Bank Alfalah Limited (“BAFL” or the “Bank”) was incorporated in Pakistan as a public limited company in 1992 under the Companies Ordinance, 1984 (now the Companies Act, 2017). The Bank received its scheduled banking license from the State Bank of Pakistan (SBP) in 1997 and is listed on the Pakistan Stock Exchange (PSX).

BAFL has grown into one of Pakistan’s leading private sector commercial banks over three decades, offering a broad spectrum of conventional and Islamic banking products across corporate, commercial, SME, consumer, agri, and digital banking segments. The Bank is sponsored by the Abu Dhabi Group (the Group - sponsors of the Bank based in Abu Dhabi, UAE), with His Excellency Sheikh Nahayan Mabarak Al Nahayan serving as the Chairman. The Bank’s registered office is situated at B.A. Building, I.I. Chundrigar Road, Karachi. As of CY25, the Bank operates with a network of 1,186 branches (CY24: 1,153 branches), and employs 17,388 employees at CY25 (CY24: 16,400). The Bank’s digital banking reported throughput of PKR 9.0trln as of CY25, reflecting meaningful traction in technology and customer-related investments. The Bank also operates a wholly-owned subsidiary, Alfalah Currency Exchange (Private) Limited, and holds equity stakes in Alfalah Insurance Limited (30%), Sapphire Wind Power Limited (30%), and Alfalah Asset Management Limited (40.22%).

Bank Alfalah offers a comprehensive range of financial products and services. Retail offerings include deposit accounts, personal loans, auto finance, credit and debit cards, and home finance. Corporate and commercial clients are served through trade finance, working capital facilities, project finance, and investment banking advisory. The Bank’s Islamic banking window offers complete range of Shariah-compliant solutions for corporate, commercial, SME, retail, treasury, trade, and consumer banking customers. The Bank operates 450 Islamic banking branches (2024: 423 branches) and 4 sub branches (2024: 4 sub branch) as at CY25. The SME and Agri segments are growing areas of strategic focus, through diverse portfolio of SME and Agri financing solutions, supporting financial inclusion. The Bank’s digital ecosystem, anchored by the Alfa App, AlfaMall (e-commerce), Alfa BNPL, and an agent network of 42,750, provides significant scale in digital payments, home remittance facilitation, and customer acquisition. BAFL is a leading player in Pakistan’s home remittance and trade finance business.

BAFL is majority-owned by the Abu Dhabi Group (the Bank's sponsors based in Abu Dhabi, UAE), with a stake of 55.61% as of Dec'25. Other stakeholders include mutual funds, NBFCs, FIs, DFIs, and individuals (44.28%), and executives (0.11%).

The ownership structure of the Bank is considered stable. The Abu Dhabi-based sponsor group has maintained its long-term commitment to the Bank since inception, with no material changes in the controlling shareholder composition anticipated. This lends significant comfort to the Bank’s strategic and financial continuity.

Sponsor’s business acumen is considered strong. Under the leadership of President & CEO Mr. Atif Bajwa, BAFL has consistently executed on its strategic agenda, delivering sustained deposit franchise growth, a successful digital transformation, and meaningful penetration in the remittances and trade finance segments over recent years.

The Abu Dhabi-based sponsor group is a diversified conglomerate with significant interests spanning banking, real estate, and energy across the Middle East and South Asia. Its financial strength provides a credible implicit support backstop for BAFL.

The Board of Directors comprises nine members, including the Chairman, the Chief Executive Officer, four Non-Executive Directors, and three Independent Directors. The Board reflects a balanced governance structure with representation from the sponsoring shareholder, independent oversight, and executive management. The Chairman, H.E. Sheikh Nahayan Mabarak Al Nahayan, serves as a Non-Executive Director, while Mr. Atif Aslam Bajwa serves as the CEO/Executive Director. The Board also includes one female Non-Executive Director, Dr. Ayesha Khan, reinforcing diversity within the governance framework. The presence of three Independent Directors enhances objective oversight and supports adherence to sound corporate governance practices.

The Chairman of the Board of Directors, His Excellency Sheikh Nahayan Mabarak Al Nahayan is a prominent member of the ruling family of Abu Dhabi, United Arab Emirates. Currently, His Excellency is UAE Cabinet Member and Minister of Tolerance and Coexistence. Mr. Abdulla Nasser Hawaileel Al Mansoori is a prominent businessman of Abu Dhabi, UAE. Presently, he is the Chairman of the Board of Al Nasser Holdings and Group Companies which have diversified activities ranging from Oilfield Services, Retailing, Investments, Manufacturing Industries, Real Estate and Food & Beverage. He has served on the Board since 1997. Mr. Abdulla Khalil Al Mutawa is serving in the position of H.E. Sheikh Suroor Bin Mohammad Al Nahyan Private Office Advisor. He has been associated with the Bank for over 27 years. Mr. Khalid Mana Saeed Al Otaiba is associated with His Excellency Dr. Mana Saeed Al Otaiba (Personal Advisor to His Highness, the President of UAE). He has served on the Board since 2003. Dr. Ayesha Khan is an expert in the field of corporate strategy, capital allocation and governance of regulated financial institution. She is currently the CEO and Regional Managing Director at Acumen Pakistan. Dr. Gyorgy Tamas Ladics, CEO of Silverlake Symmetri, has over 30 years of experience in the financial services industry, formulating digital strategies and businesses transformation globally. Mr. Khalid Qurashi, a retired banker, with considerable international banking experience. Presently, he is an independent member of the Board of HBL Bank, UK. Mr. Efstratios Georgios Arapoglou is a consultant with an earlier career in International Capital Markets and Corporate & Investment banking based in London and later in managing, restructuring and advising publicly listed Financial Institutions and Corporates in Southeastern Europe and the Middle East. Presently he is a Chairman of Bank of Cyprus and joined the Board in 2024.

The Board exercises effective oversight of the Bank’s strategic direction, risk profile, and operational performance through seven Board-level committees, namely: i) Board Audit Committee, ii) Board Human Resource, Remuneration & Nomination Committee, iii) Board Risk Management Committee, iv) Board Information Technology Committee, v) Board Strategy and Finance Committee, vi) Board Real Estate Committee, and vii) Board Crisis Management Committee. These committees support the Board in discharging its governance responsibilities by providing focused oversight across key functional and risk areas. Meetings are held regularly in accordance with approved terms of reference, facilitating timely review of strategic, financial, operational, and risk-related matters. The Board members demonstrate active participation and satisfactory attendance, reflecting a strong governance culture and effective decision-making framework.

The Board Audit Committee oversees the integrity of the Bank’s financial reporting framework, including the review of annual and interim financial statements prior to their approval by the Board. The Committee focuses on key judgmental areas, significant audit adjustments, the appropriateness of the going concern assumption, changes in accounting policies and practices, compliance with applicable accounting standards, and adherence to statutory and regulatory requirements. M/s. A.F. Ferguson & Co., Chartered Accountants (a member firm of PwC), classified in category ‘A’ by SBP and holding a satisfactory Quality Control Review (QCR) rating, are the external auditors of Bank Alfalah Limited. The auditors have expressed an unqualified opinion on the Bank’s unconsolidated financial statements for the year ended CY25.

Bank Alfalah Limited operates through a well-defined and functionally specialized organizational structure designed to support its diversified business model, effective risk management framework, and strategic growth objectives. The Bank's operations are led by an experienced senior management team, with clear reporting lines and segregation of duties embedded across business, control, and support functions to ensure operational efficiency and a robust control environment. The organizational structure comprises key business and support groups, including: i) Corporate and Investment Banking Group, ii) Retail Banking Group, iii) Islamic Banking Group, iv) Digital Banking Group, v) Global Markets and Treasury Group, vi) Operations and Corporate Services Group, vii) Audit & Inspection Group, viii) Special Assets Management Group, ix) Information Technology Group, x) Risk Management Group, xi) Compliance & Business Solutions Group, xii) Finance Group, xiii) Human Capital Group, xiv) Strategy, Transformation and Customer Experience Group, and xv) Legal & Corporate Affairs Group. The structure is periodically reviewed to align with the Bank's evolving business requirements, regulatory expectations, and digital transformation initiatives.

Mr. Atif Aslam Bajwa – President & CEO brings over 41 years of executive leadership across commercial banking, retail banking, strategic management, and corporate governance. Having held senior positions at leading regional and international financial institutions, he provides strategic direction and oversight to the Bank's operations and growth initiatives. Ms. Anjum Hai – Chief Financial Officer (CFO) carries over 31 years of experience in financial management, accounting, regulatory reporting, and corporate finance. Her background includes senior finance roles at leading domestic and international financial institutions, supporting the Bank's financial transparency and fiscal discipline. Mr. Faisal Rabbani – Chief Risk Officer (CRO) is a veteran banking professional with over 35 years of experience spanning risk management, commercial banking, trade finance, and credit functions. His extensive expertise in enterprise risk management and portfolio oversight strengthens the Bank's risk governance framework and asset quality. Mr. Muhammad Yahya Khan – Chief Digital Officer (CDO) possesses over 29 years of experience across banking, digital transformation, technology, and financial services. His leadership roles at multinational organizations in Pakistan and international markets support the Bank's digitalization strategy and customer-centric initiatives. Mr. Mohib Hasan Khan – Chief Information Officer (CIO) brings over 30 years of expertise in information technology and banking systems, including managing large-scale technology infrastructure across multiple jurisdictions. His experience strengthens the Bank's technology architecture, cybersecurity framework, and digital capabilities. Mr. Faisal Farooq Khan – Chief Human Resource Officer (CHRO) offers over 35 years of diversified experience in human resources, talent management, organizational development, and succession planning. His leadership supports the Bank's people strategy, employee engagement, and organizational effectiveness. Mr. Mohammad Raheel Yousuf – Chief Marketing Officer (CMO) is a marketing and brand management professional with over 24 years of experience in strategic marketing, branding, communications, and business development. His expertise in brand strategy and market positioning supports the Bank's franchise development and customer acquisition initiatives. Ms. Mehreen Ahmed – Group Head Retail Banking carries over 37 years of banking and non-banking experience, having been associated with Soneri Bank, MCB Bank, and Standard Chartered Bank. She joined Bank Alfalah in April 2012 and currently leads the Retail Banking Group, holding an MBA in Finance and Marketing from IBA. Dr. Muhammad Imran – Group Head Islamic Banking brings over 28 years of cross-sector experience across institutions including National Bank of Oman, UBL, BankIslami Pakistan Limited, and Standard Chartered Bank. He joined Bank Alfalah in August 2018 and holds a Ph.D. in Economics from the University of Karachi and a gold medal MBA from IBA, Karachi. Mr. Farooq Ahmed Khan – Group Head Corporate, Investment Banking and International Business brings over 29 years of financial sector experience across Faysal Bank, MCB Bank, Eco Trade & Development Bank, and United Bank Limited. Prior to joining Bank Alfalah, he served as Group Executive – Corporate & Investment Banking Group at UBL, and holds an MBA from Washington University in St. Louis, USA. Mr. Pervez Shahbaz Khan – Group Head Global Markets and Treasury offers over 31 years of diversified experience in treasury management and global markets, having been associated with Credit Agricole Indosuez, ABN Amro Bank, Citibank, The Royal Bank of Scotland, and Askari Bank Limited. He holds an MBA from the Institute of Business Administration (IBA).

The Bank has established various management-level committees to oversee day-to-day operations, facilitate timely decision-making, and ensure effective implementation of the strategic direction approved by the Board. Key management committees include: i) Central Management Committee (CMC), ii) Central Credit Committee (CCC), and iii) Digital Council (DC). These committees comprise senior management personnel and provide oversight across core business, credit, operational, and digital transformation functions. Regular meetings of these committees support effective coordination, risk oversight, and execution of the Bank's strategic objectives.

 The Bank uses Temenos (T-24) as its core banking software across all branches and head office operations.

The Bank’s risk management framework has a well-defined organisational structure for effective management of credit risk, market risk, liquidity risk, operational risk, information security risk, credit concentration risk, environment and social risk. Moreover, the Bank has an independent unit for model risk management and group oversight, and a separate division for credit administration and consumer risk. The Board Risk Management Committee is appointed and authorized by the Board of Directors to assist in the design, regular evaluation, and timely updating of the risk management framework of the Bank, and the Board Information Technology Committee plays a supervisory and advisory role for IT, Information Security and Digital Banking functions within the Bank.

During CY25, Pakistan’s banking sector’s total assets grew by approximately 17.8% YoY, while investments surged by ~31.1% to PKR ~39.1trln (CY24: PKR ~29.8trln). Net advances of the sector declined by ~6% to PKR ~14.9trln (CY24: PKR ~15.8trln). Non-Performing Loans (NPLs) decreased by 9.7% YoY to PKR ~964bln (CY24: PKR ~1,068bln). Capital Adequacy Ratio averages have shown an increasing trend, rising to 20.8% (CY24: 20.6%), with capitalization remains adequate to absorb potential shocks. While the Advances to Deposit Ratio (ADR) was reported at 37.5% (CY24: 49.7%), which appears higher relative to declining advances, because deposit growth outpaced lending activity. This reflects a cautious lending stance by banks in a challenging macroeconomic environment, where risk-averse behavior and liquidity accumulation resulted in slower credit deployment, pushing the ADR downwards. In a lower policy rate environment, coupled with high operating costs and reduced lending, the sector faced margin pressure, leading to moderated profitability by end-CY25, despite robust capitalization and improving asset quality. (Source: SBP Compendium). Amid this operating environment, Bank Alfalah Limited ("BAFL" or "the Bank") maintained its position amongst the country's large commercial banks, supported by a diversified business franchise and strong deposit mobilization capabilities. During CY25, the Bank's gross advances remained broadly stable at PKR 1.153 trln (CY24: PKR 1.156 trln), reflecting disciplined underwriting and portfolio optimization following the withdrawal of ADR-linked tax incentives, while healthy Consumer, SME, and Agriculture segment growth supported diversification. Consequently, the Advances-to-Deposit Ratio (ADR) moderated to 44.3% (CY24: 51.9%). On the funding side, deposits registered a strong growth of 16.8% to PKR 2.496 trln (CY24: PKR 2.136 trln), driven primarily by growth in low-cost current accounts and the Bank's continued focus on granular deposit mobilization. While the balance sheet expanded and risk-weighted assets increased during the year, the Capital Adequacy Ratio (CAR) moderated to 15.87% (CY24: 17.96%). Nevertheless, capitalization remains comfortably above the minimum regulatory requirement, providing adequate capacity to absorb potential shocks and support future business growth. The Bank's strong liquidity profile, healthy CASA mix, and resilient deposit franchise continue to underpin its overall risk profile despite the moderation in profitability arising from a declining interest rate environment and elevated operating expenses.

BAFL remains one of Pakistan's leading private-sector banks, supported by a strong deposit franchise, diversified customer base, and extensive branch network. During CY25, the Bank's total deposits increased by 16.8% to PKR 2,496.2bln (CY24: PKR 2,136.9bln), reflecting continued success in mobilizing deposits despite a competitive banking landscape. Customer deposits, which constitute the core funding base, increased by 16.6% to PKR 2,197.3bln (CY24: PKR 1,884.8bln), underpinned by growth across retail, commercial, and corporate banking segments. Despite robust growth in absolute deposit volumes, BAFL's market share of total industry deposits moderated slightly to 6.3% (CY24: 7.0%), primarily due to the Bank's focus on building CA averages. Nevertheless, the Bank continues to maintain a strong competitive position, supported by its established presence in transaction banking, trade finance, remittances, digital banking, and Islamic banking. The Bank's sizeable deposit franchise, diversified business model, and expanding customer relationships continue to reinforce its standing among Pakistan's leading commercial banks.

In CY25, BAFL’s total revenue grew by 7.1% YoY to PKR 183.4bln (CY24: PKR 171.2bln). Net markup/return/interest income grew by 7.2% to PKR 135.9bln (CY24: PKR 126.8bln), supported primarily by the Bank’s strong average current account deposit base and a strategically positioned long-term investment book that partially cushioned the impact of falling benchmark rates on asset yields. Asset yields declined in line with the SBP rate reduction cycle, while liability repricing benefited from the growing low-cost CASA base. Non-markup income grew by 7.0% to PKR 47.5bln (CY24: PKR 44.4bln), driven by higher foreign exchange income at PKR 11.97 bln (CY24: PKR 9.5bln), improved dividend income at PKR 3.9bln (CY24: PKR 1.8bln), and fee and commission income of PKR 16.4bln (CY24: PKR 17.5bln) earned from branch banking, digital channels, trade business, card-related services, wealth management, and investment banking desks. Capital gains remained broadly stable at PKR 13.3bln (CY24: PKR 13.9bln), reflecting active management of the investment portfolio amid the declining rate environment.

During CY25, non-markup income rose by 7.0% to PKR 47.5bln (CY24: PKR 44.4bln), supported by improved foreign exchange income, dividend income, and fee and commission income earned across digital channels, trade finance, card services, and wealth management. Non-markup income contribution to total income remained stable at 25.9% (CY24: 25.9%), reflecting the consistent diversification of the Bank's revenue base. Non-markup expenses increased by 36.4% to PKR 117.7bln (CY24: PKR 86.3bln), driven by deliberate and time-bound strategic investments in technology infrastructure, branch network expansion to 1,186 branches, significant home remittance promotional expenditure, and general inflationary pressures. Importantly, HRB-related promotional costs have begun normalising from 4QCY25 following SBP's June 2025 circular standardising rebate pricing, providing clear visibility into cost trajectory improvement. Consequently, the cost-to-income ratio stood at 64.2% (CY24: 50.4%); while elevated, this is assessed as a cyclical peak reflective of a front-loaded investment cycle rather than a structural deterioration in operating efficiency, with management action already underway to rationalise the cost base. The provisioning charge increased modestly to PKR 3.3bln (CY24: PKR 1.8bln), remaining at a contained level relative to the size of the advances portfolio and consistent with IFRS-9 ECL adjustments against a broadly stable underlying credit book. Net profit after tax declined by 26.1% to PKR 28.3bln (CY24: PKR 38.3bln), with EPS of PKR 17.97 (CY24: PKR 24.30); however, the decline is assessed as transitory in nature, driven predominantly by the HRB promotional costs and a persistently high effective tax burden from super tax rather than any impairment in the Bank's core earnings capacity. ROE declined to 15.1% (CY24: 24.2%) and ROA to 0.8% (CY24: 1.1%); both metrics, while moderated, remain positive and are expected to recover progressively as the cost cycle normalises, digital investments begin yielding return efficiencies, and the HRB promotional expense burden dissipates.

Management’s strategic agenda is centered on deepening the CASA franchise, cost structure rationalisation as the HRB promotional cycle normalises, and calibrated credit growth across SME, consumer, and agri segments to diversify the advances book and support risk-adjusted yields. The Bank’s digital ecosystem anchored by the Alfa, BNPL, AlfaMall, and its agent network, continues to supplement current account acquisition and fee income generation. Capital adequacy is expected to be sustained above regulatory minimums through earnings retention, supported by a demonstrated dividend payout policy.

At CY25, BAFL's net advances stood at PKR 1,104.92bln (CY24: PKR 1,109.38bln), remaining broadly stable despite a challenging lending environment and the unwinding of ADR-linked tax incentives that had temporarily boosted sector-wide credit growth at end-CY24. Consequently, the Advances-to-Deposit Ratio (ADR) moderated to 44.3% (CY24: 51.9%), reflecting strong deposit mobilization and a prudent approach towards credit deployment amid subdued private-sector borrowing demand. The stable advances portfolio highlights the Bank's disciplined underwriting standards and balanced risk appetite, while maintaining a diversified exposure across key economic sectors. On the asset quality front, Non-Performing Loans (NPLs) increased to PKR 47.5bln (CY24: PKR 42.4bln), mainly reflecting stress in select borrower segments amid a challenging operating environment. Consequently, the infection ratio rose to 4.12% (CY24: 3.66%); however, it remains comparatively lower than the industry average. The Bank maintained a strong coverage ratio of 102.2%, demonstrating prudent provisioning practices and providing a comfortable buffer against potential credit losses. Overall, BAFL's credit risk profile remains supported by a diversified advances portfolio, conservative underwriting standards, strong provisioning buffers, and resilient asset quality indicators.

As of CY25, BAFL's investment portfolio increased by 9.2% to PKR 2,173.4bln (CY24: PKR 1,991.2bln), reflecting the Bank's continued preference for high-quality liquid assets amid a relatively subdued lending environment. Government securities remained the dominant component of the investment portfolio, accounting for approximately 92% of total investments (CY24: ~91%). The portfolio primarily comprised Pakistan Investment Bonds (PIBs), Market Treasury Bills (MTBs), and Ijarah Sukuk, supporting both liquidity management and income generation objectives. The PIB portfolio stood at PKR 1,082.3bln at CY25, representing nearly half of the total investment book. Within this, Fixed Rate PIBs amounted to PKR 408.8bln, while Floating Rate PIBs constituted PKR 673.5bln, accounting for approximately 38% and 62% of the PIB portfolio, respectively. The weighted average maturity of the Fixed Rate PIB portfolio stood at 2.2 years compared to 0.2 years for Floating Rate PIBs, reflecting the Bank's preference for maintaining duration flexibility in a declining interest rate environment. The PIB portfolio carried an aggregate unrealized gain of PKR 25.1bln at CY25, comprising PKR 13.1bln on fixed-rate securities and PKR 12.0bln on floating-rate securities. The sizeable sovereign securities portfolio exposes the Bank to interest rate risk; however, associated credit risk remains limited owing to the government-backed nature of these instruments. During CY25, the declining interest rate environment supported treasury performance, enabling the Bank to realize capital gains of approximately PKR 9.8bln through active portfolio management and duration positioning. Overall, BAFL's market risk profile remains manageable, supported by a predominantly sovereign investment portfolio, prudent duration management practices, and strong treasury capabilities.

As of CY25, BAFL maintained a strong liquidity profile, supported by a diversified deposit franchise and substantial high-quality liquid assets. Total deposits increased by 16.8% to PKR 2,496.2bln (CY24: PKR 2,136.9bln), driven primarily by growth in low-cost current account balances and continued expansion of the Bank's retail and transactional banking franchise. The Bank's funding profile remains well-diversified, with the top 20 depositors accounting for only 13.5% of total deposits (CY24: 14.1%), indicating limited concentration risk and improved depositor granularity. Individual deposits remained the largest contributor to the deposit base, constituting 40.9% of total deposits (CY24: 43.0%), while private sector deposits represented 28.8% (CY24: 31.9%). Government deposits increased to 9.6% (CY24: 6.3%), reflecting stronger public-sector relationships during the year. The deposit mix remained favorable, with Current Account deposits increasing by 16.9% to PKR 954.8 bln (CY24: PKR 817.05 bln), while the Bank sustained a strong CASA ratio of 69.5%, reflecting its ability to mobilize stable and cost-effective funding despite intense competition within the banking sector. The Bank's Advances-to-Deposit Ratio (ADR) moderated to 44.3% (CY24: 51.9%), primarily due to strong deposit growth coupled with broadly stable advances. The Bank's liquidity position remained comfortably above regulatory requirements, with the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) reported at 180% and 140%, respectively. Going forward, BAFL is expected to continue benefiting from its granular deposit base, strong CASA franchise, and robust liquidity buffers.

As at CY25, BAFL's Capital Adequacy Ratio (CAR) stood at 15.87% (CY24: 17.96%), while the Tier-I Capital Ratio was reported at 12.33% (CY24: 14.04%), remaining comfortably above the minimum regulatory requirement prescribed by the State Bank of Pakistan. The moderation in capital ratios primarily reflects the growth in risk-weighted assets (RWAs), which increased by 19.7% to PKR 1,339.7bln (CY24: PKR 1,118.9bln), outpacing internal capital generation during the year. The increase in RWAs was driven by balance sheet expansion and higher capital allocation against credit and market risk exposures. Despite the decline in regulatory capital ratios, the Bank's capitalization remains supported by a strong equity base and sustained earnings generation capacity. Shareholders' equity increased to PKR 197.5bln at CY25 (CY24: PKR 178.1bln), reflecting profit retention and growth in reserves. The Common Equity Tier-I (CET-I) ratio stood at 11.31% (CY24: 12.83%), providing a solid capital buffer above regulatory thresholds. To further strengthen its capital structure and support future growth objectives, the Bank continues to maintain Additional Tier-I instruments within its regulatory capital base. Furthermore, the planned issuance of a Tier-II Term Finance Certificate (TFC) is expected to provide additional capital support, enhance the Bank's CAR, and create further capacity for business growth and balance sheet expansion. Overall, BAFL's capitalization profile remains adequate, providing sufficient loss-absorption capacity to support business growth while maintaining compliance with evolving regulatory capital requirements.