Easypaisa Bank Limited (formerly Telenor Microfinance Bank Limited) (“Easypaisa” or the “Bank”) is incorporated in Pakistan as a public limited company and is engaged in digital banking, microfinance business, and related services. The Bank was granted a commercial license for Digital Retail Banking by the State Bank of Pakistan on 28 January 2025 and subsequently declared a scheduled bank under the SBP Act, 1956.

Easypaisa Bank Limited was incorporated on 1 August 2005 under the provisions of the Companies Act, 2017 (previously the Companies Ordinance, 1984), with the Securities and Exchange Commission of Pakistan, and commenced operations in September 2005. The Bank was subsequently among the leading applicants under the State Bank of Pakistan’s Digital Banks Framework 2022 and has since been granted a Digital Retail Bank (DRB) license, reflecting its longstanding focus on financial inclusion and digital financial services. In view of its established operational history and robust business model, the Bank was exempted from the pilot and transitional phase requirements, including certain restrictions on deposit mobilisation and lending activities. This transition has marked a significant milestone in the Bank’s evolution, reinforcing its position as a key player in Pakistan’s digital banking landscape. The registered office of the Bank is located at 19-C, 9th Commercial Lane, Main Zamzama Boulevard, Phase V, DHA, Karachi.

As part of its digital transformation strategy, Easypaisa has streamlined its physical presence, maintaining 25 full-service branches while converting the remainder into cashless service centers. The Bank continues to position itself as a leading digital financial services provider, with a strong focus on innovation in payments, credit, and embedded finance. On the lending side, Easypaisa has expanded its portfolio through embedded finance solutions, including Buy Now, Pay Later (BNPL) for airtime and utility payments and merchant cash lending, thereby improving credit access for individuals and SMEs. It has also strengthened its savings and investment offerings through products such as Savings Pockets, Daily Savings Plans, and Digital Term Deposits, supporting deposit growth and customer engagement. The Easypaisa mobile application provides a comprehensive digital ecosystem enabling fund transfers, bill payments, mobile top-ups, insurance subscriptions, merchant payments, and e-commerce integrations. It also facilitates government-related transactions, including e-Challan payments and various fee payments, reinforcing its role in digital public service delivery, while further supporting embedded finance through integrated lending and collection capabilities. During CY25, Easypaisa processed approximately 4.68bln transactions with a cumulative value of around PKR 16trln, reflecting the scale and increasing usage of its platform. The transaction mix remains well-diversified, with significant contributions from money transfers, online and merchant payments, mobile top-ups, Mini Apps and other digital payment streams, highlighting strong customer engagement and product penetration. Going forward, Easypaisa aims to further expand its offerings, including Islamic Banking products, international remittances, freelancer-focused accounts, and broader ecosystem integrations to strengthen its position as a full-spectrum digital financial services provider.

Easypaisa Bank Limited is a joint venture between Telenor Pakistan B.V. and Alipay (Hong Kong) Holding Limited. Telenor Pakistan B.V., a public limited company headquartered in Amsterdam, Netherlands, holds a 55% shareholding, while Alipay (Hong Kong) Holding Limited holds the remaining 45%. Telenor Pakistan B.V. is a subsidiary of Telenor ASA, a telecommunications company from Norway, whereas Alipay (Hong Kong) Holding Limited is a subsidiary of Ant Group Co., Ltd., a financial technology company headquartered in China.

Ant Group, an affiliate of Alibaba Group — one of China's largest multinational conglomerates — operates Alipay, the world's largest mobile payment platform. The platform serves a vast digital payments ecosystem encompassing over 1.6 billion users and approximately 90 million merchants globally. Telenor ASA, the ultimate parent company of the Telenor Group, is a leading global telecommunications operator headquartered in Oslo, Norway, with a majority shareholding held by the Government of Norway. The Group maintains an operational presence across 13 countries, positioning it among the foremost telecommunications enterprises worldwide.

Ant Financial ranks among the world's foremost financial technology conglomerates, distinguished by its innovation capabilities and scale across digital financial services. The Bank is well-positioned to leverage Ant Financial's strategic vision, technological expertise, and extensive global experience in advancing its digital banking proposition. Telenor Group, a prominent international telecommunications operator with an established presence across the Nordic region and Asia, contributes deep domain expertise in connectivity and customer-centric digital solutions, further strengthening the Bank's institutional foundation and capacity for sustained growth and innovation.

The Ant Group’s Initial strategic investments amounted to USD 185.4 million. The continued and unwavering support of its shareholders — Telenor Group and Ant Group — has been instrumental in underpinning the Bank's growth trajectory and overall financial resilience. In addition to a series of prior capital injections, the Bank received  a further equity investment of USD 10.0 million in October 2024 from its existing shareholders, with ownership proportions remaining unchanged.

Overall governance and strategic oversight of the Bank vests in an eight-member Board of Directors (the "Board"), inclusive of the Chief Executive Officer. The Board comprises three independent directors, one executive director, and four non-executive directors, including the Chairperson, Mr. Irfan Wahab Khan, who serves as a representative of the Telenor Group. To ensure effective oversight across key functional domains, the Board operates through six dedicated committees: (i) the People Committee, (ii) the Audit Committee, (iii) the Risk Management Committee, (iv) the Information Technology Committee, (v) the Compliance Committee, and (vi) the Executive Committee. During CY25, the Board convened eight meetings, with attendance recorded at a satisfactory level.

Mr. Irfan Wahab Khan – Executive Director / Chairman of the Board, is a seasoned executive with over 25 years of experience across fintech, telecom, digital services, and consulting. He is also Senior Vice President – Head of Portfolio Development at Telenor Group and formerly served as CEO of Telenor Pakistan (2016–2023). He has held multiple senior leadership roles within Telenor, including EVP Emerging Asia Cluster Head and Board positions across Telenor entities. He holds advanced qualifications from University of Westminster, Harvard, INSEAD, London Business School, and IMD Switzerland. Mr. Henning Thronsen – Non-Executive Director, is a senior treasury and finance professional serving as Head of Project & Corporate Finance at Telenor Group Treasury with over 20 years of experience in capital structuring, M&A, risk management, and corporate finance. He oversees group-wide treasury functions and holds multiple board positions across Telenor entities. Mr. Zhi Xian Li – Non-Executive Director, is Country Manager for Pakistan at Ant Group with over 15 years of experience in telecommunications and digital financial services. He oversees strategic partnerships and joint ventures, including Easypaisa, and has previously held leadership roles at China UnionPay, including General Manager for Africa. He holds a Master’s degree in Computer Science. Mr. Amjad Waheed – Independent Director, has over 30 years of experience in investment banking and asset management. He is CEO of NBP Fund Management Limited and has previously led equity fund management at Riyad Bank, Saudi Arabia. He holds an MBA, PhD in Finance, and is a CFA charterholder. Mr. Douglas Feagin – Non-Executive Director, has over 30 years of experience in global financial services. He is Senior Vice President at Ant Group responsible for global partnerships and investments and previously spent over 20 years at Goldman Sachs in senior finance and fintech roles. He holds a BA in Economics from the University of Virginia and an MBA from Harvard Business School. Ms. Musharaf Hai – Independent Director, has over 35 years of experience across FMCG, banking, and consumer sectors, including senior leadership roles at Unilever, Citigroup, and as CEO of L’Oréal Pakistan. She has led major business transformation and market expansion initiatives and has received national and international honors including Sitara-i-Imtiaz and France’s Chevalier de l’Ordre National du Mérite. Mr. Muhammad Shoaib – Independent Director, has over 20 years of experience in digital transformation, cybersecurity, and technology consulting. He is a Managing Director and Partner at Boston Consulting Group and advises regulators and financial institutions on digital strategy, AI, and cyber risk. He holds advanced degrees in IT, cybersecurity, and information systems along with multiple global certifications.     

The Board, drawing upon its members' extensive collective expertise spanning the financial services and telecommunications industries, provides strategic counsel to the Bank's management and undertakes regular performance evaluations, including the periodic assessment of progress against established growth targets.

EY Ford Rhodes Chartered Accountants served as the external auditors of the Bank and expressed an unqualified opinion on the Bank's financial statements for the year ended December 31, 2025. In compliance with the State Bank of Pakistan's auditor rotation regulations, EY retired upon completion of its permissible tenure. PwC has been appointed as the Bank's external auditors for the current year and will conduct the audit from 2026 onward.

The Bank's organizational structure encompasses eleven departments, each led by a designated Department Head reporting directly to the Chief Executive Officer. The Head of Internal Audit maintains a reporting line to the Audit Committee, in accordance with sound governance practice. Collectively, the Senior Management team brings considerable professional experience and domain expertise to their respective roles.

The management team comprises qualified individuals with experience in their respective fields. In July 2024, Mr. Jahanzeb Khan appointed as President & CEO of the Bank. Jahanzeb Khan is a globally recognized leader in digital banking and fintech innovation, bringing over 25 years of experience in the financial services industry. As an accomplished Leader, he has successfully led transformational initiatives for prominent organizations across the globe including Finca Microfinance Bank, JP Morgan and Deloitte. His core expertise spans payments technology, digital banking solutions, fintech strategy, and management consulting. Mr. Jahanzeb is known for his ability to craft and implement high-impact strategies, develop world-class digital solutions, drive sustainable revenue growth, and achieve cost efficiencies through innovation and operational excellence. Mr. Amin Sukhiani, serves as the Chief Financial Officer of Easypaisa Bank Limited. With over two decades of experience in the financial services sector, he has played a pivotal role in transforming a microfinance institution into a full-fledged digital bank. Prior to this, he held senior finance roles at Bank Alfalah, where he led strategic initiatives including a digital bank license application, major share buy-backs, and IFRS implementations. He has also served in leadership positions at MCB Bank, Mnet Services, Faysal Bank, and PWC. Mr. Sukhiani is a Chartered Accountant and recipient of a Gold Medal from ICAP. He has completed various leadership and finance trainings from institutions including Euromoney, Oracle University, Franklin Covey, and RBL Group. Mr. Shahzad Khan, Chief Business Officer, having an experience of more than 20 years, spearheads the Channels, corporate business and productive lending portfolio with extensive cross functional experience in strategy development and implementation, product management, business analysis and performance management frameworks for leading Telcom and Multinational entities in Middle east and Pakistan, Namely Vodafone Qatar, Mobilink Pakistan, Pepsi Cola International. He is also experienced in OPEX/CAPEX Forecasting & Modelling for large scale organisations. Mr. Farhan Hassan, Chief Digital Officer, brings more than 15 years of extensive work experience in Product Management, Business Planning & Strategy, Marketing Analytics & consumer Insights & pricing. He leads the Wallet Business at Pakistan’s premier fintech, Easypaisa, where he oversees a broad portfolio including payments, savings products,  mini app platforms, online payment integrations, marketing and corporate communication. With extensive experience across Asia and Europe including Telenor and China Mobile, Mr. Farhan has a strong track record in developing and managing customer-centric digital products, driving innovation and growth in the financial services sector. Mr. Muhammad Rizwan Ikram, Chief Risk Officer, is a seasoned risk management professional with more than 22 years of experience and a strong track record in safeguarding financial institutions from diverse risks. His expertise is in Risk Management domains i.e. ERM, Credits, Market, Liquidity & Operational Risk, along with Information Security Risk Management (ISRM) along with Credit Administration, Data Analysis and process re-engineering. He started his career with MCB and later on joined renowned Microfinance banks like Khushali Bank Ltd, Mobilink Microfinance Bank, and U Microfinance Bank, where he worked at various senior positions.  He has been among founding team members that established & launched Mobilink Microfinance Bank in 2012 & U Microfinance Bank in 2013. Muhammad Khurram Warraich, Chief Digital Lending Officer, brings to Easypaisa more than 19 years of work experience in Business Planning & Analytics, Pricing & Strategy, BI & Commercial Banking. He is one of the pioneers to work on the Digital Lending portfolio. He has worked for Organizations like HBL, Burraq Telecom, PAKTEL Limited, Mobilink & Telenor. The remaining members of the management team comprise the Chief Operations Officer, Chief Compliance Officer, Chief Human Resources Officer, Chief Legal Officer & Company Secretary, Chief Technology Officer, and Chief Audit Executive.

Easypaisa Bank has instituted a structured framework of management committees to ensure effective oversight of operations, robust risk governance, and strategic alignment across the organization. The principal committees are: The Executive Committee, comprising the CEO, CFO and Business Heads serves as the primary forum for executive-level decision-making. The Asset-Liability Committee (ALCO) is responsible for balance sheet management, encompassing product pricing, maturity profiling, investment strategy, treasury operations, and the management of market, interest rate, and liquidity risks in accordance with prevailing regulatory guidelines. The Management Committee oversees strategic, operational, and administrative matters of the Bank — excluding lending activities — and ensures effective alignment between strategic intent and operational execution. The Management Risk Committee (MRC) is entrusted with the identification, assessment, and mitigation of material financial and non-financial risks, operating within the parameters of the Bank's defined risk appetite and applicable regulatory requirements. The Compliance Committee (CCM) monitors enterprise-wide compliance risk, facilitates the resolution of cross-functional compliance matters, and fosters a robust control environment and compliance culture across the organization. The IT Steering Committee (ITSC) provides strategic oversight of the Bank's technology landscape, guiding technology investments, aligning IT strategy with broader business objectives, and supporting capital expenditure planning and digital enablement initiatives across the institution.

The Business Intelligence (BI) Data Warehouse serves as a core analytical platform for Easypaisa Digital Bank, supporting data driven decision making across multiple levels of the organization. The platform provides periodic automated reporting and insights on key financial and operational activities, including loan disbursements, repayments, recoveries, deposit mobilization, and channel performance. Segmented reporting and analytics across branch and branchless banking channels enable management to monitor business performance at a granular level and assess trends across products, customer segments, and operating channels. They also support timely visibility of key performance indicators and help align day-to-day execution with the Bank’s broader strategic objectives. The BI infrastructure contributes to improved consistency, accuracy, and timeliness of management information, thereby strengthening performance monitoring, operational oversight, and informed decision-making across the Bank.

The Bank has a robust Risk Division Unit tasked with overseeing risks associated with the Banking in general and specifically the risks associated with Digital Banking. The Bank has meticulously deployed a comprehensive Enterprise policy framework, which encompasses primarily Credit, operational, Liquidity, Market, Fraud Risk, Information Security policies covering the policy statements around key risks faced by the bank. These policies along with relevant guidelines form Risk management framework. On top of that, the Bank has successfully developed and deployed an in-house system to monitor the implementation of the Risk Management framework. All these areas are further strengthened via Board Approved Risk Appetite Framework (RAF) clearly delineating the Risk limits and tolerance levels to achieve the Business objectives. RAF acts as the pivotal point in the overall Enterprise Risk Management Framework implementation Being a bank, Credit Risk poses the primary risk exposure for the bank. EDB has underwriting systems to assess customers’ credit history and evaluate their credit scores to make more informed lending decisions. To further strengthen its risk posture, the Bank has adopted a forward-looking approach to credit risk management through the implementation of IFRS 9, transitioning to an expected credit loss (ECL) model. This enhances the Bank’s ability to anticipate potential credit losses and maintain a more accurate reflection of its financial health. Being a digital Bank, EDB has invested in Credit Scoring and Credit models to issue loans digitally. Data Science based models facilitate underwriting digitally. Risk parameters are updated periodically to manage the exposures within the RAF limits. In parallel, the Bank continues to invest in Cybersecurity and data protection. With a focus on continuous monitoring, encryption, and strict access controls, these measures form a multi-layered defense strategy to mitigate emerging cyber threats, ensure regulatory compliance, and uphold operational integrity in an increasingly digital financial landscape. As a Digital Bank, the Bank is prioritizing Digital wellbeing and Cybersecurity across infrastructure, customer interfaces, and service-supporting assets. The Bank has implemented robust solutions to enhance our cybersecurity posture and monitoring capabilities while investing significantly in data privacy to meet regulatory requirements and public expectations. The commitment is validated through PCI-DSS (4.0) and ISO 27001 certifications, providing stakeholders with added assurance In addressing information and cybersecurity concerns, the Bank has prioritized combating Digital Frauds and Scams since 2021. The enhanced processes and services have successfully reduced customer exposure to fraudulent activities. The Bank remains committed to full compliance with SBP regulatory requirements for Digital Banking Products and Services security while implementing industry best practices. The ongoing collaboration with Ant International has been instrumental in developing these capabilities, and the Bank continues to strengthen fraud management framework. The Bank’s systems are designed to manage digital frauds and ensure that customers funds remain secure and protected. Risk Management effectiveness depends critically on data quality and analytics capabilities. The Bank has a robust Risk Analytics function that leverages MIS to deliver timely, detailed operational insights enabling calculated management decisions in all domains of Risk Management. The Bank is enhancing these capabilities through planned automation and AI implementation to generate enterprise-level insights for comprehensive risk management across the organization.

Easypaisa Bank Limited holds the distinction of being Pakistan's first digital bank, underpinned by a robust and scalable technology infrastructure comprising Ericsson's Wallet Platform for digital servicing and the T24 core banking suite. The Bank delivers seamless financial services through a unified, secure platform capable of processing in excess of 12,000 transactions per second and handling approximately 600 million monthly transactions. The Bank offers one of the most expedient account opening experiences in the market, supported by a comprehensive end-to-end digital customer journey. The Bank's technology stack is positioned among the most scalable and resilient within Pakistan's financial ecosystem. The Easypaisa Super App serves as a consolidated digital interface, offering customers a single-point access to a broad spectrum of financial services — encompassing payments, savings, lending, deposits, and a range of embedded financial products — thereby promoting accessibility, operational performance, and financial inclusion at scale. In alignment with its strategic transition to a digital-first operating model, the Bank has rationalized its physical footprint by reducing its branch network to 25 locations, with the remaining branches having been transformed into cashless service centers. This strategic reconfiguration supports the Bank's evolution into Pakistan's first fully digital retail bank, enabling a more seamless, efficient, and technology-driven banking experience for its customers.

Pakistan’s digital financial services landscape spans a tiered mix of full-service digital banks, EMIs, and conventional banks with digital channels, with competitive positioning driven by customer acquisition economics, brand strength, technological capability, and regulatory standing. The State Bank of Pakistan’s 2022 Digital Banking Framework represents a structural inflection point, introducing a phased licensing regime (NOC → IPA → Pilot →Transition → full license) to enable innovation while preserving financial stability. The process drew 20 applicants across banks, EMIs, fintechs, and foreign investors; following rigorous assessment of governance, financial strength, strategy, and technology infrastructure, five entities were granted NOCs. Amongst these five secured the NOCs Easypaisa Bank Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, HugoBank Limited, and Buraq Bank Limited   Within the EMI segment, JazzCash and Easypaisa continue to dominate mobile wallet services. Emerging players such as SadaPay and NayaPay have captured niche urban segments but remain sub-scale relative to incumbents. Within the licensed digital retail bank cohort, Mashreq Bank Pakistan Limited successfully progressed beyond its pilot phase and was granted its full Digital Retail Bank (DRB) license by the State Bank of Pakistan on September 15, 2025, thereby attaining scheduled bank status and marking its transition into full-scale commercial operations. Raqami Islamic Digital Bank Limited, following completion of its pilot operations and fulfillment of regulatory and Shariah-compliance requirements, was subsequently awarded its full DRB license on February 9, 2026, positioning it as Pakistan’s first fully Shariah-compliant digital retail bank to commence commercial operations. Against this competitive landscape, Easypaisa Bank Limited occupies a demonstrably differentiated and more advanced position relative to its licensed digital banking peers. The Bank’s competitive positioning rests on several structural advantages that are assessed as credit-positive.

Easypaisa was among the pioneering applicants under the State Bank of Pakistan's Digital Banks Framework 2022, reflecting the institution's long-standing commitment to advancing financial inclusion. The successful completion of its transition from a microfinance bank to a fully licensed digital retail bank represents a landmark milestone in the Bank's institutional evolution and has established a solid foundation within Pakistan's emerging digital banking landscape. While other licensees — including Mashreq and Raqami — have similarly been granted digital retail banking licenses, both entities are in emerging stages of operations with their banking businesses yet to attain meaningful scale.

During CY25, markup income recorded a growth of 8.4%, increasing to PKR 28.1bln (CY24: PKR 25.9bln), underpinned by a materially expanded investment portfolio and sustained earnings contribution from the advances book, notwithstanding the headwinds posed by a declining policy rate environment. The income profile remained predominantly anchored in core lending activities, with loans and advances contributing PKR 17.1bln, representing approximately 60.9% of total markup income. Within the advances portfolio, livestock financing emerged as the highest-yielding segment at 56.46%, followed by micro-enterprise lending at 42.74% other advances at 35.84% and nano lending at 11.70%. Investments constituted the second largest income contributor at PKR 9.4bln (~33.4% of total markup income), reflecting notable year-on-year growth in the portfolio. Income from lendings to financial institutions moderated to PKR 1.4bln (~5.0%), while income on balances with banks remained marginal at PKR 0.2bln (~0.7%). On the expense side, markup expenses increased by 29.8% to PKR 1.9bln (CY24: PKR 1.5bln), attributable primarily to the growth in the deposit base; however, the cost of deposits remained broadly contained at approximately 1.7% (CY24: 2.1%), reflecting the Bank's structurally low-cost funding profile. Consequently, net interest margin (NIM) expanded by 7.1% to PKR 26.1bln (CY24: PKR 24.4bln), supported by the Bank's competitively priced deposit franchise and a high-yielding asset mix, with core lending and investments collectively accounting for over 94% of total markup income — affirming the resilience and quality of the Bank's interest-earning asset base.

In CY25, non-markup income grew by 37.7% to PKR 19.9bln (CY24: PKR 14.5bln), driven primarily by fee and commission income, which expanded by 38.3% to PKR 19.9bln (CY24: PKR 14.4bln). The income mix remains highly concentrated, with fee, commission, and brokerage income contributing ~99.9% of total non-markup income, reflecting the Bank’s strong reliance on its service-based digital ecosystem. Branchless banking income remained the dominant contributor, rising to PKR 17.8bln (CY24: PKR 13.1bln), underscoring strong customer activity and transaction volumes. Other income streams, including gains on securities (PKR 14.17mln) and other income (PKR 14.02mln), remained negligible, while dividend and foreign exchange income did not contribute during the year, indicating limited reliance on non-core income sources. On the expense side, total non-markup expenses increased by 7.1% to PKR 33.7bln, largely driven by operating expenses, which accounted for ~99.5% of the total. The cost structure was primarily led by other operating expenses (~52.3%), including brokerage and commission, marketing and publicity, and higher CNIC verification costs, reflecting business expansion and increased transaction activity. Information technology expenses remained a key cost driver (~23.3%), driven by higher software maintenance, cloud services, and depreciation, indicating continued investment in digital infrastructure. Total compensation expense remained a significant component (~19.7%) of total operating costs; however, it declined by ~6.7% YoY, providing partial cost relief against the increase in other expense categories, particularly IT and operating expenses, while property-related expenses remained contained (~4.7%). The Bank’s profitability profile strengthened during CY25. Profit before credit loss allowance increased significantly by ~66.9% to PKR 12.4bln (CY24: PKR 7.4bln), reflecting strong core operating performance. However, credit loss allowance and write-offs (net) rose sharply to PKR 4.9bln (CY24: PKR 2.7bln), primarily driven by a substantial increase in provisioning against the lending portfolio. In particular, credit loss allowance against loans and advances nearly doubled to PKR 6.5bln (CY24: PKR 3.7bln), while impairment against fixed assets increased to PKR 107.9mln (CY24: PKR 9.3mln). This was partially offset by improved recoveries against write-offs, which increased to PKR 1.8bln (CY24: PKR 1.2bln). Despite these recoveries, the higher provisioning requirement on core advances remained the key driver of the increase in credit-related expenses. Consequently, the Bank maintained a resilient Profit Before Tax (PBT) of PKR 6.8bln (CY24: PKR 3.9bln), supported by strong underlying earnings momentum driven by net markup income growth, a low-cost deposit base, and improved yields from the lending and investment portfolio, alongside continued expansion in fee and commission income. On a reported basis, Profit After Tax (PAT) surged to PKR 17bln (CY24: PKR 3.4bln), largely on account of a PKR 10.8bln deferred tax asset recognized during the year, reflecting management's confidence in forward earnings visibility as a scheduled bank. Excluding this one-off impact, normalized PAT is estimated at approximately PKR 6.8bln, still reflecting ~94% growth YoY and highlighting the Bank’s strong underlying operating performance.

Easypaisa Bank Limited, backed by the strategic partnership of Telenor Group and Ant Financial Services Group through shareholding stakes of 55% and 45%, respectively, remains focused on creating sustainable long-term value for its stakeholders while advancing financial inclusion across Pakistan. As one of the country’s leading branchless banking platforms, the Bank is committed to delivering a superior customer experience through an extensive range of innovative payment, deposit, and lending solutions tailored to the evolving needs of its customers. In January 2025, Easypaisa Bank achieved a landmark milestone by becoming the first institution in Pakistan to receive a Digital Retail Bank License and commercial launch approval. This achievement underscores the Bank’s pioneering role in the digital banking landscape and represents a significant step toward fostering financial inclusion and technological innovation. Leveraging this license, the Bank is positioned to expand beyond its traditional mobile wallet services and offer a comprehensive suite of digital banking products, including deposit accounts, credit cards, digital financing, investment solutions, and insurance products through a secure and user-friendly platform. This development further reinforces the Bank’s commitment to driving fintech innovation and broadening access to formal financial services, particularly for underserved segments of the population.

At end-CY25, the Bank’s gross advances contracted by 5.6% to PKR 26.9bln (CY24: PKR 28.5bln), while net advances remained broadly stable at PKR 25.4bln (CY24: PKR 25.5bln), reflecting ongoing portfolio consolidation (PR driven) and credit risk management. This contraction was primarily driven by gross charge-offs of PKR 8bln (CY24: PKR 2.1bln), despite strong underlying lending activity, as evidenced by new digital disbursements of PKR 104.7bln during CY25 (CY24: PKR 87.4bln), indicating sustained origination strength and transaction velocity. Consequently, the Net Advances to Deposit Ratio (ADR) declined to 19.9% (CY24: 33.5%), as deposit growth outpaced advances, supporting a strong liquidity position. The sector-wise composition of gross advances (PKR 26.9bln) remained concentrated in high-velocity digital lending segments, with Working Capital at 44.2% (PKR 11.9bln) as the largest share, followed by Instant Collateralized Loans at 30.9% (PKR 8.3bln), Others at 22.9% (PKR 6.2bln), and Livestock at 2.0% (PKR 0.5bln). Agricultural exposure remained negligible, reflecting a structural shift toward short-tenor, transaction-based credit products. The portfolio mix, with a higher proportion of Working Capital and Instant Retail lending, underscores the Bank’s focus on short-term liquidity financing within its digital lending framework. Despite strong disbursement momentum, the on-book contraction was driven by aggressive charge-offs of non-performing exposures, particularly within retail segment, reflecting continued portfolio de-risking. Nevertheless, the Bank originated PKR 104.7bln in new advances during CY25, highlighting robust underlying demand, with the reported portfolio representing only a fraction of annual disbursements due to short tenure and rapid turnover. As a result, Stage 1 (performing) advances accounted for over 95% of the gross book, indicating a significantly improved asset quality profile post clean-up. Asset quality indicators strengthened materially, with Non-Performing Loans (NPLs) declining to PKR 1.1bln (CY24: PKR 3.98bln), translating into an improved infection ratio of 4% (CY24: 14%), supported by charge-offs and portfolio rationalization. Overall, CY25 reflects a strategically rebalanced advances portfolio characterized by rapid digital origination, prudent legacy loans clean-up, and improved asset quality metrics, albeit with a temporarily compressed Net ADR due to strong deposit growth.

At end-CY25, the investment portfolio expanded significantly by 86.1% to PKR 113.3bln (CY24: PKR 60.9bln), primarily driven by strong deployment of surplus liquidity, with new investment acquisitions of PKR 132.5bln (CY24: PKR 68.8bln) outweighing maturities and derecognitions of PKR 89bln (CY24: PKR 43.5bln). The portfolio remains fully concentrated in government securities, reflecting the Bank’s continued sovereign-first investment strategy and preference for high-quality liquid assets to deploy its expanding deposit base. Within the portfolio, Market Treasury Bills (MTBs) constituted the major share at PKR 103.2bln (91.1%), carrying yields in the range of 10.35%–10.44% with maturities extending up to December 2026. Pakistan Investment Bonds (PIBs) stood at PKR 10bln (8.9%), offering relatively higher yields of 11.33%–12.23% with maturities extending to January 2027, thereby providing a limited duration exposure within the overall portfolio. Consequently, the investment book now represents 61.3% of total assets, underscoring its significance as the primary deployment avenue of extra liquidity as per economic outlook. In line with regulatory treatment under IFRS 9, sovereign exposures remain exempt from expected credit loss provisioning, resulting in nil impairment charge against the portfolio. Accordingly, mark-to-market gains of PKR 297.2mln were recognised, supporting capital position. Overall, the investment portfolio continues to serve as a key driver of stable and risk-free income generation, contributing a substantial share to the Bank’s overall mark-up income base.

At end-CY25, total deposits grew by 67.6% to PKR 127.7bln (end-CY24: PKR 76.2bln), representing one of the highest deposit growth rates in the Pakistani banking system. Customer deposits dominated at PKR 126.8bln (CY24: PKR 76.2bln), with current deposits rising sharply to PKR 101.8bln (CY24: PKR 63.1bln) and savings deposits expanding to PKR 22.3bln (CY24: PKR 12.9bln). Term deposits grew to PKR 2.8bln from PKR 31.7mln in CY24, reflecting early traction of the Bank's digital term deposit product. The current account ratio remained among the highest in the industry at approximately 80%, sustaining the Bank's structurally low cost of deposits of approximately 1.7% (CY24: 2.1%). The CASA ratio remained exceptionally strong at 97.8% (CY24: ~99.9%), with the modest moderation attributable to the emergence of term deposits. Individual and branchless banking customers constituted 96.6% of total deposits at PKR 123.3bln, reinforcing the Bank's retail-digital franchise depth. Government and public sector deposits remained negligible at PKR 1.8bln (1.4%), meaningfully reducing structural concentration risk on the funding side relative to traditional commercial bank peers.

In CY25, the Bank formalised the conversion of a previously received advance of PKR 2,776.5mln into equity through the issuance of 10.433 million ordinary shares to its shareholders in proportion to their respective shareholdings, while maintaining unchanged ownership structure at 55% and 45%. In CY24, the Bank received an equity investment of USD 10mln from its shareholders — Telenor Pakistan B.V. and Alipay (Hong Kong) Holding Limited — reflecting continued sponsor support toward strengthening the capital base and advancing its transition into a full-service digital retail bank. Net cash generated from operating activities surged to PKR 67.7bln in CY25 (CY24: PKR 24.6bln), primarily driven by strong deposit mobilisation of PKR 51.5bln and improved operating profitability, which more than offset investing cash outflows of PKR 56.3bln. Overall, the Bank’s cash generation profile strengthened materially during the year, supported by expansion in its digital ecosystem and core deposit franchise.

At end-CY25, the Bank transitioned to the Basel III capital adequacy framework applicable to scheduled banks, with total equity strengthening to PKR 30.9bln (CY24: PKR 14.1bln), primarily driven by the recognition of a net deferred tax asset of PKR 10.8bln on carry-forward losses and unabsorbed tax depreciation, along with healthy retention of CY25 earnings. The Bank maintained a robust capital position, with Total Capital Adequacy Ratio (CAR) reported at 20.39%, comfortably exceeding the regulatory requirement of 15.00%. This strength was supported by a significant increase in paid-up capital, which rose to PKR 27.5bln (CY24: PKR 11.5bln), providing adequate cushion to absorb the sharp increase in Operational Risk Weighted Assets, which surged to PKR 71.3bln due to change in treatment of operational risk for commercial bank (CY24: PKR 5.4bln) during the year. The CAR profile was further supported by SBP-approved transitional regulatory relaxations, including IFRS 9 ECL phasing (+0.33%), intangible asset treatment (+2.05%), and market risk on FVOCI investments (+1.06%), collectively enhancing the reported capital position. Consequently, Common Equity Tier 1 (CET1) and Tier 1 CAR stood at 19.93% against the regulatory threshold of 9.5%. On a fully-loaded basis (excluding regulatory relaxations), Total CAR is estimated at ~16.95% (~17.0%), which continues to reflect comfortable capital buffers over minimum requirements. Paid-up capital net of accumulated losses increased significantly to PKR 27.5bln (CY24: PKR 11.5bln), reflecting capital injections. The leverage ratio also improved to 10.49% (CY24: 9.29%), remaining well above the regulatory minimum of 3%, indicating a strengthened capital structure and improved loss-absorbing capacity. Overall, the capital position remains adequate to support continued expansion in digital lending, investments, and strategic growth initiatives.