Bank of Khyber ("BoK" or the "Bank") was established in 1991 under the Bank of Khyber Act, passed by the Provincial Legislative Assembly of the province of Khyber Pakhtunkhwa (KPK). The Bank acquired the status of a scheduled bank in 1994 and is principally engaged in the business of commercial banking and related services. 

The Bank was founded with a strategic vision to progressively expand Islamic banking operations. The head office of the Bank is at 24 - The Mall, Peshawar Cantt. Khyber Pakhtunkhwa. 

Bank of Khyber continues to operate as a scheduled Bank with a growing workforce, reporting a headcount of 2,259 employees at the end of CY24 (CY23: 2,114 employees). As of the end of CY24, the Bank operates 246 branches including 131 Islamic banking branches (CY23: 238 branches including 123 Islamic banking branches), concentrated in the province of Khyber Pakhtunkhwa (KPK), in line with its historical and strategic roots. Despite maintaining a relatively limited presence in other provinces, the Bank’s broader national footprint provides potential for future growth, particularly in underserved markets. The Bank consistently upheld its commitment to providing innovative and value-driven financial products and services. Its ongoing focus has been on advancing digital banking capabilities, enabling customers to effortlessly perform banking transactions via mobile and online platforms.

The Government of Khyber Pakhtunkhwa (GoKP) has a majority stake in BoK (70.2%), whereas, Ismail Industries owns (24.4%) stake. The remaining shareholding is widely dispersed.

The pressence of Government of Khyber Pakhtunkhwa (GoKP) signals a strong public sector backing, which is source of stability, particularly in terms of governance, regulatory compliance, and financial support if required. This level of government involvement often enhances stakeholder confidence, where private sector investment may be limited. The presence of Ismail Industries as a strategic long-term shareholder further strengthens the Bank’s shareholder base. Ismail Industries’ involvement suggests a commitment to the Bank’s long-term growth trajectory and may also reflect confidence in its strategic direction and financial sustainability. As a reputable private sector player with diverse business interests, their stake brings operational expertise and credibility from the private sector perspective. The Bank's shareholding pattern is expected to remain stable in the foreseeable future.

The GoKP and Ismail Industries support the professional independence of the Bank. The business acumen of the owners is reflected in the strong professional expertise by the Board put in place by them.

The Bank benefits from the backing of the Government of Khyber Pakhtunkhwa, which enhances its financial strength and credibility. Additionally, Ismail Industries, one of the Country’s leading manufacturers in the confectionery, snacks, and biscuit segment, represents a key strategic shareholder. The continued support from these strong sponsors underpins the Bank’s stability and may positively influence its credit profile and ratings going forward.

The Board comprises nine members, including the Chairperson and the CEO, with overall control and strategic oversight vested in the Board. It is chaired by Mr. Ikramullah Khan. The composition includes six independent directors, two non-executive directors, and one executive director.

The profile of the members is considered strong where the majority of members are representing the government on Board. Mr. Ikramullah Khan was appointed as Secretary Finance on August 27, 2024. He has been appointed as Chairperson on the Board of BoK on September 14, 2024 by virtue of his position as Additional Chief Secretary, Government of Khyber Pakhtunkhwa. He has remained on different administrative positions and has also attended various national and international courses. Amer Sultan Tareen - Secretary Finance Govt of KP and Non-Executive Director, is a civil servant of the Pakistan Administrative Service Group. He has been appointed as Director on the Board of the Bank by virtue of his positions as Secretary Finance, Government of Khyber Pakhtunkhwa. Mr. Amer Sultan Tareen holds Master Degree in Public Policy and has remained on different administrative positions. Syed Asad Ali Shah - Independent Director brings over 35 years of distinguished experience across Pakistan’s leading corporate and financial institutions in both the public and private sectors. He has held key roles including Managing Partner at Deloitte Yusuf Adil, President of ICAP, and Chair of a UN financial reporting group. Currently, he is CEO of Asad Ali Shah Associates and serves on several boards, including K-Electric and SECP’s Policy Board. He holds FCA and FCMA qualifications. Tahir Jawaid - Independent Director is an engineer with over 40 years of leadership experience in Fertilizer, Petrochemical, Power, and HR sectors. Former CEO of HPSL and Senior VP at HUBCO, he also led HR at Engro Corporation. With international experience in the U.S., he currently serves as Chief Capability Officer at August Leadership. Abid Sattar - Independent Director is a seasoned banking professional with over 38 years of experience across corporate, retail, operations, compliance, and international banking. He has held leadership roles at Chase Manhattan, Citibank, Standard Chartered, Habib Bank, and served as President & CEO of Askari Bank. A gold medalist MBA and M.Phil. graduate from Cambridge, he is recognized for pioneering the integration of technology in banking, driving innovation in digital banking and fraud risk management. His strategic leadership has made him a key figure in advancing technology-driven financial services. Osman Asghar Khan - Independent Director holds degrees from Brown and Boston University, and is a CPA and Chartered Accountant in multiple jurisdictions. With extensive finance and operations experience locally and internationally, he serves on several boards including Faysal Asset Management and Pakistan Stock Exchange. He is Managing Director of Afiniti Software and Honorary Consul of Ireland in Pakistan. Muhammed Shahid Sadiq - Independent Director is a Chartered Accountant with over 40 years’ experience in audit, consultancy, and tax in Pakistan and the UK. He has worked extensively in banking audits and tax advisory, representing clients before tax authorities and courts. Formerly a partner at A.F. Ferguson & Co. and Deloitte Pakistan, he is also a certified Director for State Owned Enterprises from PICG. Natasha Jehangir Khan -  Independent Director has over 16 years of experience in financial and power sector regulation, constitutional and administrative law, and corporate transactions. She has played a key role in major legislation, including reforms in Pakistan’s electricity market. Having worked with the Attorney General’s office, SECP, ADB, and JICA, she advises on regulatory reforms and investment climate improvements. Whereas, BoK’s Shariah Board comprises four leading Islamic scholars of the Country, namely (i) Mufti Muhammad Zahid ii) Mufti Muhammad Arif Khan, iii) Mufti Abdul Wahab, and iv) Qazi Abdul Samad.

The Board monitors the key functional and risk areas through its five committees namely; i) Audit Committee, ii) Human Resource & Remuneration Committee, iii) Risk Management Committee, iv) IT Steering Committee, and v) Compliance Committee. The Board had a total of ten meetings, and the attendance of members is good.

A. F. Ferguson & Co. Chartered Accountants are the external auditors of the Bank, classified in category 'A' by SBP. They have expressed an unqualified opinion on the Bank’s financial statements for the year ended December 31, 2024.

The Bank's overall functions are currently segregated into nine groups, including (i) Risk Management Group (ii) Conventional Banking Group iii) Islamic Banking Group (iv) Treasury & Investment Group (v) Compliance Group (vi) Human Resource Group (vii) Operations & Support Group (viii) DCB Group ix) Finance Group

 Mr. Hassan Raza - CEO  was appointed in replacement of Mr. Irfan Saleem Awan on November 11, 2024. Mr. Hassan Raza is a seasoned banker with over thirty years of hands on banking experience. He has remained on key positions at various esteemed national and multinational banks. He was previously CEO of Pak China Investment Company (PCICL). Irfan Saleem Awan - CFO, spans over two decades with experience of working in various areas, including finance, compliance, enterprise risk management, strategic planning, company secretarial, and external audit. The senior management team comprises seasoned professionals with diverse and extensive experience across various segments of the financial services industry. Ihsan Ullah Ihsan - Senior Executive Vice President – Strategy & Special Initiatives Group holds an MBA from IBA Karachi and a B.Sc. in Mathematics & Statistics. With over 25 years of banking experience, his expertise spans corporate banking, risk management, project financing, and Islamic banking. He has held senior roles at Al Baraka, Burj Bank, Pak Brunei, and SBP, and has served on boards of listed and unlisted companies. Mudassar Iqbal - Chief Risk Officer holds a Bachelor’s degree from the University of Punjab and has completed CA (Inter) from ICAP. With 16 years of experience, he has held key roles at MCB Bank and Dubai Islamic Bank. Most recently, he served as Chief Internal Auditor, overseeing audits across branches, head office functions, credit, and IT to ensure internal control and regulatory compliance. Khalid Abdul Aziz - Chief Compliance Officer has over 38 years of diverse banking experience. He joined the bank in 2015 as Head of Banking Operations (Conventional) and previously held key roles at Habib Bank Limited, including Regional GM Operations. He has worked in Afghanistan, Dubai, and Pakistan, and has received multiple performance awards. 

The Bank has 10 committees in place with well-defined terms of reference to oversee its day-to-day operational matters and to take decisions to implement the strategy outlined by the Bank.

The Bank maintains a structured reporting framework with reports generated on a daily, weekly, and monthly basis, facilitating timely monitoring and informed decision-making. The quality of these reports is regarded as adequate, supporting operational efficiency and compliance. On the Islamic banking front, deposits are mobilized under the Mudarabah arrangement, in line with Shariah principles. To ensure transparency and accuracy in profit distribution and pool management, the Bank has implemented "Al-Quist", a specialized software solution designed to support Islamic financial operations. This reflects the Bank’s commitment to robust systems and governance in its Islamic banking operations. During the year CY24, the Bank has launched its digital master card which is a remarkable addition to its product suite.

BoK has established separate risk management, credit management, compliance, and internal control divisions. The MRMC, HOCC, and ALCO of management operate within the established framework to monitor the Bank's activities and maintain the risk level within predefined limits. Furthermore, the committee ensures that the risk tolerance is well-defined and remains aligned with risk appetite, considering parameters like size, financials, and market size. 

During CY24, Pakistan's Banking sector's total assets posted growth of ~15.81% YoY whilst investments surged by ~14.50% to PKR ~29.79trln (endDec23: PKR ~26trln). Gross Advances of the sector recorded growth of ~29.11% to stand at PKR ~16.914trln (end-Dec23: PKR ~13.101trln). Non-performing loans witnessed an increase of 7.34% YoY to PKR ~1,068bln (end-Dec23: ~995bln). The CAR averaged at 20.6% (end-Dec23: 19.7%). Looking ahead, given the expected monetary rate cut and high cost environment, Banks are likely to sustain some dilution in profitability by CY25.

During CY24, Bank holds a customer deposit base of PKR 276bln other than financial institutions. (CY23: PKR 286bln). On such basis, the market share of the Bank stood at 1.1% (CY23: 1.1%) which is in line with its peers. This steady performance reflects the Bank’s ability to sustain its position within the competitive landscape of the banking sector.

During CY24, the markup earned shows an increase on a YoY basis to stand at PKR 65.2bln (CY23: PKR 59.1bln), reflecting enhanced revenue generation from interest-earning assets. Despite the uptick in markup income, the asset yield declined to 17.2% (CY23: 18.6%), primarily repricing at lower interest rates amid prevailing market dynamics. The cost of funds registered a marginal decline standing at 13% (CY23: 13.8%). Consequently, the Bank’s spread decreased to 4.3% (CY23: 4.8%) indicating moderate compression in intermediation margins.

The non-markup income decreased by 15.6% on a YoY basis to stand at PKR 1.8bln (CY23: PKR 2.1bln). This contraction was primarily driven by a sharp reduction in foreign exchange income, which fell to PKR 0.5bln (CY23: PKR 1.5bln). Additionally, dividend income declined significantly to PKR 2mln (CY23: 11mln) further weighing on the Bank's non-core earnings. Despite the pressure on non-markup income, the Bank’s net profitability registered a modest improvement, rising to PKR 3.6bln (CY23: PKR 3.5bln). This marginal increase suggests that the growth in core banking operations, along with controlled operating expenses, offset the decline in ancillary income streams, thereby supporting bottom-line stability. The improvement in earnings highlights operational efficiency, supported by higher non-core income and effective cost management, contributing positively to the Bank’s financial sustainability.

The competitive landscape within the banking sector has become increasingly intense, driven by rapid technological advancements and evolving customer expectations. In response, the Bank is actively pursuing a strategy to strengthen its digital footprint, with the objective of delivering a comprehensive suite of digital and online banking services. This includes enhancing user-friendly mobile and internet banking platforms, expanding self-service capabilities, and introducing innovative digital solutions to improve customer convenience, accessibility, and engagement.

The Bank posted a strong 45% growth in gross advances, amounting to PKR 160bln in CY24 (CY23: PKR 110bln), while non performing advances reamined stable at PKR 13.3bln (CY23: 13.2bln). This led to a significant decline in the infection ratio to 8.2% (CY23: 12.1%), reflecting improved asset quality. Consequently, the Advance to Deposit Ratio (ADR) elevated to 55.2% at the end of CY24 (CY23: 37.6%). Additionally, the Bank strengthened its risk buffers, with provision coverage rising to 85.9% (CY23: 61.1%), demonstrating a more conservative approach to credit risk management.

At the end of CY24, the Bank’s investment portfolio exhibited a robust YoY escalation surging to PKR 283bln (CY23: PKR 223.3bln). This significant uptick reflects a deliberate strategy, with a greater allocation towards government securities, signaling a risk-averse approach in light of heightened credit risk or economic uncertainty. This pivot underscores the Bank’s emphasis on capital preservation and stable returns, leveraging sovereign instruments as a means to maintain asset quality and liquidity. Going forward, maintaining this momentum while ensuring optimal duration and yield management will be essential to sustain returns and liquidity buffers.

At the end of CY24, the Bank’s deposit base recorded a decrease to stand at PKR 278bln (CY23: PKR 289bln) primarily driven by a reduction in term deposits. This contraction may reflect customers’ shifting liquidity preferences. The Current Account (CA) and Savings Account (SA) mix also witnessed slight changes, with CA proportion increasing to 20% (CY23: 17%) and SA increasing to 49% (CY23: 47%). While the overall deposit base has shrunk, the higher SA proportion indicates a marginal improvement in the low-cost deposit mix, which is favorable for the Bank’s cost of funds and profitability margins.

At end of CY24, the Bank’s equity base was recorded at PKR 21.9bln (CY23: PKR 20.3bln). During the same period, the Capital Adequacy Ratio (CAR) slightly declined to 17.81%, compared to 18.25% in the previous year, primarily due to growth in risk-weighted assets. Notably, the Bank has not incorporated any additional Tier I or Tier II capital and continues to meet its regulatory capital requirements solely through its core equity base, reflecting strong internal capital generation and a conservative capital structure.