,892 1,982,031 1,403,045 1,495,347 5,256,937 3,477,378
Advances – gross 9.2 484,350,069 437,840,894 15,853,918 16,064,641 500,203,987 453,905,535
Provision against advances

Specific 9.3 & 9.4 - - (15,112,624) (15,533,497) (15,112,624) (15,533,497)
General 9.4 (39,795) (15,868) - - (39,795) (15,868)
(39,795) (15,868) (15,112,624) (15,533,497) (15,152,419) (15,549,365)
Advances – net of provision 484,310,274 437,825,026 741,294 531,144 485,051,568 438,356,170
Later than Over five Later than Over five

Not later Total Not later Tota
one and years one and years
than one than one
less than less than
year year
five years five years
Rupees in ‘000
Includes Net investment in finance

9.1
as described below
lease
Lease rentals receivable 606,329 1,331,279 85,114 2,022,722 631,223 1,504,537 116,221 2,251,981
Residual value 50,138 510,411 147,989 708,538 42,542 460,880 188,280 691,702
Minimum lease payments 656,467 1,841,690 233,103 2,731,260 673,765 1,965,417 304,501 2,943,683
Financial charges for future periods (108,826) (206,316) (19,224) (334,366) (66,148) (133,067) (130,661) (329,876)
Present value of minimum lease payments 547,641 1,635,374 213,879 2,396,894 607,617 1,832,350 173,840 2,613,807

2019 2018
Rupees in ‘000
9.2 Particulars of advances (Gross)
9.2.1 In local currency 484,455,795 443,682,812

500,203,987 453,905,535
9.3 Advances include Rs. 15,853.918 million (2018: Rs. 16,064.641 million) which have been placed under non-performing
status as detailed below:

Non
Performing Non Specific
Loans Specific Performing
Loans Provision
Provision
Rupees in ‘000
Category of Classification Domestic
Other Assets Especially Mentioned 35,436 449 38,425 2,231

Substandard 809,938 202,107 436,938 109,035
Doubtful 196,952
15,853,918 98,476
15,112,624 334,094
16,064,641 167,047
15,533,497
Loss 14,811,592 14,811,592 15,255,184 15,255,184
9.4 Particulars of provision against advances

Note Specific General Total Specific General Total
Rupees in ‘000
Opening balance 15,533,497 15,868 15,549,365 16,702,236 11,701 16,713,937

Exchange adjustments - (896) (896) - - -
Charge for the year 589,752 24,823 614,575 500,412 4,167 504,579
Reversals 9.5 (1,008,707) - (1,008,707) (1,637,415) - (1,637,415)
(418,955) 24,823 (394,132) (1,137,003) 4,167 (1,132,836)
Amounts written off 9.6 (1,918) - (1,918) (31,736) - (31,736)
Closing balance 15,112,624 39,795 15,152,419 15,533,497 15,868 15,549,365
9.4.1 In local currency 14,748,991 16,820 14,765,811 15,207,403 15,717 15,223,120

In foreign currencies 363,633 22,975 386,608 326,094 151 326,245
15,112,624 39,795 15,152,419 15,533,497 15,868 15,549,365
9.4.2 No benefit of forced sale value of the collaterals held by the Group has been taken while determining the provision against
non- performing loans as allowed under BSD circular No. 01 dated October 21, 2011.
9.5 This includes reversal of provision on account of a non performing loan, classified as loss, settled against Debt Property
Swap amounting to Rs. 311.2 million (2018: Rs. 29.2 million).

2019 2018
Rupees in ‘000
9.6 Particulars of write–offs
9.6.1 Against provisions 1,918 31,736

Directly charged to Profit and Loss account - -
1,918 31,736
9.6.2 Write–offs of Rs. 500,000 and above – Domestic 9.7 1,918 31,736
Write–offs of below Rs. 500,000 - -
1,918 31,736
9.7 Details of loan write–off of Rs. 500,000/– and above
In terms of sub-section (3) of Section 33A of the Banking Companies Ordinance, 1962, the Statement in respect of written-
off loans or any other financial relief of five hundred thousand rupees and above allowed to a person(s) during the year
ended December 31, 2019 is given in Annexure-’I’. However, these write-offs do not affect the Bank’s right to recover debts
from these customers.

2019 2018
Rupees in ‘000
10 FIXED ASSETS
Capital work–in–progress 10.1 2,991,144 2,338,494

Property and equipment 10.2 51,161,710 48,061,279
Right-of-Use Assets 4.1 8,087,208 -
62,240,062 50,399,773
10.1 CAPITAL WORK-IN-PROGRESS
Civil works 2,219,464 1,855,180

Equipment 6,546 -
Advances to suppliers 765,134 483,314
2,991,144 2,338,494
December 31,2019
Land Land fixture
equipment Vehicles Premises) Total
Rupees in ‘000
At January 1, 2019
Net book value 17,564,604 10,962,212 6,779,980 4,329,381 898,283 5,437,043 519,235 1,570,541 48,061,279

Additions 1,547,674 354,505 795,815 296,857 223,501 1,916,366 431,013 810,629 6,376,360
Disposals cost - - - (89,780) (14,449) (140,257) (346,079) (553) (591,118)
Disposals accumulated depreciation - - - 16,432 12,855 127,573 326,274 553 483,687
Disposals - - - (73,348) (1,594) (12,684) (19,805) - (107,431)
Exchange rate adjustments - - - - - (122) - - (122)

Net book value 19,112,278 11,316,717 7,214,513 4,331,458 924,738 5,732,623 711,784 1,817,599 51,161,710
Rate of depreciation (percentage) - - 5% 5% 10% 10% -50% 20% 20% -
December 31,2018
Land Land fixture Total
equipment Vehicles Premises)
Rupees in ‘000
At January 1, 2018
Cost / Revalued amount 15,281,070 11,068,636 6,260,977 4,261,641 1,682,198 11,676,459 827,965 3,501,922 54,560,868
Accumulated depreciation - - - - (878,225) (7,220,730) (537,487) (1,997,095) (10,633,537)
Net book value 15,281,070 11,068,636 6,260,977 4,261,641 803,973 4,455,729 290,478 1,504,827 43,927,331

Additions 2,380,971 58,138 859,667 296,527 273,610 2,347,406 359,000 575,046 7,150,365
Disposals cost - - - - (17,878) (429,280) (28,822) (90) (476,070)
Disposals accumulated depreciation - - - - 17,173 422,746 24,524 90 464,533
Disposals - - - - (705) (6,534) (4,298) - (11,537)
Exchange rate adjustments - - - - (78) (113) - - (191)
Other adjustments / transfers (97,437) (164,562) - - - - - - (261,999)

Net book value 17,564,604 10,962,212 6,779,980 4,329,381 898,283 5,437,043 519,235 1,570,541 48,061,279
Rate of depreciation (percentage) - - 5% 5% 10% 10% -50% 20% 20% -
10.3 Bank arranged for valuation of all Land and Buildings as at December 31, 2017 from four independent valuers {Sadruddin
Associates (Pvt.) Ltd, Unicorn International Surveyors, Indus Surveyors (Pvt.) Limited and Harvester Services (Pvt). Ltd.}.
The revalued amounts of properties have been determined on the basis of market value. Had there been no revaluation, the
carrying amount of revalued assets would have been as follows:
Rupees in ‘000
– Land (Freehold and leasehold) 16,670,183

– Building 8,393,866
10.4 Fair value of property and equipment excluding land and buildings is not expected to be materially different from their
carrying amount.

2019 2018
Rupees in ‘000
10.5 Incremental depreciation charged during the year

transferred to unappropriated profit 20.1 164,129 172,713
10.6 Restriction / discrepancy in the title of property

having a net book value of 63,370 57,694
10.7 The cost of fully depreciated

assets that are still in use:
Furniture and fixtures 510,781 342,011

Electrical, office and computer equipments 5,317,286 4,497,694
Vehicles 108,035 327,935
Leasehold Improvements 1,738,160 1,342,260
2019 2018
Rupees in ‘000
10.8 The carrying amount of property and equipment

that have retired from active use 283,457 349,670
11 INTANGIBLE ASSETS
Capital work in progress 11.1 650,104 340,990

Intangible Assets 11.2 1,325,794 1,415,137
1,975,898 1,756,127
11.1 Capital work in progress
Softwares 623,308 184,046

Advances for softwares to suppliers 26,796 156,944
650,104 340,990
December 31, 2019

Computer
Rupees in ‘000
11.2 Intangible Assets
At January 1, 2019
Cost 3,168,039 - 3,168,039

Net book value 1,415,137 - 1,415,137

Additions:
directly purchased 157,303 - 157,303
Disposals cost (735) - (735)
Disposals accumulated depreciation 735 - 735
- - -
Cost 3,324,607 - 3,324,607

Net book value 1,325,794 - 1,325,794
Rate of amortisation (percentage) 5% to 33.33% 5% to 33.33%
Useful life 3 to 20 Years 3 to 20 Years
Allied Bank 235

Limited
December 31, 2018
Computer
Rupees in ‘000
At January 1, 2018
Cost 2,714,595 - 2,714,595

Net book value 1,365,763 - 1,365,763

Additions:
directly purchased 453,444 - 453,444
Cost 3,168,039 - 3,168,039

Net book value 1,415,137 - 1,415,137
Rate of amortisation (percentage) 14.28%-33.33% 14.28%-33.33%
Useful life 3 to7 Years 3 to7 Years

2019 2018
Rupees in ‘000
11.3 The cost of fully amortized assets that are still in use:
Intangible assets – software 347,206 330,126
11.4 During 2019, the Group conducted a review of useful life of its intangible assets, which resulted in change in estimate of
expected usage of certain softwares. The softwares, which management had previously intended to use for 7 years, are
now expected to remain in usage for 20 years from the date of purchase. As a result, the expected useful life of the
softwares increased and their estimated residual value decreased. The effect of these changes on actual and expected
amortization expense, included in ‘Operating expenses’, was as follows.
2019 2020 2021 2022 2023

Rupees in ‘000
Decrease in annual amortization expense (188,617) (45,731) (23,808) (21,867) (14,135)

2019 2018
Rupees in ‘000
12 OTHER ASSETS
Income / Mark–up accrued in local currency – net of provision 20,573,788 11,777,626
Income / Mark–up accrued in foreign currency – net of provision 245,676 293,994
Advances, deposits, advance rent and other prepayments 1,293,653 1,254,352
Advance taxation (payments less provisions) 3,817,847 4,624,072
Non–banking assets acquired in satisfaction of claims 12.1 1,609,193 1,947,348
Mark to market gain on forward foreign exchange contracts - 2,698,766
Acceptances 5,182,716 4,183,083
Due from the employees' retirement benefit schemes
Benevolent fund 36.4 - 115,915
Pension fund 36.4 4,440,411 4,560,065
Fraud and forgeries 524,357 510,013
Stationery and stamps in hand 286,343 190,398
Overdue FBN / FBD 97,601 72,441
Home Remittance Cell agent receivable 93,978 111,098
Receivable from SBP - customers encashments 6,033 12,572
Suspense Account 1,387 -
Others 96,535 3,572
38,301,847 32,378,358
Less: Provision held against other assets 12.2 (862,460) (787,203)
Other assets (net of provision) 37,439,387 31,591,155
Surplus on revaluation of non–banking assets acquired
Other assets – net 40,316,857 33,751,113
12.1 Market value of non–banking assets

acquired in satisfaction of claims 4,486,663 4,107,306
Full-scope revaluation was carried out at December 31, 2019 through two independent valuers approved by Pakistan
Banks’ Association (A-1 Warda Engineering Services & Sadruddin Associates Private Limited). The revalued amounts of
properties have been determined on the basis of market rates depending upon physical verification and general appearance
of the site.

2019 2018
Rupees in ‘000
12.1.1 Non banking assets acquired in satisfaction of claims
Opening balance 4,107,306 3,584,030

Additions 361,584 52,482
Revaluation 884,674 600,425
Disposals / Transfers (847,050) (109,969)
Depreciation (19,851) (19,662)
Closing balance 4,486,663 4,107,306
2019 2018
Rupees in ‘000
12.1.2 Gain / Loss on Disposal of Non banking assets acquired in satisfaction of claims
Disposal proceeds 879,316 3,542

Less:
Cost (847,050) (3,629)
Impairment / Depreciation - 60
(847,050) (3,569)
Gain / (loss) 32,266 (27)
12.2 Provision held against other assets

Provision against fraud and forgeries 524,357 507,977
Overdue Foreign Bills Negotiated / Discounted 24,295 24,295
Suspense account 6,453 -
Others 154,444 22,382
862,460 787,203
12.2.1 Movement in provision held against other assets

Charge for the year 213,529 96,695
Reversals (112,865) (12,000)
Written off / adjusted (25,407) (44,554)
13 CONTINGENT ASSETS
There were no contingent assets of the Bank as at December 31, 2019 and December 31,
2018.
14 BILLS PAYABLE
In Pakistan 7,878,626 7,752,959
15 BORROWINGS
Secured
Borrowings from State Bank of Pakistan
Repurchase agreement borrowings 15.1 & 15.8 170,120,570 157,248,800
Under export refinance scheme 15.2 22,523,266 17,913,692
Under long term financing facility 15.3 21,426,590 13,894,674
Under financing scheme for renewable energy 15.4 426,031 158,952
214,496,457 189,216,118
Repurchase agreement borrowings from Financial Institutions 15.5 & 15.8 26,585,287 14,559,563
Unsecured
Call borrowings 15.6 24,602,435 11,861,797
Trading liability - 9,987,849
Overdrawn nostro accounts 64,207 243,624
Musharaka borrowing 15.7 700,000 -
Other borrowings - 14,035
25,366,642 22,107,305
266,448,386 225,882,986
15.1 This represents local currency borrowing from the SBP against government securities, carrying mark-up at the rate of
13.31% (2018: 10.21%) per annum, maturing on January 03, 2020.
15.2 The Bank has entered into various agreements for financing with the State Bank of Pakistan (SBP) for extending export
finance to customers. As per agreements, the Bank has granted to SBP the right to recover the outstanding amount from
the Bank at the date of maturity of the finance by directly debiting the current account maintained by the Bank with the SBP.
The borrowing carries mark-up at the rate of 1.00% to 2.00% (2018 1.00% to 2.00%) per annum. These borrowings are
repayable within six months from the deal date.
15.3 This represents Long Term Financing facility availed by the Bank for further extending the same to its customers, for a
maximum period of 10 years. The borrowing carries mark-up at the rate of 1.50%, 2.50% and 3.00% (2018: 4.50%, 3.50%
and 3.00%) per annum for financing up-to 3 years, 5 years & 10 years respectively.
15.4 These represent borrowings from the SBP availed by the Bank for financing power projects / facilities using alternative /
renewable energy (solar, wind, hydro, biogas, bio-fuels, bagasse cogeneration, and geothermal as fuel) for a maximum
period of 12 years under Category I and for a maximum period of 10 years under Category II and III. The borrowing carries
mark-up at the rate of 3% for Category I, 4% for Category II and 3% for Category III.
15.5 These represent borrowings in local and foreign currency from local and foreign interbank markets against government
securities, carrying mark-up at the rate of 13% to 13.20% (2018: 10% to 10.21%) per annum for local currency borrowings,
and at the rate of 2.45% to 2.65% (2018: 3.37% to 3.99%) per annum for foreign currency borrowings. These borrowings
are maturing on various dates, latest by January 31, 2020.
15.6 These represent unsecured borrowings in local and foreign currency from the local and foreign interbank markets, carrying
mark- up at the rate of 12.25% to 12.50% (2018: 8.10% to 10.10%) per annum for local currency borrowings, and at the
rate of 2.40% to 3% (2018: 2.35% to 4.27%) per annum for foreign currency borrowings. These borrowings are maturing on
various dates, latest by April 13, 2020.
15.7 This represents unsecured local currency borrowing by Islamic banking business under Musharaka agreement at profit of
8% (2018: Nil) per annum, maturing on January 02, 2020.
15.8 Note 8.2.1 includes the carrying amount of investments given as collateral.

2019 2018
Rupees in ‘000
15.9 Particulars of borrowings with respect to currencies

266,448,386 225,882,986

In Local In Foreign Total In Local In Foreign Total
Currency Currencies Currency Currencies
Rupees in ‘000
16 DEPOSITS AND OTHER ACCOUNTS
Customers
Current deposits 327,523,076 20,719,488 348,242,564 292,438,272 18,841,868 311,280,140
Savings deposits 403,505,248 21,019,875 424,525,123 365,456,206 24,707,235 390,163,441
Term deposits 107,203,269 63,293,352 170,496,621 120,847,788 50,092,266 170,940,054
Others 19,207,173 30,890 19,238,063 31,335,721 32,615 31,368,336
857,438,766 105,063,605 962,502,371 810,077,987 93,673,984 903,751,971
Term deposits 10,011,200 40,261 10,051,461 4,950,750 52,735 5,003,485
Others 3,005,421 - 3,005,421 505,421 - 505,421
86,435,133 81,300 86,516,433 80,630,412 80,684 80,711,096
943,873,899 105,144,905 1,049,018,804 890,708,399 93,754,668 984,463,067
Allied Bank 239

Limited
2019 2018
Rupees in ‘000
Individuals 457,188,412 384,786,399

Private Sector 270,915,027 287,469,596
Government (Federal and Provincial) 125,409,058 117,892,648
Public Sector Entities 108,998,643 113,603,058
Non–Banking Financial Institutions 77,133,815 72,920,606
Banking Companies 9,373,849 7,790,760
1,049,018,804 984,463,067
16.2 This includes deposits eligible to be covered under insurance arrangements amounting to Rs. 628,087 million (December
31, 2018: 585,901 million).
16.3 Net outstanding value against prepaid cards is Rs. 128.403 million as at reporting date (December 31, 2018: 140.858 million).
December 31, 2019

Recognised
Rupees in ‘000
17 DEFERRED TAX LIABILITIES

Provision against:
– Investments 19,093 - - 19,093
– Other assets 38,959 4,080 - 43,039
– Advances 46,313 68,871 - 115,184
– Workers welfare fund 790,207 (269,227) - 520,980
952,376 (196,276) - 756,100
– Surplus on revaluation of investments (2,787,505) (19,657) (1,207,883) (4,015,045)
- Surplus on revaluation on non banking assets (23,962) - (112,827) (136,789)
– Actuarial gains (338,631) - 270,629 (68,002)
– Accelerated tax depreciation / amortization (1,386,284) 41,517 - (1,344,767)
written down value of leased assets (13,206) 799 - (12,407)
(5,703,735) 85,341 (1,050,081) (6,668,475)
(4,751,359) (110,935) (1,050,081) (5,912,375)
December 31, 2018
Recognised
Rupees in ‘000

Provision against:
– Investments 19,093 - - 19,093
– Other assets 38,959 - - 38,959
– Advances 46,869 (556) - 46,313
– Workers welfare fund 1,183,246 (393,039) - 790,207
1,345,971 (393,595) - 952,376
– Surplus on revaluation of investments (5,648,427) 2,998 2,857,924 (2,787,505)
– Surplus on revaluation on non banking assets (25,789) - 1,827 (23,962)
– Actuarial gains (93,888) - (244,743) (338,631)
– Accelerated tax depreciation / amortization (1,296,878) (89,406) - (1,386,284)
(8,287,177) (31,566) 2,615,008 (5,703,735)
(6,941,206) (425,161) 2,615,008 (4,751,359)

2019 2018
Rupees in ‘000
18 OTHER LIABILITIES
Mark-up / return / interest payable in local currency 4,323,269 2,366,946

Mark-up / return / interest payable in foreign currencies 519,548 343,307
Accrued expenses 1,640,767 1,101,822
Retention money payable 342,559 306,416
Unearned commission and income on bills discounted 115,745 123,294
Acceptances 5,182,716 4,183,083
Unclaimed dividends 330,514 291,816
Dividend payable 23,558 32,055
Branch adjustment account 41,140 280,134
Unrealized loss on forward foreign exchange contracts 2,714,153 -
Provision for:
Gratuity 36.4 620,977 444,655
Employees' medical benefits 36.4 1,365,237 1,332,925
Employees' compensated absences 36.4 668,547 606,216
Early retirement 337,527 -
Payable to defined contribution plan 84,946 3,306
Provision against off-balance sheet obligations 18.1 313,043 306,342
Security deposits against lease 712,112 693,151
ATM / Point of Sale settlement account 1,243,494 932,311
Charity fund balance 15 -
Home Remittance Cell overdraft 490,972 701,908
With-holding tax payable 2,348,629 690,598
Sundry deposits 2,451,078 2,427,652
Workers welfare fund payable 29 1,522,454 2,297,057
Present value of lease liability 8,625,316 -
Others 895,380 1,278,127
36,913,696 20,743,121
2019 2018
Rupees in ‘000
18.1 Provision against off–balance sheet obligations

Charge for the 6,701 -
year
Reversals - -
Net reversal 6,701 -
The above provision includes provisions made against letters of guarantee issued by the
Bank.
19 SHARE CAPITAL
19.1 Authorized capital

2019 2018 2019 2018
1,500,000,000 1,500,000,000 Ordinary shares of Rs.10/– each 15,000,000 15,000,000
19.2 Issued, subscribed and paid–up capital
Fully paid–up Ordinary shares of Rs. 10/– each

2019 2018 2019 2018
406,780,094 406,780,094 Fully paid in cash 4,067,801 4,067,801

720,745,186 720,745,186 Issued as bonus shares 7,207,452 7,207,452
1,127,525,280 1,127,525,280 11,275,253 11,275,253
pursuant to the Scheme of Amalgamation in accordance
with the swap ratio stipulated therein less 9,200,000
ordinary shares of Rs. 10 each, held by Ibrahim
9,148,550 9,148,550 Leasing Limited on the cut–off date (September 30, 2004) 91,486 91,486

pursuant to the Scheme of Amalgamation of First
Allied
Bank Modaraba with Allied Bank Limited in accordance
8,400,000 8,400,000 with the share swap ratio stipulated therein. 84,000 84,000
1,145,073,830 1,145,073,830 11,450,739 11,450,739
Ibrahim Holdings (Private) Limited (holding company of the Bank), holds 972,510,410 (84.93%) [2018: 967,911,610
(84.53%)] ordinary shares of Rs. 10 each respectively, as at reporting date.
2019 2018
Rupees in ‘000
20 SURPLUS ON REVALUATION OF ASSETS – NET OF TAX
Surplus arising on revaluation of:

– fixed assets 20.1 15,638,996 15,755,409
– non–banking assets acquired in satisfaction of claims 20.2 2,740,681 2,135,996
– available–for–sale securities 8.1 7,428,981 5,185,769
Surplus on revaluation of assets – net of tax 25,808,658 23,077,174
20.1 Surplus on revaluation of fixed assets
Surplus on revaluation during the year - 37,226

Surplus related to transfer / adjustments (14,966) (168,022)

Related deferred tax liability (57,445) (60,450)
10.5 (164,129) (172,713)
Revaluation surplus as at January 1, 2019 (1,154,146) (1,208,989)
Deferred tax liability on revaluation surplus 5,237 (5,607)
Deferred tax on incremental depreciation transferred
to profit and loss account 57,445 60,450
(1,091,464) (1,154,146)
15,638,996 15,755,409
20.2 Surplus on revaluation of non–banking assets acquired in satisfaction of claims
Surplus on revaluation during the year 884,673 599,769

Surplus realised on disposal /transfer (163,739) (39,099)

Related deferred tax liability (1,198) (976)
(3,422) (2,133)
Revaluation surplus as at January 1, 2019 (23,962) (25,789)
Deferred tax liability on revaluation surplus (114,025) (5,412)
Deferred tax on surplus on disposal/transfer - 6,263
Deferred tax on incremental depreciation transferred
to profit and loss account 1,198 976
(136,789) (23,962)
2,740,681 2,135,996
2019 2018
Rupees in ‘000
Guarantees 21.1 32,308,285 28,018,148

Commitments 21.2 424,029,683 342,834,074
Other contingent liabilities 21.3 8,923,603 8,738,009
465,261,571 379,590,231
21.1 Guarantees
Financial guarantees 4,594,077 4,434,872

Performance guarantees 5,508,570 6,656,657
Other guarantees 22,205,638 16,926,619
32,308,285 28,018,148
21.2 Commitments
Documentary credits and short term trade related transactions:

letters of credit 60,392,362 68,457,757
Commitments in respect of:

forward foreign exchange contracts 21.2.1 358,881,918 207,509,971
forward government securities transactions 21.2.2 513,938 57,768,858
operating leases - 6,018,458
Commitments for acquisition of:

fixed assets 4,199,234 2,895,671
intangible assets - 119,768
Other Commitments 42,231 63,591
424,029,683 342,834,074
21.2.1 Commitments in respect of forward foreign exchange contracts
Purchase 220,381,401 137,056,586

Sale 138,500,517 70,453,385
358,881,918 207,509,971
21.2.2 Commitments in respect of forward government securities transactions
Purchase 464,217 57,768,858

Sale 49,721 -
513,938 57,768,858
21.3 Other contingent liabilities
21.3.1 Claims against the Bank not acknowledged as debt 8,923,603 8,738,009
21.3.2 The income tax assessments of the Group have been finalized up to and including tax year 2019 for local, Azad Kashmir
and Gilgit Baltistan operations. While finalizing income tax assessments up to tax year 2018, income tax authorities made
certain add backs with aggregate tax impact of Rs.25,467 million (December 31, 2018: Rs.24,344 million). As a result of
appeals filed by the Group before appellate authorities, most of the add backs have been deleted. However, the Group and
Tax Department are in appeals / references before higher forums against unfavorable decisions. Pending finalization of
appeals / references no provision has been made by the Group on aggregate sum of Rs.25,467 million (December 31,
2018: Rs.24,344 million). The management is confident that the outcome of these appeals / references will be in favor of
the Group.
Tax Authorities have conducted proceedings of withholding tax audit under section 161/205 of Income Tax Ordinance, 2001
for tax year 2003 to 2006 and tax year 2008 to 2018 and created an arbitrary demand of Rs.1,720 million (December 31,
2018: Rs.1,556 million). The Group’s appeals before CIR(A)/Appellate Tribunal Inland Revenue (ATIR) are pending for
adjudication. The management is confident that these appeals will be decided in favor of the Group; therefore, no provision
has been made against the said demand of Rs.1,720 million (December 31, 2018: Rs.1,556 million).
Tax authorities have also issued orders under Federal Excise Act, 2005 / Sales Tax Act, 1990 and Sindh Sales Tax on
Services Act, 2011 for the year 2008 to 2017 thereby creating arbitrary aggregate demand of Rs.963 million (December 31,
2018: Rs.900 million). The Group’s appeals before CIR(A)/Appellate Tribunal Inland Revenue (ATIR) are pending for
adjudication. The management is confident that aforesaid demand will be deleted by appellate authorities and therefore no
provision has been made against the said demand of Rs.963 million (December 31, 2018: Rs.900 million).
21.3.3 As a result of default by Fateh Textile Mills to terms of compromise decree passed in August 2002 by the Honourable High
Court of Sindh, 16,376,106 shares of ABL were sold in accordance with section 19 (3) of the Financial Institutions
(Recovery of Finances) Ordinance, 2001, after complying with the due and complete transparent process. Sealed bids were
invited from interested parties. The bidding process was scheduled for July 23, 2004 and the Rs. 25 per share was fixed
reserve price. On the bid date, the highest offer for these shares was received at a rate of Rs. 25.51 per share. The bid was
approved and the successful bidder had deposited an amount of Rs. 417.75 million with the Bank.
Fateh Textile Mills Limited filed suit in the High Court of Sindh challenging the above sale of shares. The High Court had not
granted a stay order against the said sale. The sale of shares was, therefore; concluded.
21.3.4 While adjudicating foreign exchange repatriation cases of exporter namely: Fateh Textile Mills Limited, the Foreign
Exchange Adjudicating Court (FEAC) of the State Bank of Pakistan (SBP) has arbitrarily adjudicated penalties against
various banks including Rs. 2,173 million in aggregate against Allied Bank Limited (the Bank). Against the said judgments,
the Bank had filed appeals before the Appellate Board and Constitutional Petitions (CP) in the High Court of Sindh, Karachi.
The Honorable High Court granted relief to the Bank by way of interim orders. Meanwhile, alongwith other banks, Bank filed
a further CP whereby vires of section 23C of the FE Regulations Act, 1947 was sought to be declared ultra vires. On
November 8, 2018, the Honorable court was pleased to order that the Appellate Board shall not finally decide the appeals.
Subsequently, the earlier CP was disposed of vide order dated January 15, 2019 with a direction to the Appellate Board to
first decide the stay application of the Bank and till then, the Foreign Exchange Regulation Department has been restrained
from taking any coercive action against the Bank. Based on merits of the appeals, the management is confident that these
appeals shall be decided in favor of the Bank and therefore no provision has been made against the impugned penalty.
22 DERIVATIVE INSTRUMENTS
The Bank at present does not offer structured derivative products such as Interest Rate Swaps, Forward Rate Agreements
or FX Options. However, the Bank buys and sells derivative instruments such as:

– Equity Futures
Forward Exchange Contracts
Forward Exchange Contract (FEC) is a product which is offered to the obligor who transact internationally. These obligor
use this product to hedge themselves from unfavorable movements in a foreign currency, however, by agreeing to fix the
exchange rate, they do not benefit from favorable movements in that currency.
An FEC is a contract between the Obligor and the Bank in which both agree to exchange an amount of one currency for
another currency at an agreed forward exchange rate for settlement over more than two business days after the FEC is
entered into (the day on which settlement occurs is called the value date). FEC is entered with those Obligors whose credit
worthiness has already been assessed, and they have underlined trade transactions.
If the relevant exchange rate moves un-favorably, Obligor will benefit from that movement because the Bank must
exchange currencies at the FEC rate. In order to mitigate this risk of adverse exchange rate movement, the Bank hedges its
exposure by taking opposite forward position in inter-bank FX.
Foreign Exchange Swaps
A Foreign Exchange Swap (FX Swap) is used by the Bank if it has a need to exchange one currency for another currency
on one day and then re-exchange those currencies at a later date. Exchange rates and forward margins are determined in
the “inter-bank” market and fluctuate according to supply and demand.
An FX Swap prevents the Bank from gaining any benefit resulting from a favorable exchange rate movement in the relevant
currency pair between the time Bank enters into the transaction deal and when settlement occurs. Cancellation of the swap
may also result in exposure to market movements. The key advantage of an FX swap is that it provides the Bank with
protection against unfavorable currency movements between the time it enters into the transaction and settlement. The term
and amounts for FX Swap can also be tailored to suit the Bank’s particular needs.
Equity Futures
An equity futures contract is a standardized contract, traded on a futures counter of the stock exchange, to buy or sell a
certain underlying script at a certain date in the future, at a specified price.
The Bank may use equity futures as a hedging instrument to hedge its equity portfolio, in both ‘held-for-trading’ and
‘available-for- sale’, against equity price risk. Only selected shares are allowed to be traded on futures exchange. Equity
futures give flexibility to the Bank either to take delivery on the future settlement date or to settle it by adjusting the notional
value of the contract based on the current market rates. Maximum exposure limit to the equity futures is 10% of Tier I
Capital of the Bank, based on prevailing SBP regulations.
The accounting policies used to recognize and disclose derivatives are given in Note 4.15.2. The risk management
framework of derivative instruments is given in note 43.
2019 2018
Rupees in ‘000
23 MARK–UP / RETURN / INTEREST EARNED

On:
Loans and advances 49,550,748 29,697,818
Investments 64,070,753 37,204,167
Lendings to financial institutions 8,639,234 6,185,232
Balances with banks 377,845 188,257
122,638,580 73,275,474
24 MARK–UP / RETURN / INTEREST EXPENSED

On:
Deposits 58,818,173 30,128,283
Borrowings 15,225,536 9,524,346
Cost of foreign currency swaps against foreign currency deposits 6,100,939 1,504,521
Interest expense on lease liability 988,344 -
81,132,992 41,157,150
25 FEE AND COMMISSION INCOME
Card related fees (debit and credit cards) 1,637,042 1,328,552

Branch banking customer fees 1,994,939 1,849,638
Commission on remittances including home remittances 691,815 590,077
Investment banking fees 578,270 524,226
Commission on trade 346,940 362,470
Commission on cash management 153,625 119,770
Commission on guarantees 134,569 103,085
Commission on bancassurance 119,076 78,936
Credit related fees 42,775 20,270
Consumer finance related fees 4,085 4,196
5,703,136 4,981,220
26 GAIN ON SECURITIES
Realised – net 26.1 1,622,033 2,372,668

Unrealised – held for trading 8.1 141,479 (53,327)
1,763,512 2,319,341
26.1 Realised gain / (loss) on:
Federal government securities 583,191 1,775,998

Shares 990,608 606,868
Non Government debt securities (685) (1,153)
Open Ended Mutual Funds 48,919 (9,045)
1,622,033 2,372,668
2019 2018
Rupees in ‘000
27 OTHER INCOME
Recovery of written off mark-up and charges 12,198 172,074
Gain on sale of fixed assets - net 268,306 34,903
Other assets disposal 79,258 34,464
Rent on property - -
Fee for attending Board meetings 3,384 2,845
Gain on disposal of islamic financing and related assets - 2,629
Gain / (loss) on sale of non-banking assets 27.1 32,266 (27)
395,412 246,888
27.1 This includes gain on sale of two non-banking assets amounting to Rs. 18 million and Rs. 14.266 million respectively (2018:
loss of Rs. 0.027 million).

2019 2018
Rupees in ‘000
28 OPERATING EXPENSES
Total compensation expense 28.1 13,749,364 12,502,989
Property expense:
Depreciation 28.2 3,906,601 2,068,320
Rent and taxes 28.2 288,321 1,755,132
Utilities cost 1,231,431 1,012,681
Security (including guards) 888,206 717,501
Repair and maintenance (including janitorial charges) 751,678 564,580
Insurance 73,833 68,064
7,140,070 6,186,278
Information technology expenses:
Network charges 689,087 631,926
Amortization 246,646 404,071
Software maintenance 546,047 353,806
Hardware maintenance 346,507 297,826
Others 9,234 8,521
2,505,744 2,244,861
Other operating expenses:
Marketing, advertisement and publicity 746,592 654,441
Insurance 28.3 1,148,296 567,053
Outsourced service costs 35.1 625,208 534,151
Cash in Transit service charge 521,405 415,560
Stationery and printing 466,341 334,409
Travelling and conveyance 234,157 193,607
Legal and professional charges 119,572 141,709
Postage and courier charges 218,094 126,877
Donations 28.5 55,253 113,238
NIFT clearing charges 123,966 106,097
Communication 89,261 87,952
Directors fees and allowances 32,860 29,736
Fees and allowances to Shariah Board 6,059 6,991
Training and development 96,671 101,430
Auditors Remuneration 28.4 21,360 19,611
Others 475,098 398,761
248 Report 2019

2019 2018
Rupees in ‘000
Salaries 9,014,086 8,273,108

Fees And Allowances etc. 1,476,956 1,440,423
Bonus and Awards
Variable 979,147 570,583
Fixed 568,546 526,326
Charge For Defined Benefit Plan 455,260 768,712
Contribution To Defined Contribution Plan 318,753 310,235
Conveyance expense 300,414 199,580
Medical expense 189,264 113,576
Insurance 86,675 80,194
Education Subsidy 29,793 30,200
Hajj Expenses 24,494 23,531
Staff Uniform 12,219 13,175
Executive Club Membership 5,291 11,335
Verification Charges Educational Documents 3,821 1,282
Recruitment Charges 4,631 2,275
Others 2,048 1,218
Sub–Total 13,471,398 12,365,753
Voluntary Retirement Scheme 277,966 137,236
Grand Total 13,749,364 12,502,989
28.1.1 The Bank announced the Voluntary Retirement Scheme (VRS) for its employees. Forty eight (48) employees (2018: 53) of
the Bank opted for retirement under this scheme.
28.2 Adoption of IFRS 16 ‘Leases’ resulted in increase in depreciation expense of Rs. 1,610.1 million and decrease of rent and
registration charges of Rs. 1,869.4 million.
28.3 Includes Deposit protection cost of Rs. 937.4 million (December 31, 2018: 410.6 million).

2019 2018
Rupees in ‘000
28.4 Auditors’ remuneration
Audit fee 6,450 6,450

Fee for other statutory certifications 5,859 4,752
Annual audit overseas business unit* 2,341 2,150
Half year review 2,620 2,620
Special certifications and miscellaneous services 1,787 1,359
Sales tax 631 628
Out-of-pocket expenses 1,672 1,652
21,360 19,611
*This includes audit fee amounting to Bahraini Dinar 5,500 (2018: 5,500) relating to Wholesale Bahrain Branch.
28.5 None of the directors, executives and their spouses had any interest in the donees, except Mr. Mohammad Naeem Mukhtar
(Chairman/ Non-Executive Sponsor Director) is director in National Management Foundation (LUMS). Further, spouse of a
key management personnel also holds key position in RAAST Welfare Society.
2019 2018
Rupees in ‘000
Acumen Fund Pakistan - 10,000

Anjuman Himayat-i-Islam 28.5.1 4,454 5,065
Bakhtawar Amin Memorial Trust Hospital - 1,000
Government College of Science, Lahore 599 -
Chaman (Center for Mentally Challenged Children) - 1,000
Lahore Businessmen Association For Rehabilitation Of The Disabled 5,000 -
Children Hospital Faisalabad - 1,730
Diamer - Bhasha and Mohmand Dam Fund - 14,283
Fountain House Mental Health Association - 500
Liver Foundation Trust 1,000 1,000
Namal Education Foundation - 30,000
National Management Foundation (LUMS) 30,000 30,000
Mashal Association 200 -
Punjab Food Authority - 337
RAAST Welfare Society 1,000 1,000
Rising Sun Institution for Special Children - 200
Shaukat Khanum Memorial Trust - 1,000
Sundas Foundation - 1,000
Tamir Welfare Organization 3,000 2,500
Tehzeeb Social Welfare Organization - 250
The Indus Hospital 10,000 10,000
University of Turbat - 2,373
55,253 113,238
28.5.1 This represents charitable expenses on account of sadqa & feeding to under privileged.
29 WORKERS WELFARE FUND

Supreme Court of Pakistan vide order dated November 10, 2016 held that the amendments made in the law through
Finance Act 2008, introduced by the Federal Government for the levy of Worker Welfare Fund (WWF) were unlawful.
Federal Board of Revenue filed review petition against the subject order, which is currently pending for adjudication.
WWF provision from 2014 to 2019 has been maintained conservatively based on tax advisor’s opinion in view of provincial
levy of WWF by the provinces with effect from 2014, including levy by Sindh which is under litigation.
Punjab Government has promulgated Punjab Workers Welfare Fund Act 2019 (PWWF) with effect from December 13,
2019, therefore, WWF provision related to Punjab and pertaining to the period from 2014 till the date of promulgation of
PWWF is reversed from the provision maintained for WWF from 2014 to 2019.

2019 2018
Rupees in ‘000
30 OTHER CHARGES
Penalties imposed by State Bank of Pakistan 120,914 38,143
Education cess 54,187 23,267
Depreciation - non-banking assets 19,851 19,662
Other assets written off 93 891
195,045 81,963
Annual
250 Report 2019
Statements

2019 2018
Rupees in ‘000
31 PROVISIONS AND WRITE OFFS – NET
Provision for diminution in the value of investments 8.3.1 979,141 109,019

Reversal against loans and advances 9.4 (394,132) (1,132,836)
Provision / (reversal) against other assets 12.2.1 100,664 84,696
Provision against off balance sheet obligations 6,701 -
Bad debts written off directly - -
692,374 (939,121)
Recovery of written off bad debts (145,716) (150,567)
546,658 (1,089,688)
32 TAXATION
Current – for the year including super tax 9,267,347 7,780,029

– for prior year 834,833 (4,096)
10,102,180 7,775,933
Deferred – current 110,980 425,161
10,213,160 8,201,094
32.1 Relationship between tax expense and accounting profit
Accounting profit for the year 24,701,923 21,232,911
Tax on income @ 35% (2018: 35%) 8,645,673 7,431,519

Super Tax @ 4% 964,348 790,490
Prior year Super Tax @ 4% 834,833 -
Others (231,694) (20,915)
Tax charge for the year 10,213,160 8,201,094
33 EARNINGS PER SHARE – BASIC AND DILUTED
Profit after taxation 14,488,763 13,031,817
Number of Shares
Weighted average number of ordinary shares outstanding during the year 1,145,073,830 1,145,073,830
Rupees
Earnings per share – basic and diluted 12.65 11.38
There is no dilution effect on basic earnings per share.

2019 2018
Rupees in ‘000
34 CASH AND CASH EQUIVALENTS
Cash and balances with treasury banks 5 119,935,126 99,177,561

Balances with other banks 6 602,582 2,575,055
Overdrawn nostro accounts 15 (64,207) (243,624)
120,473,501 101,508,992
Numbers
35 STAFF STRENGTH
Permanent 11,389 11,122

Temporary / on contractual basis / trainee 458 276
Bank's own staff strength at the end of the year 11,847 11,398
Average number of employees 11,623 11,141
35.1 In addition to the above, 501 (2018: 376) employees of outsourcing services companies were assigned to the Bank as at the
end of the year to perform services other than guarding and janitorial services. Further, 7 (2018: 8) employees were posted
abroad. The rest were working domestically.
36 DEFINED BENEFIT PLANS
36.1 General description
The Bank operates a funded gratuity scheme for all employees who opted for the staff retirement benefit scheme introduced
by the management with effect from July 1, 2002. For those employees who did not opt for the new scheme, the Bank
continues to operate a funded pension scheme.
The Bank also provides post retirement medical benefits (unfunded scheme) to eligible retired employees.
36.2 Number of employees and beneficiaries under the schemes
The number of employees covered under the following defined benefit scheme / plans are:

2019 2018
Numbers
– Pension fund 632 922

– Gratuity fund 11,427 10,674
– Benevolent fund - 76
– Employees’ compensated absences 11,183 10,815
In addition, the number of beneficiaries covered under the following

defined benefit scheme / plans are:
– Pension fund 2,330 2,236

36.3 Principal actuarial assumptions
The actuarial valuations were carried out for December 31, 2019 based on the Projected Unit Credit Method, using the
following significant assumptions:
Sources of estimation December 31, December 31,

2019 2018
Withdrawal rate
Pension fund Low Low
Gratuity fund Moderate High
Benevolent fund High
Post retirement medical benefits High High
Employees’ compensated absences High High
Mortality rate Adjusted SLIC Adjusted SLIC

2001–2005 2001–2005
Discount rate Yield on investments in Government Bonds 11.25% 13.25%
Expected rate of return on plan assets

Pension fund Yield on investments in Government Bonds 11.25% 13.25%
Gratuity fund Yield on investments in Government Bonds 11.25% 13.25%
Benevolent fund Yield on investments in Government Bonds 13.25%
Expected rate of salary increase Rate of salary increase 9.25% 11.25%
The expected return on plan assets is based on the market expectations and depends on the asset portfolio of the Bank, at
the beginning of the period, for returns over the entire life of the related obligation.
36.4 Reconciliation of (receivable from) / payable to defined benefit plans / other long term benefits
Note Pension
Gratuity Benevolent Post Employees’ Pension Gratuity Benevolent Post Employees’
fund
Present value of defined benefit obligations 36.6 1,661,826 3,365,399 - 1,365,237 668,548 1,585,703 2,827,757 9,206 1,332,925 606,880
Fair value of plan’s / scheme’s assets 36.7 (6,102,237) (2,744,422) - - - (6,145,768) (2,383,102) (241,036) - -
Benefit of the surplus not available to
the Bank - - - - - - - 115,915 - -
36.5 Movement in (receivable from) / payable to defined benefit plans
Post Employees’ Post Employees’

Pension Gratuity Benevolent Pension Gratuity Benevolent
Note retirement compensated retirement compensated
fund fund fund fund fund fund
Opening balance (4,560,065) 444,655 (115,915) 1,332,925 606,880 (3,692,032) 511,919 (112,061) 1,240,250 571,757
(Reversal) / charge for the year 36.9 (466,025) 476,334 (28,157) 192,559 185,016 (121,245) 390,919 (18,490) 144,612 244,446
Other comprehensive (income) / losses 727,746 90,890 - (44,640) - (746,788) (72,143) 14,636 105,031 -
Contribution to the fund / benefits paid (142,067) (390,902) 144,072 (115,607) (123,348) - (386,040) - (156,968) (209,323)
Closing balance (4,440,411) 620,977 - 1,365,237 668,548 (4,560,065) 444,655 (115,915) 1,332,925 606,880
36.6 Movement in defined benefit obligations
December 31, 2019

Post Employees’
Pension Gratuity Benevolent
retirement compensated
fund fund fund
medical absences
Rupees in ‘000
Opening balance 1,585,703 2,827,757 9,206 1,332,925 606,880

Interest cost 178,867 357,867 - 168,954 72,152
Benefits paid (471,523) (253,741) (9,206) (115,607) (123,348)
VRS / settlement loss / (gain) 147,596 2,970 - 1,726 15,391
Re-measurement loss / (gain) 221,183 16,098 - (44,640) 59,950
Closing balance 1,661,826 3,365,399 - 1,365,237 668,548
December 31, 2018

Post Employees’
fund fund fund
medical absences
Rupees in ‘000
Opening balance 1,979,453 2,531,300 8,036 1,240,250 571,757

Interest cost 148,404 195,575 579 95,846 38,441
Benefits paid (361,231) (321,380) (2,041) (156,968) (209,323)
Past Service Cost- Supreme Court 172,111 - - - -
Past Service Cost- Change in retirement age 4,285 33,851 - 22,975 18,252
VRS / settlement loss / (gain) 6,952 7,672 - (3,450) 17,215
Re-measurement loss / (gain) (364,271) 73,576 2,632 105,031 137,850
Closing balance 1,585,703 2,827,757 9,206 1,332,925 606,880
36.7 Movement in fair value of plan assets
December 31, 2019

Post Employees’
fund fund fund
medical absences
Rupees in ‘000
Opening balance 6,145,768 2,383,102 241,036 - -

Expected return on plan assets 792,488 298,951 - - -
Bank’s contribution 142,067 390,902 - - -
Benefits paid (471,523) (253,741) (241,036) - -
Re–measurement gain / (loss) (506,563) (74,792) - - -
Closing balance 6,102,237 2,744,422 - - -
December 31, 2018

Post Employees’
fund fund fund
medical absences
Rupees in ‘000
Opening balance 5,671,485 2,019,381 232,158 - -

Expected return on plan assets 452,997 153,342 19,069 - -
Bank’s contribution - 386,040 - - -
Benefits paid (361,231) (321,380) (2,041) - -
Re–measurement gain / (loss) 382,517 145,719 (8,150) - -
Closing balance 6,145,768 2,383,102 241,036 - -
36.8 Composition of plan assets
December 31, 2019

medical absences
Rupees in
‘000
Equity securities 4,880,641 738,956 - - -

Cash and cash equivalents 1,221,596 2,005,466 - - -
6,102,237 2,744,422 - - -

Shares of ABL 2,649,848 582,681 - - -

Term deposit receipts 1,047,174 1,895,966 - - -
Bank balances with ABL 174,422 109,500 - - -
3,871,444 2,588,147 - - -
December 31, 2018

medical absences
Rupees in
‘000
Equity securities 5,333,723 655,028 29,796 - -

Government securities - - - - -
Cash and cash equivalents 812,045 1,728,074 211,240 - -
6,145,768 2,383,102 241,036 - -

Shares of ABL 3,277,428 655,028 29,796 - -

Term deposit receipts 664,594 1,693,708 193,345 - -
Bank balances with ABL 147,451 34,366 17,895 - -
4,089,473 2,383,102 241,036 - -
36.8.3 Investment in term deposit receipts are subject to credit risk and interest rate risks, while equity securities are subject to price
risk. These risks are regularly monitored by Trustees of the employee funds.
36.9 Charge for defined benefit plan
December 31, 2019

medical absences
Rupees in ‘000

Interest cost - - - 168,954 72,152
Net interest (613,621) 58,916 - - -
VRS loss / (gain) 147,596 2,970 - 1,726 15,391
(466,025) 476,334 - 192,559 185,016
December 31, 2018
medical absences
Rupees in
‘000

Interest cost - - - 95,846 38,441
Net interest (304,593) 42,233 (18,490) - -
VRS loss / (gain) 6,952 7,672 - (3,450) 17,215
(121,245) 390,919 (18,490) 144,612 244,446
36.10 Re–measurements recognized in other comprehensive income
December 31, 2019

medical absences
Rupees in ‘000
Re-measurement gain / (loss) on obligations

- Experience adjustments (221,183) (16,098) - 44,640 -
Re-measurement gain / (loss) on assets (506,563) (74,792) - - -
Re-measurement gain / (loss) in OCI (727,746) (90,890) - 44,640 -
December 31, 2018

medical absences
Rupees in
‘000
Re-measurement gain / (loss) on obligations 364,271 (73,576) (2,632) (105,031) -

Re-measurement gain / (loss) on assets 382,517 145,719 (8,150) - -
Asset ceiling adjustment - - (3,854) -
Re-measurement gain / (loss) in OCI 746,788 72,143 (14,636) (105,031) -

2019 2018
Rupees in
‘000
36.11 Actual return / (loss) on plan assets
– Pension fund 285,925 835,514

– Gratuity fund 224,159 299,061
– Benevolent fund - 10,919
Pension fund
2019 2018 2017 2016 2015
Rupees in ‘000
(4,440,411) (4,560,065) (3,692,032) (4,614,727) (3,799,170)
Re–measurement gain / (loss) on obligation (221,183) 364,271 (94,595) (172,722) (152,852)
Re–measurement gain / (loss) on assets (506,563) 382,517 (1,191,876) 660,173 (854,480)
Gratuity fund
2019 2018 2017 2016 2015
Rupees in ‘000
620,977 444,655 511,919 255,291 561,455
Re–measurement gain / (loss) on obligation (16,098) (73,576) (20,492) 36,036 (167,783)
Re–measurement gain / (loss) on assets (74,792) 145,719 (230,025) 26,301 (168,935)
Benevolent fund
2019 2018 2017 2016 2015
Rupees in ‘000
Present value of defined benefit obligation - 9,206 8,036 8,776 12,355

Fair value of plan assets - (278,393) (232,158) (221,007) (205,166)
- (269,187) (224,122) (212,231) (192,811)
Re–measurement (loss) / gain on obligation - (2,632) (1,111) 931 (4,376)
Re–measurement (gain) / loss on assets - (8,150) (3,976) 1,136 (10,841)
Post retirement medical

2019 2018 2017 2016 2015
Rupees in ‘000
1,365,237 1,332,925 1,240,250 1,298,380 1,217,945
Re–measurement (loss) / gain on obligation 44,640 (105,031) 62,068 (97,990) (243,936)
Employees’ compensated absences

2019 2018 2017 2016 2015
Rupees in ‘000
Present value of defined benefit obligation 668,548 606,880 570,128 698,964 761,498
668,548 606,880 570,128 698,964 761,498
Re–measurement (loss) / gain on obligation (59,950) (137,850) 71,640 11,662 (45,712)
36.13 Expected contributions to be paid to the funds in the next financial year
The Bank contributes to the gratuity fund as per actuarial expected charge for the next financial year. No contributions are
being made to pension fund due to surplus of fair value of plan’s assets over present value of defined obligation. Based on
actuarial advice, management estimates that the charge / (reversal) in respect of defined benefit plans for the year ending
December 31, 2020 would be as follows:
medical absences
Rupees in ‘000
Expected (reversal) / charge for the next year (499,546) 407,227 - 127,086 108,310
36.14 Sensitivity analysis
+1% -1% +1% Salary -1% Salary +10% -10% 1Year 1Year
Description Discount Discount Increase Increase Withdrawal Withdrawal Mortality age Mortality age
Rate Rate Rate Rate Rate Rate set back set forward
Rupees in ‘000
Pension fund 1,613,770 1,715,331 1,661,826 1,661,826 1,661,894 1,661,765 1,662,587 1,661,069
Gratuity fund 3,159,317 3,597,914 3,616,359 3,139,696 3,351,328 3,351,328 3,350,060 3,352,591
Benevolent fund - - - - - - - -
Post retirement medical 1,272,317 1,470,835 1,399,106 1,330,036 1,405,845 1,329,438 1,360,812 1,369,967
Leave compensated absences 625,368 717,204 717,674 624,241 660,538 676,907 666,953 670,135
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation
calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the
defined benefit obligation recognized within the statement of financial position.
December 31, 2019

medical absences
Rupees in
‘000
36.15 Maturity Profile
The weighted average duration of the obligation (in years) 3.06 6.5 - 5.40 5.40
36.16 Funding Policy
The Bank endeavours to ensure that liabilities under the various employee benefit schemes are covered by the Fund on any
valuation date having regards to the various actuarial assumptions such as projected future salary increase, expected future
contributions to the fund, projected increase in liability associated with future service and the projected investment income
of the Fund.
36.17 Risk associated with defined benefit plans
The defined benefit plans may expose the bank to actuarial risks such as longevity risk, investment risk, salary increase risk
and withdrawal rate risk as described below;
Longevity risks:
The risk arises when the actual lifetime of retirees is longer than expectation. This risk is measured at the plan level over
the entire retiree population.
Investment risks:
The risk arises when the actual performance level of investment levels is lower than expectation and thus creating a
shortfall in the funding objectives.
Salary increase risk:
The most common type of retirement benefit is one where the final benefit is linked with final salary. The risk arises when
the actual increases are higher than expectations and impact the liability accordingly.
Withdrawal Rate:
The risk of actual withdrawals varying with the actuarial assumptions can impose a risk to the benefit obligation. The
movement of the liability can go either way.
37 DEFINED CONTRIBUTION PLAN
The Bank operates an approved contributory provident fund for 10,089 (2018: 10,158) employees where contributions are
made by the Bank and employees at 8.33% per annum (2018: 8.33% per annum) of the basic salary every month.
38 COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
December 31, 2019

Directors
Members Key Man- Other Material
Non-Execu- President
Chairman Shariah agement Risk Takers /
tives / CEO
Board Personnel Controllers
Rupees in ‘000

Managerial remuneration - - - - - -
- Fixed (including Eid bonus) - - 2,842 14,200 112,947 186,385
- Total Variable - - - 22,000 121,500 84,501
of which
a. Cash Bonus / awards - - - 22,000 121,500 84,501
b. Bonus and awards in Shares - - - - - -
Charge for defined benefit plans - - 294 1,590 20,448 35,936

Contribution to defined
contribution plan - - 219 1,183 8,922 15,526
Rent and house maintenance - - 1,574 8,520 57,922 107,860
Utilities - - 525 2,840 19,307 35,965
Medical - - 525 2,840 20,335 35,965
Conveyance - - 813 3,000 50,990 58,203
Others - - 284 349 12,805 41,375
Total - 30,000 7,076 56,522 425,176 601,716
Number of persons 1 8 3 1 19 75
December 31, 2018

Directors
Members Key Man-
u- President /
Non-Exec
Chairman Shariah agement
tives CEO
Board Personnel
Rupees in
‘000

Managerial remuneration
- Fixed - - 3,107 12,900 106,023
- Total Variable - - - 20,000 117,600
of which
a. Cash Bonus / awards - - - 20,000 117,600
b. Bonus and awards in Shares - - - - -
Charge for defined benefit plans - - 309 1,399 20,088

Contribution to defined
contribution plan - - 237 1,075 8,375
Rent and house maintenance - - 1,708 7,740 54,560
Utilities - - 569 2,580 18,187
Medical - - 569 2,687 18,390
Conveyance - - 1,095 3,000 51,218
Others - - 420 374 8,935
Total - 18,700 8,014 51,755 403,376
Number of persons 1 8 4 1 18
38.2 Remuneration paid to Directors for participation in Board and Committee Meetings
December 31,
2019 Board
Human Committees Strategic
Board Audit Total
Name of Director Resource E-Vision Planning and
Committee Board Risk Amount
Management
Meetings Remuneration Monitoring
Committee Committee
Rupees in
‘000
Mohammad Naeem Mukhtar - - - - - - -

Sheikh Mukhtar Ahmad - - - - - - -
Muhammad Waseem Mukhtar 1,750 1,150 1,400 - - 2,400 6,700
Abdul Aziz Khan 1,250 - 1,150 1,150 - 2,150 5,700
Dr. Muhammad Akram Sheikh 1,750 1,400 1,400 1,150 - - 5,700
Zafar Iqbal 1,750 1,400 - - 1,000 - 4,150
Nazrat Bashir 1,750 - - - 1,000 2,400 5,150
Kamran Shahzad 1,300 - - - - - 1,300
Pervaiz Iqbal 1,300 - - - - - 1,300
Total Amount Paid 10,850 3,950 3,950 2,300 2,000 6,950 30,000
December 31,
2018 Board
Human Committees Strategic
Board Audit Total
Name of Director Resource E-Vision Planning and
Committee Board Risk Amount
Management
Meetings Remuneration Monitoring
Committee Committee
Rupees in
‘000
Mohammad Naeem Mukhtar - - - - - - -

Sheikh Mukhtar Ahmad - - - - - - -
Muhammad Waseem Mukhtar 1,050 300 750 450 - 1,650 4,200
Abdul Aziz Khan 1,050 - 750 600 - 1,500 3,900
Dr. Muhammad Akram Sheikh 1,050 750 150 300 600 - 2,850
Zafar Iqbal 1,050 750 - - 150 - 1,950
Nazrat Bashir 450 - - - 150 300 900
Mubashir A. Akhtar 600 450 - - 450 1,200 2,700
Kamran Shahzad 1,100 - - - - - 1,100
Pervaiz Iqbal 1,100 - - - - - 1,100
Total Amount Paid 7,450 2,250 1,650 1,350 1,350 4,650 18,700
38.3 Remuneration paid to Shariah Board Members
Resident Non-Resident Non-Resident

Items Chairman Resident
Member(s) Chairman Member Member(s)
Member
Rupees in ‘000
Salaries and allowances 3,979 1,162 1,355 3,672 2,979 1,053
Total Number of Persons 1 1 1 1 1 1
38.4 Deferred cash bonus / remuneration for MRTs for the year 2019 is Rs. 15,828,450
39 FAIR VALUE OF FINANCIAL INSTRUMENTS
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:
December 31, 2019

Financing Other Other
Held to Held for Available Total
On–Balance sheet Financial and financial financial Total Level 1 Level 2 Level 3
Maturity Trading for Sale
Instruments receivables assets liabilities
Rupees in ‘000
Investments
Shares / Open Ended Mutual Funds 2,197,434 28,613,526 - - - 30,810,960 28,458,268 2,352,692 - 30,810,960
Federal Government Securities 19,868,163 678,973,168 - - - 698,841,331 - 698,841,331 - 698,841,331
Non Government Debt Securities - 4,176,639 - - - 4,176,639 - 4,176,639 - 4,176,639

Cash and balances with treasury banks - - - 119,935,126 - 119,935,126 - - - -
Balances with other banks - - - 602,582 - 602,582 - - - -
Lendings - - 13,606,921 - - 13,606,921 - - - -
Advances - - 485,051,568 - - 485,051,568 - - - -
Other assets - - - 34,250,198 - 34,250,198 - - - -
Investments ( HTM, unlisted ordinary shares,
Term
finance certificate, sukuks, subsidiaries ) 13,015,041 - 12,810,456 - - - 25,825,497 - - - -
13,015,041 22,065,597 724,573,789 498,658,489 154,787,906 - 1,413,100,822 28,458,268 705,370,662 - 733,828,930
Trading Liability - - - - - - - - - - -
Financial liabilities – not measured at fair value -
Bills payable - - - - - 7,878,626 7,878,626 - - - -

Borrowings - - - - - 266,448,386 266,448,386 - - - -
Deposits and other accounts - - - - - 1,049,018,804 1,049,018,804 - - - -
- - - - - 1,359,905,329 1,359,905,329 - - - -
Off-balance sheet financial instruments -
measured at fair value

Forward government securities transactions - - - - 513,938 - 513,938 - 513,938 - 513,938
- - - - 359,395,856 - 359,395,856 - 359,395,856 - 359,395,856
December 31, 2018

Financing Other Other
Held to Held for Available Total
On–Balance sheet Financial and financial financial Total Level 1 Level 2 Level 3
Maturity Trading for Sale
Instruments receivables assets liabilities
Rupees in ‘000

-
Investments
Shares / Open Ended Mutual Funds - 1,859,024 30,241,640 - - - 32,100,664 30,115,370 1,985,294 - 32,100,664
Federal Government Securities - - 609,053,323 - - - 609,053,323 - 609,053,323 - 609,053,323

Balances with other banks - - - - 2,575,055 - 2,575,055 - - - -
Lending - - - 53,780,195 - - 53,780,195 - - - -
Advances - - - 438,356,170 - - 438,356,170 - - - -
Other asset - - - - 28,199,057 - 28,199,057 - - - -
Investments (HTM, unlisted ordinary shares,
Term finance certificate, sukuks, subsidiaries ) 16,151,622 - 12,294,994 - - - 28,446,616 - - - -
16,151,622 1,859,024 654,576,663 492,136,365 129,951,673 - 1,294,675,347 30,115,370 614,025,323 - 644,140,693
Trading Liability - 9,987,849 - - - - 9,987,849 - 9,987,849 - 9,987,849

Bills payable - - - - - 7,752,959 7,752,959 - - - -
Borrowings - - - - - 225,882,986 225,882,986 - - - -
Deposits and other accounts - - - - - 984,463,067 984,463,067 - - - -
- 9,987,849 - - - 1,238,255,657 1,248,243,506 - 9,987,849 - 9,987,849
Forward government securities transactions 57,768,858 57,768,858 57,768,858 57,768,858
- - - - 265,278,829 - 265,278,829 - 265,278,829 - 265,278,829
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Rupees in ‘000
39.1 Fair value of non-financial assets

Fixed assets - 41,974,966 - 41,974,966 - 39,636,178 - 39,636,178
Non-banking assets - 4,486,663 - 4,486,663 - 4,107,306 - 4,107,306
39.2 Valuation Techniques used in determination of Fair Valuation of Financial Instruments within Level 2
Item Valuation approach and input used
Federal Government Securities Marked to Market on the basis of PKRV rates.

Non-Government Debt Securities Marked to Market on the basis of MUFAP rates.
Foreign exchange contracts Marked to Market on the basis of SBP rates.
Open ended mutual funds Marked to Market on the basis of MUFAP rates.
40 SEGMENT INFORMATION
40.1 Segment Details with respect to Business Activities
December 31, 2019

Investment and Retail Sale Islamic Asset Others Total
Banking Management
Banking Banking (Treasury)
Rupees in ‘000
Profit & Loss

Net mark-up/return/profit 45,813,790 (54,926,966) 49,983,718 1,203,117 (1,882) (566,190) 41,505,587
Inter segment revenue - net (45,178,102) 95,831,440 (47,548,684) - - (3,104,654) -
Non mark-up/ return/ interest income 4,419,600 3,339,124 2,611,642 161,154 778,874 359,661 11,670,055
Total Income 5,055,288 44,243,598 5,046,676 1,364,271 776,992 (3,311,183) 53,175,642
Segment direct expenses (582,516) (15,889,959) (114,760) (1,285,405) (316,708) (9,737,713) (27,927,061)
Total expenses (582,516) (15,889,959) (114,760) (1,285,405) (316,708) (9,737,713) (27,927,061)
Provisions (1,262,930) (235,843) - (12) - 952,127 (546,658)
Profit before tax 3,209,842 28,117,796 4,931,916 78,854 460,284 (12,096,769) 24,701,923
Balance Sheet
Cash & Bank balances 59,821 51,303,207 61,984,899 2,045,240 15,525 5,129,016 120,537,708
Investments 47,263,032 - 697,876,038 12,452,302 2,197,434 (134,379) 759,654,427
Net inter segment lending (413,851,658) 972,381,940 (557,387,799) 161,300 - (1,303,783) -
Lendings to financial institutions 4,753,821 - 2,052,492 11,554,430 - (4,753,822) 13,606,921
Advances - performing 437,660,414 25,631,709 - 12,615,228 35,688 8,407,030 484,350,069
Advances - non-performing 511,117 461,688 - - - 14,881,113 15,853,918
Provision against advances (127,779) (205,889) - (20) - (14,818,731) (15,152,419)
Advances - net 438,043,752 25,887,508 - 12,615,208 35,688 8,469,412 485,051,568
Others 7,072,635 8,706,936 7,215,579 2,752,910 545,118 78,239,639 104,532,817
Total Assets 83,341,403 1,058,279,591 211,741,209 41,581,390 2,793,765 85,646,083 1,483,383,441
- -
Borrowings 63,149,483 2,415,660 203,936,638 1,700,000 - (4,753,395) 266,448,386
Deposits & other accounts - 1,012,571,004 - 34,389,411 - 2,058,389 1,049,018,804
Others 2,413,361 16,402,958 1,917,550 2,143,144 433,045 27,394,639 50,704,697
Total liabilities 65,562,844 1,031,389,622 205,854,188 38,232,555 433,045 24,699,633 1,366,171,887
Equity / Reserves 17,778,559 26,889,969 5,887,021 3,348,835 2,360,720 60,946,450 117,211,554
Total Equity and Liabilities 83,341,403 1,058,279,591 211,741,209 41,581,390 2,793,765 85,646,083 1,483,383,441
Contingencies and Commitments 78,732,154 12,055,398 359,395,856 1,907,886 42,231 13,128,046 465,261,571
December 31, 2018
Investment and Retail Sale Islamic Asset Others Total
Banking Management
Banking Banking (Treasury)
Rupees in ‘000
Profit & Loss

Net mark-up/return/profit 27,902,619 (28,096,467) 31,526,565 655,849 2,883 111,838 32,103,287
Inter segment revenue - net (27,412,947) 56,996,482 (27,126,100) - - (2,457,435) -
Non mark-up/ return/ interest income 4,610,156 2,879,344 3,460,206 79,343 504,736 260,391 11,794,176
Total Income 5,099,828 31,779,359 7,860,671 735,192 507,619 (2,085,206) 43,897,463
Segment direct expenses (525,101) (13,782,024) (108,445) (1,083,994) (291,136) (7,963,540) (23,754,240)
Total expenses (525,101) (13,782,024) (108,445) (1,083,994) (291,136) (7,963,540) (23,754,240)
Provisions (234,885) (3,418) - 8 - (851,393) (1,089,688)
Profit before tax 4,809,612 18,000,753 7,752,226 (348,810) 216,483 (9,197,353) 21,232,911
Balance Sheet
Cash & Bank balances 79,354 44,090,551 47,880,283 4,157,592 1,263 5,543,573 101,752,616
Investments 53,748,130 - 606,731,062 10,249,093 1,859,024 - 672,587,309
Net inter segment lending (402,000,239) 893,698,327 (529,115,678) 1,705,552 - 35,712,038 -
Lendings to financial institutions 3,610,409 - 50,255,680 3,529,999 - (3,615,893) 53,780,195
Advances - performing 394,258,308 28,081,086 - 6,927,030 38,985 23,965,054 453,270,463
Advances - non-performing 415,941 183,631 - - - - 599,572
Provision against advances (116,635) (103,416) - (8) - (15,293,806) (15,513,865)
Advances - net 394,557,614 28,161,301 - 6,927,022 38,985 8,671,248 438,356,170
Others 4,772,402 7,977,518 2,236,843 1,641,756 406,822 68,871,672 85,907,013
Total Assets 54,767,670 973,927,697 177,988,190 28,211,014 2,306,094 115,182,638 1,352,383,303
- -
Borrowings 42,470,266 3,912,691 183,088,196 - - (3,588,167) 225,882,986
Deposits & other accounts - 957,686,063 - 24,632,633 - 2,144,371 984,463,067
Others 2,326,844 12,328,943 (3,680,842) 326,877 321,117 21,624,500 33,247,439
Total liabilities 44,797,110 973,927,697 179,407,354 24,959,510 321,117 20,180,704 1,243,593,492
Equity / Reserves 9,970,560 - (1,419,164) 3,251,504 1,984,977 95,001,934 108,789,811
Total Equity and Liabilities 54,767,670 973,927,697 177,988,190 28,211,014 2,306,094 115,182,638 1,352,383,303
Contingencies and Commitments 83,806,271 12,033,028 265,278,829 582,318 65,371 17,824,414 379,590,231
40.2 GEOGRAPHICAL SEGMENT ANALYSIS
December 31, 2019

Domestic Middle
Rupees in
‘000
Profit & Loss

Inter segment revenue – net (134,330) 134,330 - -
Non mark–up / return / interest income 11,609,702 168,321 - 11,778,023
Total Income 52,607,083 676,528 - 53,283,611

Total expenses (27,909,520) (91,819) (33,691) (28,035,030)
Provisions 528,487 18,171 - 546,658
Balance Sheet

Investments 754,878,785 4,775,642 - 759,654,427
Advances - non-performing 15,853,918 - - 15,853,918
Advances - net 470,364,020 14,687,548 - 485,051,568
Others 104,310,872 221,945 - 104,532,817
Total Assets 1,458,924,643 24,458,798 - 1,483,383,441
Borrowings 241,166,918 20,532,792 - 261,699,710

Deposits & other accounts 1,048,476,528 542,276 - 1,049,018,804
Others 50,611,478 93,219 - 50,704,697
Equity / Reserves 113,921,043 3,290,511 - 117,211,554
Contingencies and commitments 464,720,055 541,516 465,261,571

December 31, 2018
Domestic Middle
Rupees in
‘000
Profit & Loss

Inter segment revenue – net - 262,892 - 262,892
Non mark–up / return / interest income 12,052,442 (172,326) - 11,880,116
Total Income 43,364,562 633,878 - 43,998,440

Inter-segment expense allocation - - - -
Total expenses (23,726,906) (97,631) (30,680) (23,855,217)
Provisions (1,109,600) 19,912 - (1,089,688)
Balance Sheet

Investments 662,343,886 10,243,423 - 672,587,309
Net inter segment lendings 1,302 3,609,107 - 3,610,409
Advances - non-performing 531,144 - - 531,144
Advances - net 436,967,702 1,388,468 - 438,356,170
Others 85,781,584 125,429 - 85,907,013
Total Assets 1,340,594,812 15,398,900 - 1,355,993,712
Borrowings 213,245,406 12,637,580 - 225,882,986

Deposits & other accounts 983,976,700 486,367 - 984,463,067
Others 33,222,494 24,945 - 33,247,439
Equity / Reserves 106,539,803 2,250,008 - 108,789,811

26
6
41 RELATED PARTY TRANSACTIONS
Note
ReAn
ponu
The Group has related party relationships with its parent, companies with common directorship, directors, employee benefit plans and key management personnel including their
associates. s to
rt al
Contributions to the accounts in respect of staff retirement benefits are made in accordance with actuarial valuation / terms of the contribution plan. Remuneration of the key
the
20
19
management personnel are in accordance with the terms of their employment. Other transactions are at agreed terms.
Con
solid
Parent Directors
Key
management Associates*
Joint
venture
Other
Key
Joint
venture
Othe
related
ated
Fina
Rupees in ‘000

ncial
Stat
In current accounts – – – – – – – – – – – –
In deposit accounts – – – – – – – – – – – – eme
Lendings to financial institutions
– – – – – – – – – – – –
nts
for the
Opening balance – – – – – – – – – – – –
year
Addition during the year – – – – – – – – – – – –
ended
Repaid during the year – – – – – – – – – – – –
Dece
Transfer in / (out) – net – – – – – – – – – – – –
mber
Closing balance – – – – – – – – – – – –
31,
2019
Investments
Opening balance - - - 351 - 1,859,024 - - - 351 - 1,741,623
Investment made during the year - - - - - 4,276,363 - - - - - 1,797,598
Investment redeemed / disposed off during the year - - - - (4,073,665) - - - - - (1,626,870)
Surplus - - - - - 135,712 - - - - - (53,327)
Transfer in / (out) – net - - - (351) - - - - - - - -
Closing balance - - - - - 2,197,434 - - 351 - 1,859,024
Provision for diminution in value of investments – – – - – – – – – 4,649 – –
Advances
Opening balance - 8,704 264,404 - - 593 - 17,029 252,674 - - (57)

Addition during the year - 25,719 97,754 - - 9,129 - 13,304 112,248 - - 8,011
Repaid during the year - (29,659) (165,274) - - (9,147) - (21,629) (102,179) - - (7,361)
Transfer in / (out) – net - - - - - - - - 1,661 - -
Closing balance - 4,764 196,884 - - 575 - 8,704 264,404 - - 593
Provision held against advances – – – – – – – – – – –

December 31, 2019
Key Other
December 31, 2018
Key Othe
Note
s to
Joint Joint
Parent Directors management Associates* related Parent Directors management Associates* related
venture venture
Rupees in ‘000
the
Other Assets
Interest / mark-up accrued - 7,860 69,367 - - - 13,143 66,580 - - -
Con
Receivable from staff retirement fund - - - - - 3,705,491 - - - - - 4,204,441 solid
Other receivable
Provision against other assets
-
-
-
-
-
-
-
-
-
-
365,707
-
-
-
-
-
-
-
-
-
-
-
330,776
–
ated
Borrowings
Fina
Opening balance – – – – – – – – – – – – ncial
Borrowings during the year
Settled during the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Stat
Transfer in / (out) - net – – – – – – – – – – – – eme
nts
Closing balance – – – – – – – – – – – –
Subordinated debt for the

Opening balance – – – – – – – – – – – – year
Issued / Purchased during the year – – – – – – – – – – – – ended
Redemption / Sold during the year – – – – – – – – – – – – Dece
Closing balance – – – – – – – – – – – – mber
31,
Deposits and other accounts 2019
Opening balance 1,784 24,424 70,387 82,381 - 18,296,520 1,202 262,709 61,889 85,690 - 9,246,496
Received during the year 8,594,379 1,824,926 524,039 7,718,711 - 247,373,312 9,623,398 99,342 622,197 8,614,444 - 226,189,869
Withdrawn during the year (8,593,314) (1,492,156) (559,794) (7,677,777) - (248,754,026) (9,622,816) (337,996) (616,342) (8,617,739) - (217,149,184)
Transfer in / (out) - net - - - - - - - 369 2,643 (14) - 9,339
Closing balance 2,849 357,194 34,632 123,315 - 16,915,806 1,784 24,424 70,387 82,381 - 18,296,520
Other Liabilities
Interest / mark-up payable - - - 599 - 116,987 - 2,506 625 757 - 651,581
Payable to staff retirement fund - - - - - - - - - - -
Alli Other liabilities

Contingencies and Commitments
ed
Other contingencies - - - - - - - - - - -
Ba
nk
Li
mit
ed
26
7
26
8
41.1 RELATED PARTY TRANSACTIONS
Note
ReAn
ponu December 31, 2019 December 31, 2018 s to
rt al Parent Directors
Key
Joint
Other
Key
Joint
Othe
related
the
20 venture venture
19
personnel parties
Rupees in ‘000
personnel parties
Con
Income
solid
Mark-up / return / interest earned - 422 18,179 - - - - 513 13,475 - - - ated
Sales Commission
-
1 21
-
97
- -
16
-
-
22,444
492,090
-
2 10
-
101
- -
83
-
-
26,827
483,477
Fina
Dividend income - - - - - - - - - - - -
ncial
Net gain / (loss) on sale of securities - - 14 - - 465 - - - - - (262)
Rental Income - - - - - - - - - - - - Stat
Other Income - - - - - - - - - - - 2,237
eme
Expense nts
Mark-up / return / interest paid - 14,749 559 5,108 - 884,506 - 2,506 625 757 - 651,581
for the
Directors meeting fee - 30,000 - - - - - 18,700 - - - -
year
Remuneration - 78,174 371,381 - - - - 73,504 351,782 - - -
ended
Other expenses** - - - 31,211 - - - - - 32,006 - -
Dece
Rent expense*** - - - 28,658 - - - - - 26,363 - -
mber
Charge in respect of staff retirement
31,
benefit funds - - - - - 74,123 - - - - - 551,657
2019
Insurance premium paid - 167 879 - - - - 99 244 - - -
Insurance claims settled - - - - - - - - - - - -
Shares held by the holding company, outstanding at the end of year are included in note 19 to these consolidated financial
statements. ‘*Associated companies are as per IAS 24 ‘Related Party Disclosures’.
‘**Other expenses mainly include donation of Rs. 30 million to National Management Foundation for construction of hostel building.
‘***Rent expense of ABL Branch with associated company (Ibrahim Fibres Limited) was carried out on terms other than that of arm’s length with prior permission of State Bank of Pakistan.
During the year ended December 31, 2019; certain movable assets having cumulative net book value of Rs. 36,000 were disposed off for Rs. 269,000 to the Key Management Personnel
of the Bank.
Statements

2019 2018
Rupees in ‘000
42 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS
Minimum Capital Requirement (MCR):

Paid–up capital (net of losses) 11,450,739 11,450,739
Capital Adequacy Ratio (CAR):

Eligible Common Equity Tier 1 (CET 1) Capital 82,135,834 75,372,381
Eligible Additional Tier 1 (ADT 1) Capital - -
Total Eligible Tier 1 Capital 82,135,834 75,372,381
Eligible Tier 2 Capital 22,351,157 20,564,931
Total Eligible Capital (Tier 1 + Tier 2) 104,486,991 95,937,312
Risk Weighted Assets (RWAs):

Credit Risk 345,197,859 315,518,950
Market Risk 49,574,917 40,673,396
Operational Risk 84,845,040 78,800,062
Total 479,617,816 434,992,408
Common Equity Tier 1 Capital Adequacy ratio 17.13% 17.33%

Tier 1 Capital Adequacy Ratio 17.13% 17.33%
Total Capital Adequacy Ratio 21.79% 22.05%
In order to strengthen the solvency of Banks / Development Financial Institutions (DFI), SBP through its BSD Circular No.
07 of 2009 dated April 15, 2009 has asked the Banks to raise their minimum paid up capital to Rs. 10 billion free of losses.
Further, SBP through its BPRD Circular # 6 of 2013 dated August 15, 2013 has asked Banks to maintain the minimum
Capital Adequacy Ratio (CAR) of 12.50% on standalone as well as on consolidated basis till December 31, 2019. A phase
in arrangement was put in place whereby the banks were required to maintain the following ratios on an ongoing basis,
which has been completed as on December 31, 2019.
2015 2016 2017 2018 2019
Common Equity Tier–1 – CET1 6.00% 6.00% 6.00% 6.00% 6.00%

Additional Tier–1 1.50% 1.50% 1.50% 1.50% 1.50%
Tier 1 7.50% 7.50% 7.50% 7.50% 7.50%
Total Capital 10.00% 10.00% 10.00% 10.00% 10.00%
*Capital Conservation Buffer – CCB 0.25% 0.65% 1.275% 1.90% 2.50%
Total Capital plus CCB 10.25% 10.65% 11.275% 11.90% 12.50%
* Consisting of CET1 only.
The paid up capital and Consolidated CAR of the Bank stands at Rs. 11.451 billion and 21.79% of its total risk weighted
assets as at December 31, 2019, respectively. The Bank has complied with all externally imposed capital requirements as at
year end. Standardized Approach is used for calculating the Credit and Market risk, whereas, Basic Indicator Approach is
used for Operational Risk in the Capital Adequacy Calculation.
Allied Bank 269

Limited
2019 2018
Rupees in ‘000
Leverage Ratio (LR):

Eligible Tier-1 Capital 82,135,834 75,372,381
Total Exposures 1,801,242,634 1,634,600,480
Leverage Ratio 4.56% 4.61%
43 RISK MANAGEMENT
The principal risks associated with ABL’s business are credit risk, market risk, liquidity risk, reputational risk and operational
risk. The Risk Management Framework (henceforth to be referred to as ‘The Framework’) provides principles for identifying,
assessing, and monitoring risk within the Bank. The Framework specifies the key elements of the risk management process
in order to maximize opportunities, minimize adversities and to achieve improved outputs based on informed decision
making.
The Bank performs risk measurement, monitoring and control functions through use of various risk procedures and models.
To give it a formal structure, all the policies and guidelines are approved by the Board and relevant management
committees.
Technical Appraisal and Enterprise Risk which inter alia includes Risk Architecture, Reputational Risk, Operational Risk and
Market & Liquidity Risk. All these functions are operating in tandem to improve and maintain the health of the Bank’s assets
and liabilities.
Categories of Risk
Credit Risk This risk is defined as the possibility of loss due to unexpected default or a deterioration of credit
worthiness of a business partner.
Credit Risk includes Country Risk i.e., the risks that counterparty is unable to meet its foreign
currency obligations as a result of adverse economic conditions or actions taken by governments
in the relevant country.
Market Risk The risk of loss generated by adverse changes in the price of financial assets or contracts
currently held by the Bank (this risk is also known as price risk).
Liquidity Risk The risk that the Bank is unable to meet its payment obligations when they fall due and to replace
funds when they are withdrawn; the consequences of which may be the failure to meet
obligations to repay depositors and fulfill commitments to lend.
Operational Risk Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people,
and systems or from external events. The definition excludes reputational risk.
Reputational Risk The risk of failing to meet the standards of performance or behaviour required or expected by
stakeholders in commercial activities or the way in which business is conducted.
Information Security & Information Security Governance Risk Management involves the identification of an organization’s
Governance Risk information assets and the development, documentation, and implementation of policies,
standards, procedures and guidelines that ensure confidentiality, integrity, and availability.
Strategic Risk Risk of an adverse impact on strategic goals. Strategic risk mainly arises from strategic
decisions, improper implementation of those decisions, or lack of responsiveness of Bank to
industry, economic or technological changes.
Risk Responsibilities
– The Board of Directors are accountable for overall supervision of the risk management process. The Board is
responsible for determining the manner in which risk authorities are set, as well as the approval of all risk policies
and ensuring that these are properly implemented. Further, the Board shall also seek appointment of senior
management personnel capable of managing the risk activities conducted by the Bank.
– The Board Risk Management Committee (BRMC) is responsible for ensuring that the overall risk strategy and
appetite of the Bank is appropriately defined in the Strategic Plan and recommend the same to the Board of
Directors.
– The CEO and Group Chiefs are accountable for the management of risk collectively through their membership of
Asset & Liability Committee (ALCO) and Risk Management Committee (RMC). Independent supervision of risk
management activities is provided by the Audit Committee.
– The Risk Management Group is head by a Group Chief responsible to set-up and implement the Risk Framework of
the Bank.
Risk Management Group Organization
Technical Appraisal, Information security and Enterprise Risk which interalia includes Risk Architecture, Operational Risk
and Market & Liquidity Risk. All these functions are operating in tandem to monitor the health of assets and liabilities, while
ensuring risk mitigants against cyber and information system threats.
43.1 Credit Risk
Credit risk, the potential default of one or more debtors, is a major source of risk for the Bank. The Bank is exposed to credit
risk through its lending and investment activities. The Bank’s credit risk function is divided into Corporate and Financial
Institutions Risk and Commercial, SME and Consumer Risk. The functions operate within an integrated framework of credit
policies, guidelines and processes. The credit risk management activities are governed by the Credit Policy of the Bank that
defines the respective roles and responsibilities, the credit risk management principles and the Bank’s credit risk strategy.
The policy is supported by a comprehensive Credit Procedures Manual.
The Bank manages three principal sources of credit risk:
i) Sovereign credit risk on its public sector advances

ii) Counterparty credit risk on its private sector advances
iii)Counterparty credit risk on interbank limits
Sovereign Credit Risk
When the Bank lends to public sector borrowers, it prefers obtaining a full sovereign guarantee or the equivalent from the
Government of Pakistan (GOP). However, certain public sector enterprises have a well defined cash flow stream and
appropriate business model, based on which the lending is secured through collaterals other than GOP guarantee.
Counterparty credit risk on its private sector advances
Each borrower’s credit worthiness is analyzed on the Credit Application Package that incorporates a formalized and
structured approach for credit analysis and directs the focus of evaluation towards a balanced assessment of credit risk with
identification of proper mitigates. These risks include Industry Risk, Business Risk, Financial Risk, Security Risk and
Account Performance Risk.
Financial analysis is further strengthened through use of separate financial spread sheet templates that have been
designed for manufacturing / trading concerns, financial institutions and insurance companies.
Counter Party Credit Risk on Interbank Limits
In the normal course of its business, the Bank’s Treasury utilizes products such as Reverse REPO and call lending to meet
the needs of interbank borrowers and manage its exposure to fluctuations in market, interest and currency rates. Further,
these products are also used to temporarily invest Bank’s liquidity prior to disbursement. All of these financial instruments
involve, to varying degrees, the risk that the counterparty in the transaction may be unable to meet its obligation to the
Bank.
Reflecting a preference for minimizing exposure to counterparty credit risk, the Bank maintains eligibility criteria that link the
exposure limits to counterparty credit ratings by external rating agencies.
A. Country Risk
The Bank has in place a Country Risk Management Framework which has been approved by the Board. This framework
focuses on providing detailed roles and responsibilities with respect to country risk assessment as well as limit setting,
exposure management and reporting of cross border exposure undertaken by the Bank. The Bank utilizes S&P, Fitch and
Moody’s country ratings as well as other macroeconomic and external risk factors in assigning a country risk limit. The
Financial Institutions Division is responsible for monitoring of country exposure limits.
Credit Administration
Credit Administration is involved in minimizing losses that could arise due to security and documentation deficiencies. The
Credit Administration Function constantly monitors the security and documentation risks inherent in the existing credit
portfolio through four regional credit administration departments located all over the country.
43.1.1 Lendings to financial institutions
Gross lendings Non–performing lendings Provision held

31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
Public/ Government 2,704,142 - - - - -

Private 10,972,779 53,850,195 70,000 70,000 70,000 70,000
13,676,921 53,850,195 70,000 70,000 70,000 70,000
43.1.2 Investment in debt securities
Gross Investment Non–performing Investment Provision held

31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
Basic metals (iron, steel) 500,000 500,000 - - - -

Financial 44,714,582 42,410,942 - - - -
Hotel, restaurant & clubs 470,000 248,085 - - - -
Power, gas, water & sanitary 5,411,136 4,881,010 - - - -
Chemicals 1,600,000 - - - - -
Sugar 10,487 10,487 10,487 10,487 10,487 10,487
Textile – Spinning 51,345 51,345 51,345 51,345 51,345 51,345
Textile – Weaving 200,000 200,000 200,000 200,000 200,000 200,000
Government 710,177,493 626,834,650 3,869,387 9,756,796 15,961 21,248
Others 103,498 105,329 103,498 105,329 103,498 105,329
763,238,541 675,241,848 4,234,717 10,123,957 381,291 388,409
Gross Investment Non–performing Investment Provision held

31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
Public/ Government 713,427,493 630,584,650 3,869,387 9,756,796 15,961 21,248

Private 49,811,048 44,657,198 365,330 367,161 365,330 367,161
763,238,541 675,241,848 4,234,717 10,123,957 381,291 388,409
Gross advances Non–performing advances Provision held
31,2019 31,2018 31,2019 31,2018 31,2019 31,2018
Rupees in ‘000
43.1.3 Advances
Agriculture, Forestry and Hunting 79,583,981 78,511,776 654,964 624,049 511,318 596,596
Basic metals (iron, steel) 5,243,108 7,220,441 413,828 151,863 214,278 151,863
Cement / clay & ceramics 19,359,961 16,781,544 74,089 74,089 74,089 74,089
Chemical & pharmaceutical 25,230,941 23,965,746 372,744 376,479 372,744 376,479
Construction 6,701,913 6,958,964 190,283 120,529 176,038 120,529
Education 130,146 124,885 123 123 123 123
Financial 31,875,767 22,710,967 56,154 72,454 56,154 72,454
Footwear & leather garments 2,823,053 2,212,093 111,740 116,953 106,841 108,133
Furniture & sports goods 1,978,284 1,118,853 265,984 265,990 265,984 265,990
Grains, food & beverages 10,952,503 12,750,666 1,853,302 1,917,020 1,853,302 1,766,367
Health & social welfare 27,029 52,122 2,688 3,478 2,688 3,478
Hotel, restaurant & clubs 1,000,000 1,000,000 7,564 7,664 7,564 7,664
Individuals 10,095,807 10,071,632 368,240 361,566 337,085 361,501
Machinery & equipment 5,790,537 4,200,452 1,097,134 1,157,834 1,097,134 1,157,834
Manufacture of transport equipment 2,176,982 844,246 139,822 140,522 139,822 140,522
Paper & paper boards 7,046,681 5,632,472 208,574 210,574 208,574 210,574
Petroleum products 3,934,730 13,291,165 176,351 13,228 94,073 13,228
Power, gas, water & sanitary 156,149,658 140,719,800 637,015 637,015 637,015 637,015
Printing, publishing & allied 206,458 1,121,462 10,056 10,056 10,056 10,056
Real estate, renting, and business activities 8,331,917 5,485,741 - - - -
Rubber & plastic 288,680 295,588 230,563 233,068 230,563 233,068
Sugar 6,897,513 7,365,203 51,066 51,066 51,066 51,066
Textile -Manufacture of made up & ready 25,684,060 3,002,600 3,003,575 3,002,601 3,003,575
30,431,729
made garments
Textile - Finishing 15,189,368 16,456,503 2,872,372 2,884,586 2,872,372 2,884,586
Textile - Spinning 18,024,943 18,618,930 1,261,119 1,141,751 1,157,244 1,141,751
Textile - Weaving 3,210,115 1,664,289 38,482 38,632 38,482 38,632
Transport, storage & communication 16,154,933 12,439,987 126,459 428,077 46,546 127,149
Wholesale & retail trade 9,199,116 9,220,564 967,415 977,027 885,681 948,802
Others 22,168,134 7,385,384 663,187 1,045,374 663,187 1,030,374
500,203,987 453,905,535 15,853,918 16,064,642 15,112,624 15,533,498

Public/ Government 204,243,892 177,970,051 134,430 135,180 134,430 135,180
Private 295,960,095 275,935,484 15,719,488 15,929,461 14,978,194 15,398,317
500,203,987 453,905,535 15,853,918 16,064,641 15,112,624 15,533,497
2019 2018
Rupees in ‘000
43.1.4 Contingencies and Commitments
Agriculture, Forestry and Hunting 517,460 1,748,522

Basic metals (iron, steel) 2,865,799 2,298,302
Cement/clay & ceramics 3,578,271 2,491,703
Chemical & pharmaceutical 2,844,113 1,168,652
Construction 3,942,101 3,532,782
Education 61,193 55,461
Financial 367,806,904 272,292,661
Footwear & leather garments 341,512 248,281
Furniture & sports goods 112,737 25,375
Grains, food and beverages 1,055,823 58,426
Health & social welfare 337,057 1,993,444
Hotel, restaurant & clubs 960 960
Individuals 7,391,727 11,027,620
Machinery & equipment 16,099,059 38,708,740
Manufacture of transport equipment 188,471 87,725
Paper & paper boards 626,468 275,184
Petroleum products 23,298,418 17,777,157
Power, gas, water & sanitary 12,693,725 9,569,562
Printing, publishing & allied 67,631 136,729
Real estate, renting and business activities - 6,018,458
Rubber & plastic 35,037 106,775
Sugar 59,430 26,740
Textile - Manufacture of madeup & ready made garments 227,892 275,109
Textile - Finishing 4,891,277 1,589,863
Textile - Spinning 1,368,295 56,195
Textile - Weaving 1,618,571 65,702
Transport, storage & communication 3,015,015 5,315,605
Wholesale & retail trade 342,676 957,570
Others 9,874,129 1,680,928
465,261,751 379,590,231

Public/ Government 63,324,780 89,768,480
Private 401,936,971 289,821,751
465,261,751 379,590,231
43.1.5 Concentration of Advances
The Bank’s top 10 exposures on the basis of total (funded and non-funded) exposures aggregating to Rs. 222,105.62 million
(December 31, 2018: Rs. 220,201.42 million) are as following:

2019 2018
Rupees in ‘000
Funded 191,393,656 184,180,778

Non Funded 30,711,963 36,020,642
Total Exposure 222,105,619 220,201,420
The sanctioned limits against these top 10 exposures aggregated to Rs. 265,900.73 million (December 31, 2018: Rs.
255,278.34 million).
43.1.6 Advances – Province/Region–wise Disbursement & Utilization
During the year ended December 31, 2019

KPK
AJK
including
including
Punjab Sindh Balochistan Islamabad
FATA Gilgit–
Baltistan
Rupees in ‘000
Province/Region
Punjab 691,256,822 683,293,584 4,672,048 3,172,039 3,810 104,071 11,270
Sindh 1,110,838,731 74,993,563 1,034,704,724 35,148 9,290 1,075,242 20,764
KPK including FATA 1,621,529 243,216 - 1,378,313 - - -
Balochistan 618,127 - - 618,127 -
Islamabad 16,733,824 - - - - 16,733,824 -
AJK including Gilgit-Baltistan 881,289 - - - - - 881,289
Total 1,821,950,322 758,530,363 1,039,376,772 4,585,500 631,227 17,913,137 913,323
During the year ended December 31, 2018

KPK AJK
including including
Punjab Sindh Balochistan Islamabad
FATA Gilgit–
Baltistan
Rupees in ‘000
Province/Region
Punjab 591,723,087 522,554,625 34,494,817 - - 34,673,645 -
Sindh 802,485,680 42,048,213 656,714,012 4,851,487 - 98,871,968 -
KPK including FATA 1,429,676 686,026 - 743,650 - - -
Balochistan 525,809 - - - 525,809 - -
Islamabad 8,766,970 - - - - 8,766,970 -
Total 1,405,482,809 565,288,864 691,208,829 5,595,137 525,809 142,312,583 551,587
43.2 Market Risk
Market Risk is the risk of loss in earnings and capital due to adverse changes in interest rates, foreign exchange rates,
equity prices and market conditions. Thus market risk can be further described into Interest Rate Risk, Foreign Exchange
Risk and Equity Position Risk.
Market Risk performs risk measurement, monitoring and control functions through use of various risk procedures and
models. To give it a formal structure, all the policies and guidelines are approved by the Board and relevant management
committees. The Bank appointed services of a foreign risk advisory firm for assistance in establishment of Market Risk
Management Framework.
The Bank uses three types of risk management tools to measure the Bank’s Market Risk: Value-at Risk (VaR), Expected
Shortfall (ES) and Stress Testing. In addition, control limits are utilized to maintain the risks within acceptable levels.
The Bank maintains adequate regulatory capital to cover all interest rate risks falling under the “Trading Book” as well as
“Banking Book”, as defined by Basel capital accord. The Bank uses Standardized Approach in determining credit risk,
market risk and operational risk exposures in the capital adequacy calculation. In Market risk exposures, Maturity method is
used to calculate charge on Interest rate risk and FX risk.
In its pursuit of automation, the Bank has successfully implemented Oracle Financial Services Analytical Application
(OFSAA) Market Risk Module to automate the risk monitoring and reporting activities pertaining to Market Risk, which
allows for more efficient risk monitoring and increased focus on risk analysis to help in making more informed decisions.
43.2.1 Market Risk Pertaining to the Trading Book
Trading Book
The Trading Book of the Bank consists of positions in financial instruments held either with trading intent or in order to
hedge other elements of the trading book. To be eligible for trading book, financial instruments must be held with the intent
of trading and free of any restrictive covenants on their tradability. In addition, positions need to be frequently and
accurately valued and the portfolio should be actively monitored and managed accordingly.
The Bank’s trading book includes securities classified as ‘Held-For-Trading’, ‘Open Ended Mutual Fund’ and non strategic
listed equity placed in ‘Available-For-Sale’. These positions are exposed to all forms of market risk, therefore, are managed
actively.
Risk Pertaining to Banking Book Investment Portfolio
All investments excluding trading book are considered as part of banking book. Banking book includes:
i) Available-for-sale securities - (other than non-strategic listed equity)

ii) Held-to-maturity securities
Treasury investments parked in the banking book include:
i) Government securities
ii) Capital market investments
iii) Investments in bonds, debentures, etc.
Due to the diversified nature of investments in banking book, it is subject to interest rate risk, equity price risk and FX risk.
Interest Rate Risk – Banking Book
Government securities (PIBs, Sukuks & T-Bills), Bonds, Debentures, etc. and other money market investments are subject
to interest rate risk. To capture the risk associated with these securities, extensive modelling is being done with respect to
duration analysis. Stress testing and scenario models are also in place to capture the sensitivity of the portfolio to adverse
movement in interest rates. For prudent risk management, all money market investments are marked to market to assess
changes in the market value of investments due to interest rate movements.
Stress Testing
The Bank also conducts Stress Testing of the Bank’s investment portfolio to ascertain the impact of various scenarios on the
capital adequacy and sustainability of the Bank. The exercise assumes various stress conditions, with respect to Market
Risk (Rise or Fall in Interest Rates, leading to interest rate risk), Equity Price Risk resulting from Stock Market movements,
FX Rate Risk leading from adverse movements in exchange rates and Liquidity Risk (ability to meet short-term obligations if
there is a run on deposits). Stress testing is also conducted on various macro-economic scenarios to test the resilience of
the Bank.
43.2.2 Balance sheet split by trading and banking books

book Total book Total
book book
Rupees in ‘000
Cash and balances with treasury banks 119,935,126 - 119,935,126 99,177,561 - 99,177,561
Balances with other banks 602,582 - 602,582 2,575,055 - 2,575,055
Lendings to financial institutions 13,606,921 - 13,606,921 53,780,195 - 53,780,195
Investments 720,986,859 38,667,568 759,654,427 655,034,517 17,552,792 672,587,309
Advances 485,051,568 - 485,051,568 438,356,170 - 438,356,170
Fixed assets 62,240,062 - 62,240,062 50,399,773 - 50,399,773
Intangible assets 1,975,898 - 1,975,898 1,756,127 - 1,756,127
Deferred tax assets - - - - - -
Other assets 40,316,857 - 40,316,857 33,751,113 - 33,751,113
1,444,715,873 38,667,568 1,483,383,441 1,334,830,511 17,552,792 1,352,383,303
43.2.3 Foreign Exchange Risk
Foreign Exchange Risk is the risk of loss arising from fluctuations in exchange rates. The Bank’s FX Risk is largely
mitigated by following a matched funding policy whereas for any mismatched exposures, the Bank utilizes appropriate
derivative instruments such as Forwards and Swaps.
The majority of the Bank’s net foreign currency exposure is in US Dollars and the Bank uses system-based monitoring of it’s
intra-day Net Open Position for effective risk management. The Bank carefully monitors the net foreign currency exposure
and the effect of exchange rate fluctuations by conducting sensitivity analysis and stress testing, as well as utilizing the
currency forwards and swaps to hedge the related exposure.
The Bank maintains adequate regulatory capital to cover against foreign exchange risks.
The bank undertakes foreign exchange exposures in the shape of FX Forwards and Swaps in order to hedge its foreign
currency deposits and advances, after incorporating the impact of it’s NOSTRO and Cash Reserve balances.
Foreign Foreign Off–balance Net foreign Foreign Foreign Off–balance Net foreign
Currency Currency sheet items currency Currency Currency sheet items currency
Assets Laibilities exposure Assets Laibilities exposure
Pakistani Rupee 1,425,151,241 1,227,922,341 (80,271,378) 116,957,522 1,301,673,999 1,126,239,213 (66,414,629) 109,020,157
United States Dollar 56,981,096 130,223,325 73,575,765 333,536 50,030,348 109,211,476 58,937,581 (243,547)
Great Britain Pound Sterling 892,579 4,561,262 3,611,463 (57,220) 283,035 5,309,004 5,026,143 174
Japanese Yen 14,613 1,110 (22,808) (9,305) 4,317 975 (2,521) 821
Euro 310,246 3,435,978 3,105,506 (20,226) 326,332 2,826,096 2,502,163 2,399
Other currencies 33,666 27,871 1,452 7,247 65,272 6,728 (48,737) 9,807
58,232,200 138,249,546 80,271,378 254,032 50,709,304 117,354,279 66,414,629 (230,346)
1,483,383,441 1,366,171,887 - 117,211,554 1,352,383,303 1,243,593,492 - 108,789,811

Banking
book
book book book
Rupees in ‘000
After tax Impact of 1% change in foreign exchange rates on:

– Profit and loss account - 1,651,213 - (1,497,249)
– Other comprehensive income - - - -
43.2.4 Equity position Risk
Equity risk is the potential for incurring losses due to adverse changes in stock prices. The Bank holds a diversified portfolio
of equity investments in order to minimize non-systematic risk while retaining acceptable systematic risk. ALCO ensures that
equity price risk is mitigated through prudent portfolio management.
The Bank maintains adequate regulatory capital to cover against equity price risks. Equity investments classified as “Held-
For- Trading” as well as listed non-strategic equity investments classified as “Available-For-Sale” are part of the “Trading
Book” and subject to market risk change as specified by the Basel Framework. Un-listed and listed strategic equity
investment are part of “Banking Book” and are therefore subject to credit risk charge as specified by the Basel Framework.

Banking
book
book book book
Rupees in ‘000
After tax Impact of 5% change in equity prices on

– Profit and loss account - - - -
– Other comprehensive income (501,285,673) (610,980,676) (590,410,345) (570,465,731)
43.2.5 Yield / Interest Rate Risk in the Banking Book (IRRBB)–Basel II Specific
Interest rate / Rate of return risk is the current or prospective risk of losses, to both the Bank’s capital and earnings, arising
from movements in interest rates / rates of return. The losses may be due to earnings deterioration or capital erosion. The
Bank has a robust system in place to monitor Interest rate risk and ALCO regularly analyses the interest rate scenario and
devises strategies to minimize adverse impact of interest rate risk to the Bank’s equity and profits.
Interest rate risk is measured through “duration” of an instrument. To assess the interest rate risk at Balance Sheet and
Income Statement level, gap analysis on “re-pricing schedule” is utilized. Re-pricing schedule is a distribution of interest-
sensitive assets, liabilities, and Off-Balance Sheet positions into a number of predefined time bands according to their
maturity (if fixed-rate) or time remaining to their next re-pricing (if floating-rate), and is calculated in compliance with SBP
instructions. For non-contractual assets and liabilities, an ALCO approved methodology is utilized to place these assets and
liabilities in the re-pricing schedule. This methodology is based on the results of a behavioural analysis which statistically
models the historical trends of the last 5 years.
Government securities (PIBs & T-Bills, Sukuks), Bonds, Debentures, etc. and other money market investments are subject
to interest rate / rate of return risk. To capture the risk associated with these securities, extensive modelling is being done
with respect to duration analysis. Stress testing and scenario-based models are also in place to capture the sensitivity of the
portfolio to adverse movement in interest rates. For prudent risk management, all money market investments are marked to
market to assess changes in the market value of investments due to interest rate movements. Yield/ Interest rate sensitivity
position for on-balance sheet instruments is based on the earlier of contractual re-pricing or maturity date and for off-
balance sheet instruments is based on settlement date.
Yield Risk is the risk of decline in earnings due to adverse movement of the yield curve. Interest rate risk is the risk that the
value of the financial instrument will fluctuate due to changes in the market interest rates.
In accordance with BSD Circular No.03 of 2011, issued by the SBP, the Group is required to report interest rate sensitivity
gap of assets and liabilities on the basis of an objective and systematic behavioural study approved by ALCO committee.

book book book book
Rupees in ‘000
After tax Impact of increase in interest rates by 1%

– Profit and loss account - (153,019) - -
– Other comprehensive income (2,014,326) - (1,284,209) -
43.2.6 Mismatch of Interest Rate Sensitive Assets and Liabilities Note
s to
December 31, 2019
the
Effective
Yield/
Interest
Con
rate
solid
Exposed to Yield/ Interest risk
Non–interest ated
bearing
Total
financial
instruments
Fina
Over 1 Over 3 Over 6 Rupees in 1‘000
Over Over 2 Over 3 Over 5 ncial
On–balance sheet financial instruments Assets Stat
eme
602,582
13,606,921
-
9,902,779
-
3,704,142
-
-
-
-
-
-
-
-
-
-
-
-
-
-
602,582
- nts
Investments 11.97% 759,654,427 273,486,166 299,087,158 11,271,561 55,989,298 58,286,547 9,452,969 10,765,765 7,091,383 - 34,223,580 for the
Advances 11.54% 485,051,568 199,724,882
499,623,591 133,195,835 95,709,661 24,414,511 548,136 1,168,105 5,108,162 18,140,328 4,778,872 2,263,076
Other assets
1,414,368,791
35,518,167 -
435,987,135
-
106,981,222
-
80,403,809
-
58,834,683
-
10,621,074
-
15,873,927
-
25,231,711
-
4,778,872 176,032,767
- 35,518,167
year
Liabilities ended
Bills payable 7,878,626 - - - - - - - - - 7,878,626 Dece
Borrowings 9.48% 266,448,386 220,053,947 17,002,396 7,539,422 140,611 400,733 199,152 3,137,791 17,974,334 - -
mber
Deposits and other accounts 6.24% 1,049,018,804 125,011,712 235,893,774 312,174,543 42,431,719 14,219,030 1,965,574 1,734,959 370,974 - 315,216,519
Liabilities against assets subject to finance lease - - - - - - - - - - - 31,
Subordinated debt - - - - - - - - - - - 2019
Other liabilities 36,559,513 - - - - - - - - - 36,559,513
1,359,905,329 345,065,659 252,896,170 319,713,965 42,572,330 14,619,763 2,164,726 4,872,750 18,345,308 - 359,654,658
On–balance sheet gap 54,463,462 154,557,932 183,090,965 (212,732,743) 37,831,479 44,214,920 8,456,348 11,001,177 6,886,403 4,778,872 (183,621,891)
Off–balance sheet financial instruments

Documentary credits and short–term
trade–related transactions 92,700,647 10,620,023 19,877,017 37,388,266 10,648,056 12,520,902 577,593 196,028 - 872,762 -

– forward foreign exchange contracts 220,381,401 71,170,538 59,117,691 85,699,466 4,393,706 - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
220,845,618 71,634,755 59,117,691 85,699,466 4,393,706 - - - - - -
Alli Commitments in respect of sale of:

– forward foreign exchange contracts 138,500,517 46,693,645 38,926,182 52,880,690 - - - - - - -
ed – forward government securities transactions 49,721 49,721 - - - - - - - - -
Ba – derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
nk 138,550,238 46,743,366 38,926,182 52,880,690 - - - - - - -
Li
mit Other commitments 38,311,885 16,914,205 5,340,939 8,850,528 7,206,213 - - - - - -
ed
27 Off–balance sheet gap 213,307,912 52,425,617 45,409,465 79,057,570 22,247,975 12,520,902 577,593 196,028 - 872,762 -
9 Total Yield/Interest Risk Sensitivity Gap 267,771,374 206,983,549 228,500,430 (133,675,173) 60,079,454 56,735,822 9,033,941 11,197,205 6,886,403 5,651,634 (183,621,891)
Cumulative Yield/Interest Risk Sensitivity Gap 267,771,374 206,983,549 435,483,979 301,808,806 361,888,260 418,624,082 427,658,023 438,855,228 445,741,631 451,393,265 -
28
0
43.2.6 Mismatch of Interest Rate Sensitive Assets and Liabilities
Note
December 31, 2018 s to
Effective
the
ReAn Yield/
Interest Con
ponu rate
rt al Exposed to Yield/ Interest risk solid

20
Total
Non–interest
bearing ated
19 financial
Over 1 Over 3 Over 6 Rupees

Overin1 ‘000 Over 2 Over 3 Over 5
instruments Fina
On–balance sheet financial instruments Assets
Upto 1 Above
ncial
Stat
99,177,561
2,575,055
14,128,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
85,048,761
2,575,055
eme
Lending to financial institutions
Investments
7.95%
7.94%
53,780,195
672,587,309
50,993,095
231,024,247
2,787,100
324,350,027
-
20,049,288
-
32,732,625
-
893,744
-
5,816,244
-
7,291,693
-
16,569,201
-
-
-
33,860,240 nts
Advances 7.35% 438,356,170
1,295,462,551 40,863,430
337,009,572 237,269,909
564,407,036 96,024,034
116,073,322 35,018,571
67,751,196 1,248,347
2,142,091 3,499,197
9,315,441 7,321,457
14,613,150 11,978,040
28,547,241 4,847,232 285,953
4,847,232 150,756,270 for the
Other assets 28,986,261 - - - - - - - - - 28,986,261
year
Liabilities
Bills payable 7,752,959 - - - - - - - - - 7,752,959 ended
Borrowings 5.89% 225,882,986 173,702,776 27,973,227 10,161,557 40 282,296 641,607 1,556,729 11,564,754 - - Dece
Deposits and other accounts 3.51% 984,463,067 121,284,355 229,412,178 295,508,730 53,568,188 19,398,720 825,194 876,633 534,810 80,108 262,974,151
mber
Subordinated debt - - - - - - - - - - - 31,
Other liabilities 20,156,646 - - - - - - - - - 20,156,646 2019
1,238,255,658 294,987,131 257,385,405 305,670,287 53,568,228 19,681,016 1,466,801 2,433,362 12,099,564 80,108 290,883,756
On–balance sheet gap 57,206,893 42,022,441 307,021,631 (189,596,965) 14,182,968 (17,538,925) 7,848,640 12,179,788 16,447,677 4,767,124 (140,127,486)
Off–balance sheet financial instruments

Documentary credits and short–term
trade–related transactions 96,475,905 12,705,839 6,870,608 32,410,166 21,944,400 20,200,564 1,085,634 77,339 7,500 1,173,855 -

– forward government securities transactions 57,768,858 54,219,284 3,549,574 - - - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
194,825,444 101,095,122 59,070,241 34,407,428 252,653 - - - - - -
Commitments in respect of sale of:

– forward government securities transactions - - - - - - - - - - -
– derivatives - - - - - - - - - - -
– forward lending - - - - - - - - - - -
70,453,385 33,140,303 16,724,966 20,561,418 26,698 - - - - - -
Other commitments 27,762,282 13,998,922 4,536,571 2,459,295 1,850,964 807,808 807,808 1,615,617 1,685,297 - -
Off–balance sheet gap 248,610,246 94,659,580 53,752,454 48,715,471 24,021,319 21,008,372 1,893,442 1,692,956 1,692,797 1,173,855 -
Cumulative Yield/Interest Risk Sensitivity Gap 305,817,139 136,682,021 497,456,106 356,574,612 394,778,899 398,248,346 407,990,428 421,863,172 440,003,646 445,944,625 -
December 31, December

Reconciliation to total assets December 31, Reconciliation to total liabilities December 31,
31,
2019 2018 2019 2018
(Rupees in ‘000) (Rupees in ‘000) (Rupees in ‘000) (Rupees in ‘000)
Balance as per balance sheet 1,483,383,441 1,352,383,303 Balance as per balance sheet 1,366,171,887 1,243,593,492
Less: Non financial assets Less: Non financial liabilities

Fixed assets 64,215,960 52,155,900 Deferred tax liabilities 5,912,375 4,751,359
Other assets 4,798,690 4,764,852 Other liabilities 354,183 586,475
69,014,650 56,920,752 6,266,558 5,337,834
Total financial assets 1,414,368,791 1,295,462,551 Total financial liabilities 1,359,905,329 1,238,255,658
43.3 Operational Risk
The Bank, like all financial institutions, is exposed to different types of operational risks, including the potential losses arising
from internal activities or external events caused by breakdowns in information, communication, physical safeguards,
business continuity, supervision, transaction processing, settlement systems and the execution of legal, fiduciary and agency
responsibilities.
In accordance with the BoD approved Operational Risk Policy, Bank maintains a system of internal controls designed to
keep operational risk at appropriate levels, in view of the bank’s financial strength and the characteristics of the activities and
market in which it operates. These internal controls are periodically updated to conform to industry best practice.
Further, detailed data of operational losses is being maintained, in conformance with regulatory guidelines. Major
Operational Risk events are also analyzed from the control breaches perspective and mitigating controls are assessed on
design and operating effectiveness. Quarterly updates on Operational Risk events are presented to senior management and
Board’s Risk Management Committee & BoD.
The Bank has a BoD approved BCP policy and Business Continuity Plan applicable to all its functional areas. The Bank
updates functional BCPs on annual basis or at any process change.
The Bank is also implementing internationally accepted Integrated Framework on Internal Control issued by the Committee
of Sponsoring Organizations of the Tread way Commission (COSO), with a view to consolidate and enhance the existing
internal control processes.
The Bank with permission of SBP is conducting a parallel run for Alternate Standardized Approach (ASA) for Basel II –
Operational Risk Capital Charge Reporting, which signifies readiness of the Bank to move to advance approach.
43.4 Liquidity Risk
Liquidity Risk is the risk that the Bank is unable to fund its current obligations and operations in the most cost efficient
manner. The Bank’s BoD has delegated the responsibility to ALCO for ensuring that Bank’s policy for liquidity management
is adhered to on a continual basis. ALCO uses gap analysis based on “maturity schedule” to assess the Bank’s liquidity risk
and devise strategies accordingly. The Bank also has various limits and triggers in place to monitor liquidity risk on a
periodic basis, while it also utilizes stress testing & scenario analysis to assess adequacy of Bank’s liquid assets. The Bank
also complies with SBP’s instructions on Liquidity Standards as prescribed under the Basel III Framework.
The Bank has in place a robust Liquidity Crisis Contingency Plan in place to deal with any liquidity crisis in the most efficient
and effective manner.
Liquidity Management Framework
Daily liquidity management is carried out centrally by the Asset and Liability Management (“ALM”) Desk in Treasury Group
which regulates the day to day liquidity needs of the Bank. Funding and liquidity management strategies are regularly
discussed during Asset and Liability Committee “ALCO” meetings. Such discussions include analysis on composition of
deposits and tenure, funding gaps and concentration, monitoring of short and long-term liquidity ratios (including LCR and
NSFR). The Bank utilizes internal Management Action Triggers and Limits which act as early warning indicators and
safeguards to ensure sufficient liquidity buffers at all times. Additionally, external and internal liquidity stress tests are
performed to evaluate available liquidity under a range of adverse scenarios and to identify potential vulnerabilities in
portfolios. The Bank also has in place contingency funding plans that identify specific management action that can be
invoked in times of liquidity crisis.
Liquidity Risk Mitigation Techniques
The Bank uses the following tools to identify and mitigate Liquidity Risk:
• Gap Analysis
• Liquidity Ratio
• Liquidity Stress Testing
• Liquidity Contingency
Plan
• Risk Control Limits
Allied Limited 281
Bank
28
2
Note
ReAn
ponu December 31, 2019
s to
the
Upto Over 3
rt al Total
1 Day
Upto
7 Days
Upto
14 Days
Upto
1 Month
Upto
2 Months
Upto
3 Months
Over 3
to 6 Months
Over 6
to 9 Months
Upto
1 year
Upto
2 years
Upto 3 years
to 5 years
Over
5 years
20
19
Rupees in ‘000
Con
Assets solid

119,935,126
602,582
119,935,126
602,582
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ated
Lending to financial institutions 13,606,921 - 3,425,999 5,065,760 1,411,020 3,704,142 - - - - - - - - Fina
Investments – net
Advances – net
759,654,427
485,051,568
34,223,580
79,659,983
178,403,209
547,774
-
1,187,531
79,249,756
13,862,657
139,548,347
7,893,474
91,671,218
16,933,799
867,746
36,596,571
55,989,298
53,828,814
-
86,266,196
59,246,823
47,305,243
10,175,613
48,805,745
13,925,985
60,437,040
96,352,852
31,726,741
ncial
Fixed assets 62,240,062 17,185 103,109 120,294 292,141 532,729 532,729 1,598,188 1,598,188 1,598,188 3,352,692 3,306,222 3,033,557 46,154,840 Stat
eme
nts
Other assets – net 40,316,857 596,785 3,580,707 4,177,492 10,550,846 4,005,541 2,554,371 3,964,817 1,404,106 1,194,215 642,806 640,952 2,762,041 4,242,178
1,483,383,441 235,035,997 186,065,333 10,556,368 105,379,270 155,707,665 111,715,549 43,097,617 112,890,701 89,128,894 110,828,744 63,209,712 80,720,984 179,046,607
for the
Liabilities
year
ended
Bills payable 7,878,626 7,878,626 - - - - - - - - - - - -
Dece
Borrowings 266,448,386 2,071 198,180,537 1,284,249 15,167,424 5,174,127 11,828,269 12,959,088 6,219 134,392 400,733 199,152 3,137,791 17,974,334
mber
Deposits and other accounts 1,049,018,804 868,560,834 12,905,548 9,854,157 20,969,037 25,220,982 30,861,262 46,929,499 9,073,189 19,856,144 716,644 1,965,574 1,734,959 370,975 31,
Liabilities against assets subject to finance lease - - - - - - - - - - - - - - 2019
Deferred tax liabilities – net 5,912,375 38,451 230,705 269,156 667,731 581,039 328,947 75,154 362,993 62,071 491,239 231,376 218,208 2,355,305
Other liabilities 36,913,696 551,860 3,311,162 3,863,023 9,793,258 2,007,265 975,964 1,479,030 1,096,849 1,061,118 2,016,077 1,539,754 2,633,810 6,584,526
1,366,171,887 877,031,842 214,627,952 15,270,585 46,597,450 32,983,413 43,994,442 61,442,771 10,539,250 21,113,725 3,624,693 3,935,856 7,724,768 27,285,140
Net assets 117,211,554 (641,995,845) (28,562,619) (4,714,217) 58,781,820 122,724,252 67,721,107 (18,345,154) 102,351,451 68,015,169 107,204,051 59,273,856 72,996,216 151,761,467
Reserves 22,270,225
117,211,554
Note
December 31, 2018
s to
the
Upto Over 3
Total Upto Upto Upto Upto Upto Over 3 Over 6 Upto Upto Upto 3 years Over
1 Day 7 Days 14 Days 1 Month 2 Months 3 Months to 6 Months to 9 Months 1 year 2 years to 5 years 5 years
Rupees in ‘000
Con
Assets solid

99,177,561
2,575,055
99,177,561
2,575,055
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ated
Lending to financial institutions 53,780,195 - 48,468,580 500,000 2,024,515 2,787,100 - - - - - - - - Fina
Investments – net
Advances – net
672,587,309
438,356,170
35,719,264
70,461,195
220,417,989
2,033,096 194,526
- 8,071,443
13,015,876
317,394,215
6,728,414
32,888
10,881,765
16,947,301
30,016,092
25,667,744
16,468,371
6,135,369
101,843,527
1,135,813
58,049,695
7,051,206
46,900,308
8,471,835
50,434,778
25,542,242
31,328,527
ncial
Fixed assets 50,399,773 13,842 83,051 96,893 235,313 429,099 429,099 1,287,298 1,287,298 1,287,298 2,782,924 2,756,539 2,138,850 37,572,269 Stat
eme
nts
Other assets – net 33,751,113 347,328 2,083,967 2,431,295 5,904,573 1,931,149 5,678,328 4,211,433 1,496,275 1,470,237 586,758 586,758 2,732,176 4,290,836
1,352,383,303 208,294,919 273,090,728 3,227,433 29,263,180 329,290,875 17,042,978 52,524,818 44,982,382 110,799,124 62,805,965 57,545,586 64,279,189 99,236,126
for the
Liabilities
year
ended
Bills payable 7,752,959 7,752,959 - - - - - - - - - - - -
Dece
Borrowings 225,882,986 - 159,079,594 3,277,502 6,624,376 14,289,234 12,434,236 16,132,619 - 40 282,296 641,607 1,556,729 11,564,753
mber
Deposits and other accounts 984,463,067 809,675,545 10,413,217 14,158,732 30,324,819 27,831,940 13,976,360 37,210,046 12,590,619 23,771,946 2,193,097 825,194 876,633 614,919 31,
Liabilities against assets subject to finance lease - - - - - - - - - - - - - - 2019
Deferred tax liabilities – net 4,751,359 6,267 37,597 43,862 106,524 1,358,181 43,129 214,804 255,322 166,077 175,929 196,871 146,541 2,000,255
Other liabilities 20,743,121 371,706 2,230,240 2,601,946 6,311,819 744,625 711,642 1,025,241 908,295 893,367 1,044,424 773,156 895,342 2,231,318
1,243,593,492 817,806,477 171,760,648 20,082,042 43,367,538 44,223,980 27,165,367 54,582,710 13,754,236 24,831,430 3,695,746 2,436,828 3,475,245 16,411,245
Net assets 108,789,811 (609,511,558) 101,330,080 (16,854,609) (14,104,358) 285,066,895 (10,122,389) (2,057,892) 31,228,146 85,967,694 59,110,219 55,108,758 60,803,944 82,824,881
All Reserves 20,276,515
ie Unappropriated profit 53,985,383
d Surplus on revaluation of assets net of tax 23,077,174
Ba 108,789,811
nk
Li
mi
te
28
3
43.4.2 Maturities of assets and liabilities – based on expected maturities of the assets and liabilities of the Bank
December 31, 2019

Upto
1 Month
3 Months to 6 Months to 1 Year 2 Years 3 Years 5 Years 10 Years 10 Years
Rupees in ‘000
Assets
Balances with other banks 602,582 602,582 - - - - - - - -
Investments – net 759,654,427 259,295,601 231,219,565 867,746 55,989,298 68,646,525 19,575,316 13,925,985 108,719,391 1,415,000
Advances – net 485,051,568 25,925,953 27,701,487 39,002,766 142,911,817 67,716,835 69,217,337 80,848,632 26,990,835 4,735,906
Fixed assets 62,240,062 532,729 1,065,458 1,598,188 3,196,376 3,352,692 3,306,222 3,033,557 4,010,781 42,144,059
Other assets – net 40,316,857 18,905,830 6,559,912 3,964,817 2,598,321 642,806 640,952 2,762,041 4,242,178 -
1,483,383,441 349,007,277 280,753,464 52,272,291 209,363,365 143,137,016 95,795,294 101,132,576 144,533,181 107,388,977
Liabilities
Bills payable 7,878,626 7,878,626 - - - - - - - -

Borrowings 266,448,386 214,634,281 17,002,396 12,959,088 140,611 400,733 199,152 3,137,791 17,974,334 -
Deposits and other accounts 1,049,018,804 125,011,712 149,008,992 96,457,612 64,513,767 36,301,078 41,501,940 1,734,959 370,974 534,117,770
Subordinated debt -
Deferred tax liabilities – net 5,912,375 1,206,043 909,986 75,154 425,064 491,239 231,376 218,208 746,915 1,608,390
Other liabilities 36,913,696 17,519,303 2,983,229 1,479,030 2,157,967 2,016,077 1,539,754 2,633,810 6,584,526 -
1,366,171,887 366,249,965 169,904,603 110,970,884 67,237,409 39,209,127 43,472,222 7,724,768 25,676,749 535,726,160
Net assets 117,211,554 (17,242,688) 110,848,861 (58,698,593) 142,125,956 103,927,889 52,323,072 93,407,808 118,856,432 (428,337,183)

Reserves 22,270,225
117,211,554
December 31, 2018

Upto
1 Month 3 Months to 6 Months to 1 Year 2 Years 3 Years 5 Years 10 Years 10 Years
Rupees in ‘000
Assets
Balances with other banks 2,575,055 2,575,055 - - - - - - - -
Investments – net 672,587,309 229,720,004 317,736,941 17,412,057 32,732,625 9,798,775 14,898,089 8,471,835 40,401,983 1,415,000
Advances – net 438,356,170 22,695,777 21,999,745 32,820,234 121,877,527 75,466,221 64,316,834 67,851,305 26,487,962 4,840,565
Fixed assets 50,399,773 429,099 858,198 1,287,298 2,574,596 2,782,924 2,756,539 2,138,850 2,393,868 35,178,401
Other assets – net 33,751,113 10,767,163 7,609,477 4,211,433 2,966,512 586,758 586,758 2,732,176 4,290,836 -
1,352,383,303 344,540,180 361,225,283 60,702,156 164,381,450 90,858,480 84,816,797 81,695,716 74,076,901 90,086,340
Liabilities
Bills payable 7,752,959 7,752,959 - - - - - - - -

Borrowings 225,882,986 168,981,472 26,723,469 16,132,619 40 282,296 641,607 1,556,729 11,564,754 -
Deposits and other accounts 984,463,067 121,284,355 173,849,475 83,725,237 70,017,278 35,847,810 35,073,079 876,633 534,810 463,254,390
Subordinated debt -
Deferred tax liabilities – net 4,751,359 194,250 1,401,310 214,804 421,399 175,929 196,871 146,541 280,426 1,719,829
Other liabilities 20,743,121 11,515,711 1,456,267 1,025,241 1,801,662 1,044,424 773,156 895,342 2,231,318 -
1,243,593,492 309,728,747 203,430,521 101,097,901 72,240,379 37,350,459 36,684,713 3,475,245 14,611,308 464,974,219
Net assets 108,789,811 34,811,433 157,794,762 (40,395,745) 92,141,071 53,508,021 48,132,084 78,220,471 59,465,593 (374,887,879)

Reserves 20,276,515
108,789,811
Annual
284 Report 2019
43.5 Derivative Risk
Market & Liquidity Risk Division under Risk Management Group is responsible for assessing and monitoring the derivative
risk emanating from Bank’s exposures.
The Bank’s Treasury Group buys and sells derivative instruments, for hedging and market making purposes, such as:
- Forward Exchange Contracts

- Foreign Exchange Swaps
- Equity Futures
- Forward Contracts for Government Securities
The Bank’s Risk Management Group, ALCO and BRMC monitors the risk emanating from the Bank’s portfolio of derivates
exposures on a periodic basis and uses Off-Balance Sheet gap analysis to implement prudent asset liability management of
the Bank’s derivatives exposures.
44 NON ADJUSTING EVENT AFTER THE REPORTING DATE
44.1 The Board of Directors of the Bank in its meeting held on February 7, 2020 has proposed a final cash dividend in respect of
2019 of Rs. 2.00 per share (2018: cash dividend Rs. 2.00 per share). This appropriation will be approved in the forthcoming
Annual General Meeting. The consolidated financial statements of the Bank for the year ended December 31, 2019 do not
include the effect of these appropriations which will be accounted for in the consolidated financial statements for the year
ending December 31, 2020.
45 GENERAL
45.1 Captions as prescribed by BPRD circular no.2 of 2018 issued by SBP, in respect of which there are no amounts, have not
been reproduced in these financial statements, except for caption of the statement of financial position and profit and loss
account.
45.2 Comparative figures have been re-classified, re-arranged or additionally incorporated in these financial statements wherever
necessary to facilitate comparison and better presentation in accordance with new format prescribed by SBP vide BPRD
circular no. 2 of 2018.
46 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue on February 7, 2020 by the Board of Directors of the Bank.
Mehmud ul Hassan Tahir Hassan Qureshi Zafar Iqbal

Chief Financial Officer President and Chief Executive Director
Dr. Muhammad Akram Sheikh Mohammad Naeem Mukhtar

Director Chairman
Pattern of Shareholding
Information for annual financial statements as on December 31, 2019.
1 Issued, Subscribed and Paid-up Capital
Ordinary Shares As on December 31, 2019 As on December 31, 2018

No. of Shares Amount (Rs) No. of Shares Amount (Rs)
Fully paid in cash 406,780,094 4,067,800,940 406,780,094 4,067,800,940

Increase in Share Capital - - - -
Issued as bonus shares 720,745,186 7,207,451,860 720,745,186 7,207,451,860
Issued for consideration other than cash 17,548,550 175,485,500 17,548,550 175,485,500
1,145,073,830 11,450,738,300 1,145,073,830 11,450,738,300
2 Major Shareholding
Holding more than 5% of the total paid-up capital
No. of Percentage
Name of Shareholder
Shares Held Held
Ibrahim Holdings (Pvt.) Ltd. 972,510,410 84.9299

Total 972,510,410 84.9299
No. of Shareholders Shareholdings’Slab Total Shares Held

From To
6133 1 to 100 236,478

9073 101 to 500 2,518,661
1108 501 to 1000 802,483
2082 1001 to 5000 4,425,151
376 5001 to 10000 2,760,243
149 10001 to 15000 1,869,323
78 15001 to 20000 1,412,602
58 20001 to 25000 1,307,612
33 25001 to 30000 905,558
22 30001 to 35000 709,273
19 35001 to 40000 719,688
19 40001 to 45000 818,199
10 45001 to 50000 487,643
5 50001 to 55000 255,469
5 55001 to 60000 287,826
7 60001 to 65000 431,974
6 65001 to 70000 411,996
6 70001 to 75000 443,000
3 75001 to 80000 238,000
7 80001 to 85000 576,300
3 85001 to 90000 260,863
8 95001 to 100000 799,000
5 100001 to 105000 519,369
4 105001 to 110000 424,900
2 110001 to 115000 223,871
2 115001 to 120000 238,844
4 120001 to 125000 489,600
1 125001 to 130000 127,500
1 130001 to 135000 131,674
3 145001 to 150000 447,800
Annual
286 Report 2019
No. of Shareholders Shareholdings’Slab Total Shares
Held From To
3 150001 to 155000 457,927

2 155001 to 160000 316,200
1 165001 to 170000 165,500
3 175001 to 180000 530,950
1 180001 to 185000 181,820
1 185001 to 190000 189,300
1 195001 to 200000 200,000
1 210001 to 215000 210,500
1 215001 to 220000 220,000
1 235001 to 240000 236,437
1 240001 to 245000 243,200
1 250001 to 255000 250,500
1 260001 to 265000 264,800
2 290001 to 295000 582,800
1 300001 to 305000 304,100
1 345001 to 350000 346,400
1 350001 to 355000 351,600
1 355001 to 360000 360,000
1 370001 to 375000 370,500
1 375001 to 380000 378,000
1 400001 to 405000 403,500
3 495001 to 500000 1,500,000
1 525001 to 530000 528,500
1 535001 to 540000 536,900
1 540001 to 545000 541,900
1 565001 to 570000 569,800
1 580001 to 585000 580,500
2 610001 to 615000 1,224,500
1 640001 to 645000 641,200
1 735001 to 740000 737,700
1 800001 to 805000 801,700
1 820001 to 825000 822,151
1 950001 to 955000 953,100
1 960001 to 965000 964,400
1 995001 to 1000000 1,000,000
1 1015001 to 1020000 1,015,897
1 1035001 to 1040000 1,038,500
1 1065001 to 1070000 1,067,614
1 1195001 to 1200000 1,200,000
1 1225001 to 1230000 1,227,500
1 1230001 to 1235000 1,230,104
1 1525001 to 1530000 1,530,000
1 1640001 to 1645000 1,644,700
1 1755001 to 1760000 1,755,300
1 1835001 to 1840000 1,839,100
1 1940001 to 1945000 1,940,500
1 1995001 to 2000000 1,999,500
1 2580001 to 2585000 2,580,300
1 2735001 to 2740000 2,740,000
1 2885001 to 2890000 2,885,747
1 3070001 to 3075000 3,073,600
1 3125001 to 3130000 3,127,226
1 4910001 to 4915000 4,911,500
1 4995001 to 5000000 5,000,000
1 6260001 to 6265000 6,264,200
1 6275001 to 6280000 6,277,500
1 9755001 to 9760000 9,755,604
1 30995001 to 31000000 31,000,000
1 34210001 to 34215000 34,211,743
1 972510001 to 972515000 972,510,410
19301 1,145,073,830
Categories of Shareholders
No. of
Categories of Shareholders Shareholders Shares Held Percentage
Parent, Associated Companies, undertakings and related parties
IBRAHIM HOLDINGS (PRIVATE) LIMITED 1 972,510,410 84.9299

TRUSTEES OF ABL EMPLOYEES SUPERANNUATION (PENSION) FUND 1 34,211,743 2.9877
A/C
Sub-Total 2 1,006,722,153 87.9177
Directors and their Spouse(s) and Minor Children

MOHAMMAD NAEEM MUKHTAR 1 2,500 0.0002
MUHAMMAD WASEEM MUKHTAR 1 2,500 0.0002
SHEIKH MUKHTAR AHMAD 1 2,500 0.0002
ABDUL AZIZ KHAN 1 26,620 0.0023
ZAFAR IQBAL 1 2,500 0.0002
DR. MUHAMMAD AKRAM SHEIKH 1 2,500 0.0002
NAZRAT BASHIR 1 100 0.0000
Sub-Total 7 39,220 0.0034
Banks, Development Finance Institutions, Non-Banking Financial

Institutions
AL-FAYSAL INVESMENT BANK 1 55 0.0000
STANDARD CHARTERED BANK (PAKISTAN) LIMITED 1 22,118 0.0019
HABIB METROPOLITAN BANK LIMITED 1 580,500 0.0507
MCB BANK LIMITED - TREASURY 1 6,264,200 0.5471
NATIONAL BANK Of PAKISTAN 5 2,602,590 0.2273
THE BANK OF PUNJAB, TREASURY DIVISION. 1 1,999,500 0.1746
BANK ALFALAH LIMITED 1 1,530,000 0.1336
ESCORTS INVESTMENT BANK LIMITED 1 77 0.0000
FIRST CREDIT & INVESTMENT BANK LIMITED 1 21,900 0.0019
Sub-Total 13 13,020,940 1.1371
NIT AND ICP

IDBL (ICP UNIT) 1 762 0.0001
INVESTMENT CORPORATION OF PAKISISTAN 3 14,438 0.0013
Sub-Total 4 15,200 0.0013
Executives* 1 1,394 0.0001

OTHER EMPLOYEES 541 612,842 0.0535
Sub-Total 542 614,236 0.0536
Insurance Companies
STATE LIFE INSURANCE CORP. OF PAKISTAN 1 2,885,747 0.2520
JUBILEE GENERAL INSURANCE COMPANY LIMITED 1 614,100 0.0536
ALPHA INSURANCE CO. LTD. 1 121,000 0.0106
EFU LIFE ASSURANCE LTD 1 4,911,500 0.4289
IGI LIFE INSURANCE LIMITED 2 24,100 0.0021
ADAMJEE INSURANCE COMPANY LIMITED 1 6,277,500 0.5482
GULF INSURANCE COMPANY LIMITED. 1 723 0.0001
ORIENT INSURANCE CO.LTD., 1 404 0.0000
PREMIER INSURANCE LIMITED 1 5,100 0.0004
Sub-Total 10 14,840,174 1.2960
Annual
288 Report 2019
No. of
Categories of Shareholders Shareholders Shares Held Percentage
Modarabas and Mutual Funds

FIRST FIDELITY LEASING MODARABA 1 614 0.0001
M/S. FIRST TAWAKKAL MODARABA 1 347 0.0000
M/S. MODARABA AL MALI 1 116 0.0000
CDC - TRUSTEE NAFA PENSION FUND EQUITY SUB-FUND ACCOUNT 1 158,600 0.0139
TRUSTEE NATIONAL BANK OF PAKISTAN EMPLOYEES PENSION FUND 1 236,437 0.0206
GOVERNMENT OF SINDH - PROVINCIAL PENSION FUND 1 31,000,000 2.7072
TRUSTEE PAK HERALD PUBLICATIONS (Pvt) LTD STAFF PENSION FUND 1 13,600 0.0012
PAKISTAN HERALD PUBLICATIONS (PVT) LTD. STAFF PENSION FUND 1 3,500 0.0003
CDC - TRUSTEE PAKISTAN PENSION FUND - EQUITY SUB FUND 1 220,000 0.0192
TRUSTEE OF PAK. HERALD PUBLICATION (PVT.) LTD.-SPF 1 6,600 0.0006
CDC - TRUSTEE AGPF EQUITY SUB-FUND 1 4,000 0.0003
TRUSTEE-ANPL MANAGEMENT STAFF PENSION FUND 1 11,000 0.0010
ICI PAKISTAN MANAGEMENT STAF PENSION FUND 1 175,500 0.0153
ADAMJEE LIFE ASSURANCE COMPANY LTD-IMF 1 1,755,300 0.1533
WYETH PAKISTAN DC PENSION FUND 1 3,200 0.0003
PFIZER PAKISTAN DC PENSION FUND 1 6,000 0.0005
PFIZER PAKISTAN PROVIDENT FUND 1 5,000 0.0004
ADAMJEE LIFE ASSURANCE COMPANY LIMITED-NUIL Fund 1 291,600 0.0255
CDC - TRUSTEE AKD INDEX TRACKER FUND 1 41,762 0.0036
CDC - TRUSTEE UBL STOCK ADVANTAGE FUND 1 3,127,226 0.2731
CDC - TRUSTEE NBP STOCK FUND 1 3,073,600 0.2684
CDC - TRUSTEE NBP BALANCED FUND 1 153,800 0.0134
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 1 1,067,614 0.0932
CDC - TRUSTEE ABL STOCK FUND 1 536,900 0.0469
CDC - TRUSTEE NBP SARMAYA IZAFA FUND 1 123,700 0.0108
CDC - TRUSTEE UBL ASSET ALLOCATION FUND 1 370,500 0.0324
CDC - TRUSTEE UBL RETIREMENT SAVINGS FUND - EQUITY SUB FUND 1 641,200 0.0560
CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST 1 1,230,104 0.1074
MCBFSL - TRUSTEE ALLIED CAPITAL PROTECTED FUND 1 3,700 0.0003
CDC - TRUSTEE NBP FINANCIAL SECTOR FUND 1 528,500 0.0462
CDC - TRUSTEE UBL FINANCIAL SECTOR FUND 1 1,644,700 0.1436
CDC - TRUSTEE UBL DEDICATED EQUITY FUND 1 131,674 0.0115
CDC - TRUSTEE PICIC INVESTMENT FUND 1 541,900 0.0473
CDC - TRUSTEE PICIC GROWTH FUND 1 737,700 0.0644
CDC - TRUSTEE ALFALAH GHP VALUE FUND 1 62,000 0.0054
CDC - TRUSTEE HBL - STOCK FUND 1 610,400 0.0533
CDC - TRUSTEE ALFALAH GHP STOCK FUND 1 147,800 0.0129
CDC - TRUSTEE ALFALAH GHP ALPHA FUND 1 107,900 0.0094
CDC - TRUSTEE HBL EQUITY FUND 1 81,300 0.0071
CDC - TRUSTEE HBL PF EQUITY SUB FUND 1 59,100 0.0052
CDC - TRUSTEE ALLIED FINERGY FUND 1 82,000 0.0072
CDC - TRUSTEE ALFALAH CAPITAL PRESERVATION FUND II 1 10,400 0.0009
CDC - TRUSTEE HBL MULTI - ASSET FUND 1 30,000 0.0026
CDC - TRUSTEE PAKISTAN CAPITAL MARKET FUND 1 123,900 0.0108
CDC - TRUSTEE MCB PAKISTAN STOCK MARKET FUND 1 1,839,100 0.1606
CDC - TRUSTEE MCB PAKISTAN ASSET ALLOCATION FUND 1 569,800 0.0498
Sub-Total 46 51,569,694 4.5036
FOREIGN INVESTORS
MAHMOOD AHMAD CHAUDHRY 1 10,000 0.0009
ADAM JOOSUB 1 10,000 0.0009
SHOKATALI MOHAMEDALI ALIBHAI 1 25,000 0.0022
CYRUS MINOCHER PATEL 1 4,350 0.0004
HABIB BANK AG ZURICH, ZURICH,SWITZERLAND 1 6,000 0.0005
THE BANK OF NEW YORK MELLON 1 1 0.0000
ARROW DOGS OF THE WORLD ETF 1 42,158 0.0037
Sub-Total 7 97,509 0.0085
General Public-Individual 18473 42,939,524 3.7499

Others 197 15,215,180 1.3288
Grand Total 19301 1,145,073,830 100.0000
*CEO, all Chiefs & Group Heads are termed as Executives
All the trades in shares carried out by the Sponsors, Directors, Executives, their spouses and minor children reported during the
year 2019 are as under:
S.No Name Designation Sale Purchase
1 M/S. IBRAHIM HOLDINGS (PVT.) LIMITED Sponsor - 4,598,800
2 MS. NAZRAT BASHIR Director 2,500 100
Apart from the above there have been no trade in the shares of the Bank carried out by its Sponsors, Directors, Executives their
Spouses and minor children.
NOTICE OF 74th ANNUAL
GENERAL MEETING
Notice is hereby given that 74th Annual General Meeting of Statement under section 134 (3) of the
Allied Bank Limited (the “Bank”) will be held on Wednesday,
March 25, 2020 at 11:00 a.m. at Grand Ball Room ‘D’, 4th Companies Act, 2017
Floor, The Nishat Hotel, (Entrance from Gate No. 07), adjacent
to Emporium Mall, Main Abdul Haque Road, Johar Town, ITEM NO.5: To accord Post facto approval of Bank’s “Board
Lahore to transact the following business: Remuneration Policy” framed in accordance with SBP BPRD
Circular # 3 dated August 17, 2019 by passing an ordinary
Ordinary Business: resolution.
1. To confirm minutes of the 73rd Annual General Meeting of Allied

Bank Limited held on March 28, 2019. Copy of the said In terms of SBP BPRD Circular No. 03 dated August 17, 2019
minutes is being provided to all shareholders along with the Human Resource & Remuneration Committee (HR&RC) of
this notice. Allied Bank Limited has formulated a policy
containing comprehensive, fair and transparent remuneration/
2. To receive, consider and adopt Annual Audited Accounts compensation mechanism for Chairman and other Non-
of the Bank (consolidated and unconsolidated) for the year Executive Directors of the Bank. All Non-Executive Directors are
ended December 31, 2019 together with the Directors’ Report, interested parties of this policy.
Auditors’ Report and Chairman’s Review Report thereon.
The Policy on the recommendation of HR&RC was approved by
As required under Section 223 (7) of the Companies the Board of Directors in its 243rd Meeting held on December 16,
Act 2017, Financial Statements of the Bank have 2019. Accordingly, the policy is being placed before
been uploaded on website of the Bank which can be shareholders for their post facto approval.
downloaded from the following link:
https://www.abl.com/investor-relations/financials/financial- The Board Remuneration Policy of the Bank will be available to

presentations/ the members at Company Secretary Office, located at Bank’s Registered
/ Head Office, 3 – Tipu Block, New Garden Town, Lahore, during 9:00
3. To consider and approve Final Cash Dividend @ 20% (i.e. Rs. a.m. to 5:30 p.m. on working days from March 04, 2020 to March 24,
2.00 per share) as recommended by the Board of 2020. The document will also be available for inspection of the
Directors. This Final Cash Dividend would be in addition to members at the time of Annual General Meeting.
60% Interim Cash Dividends (20% each for 1st, 2nd & 3rd
quarters aggregating to Rs.6.00 per share) already paid to
the shareholders for the year ended December 31, 2019. In this respect, the following Ordinary Resolution is proposed to be
adopted by the shareholders:
4. To appoint Statutory Auditors of the Bank for the year
ending December 31, 2020 and fix their remuneration. The retiring “Resolved that Bank’s Board Remuneration Policy be and is
auditors M/s. KPMG Taseer Hadi & Co. Chartered Accountants hereby approved on post facto basis.”
have completed the maximum period of
5 Years in accordance with the regulation No. 33 of the Listed
Companies (Code of Corporate Governance) Regulations,
2019. However, the Board of Directors of the Bank with NOTES:
permission of State Bank of Pakistan (SBP) and Securities
& Exchange Commission of Pakistan (SECP) has i) All members are entitled to attend and vote at the
recommended re-appointment of M/s. KPMG Taseer Hadi Meeting.
& Co. Chartered Accountants for the next term and the audit firm
appointed will hold office till conclusion of the next AGM to be ii) A member entitled to attend and vote at the Meeting is
held in 2021. entitled to appoint another member as a proxy to attend, speak
and vote for him/her: and the proxy appointed should be a
Special Business: member of Allied Bank Limited (Proxy Form Attached).
5. To accord Post facto approval of Bank’s “Board iii) The instrument of proxy duly completed and signed along with
Remuneration Policy” framed in accordance with SBP power of attorney or other authority (if any) under which it
BPRD Circular # 3 dated August 17, 2019 by passing an is signed, or a notarized certified copy of such power of
ordinary resolution. attorney must be valid and deposited at the Registered
Office of the Bank or its Share Registrar, M/s. CDC Share
Other Business: Registrar Services Limited at CDC House, 99-B, Block-
B, S.M.C.H.S, Main Shahrah-e-Faisal, Karachi not less
6. To transact any other business with permission of the than 48 hours before the start time of the Meeting. In
Chair. calculating the 48 hours, no account shall be taken of any part
of the day that is not a working day.
Date: March 03, 2020
(Lahore)
iv) Share Transfer Books of the Bank will remain closed
from Thursday, March 19, 2020 to Wednesday, March
25, 2020 (both days inclusive). Share transfer
By Order of the Board requests received at Bank’s Share Registrar M/s. CDC
Share Registrar Services Limited on the above
mentioned address before the close of business on
Muhammad Raffat Wednesday, March 18th, 2020 will be treated as being
Company Secretary in time for the purpose of transfer of shares.
Annual
290 Report 2019
v) Members are requested to immediately notify changes
B. For Appointing Proxies:
in their registered addresses, if any, to the Bank’s Share
Registrar before start of the book closure period.
i) In case of individuals, the Account Holder or Sub-
account Holder and / or the person whose securities
vi) Members may exercise their right to vote as per provisions of the
are in group account and their registration details
Companies (Postal Ballot) Regulations, 2018, subject to the
are uploaded as per CDC’s Regulations, shall submit
requirements of Section 143 & 144 of the Companies Act
proxy form as per the above mentioned requirements.
2017. Further, details in this regard will be communicated
to the shareholders within legal time frame as stipulated
ii) The proxy form shall be witnessed by two persons whose
under these Regulations, if required.
names, addresses and CNIC numbers shall be mentioned
on the form.
vii) CDC Account Holders will have to follow the under
mentioned guidelines as laid down by the Securities and iii) Attested copies of valid CNIC or the Passport of the
Exchange Commission of Pakistan: beneficial owners and the proxy shall be furnished with the
proxy form.
A. For Attending the Meeting: iv) The proxy shall produce his / her original CNIC or
original passport at the time of the Meeting.
i) In case of individuals, the Account Holder or Sub- account
Holder and / or the person whose securities are in v) In case of corporate entity, the resolution of Board of
group account and their registration details are Directors / Power of Attorney with specimen signature
uploaded as per CDC’s Regulations, shall authenticate shall be produced along with the proxy form of the
their identity by showing original valid Computerized Company.
National Identity Card (CNIC) or original Passport at the
time of attending the Meeting.
ii) In case of corporate entity, the resolution of Board of

Directors / Power of Attorney with specimen signature
of the nominee shall be produced (if not provided
earlier) at the time of attending the Meeting.
Glossary of Financial & Banking Terms
the lender of last resort.

Accrual Basis Call Deposits
Recognizing the effects of transactions These include short notice and special
and other events when they occur without notice deposits
waiting for receipt or payment of cash or its
equivalent. Current Deposits
Non-remunerative Chequing account
Automated Teller Machine (ATM) deposits wherein withdrawals and deposit
ATM is an e-banking delivery channel that of funds can be made frequently by the
enables the customers to perform financial account holders.
transactions 24/7.
Contingencies
Alternate Delivery Channels (ADCs) A condition or situation existing at date of
ADCs are those access points that expand Statement of Financial Position where the
the reach of banking services beyond the outcome will be confirmed only by
traditional over the counter banking and occurrence of one or more future events.
traditional over the counter banking and
includes internet banking, mobile banking, CAGR
Point of Sale (POS) transactions, ATM, An abbreviation for Compound Annual
SMS and Phone banking. Growth Rate.
Basis point Corporate Governance

One hundredth of a per cent i.e. 0.01 It is “the system by which companies are
percent. 100 basis points is 1 per cent. directed and controlled” by the Securities
Used when quoting movements in interest and Exchange Commission of Pakistan. It
rates or yields on securities. involves regulatory and market
mechanisms, which govern the roles and
Bonus Issue (Scrip Issue) relationships between a company’s
The issue of new shares to existing management, its board, its shareholders
shareholders in proportion to their and other stakeholders.
shareholdings. It is a process for converting
a company’s reserves (in whole or part) into Defined Contribution
issued capital and hence does not involve A post-employment benefit plan under
an infusion of cash. which entity and employee pays fixed
contribution into a separate entity (a fund)
Cash Equivalents and will have no legal or constructive
Short–term highly liquid investments that obligation to pay further contribution if the
are readily convertible to known amounts of fund does not hold sufficient assets to pay
cash. all the employee benefits relating to
employee service in the current and prior
Capital Adequacy Ratio periods.
The relationship between capital and risk
weighted assets as defined in the Derivatives
framework developed by the State Bank of A financial instrument or a contract where;
Pakistan and Basel Committee. • Its value is dependent upon or derived
from one or more underlying assets.
Call Money Rate • Requires no or very little initial net
Interbank clean (without collateral) lending/ investment
borrowing rates are called Call Money • It is settled at a future date.
Rates
Defined Benefits
Common Equity Tier (CET) Capital In a defined benefit plan, an employer
CET capital is sum of fully paid share typically guarantees a worker a specific
capital, reserves and un-appropriated profit lifetime annual retirement benefit, based on
adjusted by regulatory adjustments as years of service, final rate of pay, age and
specified in Basel III. other factors. The risks of paying for the
plan rest entirely with the plan.
Consumer Price Index (CPI)
The CPI measure changes in the cost of Deferred Taxation
buying a representative fixed basket of Sum set aside for tax in financial
goods and generally indicates inflation rate statements that will become payable /
in the country. (Source: Pakistan Bureau of receivable in a financial year other than
Statistics) current financial year due to differences in
accounting policies and applicable taxation
Coupon Rate legislations.
Coupon rate is interest rate payable on
bond’s par value at specific regular periods. Discount rate
In PIBs they are paid on bi-annual basis. Discount is the rate at which SBP provides
three-day Repo facility to banks, acting as
Annual
292 Report 2019
Effective Tax Rate
Provision for taxation excluding deferred
tax divided by the profit before taxation.
Euro-pay, Master-card and Visa

(EMV) EMV is a global standard for
cards equipped with computer
chips and the technology used to
authenticate chip-card transactions.
Finance Lease
Finance lease is the one in which
risk and rewards incidental to the
ownership of the leased asset is
transferred to lessee but not the
actual ownership.
Financial Capital
Financial Capital represent
shareholder’s equity.
Fixed Deposits
Deposits having fixed maturity
dates and a rate of return.
Forced Sale Value (FSV)

Forced Sale Value means the value
which fully reflects the possibility of
price fluctuations and can currently
be obtained by selling the
mortgaged / pledged assets in a
forced / distressed sale conditions.
Forward Exchange Contract

Forward contracts are agreements
between two parties to exchange
two designated currencies at a
specific time in the future.
Gross Domestic Product (GDP)

GDP is a monetary value of all the
finished goods and services
produced in a country in a specified
time period. GDP includes all
private and public consumption,
government outlays, investments
and exports minus imports that
occur within a country.
Guarantees
A promise to answer for the
payment of some debt, or the
performance of some duty, in case
of the failure of another person,
who is, in the first instance, liable to
such payment or performance.
Historical Cost Convention

Recording transactions at the
actual value received or paid.
Human Capital
The collective skills, knowledge,
and other intangible assets of
individuals that can be used to
create economic value for our
customers.
Impairment
Impairment of an asset is an abrupt
decrease of its fair value and
measured in accordance with
applicable regulations.
Allied Bank 293

Limited
Intellectual Capital exercise of judgment needed in making the
Materiality
Brand value, research and development, estimates required under conditions of
The relative significance of a transaction or
innovation capacity, reputation and uncertainty, so
an event the omission or misstatement of
strategic partnerships.
which could influence the economic
decisions of users of financial statements.
Interest Rate Swap (IRS)
An Interest Rate Swap (the swap) is a
Natural Capital
financial contract between two parties
Impact on natural resources through
exchanging or swapping a stream of
operations and business activities.
interest payments for a `Notional Principal’
amount on multiple occasions during a
Non-Performing Loan
specified period. The swap is usually “fixed
A non-performing loan is a loan that is in
to floating” or “floating to floating”
default or close to being in default. Loans
exchanges of interest rate. As per the
become non-performing in accordance with
contract, on each payment date during the
provision of prudential regulations issued
swap period, the cash payments based on
by SBP.
difference in fixed/floating or floating /
floating rates are exchanged by the parties
Non-Performing Loan Substandard
from one another. The party incurring a
Category
negative interest. The party incurring a
Where markup/interest or principal is
negative interest rate differential for that leg
overdue by 90 days or more from the due
pays the other counter-party.
date.
Interest Spread
Non-Performing Loan-Doubtful Category
Represents the difference between the
Where markup/interest or principal is
average interest rate earned and the
overdue by 180 days or more from the due
average interest rate paid on funds.
date.
Interest in Suspense
Interest suspended on non–performing
Non-Performing Loan-Loss Category
loans and advances.
Where mark-up/interest or principal is
overdue by one year or more from the due
KIBOR – (Karachi Interbank Offered Rate)
date and Trade Bill (Import/ Export or Inland
KIBOR is the interbank lending rate
Bills) are not paid/adjusted within 180 days
between banks in Pakistan and is used as
of the due date.
a benchmark for lending.
Nostro Account
LIBOR (London Interbank Offered Rate)
An account held with a bank outside
An interest rate at which banks can borrow
Pakistan.
funds, in marketable size, from other banks
in the London interbank market. The LIBOR
Net Interest Income
is fixed on a daily basis by the British
The difference between what a bank earns
Bankers’ Association.
on interest bearing assets such as loans
and securities and what it pays on interest
Liquid Assets
bearing liabilities such as deposits,
An asset that can be converted into cash
refinance funds and inter–bank borrowings.
quickly and with minimal impact to the price
received.
Off Balance Sheet Transactions
Transactions that are not recognized as
Market Capitalization
assets or liabilities in the statement of
Number of ordinary shares in issue
financial position but which give rise to
multiplied by the market value of share as
contingencies and commitments.
at any cutoff date.
Organization of the Petroleum Exporting
Market Treasury bills (MTBs)
Countries (OPEC)
MTBs are negotiable debt instrument
OPEC is a permanent intergovernmental
issued by State Bank of Pakistan on behalf
Organization whose objective is to
of Government of Pakistan with tenors
coordinate and unify petroleum policies
available in 3 months, 6 months and one
among member Countries.
year maturities.
Pakistan Investment Bonds (PIBs)
Manufactured Capital
They are the long term coupon yielding
It includes business structure and
instruments of the Government of Pakistan
operational processes, including physical,
with tenors available in 3, 5, 10, 15 and 20
digital and IT Infrastructure, Product and
years.
Services that provides the framework and
mechanics of how the bank does business
Prudence
and create values.
Inclusion of degree of caution in the
that assets or income are not overstated and
liabilities or expenses are not understated.
Risk Weighted Assets

On Balance Sheet assets and the credit equivalent
of off Balance Sheet assets multiplied by the
relevant risk weighting factors.
Repurchase Agreement
Contract to sell and subsequently repurchase
securities at a specified date and price.
Reverse Repurchase Agreement Transaction

involving the purchase of securities by a bank or
dealer and resale back to the seller at a future date
and specified price.
Related Parties
Parties where one party has the ability to control the
other party or exercise significant influence over the
other party in making financial and operating
decisions.
Revenue Reserve
Reserves set aside for future distribution and
investment.
Subsidiary Company
A company is a subsidiary of another company if the
parent company holds more than 50% of the nominal
value of its equity capital or holds some share in it
and controls the composition of its Board of
Directors.
Shareholders’ Funds
Total of Issued and fully paid share capital and
revenue reserves.
Statutory Reserve Funds

A capital reserve created as per the provisions of the
Banking Companies Ordinance, 1962.
Social & Relationship Capital

Strong stakeholder relationships, including the
communities in which we operate. Building a strong
and thriving society as well as financial and digital
ecosystem.
YOY
Year on Year (2019 vs 2018).
Financial Ratios Formulas
Profit before Tax Ratio = Profit before Tax
Interest Income + Non-Interest Income
Gross Spread Ratio = Net markup Income

Gross Markup Income
Cost / Income Ratio = Operating expenses

Gross Income
Return on Equity = Net Income

Shareholder’s Equity-CET1
Profit Margin = Net Profit

Markup + Non Markup Income
Advances to Deposits Ratio (Net) = Loans & Advances (Net)

Deposits
Total Asset to Shareholder Fund (Tier 1) = Total Assets

Shareholder’s Equity-CET1
NPL Ratio = Non-Performing Loans

Gross Advances
Net Infection Ratio = Non-performing Loans - Provision on NPL’s

Net Advances
Earnings Per Share (EPS) = Profit after Tax

Weighted Average Number of Ordinary
Shares
Price Earnings Ratio = Market value of share at Year End

EPS
Dividend Yield Ratio = Annual Dividends per Ordinary Share

Market Price of Share at Year End
Dividend Payout Ratio = Dividend per Share

EPS
Dividend Cover Ratio = Basic EPS

Annual Total Dividend per Share
Break-up Value per share without = Total Equity - Revaluation Surplus

Surplus on Revaluation of Fixed Assets Total Ordinary Shares Outstanding
Break-up Value per share including = Total Shareholders’ Equity

Surplus on Revaluation of Fixed Assets Total Ordinary Shares Outstanding
Capital Adequacy Ratio = Tier One Capital + Tier Two Capital

Risk Weighted Assets
Earning Assets to Total Assets Ratio = Earning Assets

Total Assets
Net Assets per Share = Net Assets

Number of Shares outstanding
Assets Turnover = Mark-up Income + Non mark-up Income

Total Assets
Price to Book Ratio = Market value of share at Year End

Net Assets / No of Shares
NPL Coverage Ratio = Provision against NPL’s

Non-performing Loans
Annual
294 Report 2019
Form of Proxy
74th Annual General Meeting
Allied Bank Limited
I/We S/o/ D/o/ W/o
of being a
member of Allied Bank Limited and holder of ordinary shares as per Folio No.
and/or CDC Participant ID No. and Account/Sub-account No. do hereby appoint Mr./Ms.
Folio No./CDC No. having CNIC failing him/her, Mr./Ms. Folio No./ CDC No.
having CNIC of as my/our proxy and to attend, act and vote for me/us on my/our behalf at the 74 th Annual General
Meeting of the Bank to be held on Wednesday, the March 25, 2020 and at any adjournment thereof in the same manner as I/we myself/ourselves
would vote if personally present at such meeting.
Signed this day of 2020.
AFFIX
Revenue Stamp
Witness of Rs. 5/-
1. Signature
Name Signature of
CNIC # Member (s)
Address
[The signature should agree with the
specimen registered with the Company]
Witness
2. Signature
Name
CNIC #
Address
IMPORTANT NOTES:
1. A member entitled to attend and vote at a meeting is entitled to appoint another member as a proxy to attend, speak and vote for
him/her. The proxy appointed should be a member of Allied Bank Limited.
2. This instrument of proxy duly completed and signed along with Power of Attorney or other authority (if any) under which it is
signed, or notarized copy of such Power of Attorney must be valid and deposited at the Registered Office of the Bank or Bank’s
Share Registrar at M/s. CDC Share Registrar Services Limited, CDC House, 99-B, Block-B, S.M.C.H.S, Main Shahrah-e-Faisal,
Karachi not less than 48 hours before the time of the Meeting. In calculating the 48 hours, no account shall be taken of any part
of the day that is not a working day.
3. For CDC Account Holders/Corporate Entities:
i) Attested copies of valid Computerized National Identity Cards (CNIC) or the Passport of the beneficial owners and the
proxy shall be provided with proxy form.
ii) The proxy shall produce his/her original CNIC or Passport at the time of meeting.
iii) In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signatures
shall be submitted along with proxy form to the company.
4. If a member appoints more than one proxy and more than one instrument of proxies are deposited with the Share Registrar, all
such instruments of proxy shall be rendered invalid.
5. Members are requested to immediately notify changes in their registered addresses if any, to Bank’s Share Registrar at the
address mentioned above before start of the book closure.
AFFIX CORRECT POSTAGE
Company Secretary Allied Bank Limited

Head Office / Registered Office 3 Tipu Block, Main Boulevard New Garden Town
Lahore – Pakistan. Postal Code: 54000
Phone: +92 42 35880043
Website:
AFFIX CORRECT POSTAGE
Company Secretary Allied Bank Limited

Head Office / Registered Office 3 Tipu Block, Main Boulevard New Garden Town
Lahore – Pakistan. Postal Code: 54000
Phone: +92 42 35880043
Website:
112 Annual
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ABL Annual Financial Statements 2019

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About this report

The Board is responsible for the preparation of

• The International Integrated Reporting <IR>

• The Banking Companies Ordinance, 1962

• The Companies Act, 2017 issued by the

Overview 02 Who We Are

Strategy and Resource Allocation 28 Achievments Against Our Strategic Objectives

Risk Management 80 Risk & Opportunities Approach & Oversight

Governance 84 Our Governance Philosophy

1,049 Our superior asset quality depicted by an industry leading

Keeping track of the fast paced, dynamic and a competitive

Earnings Per Share (PKR)

Bank Ranking (As per

Allied Bank Limited 03

In 1 Link Acquiring transaction volume having 13.1% market share with

In PayPak POS transactions having 21.1% market share.

In Launch of PayPak Cards.

PIB: Personal Internet Banking

CAF: Conduct Assessment Framework for Banks by SBP

Human Resource Diversity

HOD: Head of Department, reporting directly to the CEO

Allied Bank Limited 07

Chief Executive Officer

Audit & Risk Review

Corporate & Business Planning

Commercial & Retail Marketing & Corporate

Commercial & Retail

Digital Banking Compliance

General Services &

Board Committee Management Committee Group Function

* Independent Shariah Board overseas Islamic banking operations

Allied Bank Limited 09

Sitting from Left to Right Standing from Left to Right

Allied Bank Limited 11

Mohammad Naeem Mukhtar

Sheikh Mukhtar Ahmad

Muhammad Waseem Mukhtar

Abdul Aziz Khan

Tahir Hassan Qureshi

Allied Bank Limited 13

The World is continuously

Tahir Hassan Qureshi

Owais Shahid Ahmad Faheem Khan Asif Bashir

Shahid Aamir Muhammad Idrees Sohail Aziz Awan

Tariq Javed Ghumman Mehmud ul Hassan Abid Anwar

Ahmed Mansoor Muhammad Mohsin Muhammad Raffat

Allied Bank Limited 19

OUR CAPITALS - Inputs ACTIVITIES

Enrichment of Customer Experience

Social And Relationship Capital

Data Governance Customer

Allied Bank Limited 21

Allied Bank Limited 27

Deployed Compliance Risk Management solution from Bench Matrix.

Establishment of dedicated Countering Financing of Terrorism (CFT) Desk.

ervices on all ABL ATMs

Trainings, Seminars & Workshopsfor employees.

Awarded “Best Place to Work” under the category of “Financial Services”

Year ended December 31,