Bank of Khyber : Transmission of Quarterly Report for the period ended September 30, 2023

The Bank Of Khyber

CONDENSED INTERIM

FINANCIAL INFORMATION

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2023

CONTENTS

	Corporate Information	1
	Directors' Review	3
	Condensed Interim Statement of Financial Position	5
	Condensed Interim Profit and Loss Account	6
	Condensed Interim Statement of Comprehensive Income	7
	Condensed Interim Statement of Changes in Equity	8
	Condensed Interim Cash Flow Statement	9
	Notes to the Condensed Interim Financial Statements	10

CORPORATE INFORMATION

Board of Directors
Muhammad Zubair Asghar Qureshi	Chairman / Non-Executive Director
Muhammad Ayaz	Non-Executive Director
Syed Asad Ali Shah	Independent Director
Tahir Jawaid	Independent Director
Mir Javed Hashmat	Independent Director
Abid Sattar	Independent Director
Dr. Aliya Hashmi	Independent Director
Osman Asghar Khan	Independent Director
Managing Director/ CEO
Muhammad Ali Gulfaraz
Shariah Board
Mufti Muhammad Zahid	Chairman Shariah Board
Mufti Muhammad Arif Khan	Member Shariah Board
Mufti Abdul Wahab	Member Shariah Board
Qazi Abdul Samad	Resident Shariah Board Member (RSBM)
Board Audit Committee
Syed Asad Ali Shah	Chairman
Muhammad Ayaz	Member
Abid Sattar	Member
Dr. Aliya Hashmi	Member
Board Human Resource & Remuneration Committee
Dr. Aliya Hashmi	Chairman
Tahir Jawaid	Member
Abid Sattar	Member
Board Risk Management Committee
Abid Sattar	Chairman
Muhammad Ayaz	Member
Dr. Aliya Hashmi	Member
Mir Javed Hashmat	Member
Managing Director	Member
	1

BoardI.T Steering Committee
Abid Sattar	Chairman
Tahir Jawaid	Member
Managing Director	Member
Board Compliance Committee
Tahir Jawaid	Chairman
Abid Sattar	Member
Managing Director	Member
Chief Financial Officer
Irfan Saleem Awan
Company Secretary
Sara Shah
Registered Office / Head Office
The Bank of Khyber
24 - The Mall, Peshawar Cantt.
UAN# 00-92-91-111 95 95 95
URL: www.bok.com.pk
Auditors
M/s Pwc A.F. Ferguson & Co.
Chartered Accountants
Legal Advisors
M/s. Mohsin Tayebaly & Co., Karachi
Registrar and Share Registration Office
THK Associates (Pvt) Ltd.
Plot # 32-C, Jami Commercial Street 2
D.H.A, Phase-VII,
Karachi-75500

2

DIRECTORS' REVIEW

On behalf of the Board of Directors of The Bank of Khyber ( The Bank), I am pleased to present the condensed Interim Financial Information of the Bank for the nine months ended September 30, 2023. The results are inclusive of Islamic Banking Operations.

Financial Highlights

The financial results of The Bank of Khyber for the nine months ended September 30, 2023 are as under:

	(Rs. in Million)
	September 30	December 31
	2023	2022
Total Assets	395,815	344,984
Deposits	284,866	248,906
Advances (Net)	92,282	127,515
Investments (Net)	214,506	173,669

	(Rs. in Million)
	Period Ended September 30
	2023	2022
Operating Profit	5,227	1,162
Provision against non-performing advances/others	(545)	(793)
Profit before taxation	4,682	370
Taxation	(2,209)	(90)
Profit after tax	2,473	280

Performance Review

Global inflation in commodity prices coupled with the domestic political instability resulted in difficult economic conditions in Pakistan with high inflation, devaluation in the Pak Rupee, slow down in import dependent manufacturing industries. In order to control the inflationary pressures, SBP maintained the policy rate at 22% in its recent monetary policy decision.

Following Pakistan's agreement with the International Monetary Fund (IMF) earlier this year we have seen some stabilization in the short-term macroeconomic environment which is necessary for a comprehensive and sustainable long-term strategy for economic turnaround.

Prudent planning and repositioning of our balance sheet has helped the Bank to register a strong recovery in financial performance. We are pleased to report a substantial increase in profit before tax to Rs. 4,682 million for the nine months ended (9M) September 30, 2023, from Rs. 370m for 9M 2022. Similarly net profit after tax for 9M 2023 rose to Rs. 2,473 million against Rs. 280 million for 9M 2022.

3

Future Outlook

The Bank is strategically repositioning while closely monitoring the prevailing situation by proactively implementing a series of measures to strengthen competitive position on a sustainable basis. This includes but is not limited to the expansion of Bank's network for maximum customer reach while continuously investing in upgrading the systems and capabilities to meet the expectations of customers. The rapid growth in traffic on Bank's digital channels is an affirmation that customers are increasingly engaging with the Bank on its new initiatives.

The Bank's strategy is to deliver sustainable growth by diversifying deposit base with a greater contribution from individuals and the private sector, growing share of fee/non mark-up income and providing the latest relevant digital financial services to facilitate customers. We have taken actions to strengthen risk management capabilities in order to manage asset quality under the difficult economic circumstances that are expected to persist for some time. Based on the above, we aim for maintaining positive momentum going forward as well.

Credit Rating

The Pakistan Credit Rating Agency Limited (PACRA) maintained the medium to long term entity rating of the Bank at 'A+' (Single A Plus) and also maintained short term entity rating of the Bank at "A1" (Single A One). Outlook on the assigned rating is "Stable".

VIS Credit Rating Company Limited (VIS) reaffirmed the medium to long term entity rating of the Bank at 'A+' (Single A Plus) and short-term rating at 'A-1'(A-One). The medium to long-term rating of 'A+' denotes good credit quality, with adequate protection factors. Outlook on the assigned rating is 'Stable'

The ratings denote low expectation of credit risk emanating from strong capacity for timely payment of financial commitments.

Acknowledgement

The Board would like to thank our shareholders, the Provincial Government, State Bank of Pakistan, other regulatory authorities and stakeholders for their continued trust, guidance and support. We are also grateful to our valued customers for their patronage and continued confidence in the Bank.

For and on behalf of the Board of Directors

Muhammad Ali Gulfaraz

Karachi: October 27,2023

Managing Director

4

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2023

		(Un-audited)	(Audited)
		September 30,	December 31,
		2023	2022
	Note	-------- Rupees in '000 --------
ASSETS
Cash and balances with treasury banks	5	21,763,660	16,273,825
Balances with other banks	6	3,934,379	3,556,532
Lendings to financial institutions	7	35,519,850	7,641,077
Investments	8	214,506,067	173,668,614
Advances	9	92,281,940	127,515,211
Fixed assets	10	5,858,921	5,613,279
Intangible assets	11	420,367	473,720
Deferred tax assets	12	2,274,809	1,367,841
Other assets	13	19,255,343	8,873,921
		395,815,336	344,984,020
LIABILITIES
Bills payable	14	1,247,559	2,102,234
Borrowings	15	76,483,190	66,263,168
Deposits and other accounts	16	284,866,182	248,905,981
Liabilities against assets subject to finance lease		-	-
Sub-ordinated debt		-	-
Deferred tax liabilities		-	-
Other liabilities	17	15,051,728	11,285,139
		377,648,659	328,556,522
NET ASSETS		18,166,677	16,427,498
REPRESENTED BY
Share capital	18	11,027,905	11,027,905
Reserves		4,141,338	3,646,746
Deficit on revaluation of assets - net	19	(965,848)	(229,857)
Unappropriated profit		3,963,282	1,982,704
		18,166,677	16,427,498
CONTINGENCIES AND COMMITMENTS	20

The annexed notes 1 to 36 form an integral part of these condensed interim financial statements.

	________________	___________	___________	___________
MANAGING	CHIEF FINANCIAL	DIRECTOR	DIRECTOR	DIRECTOR
DIRECTOR	OFFICER

5

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (UN-AUDITED)

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2023

Mark-up / return / interest earned

Mark-up / return / interest expensed

Net mark-up / interest income

NON MARK-UP / INTEREST INCOME

Fee and commission income

Dividend income

Foreign exchange income Income / (loss) from derivatives

(Loss) / gain on securities

Share of profit of associate

Other income

Total non-markup / interest income

Total income

NON MARK-UP / INTEREST EXPENSES

Operating expenses

Workers Welfare Fund

Other charges

Total non-markup / interest expenses

PROFIT BEFORE PROVISIONS

Provisions and write offs - net

Extra ordinary / unusual items

PROFIT / (LOSS) BEFORE TAXATION

Taxation

PROFIT / (LOSS) AFTER TAXATION

Basic and diluted earnings per share

	Quarter ended	Period ended
	July 1	July 1	January 1	January 1
	to	to	to	to
	September 30,	September	September 30,	September
	2023	30, 2022	2023	30, 2022
Note	------------------------	Rupees in '000 ------------------------
21	16,460,304	10,737,472	41,238,013	29,466,325
22	13,002,200	9,374,823	31,803,684	24,580,002
	3,458,104	1,362,649	9,434,329	4,886,323
23	132,784	121,579	433,617	355,210
	3,587	2,498	8,488	7,134
	342,085	225,845	1,235,272	557,967
	-	-	-	-
24	(68,572)	(110)	(70,264)	10,099
	874	-	9	1,608
25	34,036	36,619	104,599	109,059
	444,794	386,431	1,711,721	1,041,077
	3,902,898	1,749,080	11,146,050	5,927,400
26	2,179,816	1,689,203	5,915,577	4,765,221
	-	-	-	-
27	1,269	-	3,711	5
	2,181,085	1,689,203	5,919,288	4,765,226
	1,721,813	59,877	5,226,762	1,162,174
28	105,799	278,116	544,651	792,594
	-	-	-	-
	1,616,014	(218,239)	4,682,111	369,580
29	831,809	(106,822)	2,209,152	89,815
	784,205	(111,417)	2,472,959	279,765
	------------------------	Rupees ------------------------
30	0.71	(0.10)	2.24	0.25

The annexed notes 1 to 36 form an integral part of these condensed interim financial statements.

	________________	___________	___________	___________
MANAGING	CHIEF FINANCIAL	DIRECTOR	DIRECTOR	DIRECTOR
DIRECTOR	OFFICER

6

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___________

___________

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7

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2023

	Quarter ended	Period ended
	July 1	July 1	January 1	January 1
	to	to	to	to
	September	September	September	September
	30, 2023	30, 2022	30, 2023	30, 2022
	------------------------ Rupees in '000 ------------------------
Profit / (loss) after taxation for the period	784,205	(111,417)	2,472,959	279,765
Other comprehensive income / (loss)
Items that may be reclassified to profit and
loss account in subsequent periods:
Movement in deficit on revaluation of investments - net of tax	493,160	171,554	(731,211)	(230,999)
Share of deficit on revaluation of investments in associate - net of tax	118	-	(453)	(1,135)
	493,278	171,554	(731,664)	(232,134)
Items that will not be reclassified to profit
and loss account in subsequent periods:
Movement in deficit on revaluation of non-banking assets - net of tax	-	-	(2,680)	(3,247)
Share of remeasurement (loss) / gain on defined benefit obligation of associate - net of tax	-	-	564	268
	-	-	(2,116)	(2,979)
Total comprehensive income	1,277,483	60,137	1,739,179	44,652

The annexed notes 1 to 36 form an integral part of these condensed interim financial statements.

MANAGING	CHIEF FINANCIAL	DIRECTOR	DIRECTOR	DIRECTOR
DIRECTOR	OFFICER

___________

___________

___________

________________

8

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2023

			Surplus / (deficit) on
	Share	Statutory		revaluation of		Unappropriated
				Total
	capital	reserve			Non-banking	profit
	Investments	Fixed assets
			assets
		--------------------------------------------- R upees in '000 ---------------------------------------------
Balance as at January 1, 2022 (audited)	10,502,710	3,555,773	(486,113)	787,200	49,530	2,160,774	16,569,874
Profit after taxation for the nine months ended September 30, 2022	-	-	-	-	-	279,765	279,765
Other comprehensive (loss) / income - net of tax	-	-	(232,134)	-	(3,247)	268	(235,113)
	-	-	(232,134)	-	(3,247)	280,033	44,652
Transfer to statutory reserve	-	55,953	-	-	-	(55,953)	-
Transfer from surplus on revaluation of non-banking asset - net of tax	-	-	-	-	(4,340)	4,340	-
Transactions with owners, recorded directly in equity
Bonus shares issued for the year ended December 31, 2021
(Rs. 0.50 per share)	525,195	-	-	-	-	(525,195)	-
Balance as at September 30, 2022 (un-audited)	11,027,905	3,611,726	(718,247)	787,200	41,943	1,863,999	16,614,526
Profit after taxation for the three months ended December 31, 2022	-	-	-	-	-	175,099	175,099
Other comprehensive loss - net of tax	-	-	(324,271)	-	(15,037)	(22,819)	(362,127)
	-	-	(324,271)	-	(15,037)	152,280	(187,028)
Transfer to statutory reserve	-	35,020	-	-	-	(35,020)	-
Transfer from surplus on revaluation of non-banking asset - net of tax	-	-	-	-	(1,445)	1,445	-
Balance as at December 31, 2022 (audited)	11,027,905	3,646,746	(1,042,518)	787,200	25,461	1,982,704	16,427,498
Profit after taxation for the nine months ended September 30, 2023	-	-	-	-	-	2,472,959	2,472,959
Other comprehensive (loss) / income - net of tax	-	-	(731,664)	-	(2,680)	564	(733,780)
	-	-	(731,664)	-	(2,680)	2,473,523	1,739,179
Transfer to statutory reserve	-	494,592	-	-	-	(494,592)	-
Transfer from surplus on revaluation of non-banking asset - net of tax	-	-	-	-	(1,647)	1,647	-
Balance as at September 30, 2023 (un-audited)	11,027,905	4,141,338	(1,774,182)	787,200	21,134	3,963,282	18,166,677

The annexed notes 1 to 36 form an integral part of these condensed interim financial statements.

MANAGING	CHIEF FINANCIAL	DIRECTOR	DIRECTOR	DIRECTOR
DIRECTOR	OFFICER