Askari Bank : Transmission of Quarterly Report for the Period Ended 30.09.2023

Contents

Directors' Review	1
Directors' Review (Urdu)	6
Unconsolidated Condensed Interim Statement of Financial Position	7
Unconsolidated Condensed Interim Profit and Loss Account	8
Unconsolidated Condensed Interim Statement of Comprehensive Income	9
Unconsolidated Condensed Interim Statement of Changes in Equity	10
Unconsolidated Condensed Interim Cash Flow Statement	11
Notes to the Unconsolidated Condensed Interim Financial Statements	12
Consolidated Condensed Interim Statement of Financial Position	39
Consolidated Condensed Interim Profit and Loss Account	40
Consolidated Condensed Interim Statement of Comprehensive Income	41
Consolidated Condensed Interim Statement of Changes in Equity	42
Consolidated Condensed Interim Cash Flow Statement	43
Notes to the Consolidated Condensed Interim Financial Statements	44

Corporate Information

Board Of Directors	Mr. Waqar Ahmed Malik - Chairman
	Mr. Sarfaraz Ahmed Rehman
	Mr. Arif Ur Rehman
	Dr. Nadeem Inayat
	Syed Bakhtiyar Kazmi
	Mr. Manzoor Ahmed
	Mr. Kamran Yousuf Mirza
	Ms. Zoya Mohsin Nathani
	Ms. Samina Rizwan
	Raja Muhammad Abbas
	Mr. Atif R. Bokhari - President & Chief Executive
Board Audit Committee	Mr. Kamran Yousuf Mirza - Chairman
	Dr. Nadeem Inayat
	Syed Bakhtiyar Kazmi
	Mr. Manzoor Ahmed
	Raja Muhammad Abbas
Auditors	KPMG Taseer Hadi & Co.
	Chartered Accountants
Legal Advisors	M/s RIAA, Barker Gillette
	Advocates & Corporate Counselors
Company Secretary	Syed Ali Safdar Naqvi
Registered Office	AWT Plaza, The Mall, P. O. Box No. 1084
	Rawalpindi - 46000, Pakistan
	Tel: [phone], UAN: (92 51) 111 000 787
	Fax: [phone]
	Email: [e-mail]
Registrar & Share Transfer Office	CDC Share Registrar Services Limited (CDCSRSL)
	Mezzanine Floor, South Tower, LSE Plaza
	19-Khayaban-e-Aiwan-e-Iqbal, Lahore
	Tel: Customer Support Services (Toll Free)
	0800-CDCPL (23275)
	Tel: [phone]
	Fax: [phone]
	Email: [e-mail]
	Website: www.cdcsrsl.com
Entity Ratings	Long Term: AA+
	Short Term: A1+
	By PACRA
Website	www.askaribank.com
Social Media	askaribankpakistan
	Askari_Bank
	askaribankpk
	askaribanklimited
	AskariBankOfficial

DIRECTORS' REVIEW

Dear Shareholders

The Directors present the unaudited condensed interim unconsolidated financial statements for the third quarter and nine months ended September 30, 2023.

Economy:

Pakistan's economy weathered a very difficult fiscal year in recent times and a series of economic shocks; historic high inflation, a highly contractionary monetary policy, depleting reserves, surging commodity prices and import rationing. Turning to current fiscal year, the economy has started showing signs of recovery post approval of 'Stand-By Arrangement' with the IMF in July 2023 that helped avert a balance of payments crisis and unlock external funding prospects. The upturn in global economy coupled with marginal easing of import restrictions is mitigating supply side disruptions and supporting export-oriented industries. The better input situation is also paving the way for LSM growth prospects. The major recovery in cotton crop is encouraging for the agriculture sector and for the export outlook.

CPI inflation recorded at 31.4 percent year-on-year in September is showing a 2.0 percent increase over the previous month. Major drivers contributing to this rise are food and energy prices. Overall, the average CPI inflation for the current nine months at 31.7 percent compares with 18.0 percent for the corresponding period last year. The inflation will likely maintain a downward trajectory owing to easing of supply constraints from better agriculture output, rupee appreciation and commodity prices, amid high base effect. The Monetary Policy Committee of the SBP maintained Policy Rate at 22 percent during the meeting held in September.

On the external front, recent data reflects improvement in trade deficit that declined by 12.6 percent in the month of August 2023. Remittances also recorded an increase of 3.2 percent in August. The administrative measures to discipline foreign exchange market have yielded results and will further support remittances, trade and the current account balance. SBP has also implemented measures to stabilize PKR including structural reforms aimed at regulating exchange companies and curbing the dollar's ascent. Pakistan's main export markets are showing rising trends that improves export growth prospects. However, as imports increase gradually to stimulate economic activity, it is expected that the current account will remain within a sustainable limit.

Looking ahead, Pakistan's GDP growth is expected to remain below potential in short to medium term as recent indicators remain fragile due to persistent core inflation, elevated interest rates and lingering geopolitical uncertainties. The economic managers have implemented certain prior actions in pursuit of the IMF-SBA and have a tough agenda on hand to comply with program conditionalities including much needed energy reforms, improved governance in SOEs and widening of tax base. Improvement in investments and exports, careful economic management - including exchange rate flexibility, fiscal restraint remains key

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imperatives for macroeconomic stability, it is expected that the economic revival plans and prudent actions - policies including Special Investment Facilitation Council (SIFC) and Information Technology policy, will attract new investments to create a multiplier effect for a higher and inclusive economic growth in coming periods.

Financial Performance:

The financial results of the Bank for the quarter and nine months ended September 30, 2023 reflect continued growth momentum in line with the Bank's strategy, summarized as under:

		(Rupees in million)
	Nine months ended September 30,
	2023	2022
Net mark-up and non fund income	50,418	38,128
Administrative and other expenses	(21,355)	(16,896)
Operating profit	29,063	21,232
Provisions and write offs - net	(690)	(181)
Profit before taxation	28,373	21,051
Taxation	(13,809)	(10,302)
Profit after taxation	14,564	10,749
		Restated
Basic earning per share - Rupees	10.05	7.42

Profit before taxation for the current nine months at Rs.28.4 billion is showing a growth of 35 percent year-on-year while profit after taxation grew by 35 percent. The earnings per share at Rs.10.05 for the current period compares with Rs.7.42 (restated) for last year.

Askari Bank's revenues increased by 32 percent over the same period last year. Key contribution was from mark-up income which grew by 39 percent and stood at Rs.40.5 billion. The increase in mark-up income was mainly driven by a combination of earning assets growth and favourable repricing of asset book. Aggregate non-markup income increased by 10 percent year-on-year; fee and commission income increased by 37 percent contributed by increase in trade, guarantee and credit related fees while foreign exchange income declined by 18 percent due to lesser market volatility. Operating expenses for the current nine months increased by 27 percent over the corresponding period mainly due to the effect of inflation and Rupee devaluation, and also due to additional costs of 37 new branches added to the nation-wide network during the last twelve months. The Bank continues to manage costs prudently while investing in technologies and infrastructure to support revenue streams. The operating expense to income ratio improved to 41 percent for the current nine months from 43 percent for the same period last year.

The Bank's deposits closed at Rs.1.28 trillion at September 30, 2023, with a year-on-year growth of 12 percent. Current and saving accounts recorded a growth of 14 percent, contributing 82 percent of the total deposit at period end. Gross advances registered a decline

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of 10 percent from Rs. 615 billion at year end 2022 to Rs 556 billion at September 30, 2023 as the Bank strategized its sectoral exposures in view of rising borrowing costs to unprecedented levels. The economic stress on certain borrowers warranted classifications that resulted in a 5 percent increase in non-performing advances during the period in review. The increase in NPLs also caused slight erosion of coverage ratio from 99.9 to 96.6 percent at September 30, 2023.

The Bank's entity rating was reaffirmed at 'AA+' (Double A Plus) for the long-term by Pakistan Credit Rating Agency Limited (PACRA), with outlook assigned as 'Stable'. The Bank's strong brand and affiliation with Fauji Foundation are recognized as the key rating drivers, supported by Bank's experienced management team, prudent risk management policies, and deep-rooted relationship with clients. The short-term rating was maintained at 'A1+' (A One Plus).

Askari Bank is strategically positioned for sustainable growth and remains committed towards building long-term shareholder value, despite macroeconomic challenges. The Bank is focused on expanding its footprint, providing unparallel services to the customers and to grow market share in retail segment, particularly low-cost and saving deposits. Emphasis will remain on supporting trade volumes with primary focus on middle market segment while pursuing digital transformation and process improvements. To this end, the Bank will continue to invest in talent and technology enabling its teams to do more to help our customers achieve their ambitions and in-turn drive Askari Bank to grow in the future.

Acknowledgment:

On behalf of the Board, we would like to place on record our gratitude to our valued customers and shareholders for their continued patronage to the Askari brand; our profound thanks to the State Bank of Pakistan, Securities and Exchange Commission of Pakistan and other regulatory authorities for their guidance and assistance. We would also like to place on record our appreciation for the efforts of the Sharia Board for strengthening sharia compliance and governance framework for Askari Ikhlas Islamic Banking. Lastly, we express our deepest appreciation and gratitude to our staff for the hard work and dedication.

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Atif R. Bokhari	Waqar Ahmed Malik
President & Chief Executive	Chairman, Board of Directors
Karachi:
October 27, 2023

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ASKARI BANK LIMITED

Unconsolidated Condensed Interim Statement of Financial Position As at September 30, 2023

Note

ASSETS

(Un-audited)(Audited)

September 30, December 31,

20232022 (Rupees in '000)

Cash and balances with treasury banks	6
Balances with other banks	7
Lendings to financial institutions	8
Investments	9
Advances	10
Fixed assets	11
Intangible assets	12
Deferred tax assets	13
Other assets	14
LIABILITIES
Bills payable	15
Borrowings	16
Deposits and other accounts	17
Liabilities against assets subject to finance lease
Subordinated debts	18
Deferred tax liabilities
Other liabilities	19
NET ASSETS
REPRESENTED BY
Share capital
Reserves
(Deficit) / surplus on revaluation of assets - net of tax	20
Unappropriated profit
CONTINGENCIES AND COMMITMENTS	21

120,545,365

6,723,571

9,075,470

1,042,294,110

524,132,791

25,143,978

1,714,899

13,662,744

91,374,794

1,834,667,722

9,330,700

378,683,435

1,275,247,418

-

12,000,000

-

74,658,022

1,749,919,575

84,748,147

14,492,992

57,267,033

(1,189,907)

14,178,029

84,748,147

70,950,067

9,677,123

406,934

762,696,638

583,810,931

24,484,412

1,375,625

7,545,677

64,723,402

1,525,670,809

11,878,563

233,432,089

1,142,574,606

-

12,000,000

-

52,463,298

1,452,348,556

73,322,253

12,602,602

43,385,854

3,952,356

13,381,441

73,322,253

The annexed notes 1 to 38 form an integral part of these unconsolidated condensed interim financial statements.

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Chief Financial Officer		President & Chief Executive		Director		Director		Chairman

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