AL Habib Exchange Company (Private) Limited (or the "Company") was incorporated in Pakistan on 24 November 2023 as a private limited company under the Companies Act, 2017. The Company is required to operate in accordance with the rules and regulations laid down by the State Bank of Pakistan (SBP) through F.E Circular No. 9 dated 30 July 2002. 

The Company obtained a license for commencement of operations from the State Bank of Pakistan (SBP) on 20 March 2024 and started its operations on 26 March 2024. The Company operates as an exchange company and is engaged in the business of dealing in foreign exchange and currency export operations. As per the Exchange Companies Framework, the Exchange Company's outlet may be divided into branches, currency exchange and payment booths. The Company operates with 6 branches and 44 booths. The Company's registered office and principal office are situated at 202, second floor Finlay House, I.I. Chundrigar Road, Karachi.

The Company is a subsidiary of Bank AL Habib Limited (the "Holding Company"), which holds 100% of the Company's shares.

The Board comprises Mr. Ashar Husain (Chairman), Mr. Qamber Ali, and Mr. Syed Ali Zia Rizvi, all sponsor-representative directors from BAHL, collectively bringing over two decades of senior banking and financial management experience, with full attendance in board meetings during the latest year.

The senior management team is led by Mr. Syed Furqan (CEO), who reports to the Board of Directors and brings over two decades of professional experience. The finance function is headed by Mr. Hotchand (CFO & Company Secretary), with 17 years of experience and a long-standing association since 2008. Commercial operations are overseen by Mr. Muhammad Shahzad (CCO), who has 13 years of relevant experience and has been with the industry since 2012. Operational matters are managed by Mr. Muhammad Junaid Metha (Head of Operations), possessing 21 years of experience in Banking industry since 2004. Administrative functions are overseen by Mr. Muhammad Junaid, (Head of Administration), who has more than 10 years of relevant experience across multiple industries within the same functional domain, since 2015. Treasury operations are supervised by Mr. Sajid (Head of Treasury), who brings 20 years of experience and has been with the industry since 2006. Human resources are managed by Ms. Faryal Naqvi (Head of HR), with 18 years of experience and association with Banking industry since 2009.The Information Technology function is headed by Mr. Muhammad Talha Alvi, (Head of IT), who brings 17 years of industry experience, having been associated with the IT sector since 2008.

The Company applies the Anti-Money Laundering, Combating the Financing of Terrorism & Countering Proliferation Financing (AML/CFT/CPF) Regulations issued by SBP. A risk-based AML framework is established to assess business and customer risks, considering geographic, customer, product, transaction, and emerging risk factors, with reviews conducted annually or upon regulatory changes. Customer risk profiling is based on transaction purpose, geography, nationality, exposure to high-risk jurisdictions, and other regulatory requirements. The Company’s internal audit function is responsible for ensuring compliance with all applicable laws, rules, and regulations. The internal audit is conducted in-house and reports directly to the Board. The function is headed by Mr. Qaiser Khan Khattak (Head of Audit), who brings 19 years of professional experience and has been associated with the industry since 2006.

Exchange companies in Pakistan operate under the regulatory framework prescribed by the State Bank of Pakistan (SBP). Currently, there are 36 registered exchange companies, of which 12 are bank-backed while the remaining 24 are non-bank-backed. These exchange companies were established progressively to enhance transparency in foreign currency exchange transactions and to formalize and regulate the legality of such activities within the financial system. The currency exchange industry is influenced by multiple factors, including the broader macroeconomic environment, regulatory frameworks, and external dependencies such as trade and remittances, along with other geopolitical considerations. These dynamics collectively shape the operational risks and profitability of Currency Exchange Companies (ECs). Remittances remain a key driver of flows of foreign exchange, especially from regions like the Middle East, which account for a significant portion of Pakistan’s foreign currency inflows. Economic or political instability in the Middle East may disrupt the flow of remittances, which could potentially impact the liquidity position and operational capacity of Currency Exchange Companies (ECs).

The currency exchange sector in Pakistan has faced elevated risks in 2025 amid restrictive trade policies, ongoing economic uncertainty, and tight financial conditions, with PKR volatility against major currencies—particularly the US Dollar—continuing to affect import costs and trade balances, especially given the inelastic demand for essential imports.

The regulatory environment for Al Habib Exchange remains stringent, with operations governed by SBP regulations and AML/CFT requirements, ensuring compliance with evolving prudential and reporting standards. Ongoing regulatory oversight and periodic enhancements to the compliance framework continue to influence operational processes and cost structures. An Exchange Company is authorized to purchase and sell foreign currency from and to individuals, authorized dealers, and other corporate entities, subject to SBP approval and prescribed regulatory limits and full compliance with applicable AML/CFT requirements. Compliance protocols include verification of CNIC, NICOP, and POC, passport verification, biometric authentication, and maintenance of an authorized Nostro account. As per regulatory guidelines, the maximum foreign currency sale limit to an individual is USD 10,000 per person per day, or its equivalent in other foreign currencies, aggregated across all exchange companies. Furthermore, the Exchange Company shall limit its foreign exchange exposure at the close of the business day at a level not higher than 50% of its MCR as per the latest available audited financial statements.

Relative position reflects the standing of the ECs among its peers in the exchange companies. Institutions with stronger market standings demonstrate advantages arising from their comparatively larger scale and favorable market penetration. The stronger the relative position, the stronger the EC’s ability to sustain pressures on its business volumes, and in turn, its profit margins. The Company holds a favorable relative position within Pakistan’s currency exchange sector, benefiting from its association with the Bank Al Habib Group, sound governance practices, and nationwide footprint.

Al Habib Exchange commands a moderate market share in Pakistan’s currency exchange sector, supported by its established operations and steady transaction volumes.

At the end of September 2025, AL Habib Exchange generated revenue of PKR 166.04 million from exchange operations, including net revaluation gains, compared to PKR 30.25 million in the same period of 2024. This represents a significant increase of over fivefold, primarily driven by higher transaction volumes and favorable foreign exchange movements. Despite an increase in administrative expenses, the growth in revenue, supported by interest income from deposits, PIBs, and T-Bills, contributed to a notable improvement in profitability, with profit before tax rising to PKR 149.38 million versus PKR 45.83 million in the prior period.

Al Habib Exchange’s cost base is primarily driven by administrative expenses, which increased to PKR 238.77 million in 9M FY2025 from PKR 115.36 million in the same period last year, reflecting higher staff salaries, security charges, IT expenses, and other operational costs associated with expanding operations. Finance costs decreased to PKR 7.04 million (SPLY: PKR 10.99 million), mainly due to lower lease-related financing charges. Overall, while operational expenses have risen in line with business growth, the increase in revenues and other income has more than offset these costs, supporting profitability.

Al Habib Exchange promotes sustainable operations through energy-efficient processes, digital solutions, and responsible financial practices. The Company leverages secure online platforms to provide seamless money transfers and real-time customer support. Its Financial Management System (Soft Consults), implemented on March 26, 2024, remains fully operational with routine updates applied.

The Company remains exposed to operational and external event risks, including regulatory changes, cyber threats, and market disruptions. Proactive risk management frameworks, contingency planning, and real-time monitoring are in place to mitigate potential impacts on business continuity and client services. The Company has forward cover arrangements in place with scheduled banks to hedge foreign exchange exposures arising from its operations. The enhancement in the forward cover limit reflects increasing business volumes and provides additional capacity to mitigate exchange rate volatility. The availability of forward cover strengthens the Company’s risk management framework by supporting earnings stability and limiting downside risks associated with adverse foreign exchange movements.

Credit risk of the Company can emanate from its dealings with financial institutions or larger corporations. Given the nature of their operations, ECs are less exposed to traditional credit risk but must still be well poised to manage potential counterparty defaults when dealing with larger foreign currency transactions on credit. The Company is exposed to counterparty credit risk from customers. Risk is managed through thorough customer verification, defined exposure limits, and continuous monitoring of receivables to minimize default losses.

The Company maintains sufficient liquidity to meet operational and regulatory requirements, supported by stable customer inflows, short-term funding arrangements, and efficient cash management practices to ensure uninterrupted service delivery. In addition, the Company maintains 15% of its paid up capital as a regulatory reserve with SBP in the form of cash and/or unencumbered approved government securities.  As of Sep'25, the Company holds short-term investments of PKR 301 million and long-term investments of 1,522 million with includes PIB, with prudent monitoring and diversification strategies.

Market risk will directly arise from volatility of exchange rates. Interest rate movements, and broader shifts in global currency markets would also indirectly affect the Company. Exchange rate fluctuations will directly impact the profitability of the Company, especially in large-volume transactions or periods of sharp depreciation or appreciation in the domestic currency. Al Habib Exchange faces market risk arising from fluctuations in foreign exchange rates, interest rates, and the value of its investments and current currency portfolio. 

The Company has a paid-up capital of PKR 3 billion, which is well above the minimum regulatory requirement of PKR 1billion. Shareholders’ equity stood at PKR 3,066 million as of December 2024 and increased to PKR 3,172 million by September 2025.