NRSP Microfinance Bank Limited (the 'Bank') was incorporated as a public limited company under the Companies Act, 2017, and obtained a license from the State Bank of Pakistan (SBP) on February 18, 2009, to operate nationwide as a microfinance bank under the Microfinance Institutions Ordinance, 2001, with operations commencing in March 2011. The Bank's registered office is at the 7th Floor, UBL Tower, Jinnah Avenue, Blue Area, Islamabad, while its principal place of business is in Rawalpindi. The Bank was established to mobilize funds for providing microfinance banking and related services to low-income and underserved segments of society, aiming to mitigate poverty by granting access to financial markets at the micro level. It builds on the experience of its parent institution, NRSP, which in 2008 spun off its Micro Enterprise Development Program (MEDP) into this separate entity. As of Dec'25, the Bank operates a nationwide branch network of 133 branches, including 37 Islamic branches, offering a wide range of financial services, including micro-lending, micro-insurance, Islamic banking products, and deposits to financially excluded individuals in both urban and rural areas across Pakistan. Branch count remained stable relative to Dec'24, reflecting a deliberate consolidation strategy. The Bank employed 2,830 staff as at December 2025 (Dec'24: 2,747), reflecting continued operational capacity-building.

During CY25, the Bank's ownership structure underwent a decisive transformation. NRSP—the majority and founding sponsor—increased its shareholding significantly from 57.40% to 81.75% through a rights issue, reinforcing its commitment to the Bank's strategic direction and financial stability. The remaining institutional shareholders, IFC (6.86%), PROPARCO (6.81%), and Acumen Fund USA (4.57%), saw proportional dilution in their respective stakes. The concentration of ownership in NRSP provides the Bank with a decisive and supportive sponsor base. The rights issue executed in CY25—injecting PKR 1.70bln in fresh equity alongside a PKR 1.0bln advance against future rights shares—directly strengthened the Bank's capital position and underlines NRSP's long-term commitment. Continued support from international development finance institutions (IFC and PROPARCO) and impact investors (Acumen) further bolsters the Bank's reputational equity and access to concessional funding lines. The National Rural Support Program (NRSP), a nonprofit organization founded in 1991, is the largest Rural Support Program in Pakistan by outreach, workforce, and development activities. It operates as an autonomous body with a government guarantee. IFC, a member of the World Bank Group, and Acumen, established in 2001, are globally recognized institutions committed to advancing financial inclusion and sustainable economic development in underserved communities. The solid financial standing and strategic orientation of the Bank's sponsors continue to serve as a significant stabilizing factor. NRSP's enhanced equity position not only improved CAR but also sent a strong market signal about the Bank's long-term viability, supporting depositor and counterparty confidence.

The Bank is governed by a nine-member Board of Directors (BOD), which includes the President and Chief Executive Officer. The Board operates through four standing sub-committees: (i) Audit Committee, (ii) Remuneration & Compensation Committee, (iii) Operational Risk and Policy Committee, and (iv) Information and Technology Committee. These sub-committees ensure structured oversight of key governance domains. The Directors are experienced professionals with exposure across diverse sectors, bringing significant breadth to the board. Dr. Rashid Bajwa, Chairman and CEO of NRSP, brings over 50 years of leadership in rural finance and public health policy. Mr. Riaz Khan Bangash, President and CEO of NRSP Microfinance Bank with an MBA and 40 years of experience, was appointed to the board in 2023 and serves as Executive Director. Mr. Fazlullah Qureshi, a former Federal Secretary, contributes deep public sector and regulatory expertise. Mr. Shoaib Sultan Khan, a pioneer of rural support programs, offers unparalleled development sector knowledge accumulated over five decades. Dr. Ayesha Khan, CEO of Acumen Pakistan, brings expertise in corporate strategy, development finance, and impact investing, and additionally serves as a Director of Bank Alfalah. Dr. Shahida Jaffrey, an educationist and development leader, brings five decades of experience in women's education, rural health, and rural development in Balochistan. Mr. Stephen Rasmussen, an independent director with 50 years of global microfinance and digital finance experience, adds critical international perspective. Mr. Jesse C. Fripp, CEO of Shining Rock Ventures and a nominee director with 40 years of experience, brings expertise in enterprise strategy and impact capital. Mr. Shahid Sattar, an independent director with over 41 years of multi-sector banking and corporate experience, strengthens governance through independent oversight; he resigned from the directorship of Insplast effective March 31, 2026.

The Bank's organizational structure is divided into eight functional departments, with each department head reporting directly to the President and CEO. The Head of Internal Audit reports independently to the Board's Audit Committee, ensuring an unimpeded audit function. This structure promotes accountability and facilitates effective decision-making. The management team consists of experienced professionals with backgrounds across various sectors, including microfinance. Mr. Riaz Khan Bangash, an MBA graduate, serves as CEO/President with 38 years of experience. Mr. Asif Mahmood, a Chartered Accountant, is the CFO and Company Secretary with 18 years of experience. Mr. Obaid Riaz, holding an M.Com degree, is the Head of Business-Multan with 17 years of experience. Mr. Rehan Qazi, an EMBA graduate, is the Head of Business-Sindh with 22 years of experience. Mr. Shakil Ahmad, an MBA graduate, heads Business-North with 12 years of experience. Mr. Muhammad Zubair, an MBA graduate, is the Head of Business-Sahiwal, bringing 28 years of experience. Mr. Muhammad Rashid Rafique, an MBA holder, leads Business-Bahawalpur with 14 years of experience. Mr. Muhammad Hamid Anwar, with an M.Com degree, holds dual responsibilities as Head of Compliance and additional charge of Risk, backed by 17 years of experience. Mr. Muhammad Shafiq Khan, with an MCS degree, is the Acting Head of IT with 16 years of experience. Mr. Muhammad Naeem, a CMA/MS degree holder, is the Head of Internal Audit with 15 years of experience. Mr. Hafiz Muhammad Abad Irshad, with an MA in Islamic Studies, serves as the Resident Shariah Advisor with 15 years of experience. Mr. Muhammad Zeeshan Munir, an MBA graduate, leads Branchless Banking and Liability with 17 years of experience. Mr. Asif Shah Bukhari, an MBA holder, is the Acting Head of Operations, bringing 27 years of professional experience. The Bank uses Oracle Flexcube as its core banking software, implemented since 2012. A back-to-back support contract with Oracle ensures system stability and continuity. IT-related expenses stood at PKR 82.8mln in CY25 (CY24: PKR 106.6mln), with the decrease partly reflecting internal efficiency improvements.

Pakistan’s microfinance ecosystem comprises Microfinance Banks (MFBs), Microfinance Institutions (MFIs), Rural Support Programmes (RSPs), and FinTechs, with MFBs dominating (~77% of Gross Loan Portfolio (GLP)) and funded through customer deposits, highlighting their systemic importance. The sector entered FY25 in a phase of cautious recovery following macroeconomic shocks. By late CY24–Oct’25, conditions improved modestly, with easing inflation (~5.6%), stable currency, lower interest rates, and projected GDP growth of ~2.6%–3.6% for FY26. Despite this, the sector continues to face elevated credit risk, weak capital buffers, and concentration in livestock and agriculture (~57%), increasing vulnerability to external shocks. During CY25, sector advances rose to PKR 468bln (CY24: PKR 421.2bln), with ADR at 65% (Dec’24: 63%). NRSP Microfinance Bank’s ADR is higher at 78.3%, indicating relatively aggressive deployment and tighter liquidity buffers. The sector’s CAR remained weak at -1.2% (Dec’24: 2.6%), whereas NRSP Microfinance Bank improved its CAR to 16.59%, above regulatory requirements. NRSP Microfinance Bank maintained its position as a leading player, with ~10% GLP market share (CY24: 9%) and net advances growth of 10.1% to PKR 40.9bln. Deposits stood at PKR 52.3bln. Total markup/return/interest earned increased 25.4% to PKR 15.70bln (CY24: PKR 12.52bln), supported by portfolio growth and Government Subsidy Scheme income (PKR 1.34bln). Markup expenses were PKR 9.29bln (CY24: PKR 8.33bln), leading to NII of PKR 6.40bln (CY24: PKR 4.19bln), mainly due to repayment of the PKR 100bln NBP facility. Non-markup income declined to PKR 218mln (CY24: PKR 298mln), while operating expenses increased to PKR 3.78bln (CY24: PKR 3.29bln). Pre-provision profit rose to PKR 2.81bln (CY24: PKR 1.19bln), while credit loss charge stood at PKR 1.01bln (CY24: reversal of PKR 682mln). Profit after tax reached PKR 1.35bln (CY24: PKR 1.23bln), up 9.8%. NRSP Bank’s sustainability remains supported by its sponsor, with improved asset quality, profitability, and operational efficiency.

Asset quality deteriorated significantly during CY25, representing the most salient risk factor in the Bank’s profile. Stage 3 gross advances (non-performing loans) rose sharply to PKR 5.99bln (Dec’24: PKR 1.02bln), resulting in an infection ratio of ~13.9% of total gross advances of PKR 43.0bln (Dec’24: ~2.7%). This deterioration was driven predominantly by subjective classification of restructured portfolios, with PKR 6.74bln of advances identified as ‘Subjective Classified’, largely in Stage 2 and Stage 3, reflecting proactive recognition of stress in agricultural, microenterprise, and general loan segments. The credit loss allowance against advances increased to PKR 2.08bln (Dec’24: PKR 940mln), with Stage 3 coverage at PKR 1.94bln. Importantly, SBP allowed the Bank to stagger an additional ECL allowance of PKR 2.33bln over five quarters starting Q4 CY25. The investment book contracted sharply to PKR 22.9bln (Dec’24: PKR 120.1bln), mainly due to repayment of the PKR 100bln NBP term finance facility and liquidation of PIBs. The portfolio now comprises mainly Market Treasury Bills PKR 19.6bln and Ijarah Sukuks PKR 3.2bln, entirely in government securities, with interest rate risk managed through ALCO. Borrowings declined significantly to PKR 16.1bln (Dec’24: PKR 112.2bln) following repayment of the PKR 100bln NBP facility. Remaining borrowings include PMYB&ALS financing PKR 11.4bln, PMRC loan PKR 121.6mln, and NBP running finance PKR 4.0bln. These carry largely zero markup on utilization, providing cost advantage. Deposits stood at PKR 52.3bln (Dec’24: PKR 55.0bln), down 4.9%, with decline in corporate deposits partially offset by growth in individual deposits to PKR 31.5bln. Islamic deposits declined to PKR 9.8bln. ADR increased to 78.3% (Dec’24: 67.6%), reflecting faster growth in advances relative to deposits. Subordinated debt remained stable at PKR 2.49bln, while lease liabilities stood at PKR 952mln. Cash and cash equivalents were PKR 10.8bln (Dec’24: PKR 12.9bln), with compliance maintained with CRR and SLR requirements, and liquidity deemed adequate for near-term obligations. Equity strengthened significantly to PKR 6.62bln (Dec’24: PKR 3.56bln), supported by PKR 2.0bln rights issue, PKR 1.0bln advance against rights, and retained earnings. Paid-up capital increased to PKR 3.50bln, while reserves and depositor protection fund also improved. This capital injection restored historical capital weakness, reinstated regulatory CAR compliance, and led to withdrawal of Rating Watch, with CAR improving to 16.59% as at Dec’25, comfortably above the 15% threshold.

In July 2021, the Bank issued a rated, unlisted, unsecured, and subordinated TFC-II ("TFCs" or the "Instrument”) amounting PKR 770mln to contribute towards the Bank's Tier II Capital. The instrument is unsecured and subordinated as to payment of principal and profit to other indebtedness of the Bank, including deposits, but will rank pari passu with other Tier II instruments and superior to Additional Tier I instruments and common shares. The tenor of the instrument is 07 years and callable on or after five years with prior approval of SBP. The profit rate is 3MK plus 300bps and is being paid quarterly in arrears on the outstanding principal. The TFC is scheduled to mature on July 9, 2028, with principal repayments commencing in October 2027. The Bank has successfully paid 19 out of the total 28 scheduled installments, with cumulative profit payments amounting to PKR 642.18mln till date. The most recent payment of PKR 25.47mln was made on Apr 9, 2026. All previous payments and upcoming payments in CY26 have been assured by the parent company, NRSP, which remains fully committed to ensuring the timely settlement of all remaining instalments through subordinate debts.

The terms of the Tier II TFC require that, as per the Lock-in Clause, neither profit nor principal, will be payable, if such payments will result in a shortfall in the bank's MCR/CAR or cause an increase in the shortfall. Moreover, the investors shall have no right to accelerate the repayment of future scheduled payments (interest or principal) except in bankruptcy and/or liquidation.

The instrument is unsecured and subordinated.