MCB Bank Limited (hereinafter referred to as “MCB” or “the Bank”) is incorporated in Pakistan as a public limited company under the applicable corporate and banking regulatory framework and is listed on the Pakistan Stock Exchange (PSX). The Bank undertakes conventional banking operations across Pakistan and select international jurisdictions.

MCB Bank Limited (“MCB” or the Bank), established in 1947 and privatised in 1991, is amongst Pakistan’s oldest private-sector commercial banks and a flagship entity of the Nishat Group, benefiting from strong institutional backing and diversified conglomerate support. The Bank was the first in Pakistan to list GDRs on the London Stock Exchange in 2006, while Maybank holds a strategic 18.78% stake, reinforcing governance strength and regional connectivity. MCB maintains a significant Islamic banking presence through its wholly owned subsidiary, MCB Islamic Bank Limited, which operates 321 branches as of December 2025 under full Shariah governance. MCB’s group structure includes subsidiaries in exchange services, leasing, and asset management (AUM exceeding PKR 550 billion in CY25), along with Islamic banking operations and strategic investments in insurance, ATM/POS, and hosting services.

The Bank operates a strong and vast network of over 1,400 Branches and over 1,480 ATMs in Pakistan and 8 branches overseas with a footprint in the UAE, Bahrain, and Sri Lanka. With a customer base of over 7 million, MCB leads the banking & financial services sector in Pakistan, and customers across the globe have 24/7 access to MCB Bank via our world-class Internet Banking. The Bank, on a consolidated basis, is operating the 2nd largest network of more than 1,700 branches in Pakistan. The Bank offers a comprehensive suite of products and services, ensuring seamless customer access across its physical and digital channels. MCB’s digital platform, MCB Live, continued to demonstrate strong traction, with registered users increasing to 1.93 million and transaction throughput reaching PKR 3,264 billion in CY25, reflecting notable growth over CY24 levels and highlighting accelerating digital adoption across its customer base.

MCB Bank’s shareholding structure is anchored by the Nishat Group of companies, both directly and through associated corporate entities and members of the Mansha family, reflecting strong sponsor control and long-term strategic influence over the Bank. The Nishat Group is a well-established and diversified conglomerate with a strong presence across multiple sectors in Pakistan, providing MCB with substantial institutional strength and governance stability. The remaining shareholding is held by institutional investors, the general public, and foreign portfolio investors through the Pakistan Stock Exchange, resulting in a broad-based yet stable ownership profile with a long-term investment horizon and sustained commitment to the Bank.

MCB Bank’s ownership structure is expected to remain stable in the foreseeable future, underpinned by its status as a flagship entity of the Nishat Group. The Group’s diversified industrial and financial portfolio provides strong institutional support and reputational capital to the Bank. Its sustained engagement in the banking sector over more than three decades since privatisation reflects a long-term strategic commitment. The Group has demonstrated resilience and management competence in navigating Pakistan’s challenging macroeconomic environment, including periods of currency depreciation, fiscal stress, and interest rate volatility. Given the financial strength of the sponsor group and the systemic importance of MCB, sponsor willingness and capacity to provide support, if required, is considered strong.

Nishat Group, including individual holdings and investments through group corporates, is a premier business conglomerate in Pakistan and among the most diversified in South Asia, with a presence across multiple strategic sectors including textiles, cement, financial services, insurance, exchange business, power generation, hospitality, dairy, paper products, retail commerce, real estate, agriculture, aviation, and automotive industries. The Group is recognised as one of the largest private-sector contributors to employment, exports, and tax revenues in Pakistan, reflecting its broad-based economic footprint and structural importance.

The Nishat Group holds a prominent position as a highly diversified and influential conglomerate in South Asia, supported by a strong equity base and a robust asset portfolio, reflecting its financial strength and sustained capacity to maintain strategic investments across multiple sectors.

The Board of MCB Bank comprises thirteen members, including the Chief Executive Officer, four independent directors, and eight non-executive directors, ensuring a strong governance structure with robust independent oversight; with the exception of the CEO, all members serve in a non-executive capacity, reinforcing effective checks and balances in strategic decision-making.

Mian Mohammad Mansha, a well known business conglomerate has served as Chairman, Board of Directors MCB Bank Limited, after the Bank’s privatization, from 1991 to mid-1995 and then from 1997 till date. Mr. Muhammad Tariq Rafi is the Chairman of Siddiqsons Group and is a recipient of the coveted Civil Award Sitara-e-Imtiaz. Mian Umer Mansha, associated with MCB Bank’s Board since 1997, currently chairs several key committees. Mrs. Iqraa Hassan Mansha has more than 16 years diversified professional experience in Hotel Industry. She received her B.Sc. degree in International Politics from London School of Economics and M.Sc. degree in International Relations from the University of London School of Oriental and African Studies (SOAS). Muhammad Ali Zeb is currently the CEO and Managing Director of Adamjee Insurance Company Limited. He is a fellow member of the Institute of Chartered Accountants of Pakistan and has over 29 years of diversified professional experience in the fields of Finance, Insurance & Manufacturing. Mr. Yahya Saleem joined the family business as a Director of the Nishat Chunian Group, establishing a spinning mill in 1990. Since then, the company has diversified into weaving, home textiles, power generation, and entertainment. Today, Nishat Chunian Limited (NCL) ranks among the top five textile companies in Pakistan. Mr. Salman Khalid Butt is an accomplished international business executive and ex-banker. He is currently a Dubai, U.A.E. based entrepreneur. Mr. Shahzad Hussain has vast experience in Audit, Tax practice and in consultancy. He headed many assignments, including Asian Development Bank funded assignment for Punjab Government Resource Mobilization, where he gained considerable experience in Provincial Government organization structures and procedures in various fields. Mr. Masood Ahmed Puri is a distinguished and versatile senior executive with extensive expertise in strategic planning, business development, risk management, and sound decision-making. Mr. Norzulkarnien bin Nor Mohamad possesses 18 years of diversified professional experience encompassing financial and business analysis, business planning & budgeting, strategic management, strategic project management and transformation, product development, branding & marketing, business development, business management, portfolio management, sales and distribution management, operation management, knowledge management and Islamic finance. Currently, he is serving as Executive Vice President/Head Strategy, Maybank Group Islamic Banking. Shaikh Muhammad Jawed possesses extensive expertise in the efficient management of cutting-edge industrial operations. His remarkable technical proficiency has earned numerous accolades and merits for outstanding performance in exporting industrial products from Pakistan. 

The board with its active engagement with the stakeholders is well poised to govern the Bank and oversee the implementation of its strategy. To ensure effective and independent oversight of the Bank’s overall operations, the Bank has eight board committees.

The external auditors of the Bank, A. F. Ferguson & Co., Chartered Accountants, issued an unqualified audit opinion about annual financial statements for CY25. Furthermore, the Board has set up an effective internal audit function that reports independently to the Board Audit Committee. The Audit Committee and the Board also take full responsibility for ensuring that audit issues are value-added and resolved in the best interests of the Company.

MCB maintains a streamlined and well-defined organizational structure characterised by clear segregation of responsibilities, delegated authority frameworks, and established reporting lines, supported by robust monitoring and compliance mechanisms. The Bank’s predominantly horizontal management structure facilitates efficient decision-making, operational agility, and effective coordination across business and control functions. Multiple groups and divisions report directly to the CEO, ensuring centralized strategic oversight and accountability, while critical independent functions including Internal Audit and Corporate Affairs maintain separate reporting lines to the Board Audit Committee and the Board, respectively, reinforcing governance independence and institutional control discipline.

Mr. Muhammad Nauman Chughtai, President & CEO, holds an MBA from LUMS and is a CFA charter holder. With over 33 years of experience, he has held key positions such as Group Head Corporate Banking, and Chief Risk Officer at MCB Bank. His leadership, strategic insight, and focus on operational excellence continue to support the Bank’s steady growth and strong market position. Mr. Anjum Javed, a Fellow member of the Institute of Chartered Accountants of Pakistan (ICAP), has been appointed as the Chief Financial Officer of MCB Bank Limited, w.e.f February 21, 2026, bringing extensive experience gained within the Bank’s Financial Control Group.

MCB Bank operates with a comprehensive governance structure that includes multiple management committees and sub-committees, each with specific terms of reference. These committees consist of senior officials, including the President, and conduct regular meetings to address various aspects of the Bank's operations.

MCB management has centralized the authority, direction, management, and monitoring of Information Security activities for the entire organization under the umbrella of the Information Security (IS) Team.

Prudent risk management aspects are embedded in the Bank’s strategy, organizational structure, processes, and systems and controls. Risk Management & Portfolio Review Committee remains responsible for ensuring that appropriate risk management policies are developed and implemented to mitigate the key risks to which the Bank is exposed. The Bank executes its risk strategy and undertakes controlled risk–taking activities within its risk management framework. The Board of Directors and its relevant committee, i.e. the Risk Management & Portfolio Review Committee (RM&PRC), the senior management and its relevant committees, i.e. the Management Credit and Risk Committee (MC&RC), Asset Liability Committee (ALCO), etc. are responsible to ensure formulation and implementation of comprehensive Risk Management Framework. This framework is based on prudent risk identification, measurement, management and monitoring processes which are closely aligned with the activities of the Bank. The framework combines core policies, procedures and process designs with board oversight and is supported by an efficient monitoring mechanism across the Bank to ensure that risks are kept within an acceptable level. The Chief Risk Officer is responsible for overseeing the Bank's credit review, credit risk control, credit policy, market risk, operational risk, and information security risk functions across all business areas, including overseas operations.

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). The Capital Adequacy Ratio (CAR) averaged 20.8% (CY24: 20.6%), slightly below historical averages, yet capitalization remains adequate to absorb potential shocks. While the Advances (net) to Deposit Ratio (ADR) was reported at 37.5% (CY24: 49.7%), which appears to be on the lower side as compared to CY24, 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 the evolving industry dynamics and cautious lending environment, MCB Bank demonstrated stable balance sheet growth during CY25, supported by strong deposit mobilisation and sound capitalization metrics. The Bank’s deposits registered a healthy growth of 17.64% during the year, strengthening its funding base and liquidity profile. Consequently, the Advance (net) -to-Deposit Ratio (ADR) moderated to 30.53% in CY25 (CY24: 54.1%), reflecting a prudent lending stance amid subdued private sector credit expansion and a strategic tilt towards liquidity preservation. Despite balance sheet growth and evolving regulatory requirements, the Bank maintained a strong capital position, with the Capital Adequacy Ratio (CAR) improving slightly to 19.5% in CY25 (CY24: 19.4%), remaining comfortably above the minimum regulatory threshold and providing adequate loss absorption capacity against potential stress scenarios.

In CY25, the Bank’s deposit base demonstrated strong growth, increasing by 17.6% to PKR 2,261.3bln (CY24: PKR 1,922.2bln), reflecting the Bank’s sustained ability to mobilize stable and cost-effective funding. Customer deposits remained the cornerstone of the funding structure, rising by 18.0% to PKR 2,207.3bln (CY24: PKR 1,870.6bln) and comprising approximately 97.6% of the total deposit base. Despite healthy growth in deposit volumes, the Bank’s domestic deposit market share declined to 5.5% in CY25 (CY24: 5.7%), amid heightened competition in the banking sector.

In CY25, the Bank’s markup earnings declined to PKR 293.8bln (CY24: PKR 367.0bln), primarily reflecting the impact of a significantly lower interest rate environment during the year. Income from investments remained the largest contributor to markup earnings, amounting to PKR 209.9bln (CY24: PKR 246.3bln), while markup earned on loans and advances decreased to PKR 77.7bln (CY24: PKR 111.3bln). The reduction in returns on earning assets was mainly attributable to the repricing of the Bank’s investment portfolio and lending book at lower benchmark rates, resulting in a decline in advance yield to 10.7% in CY25 (CY24: 16.4%). At the same time, the Bank benefited from a notable reduction in funding costs, with the cost of funds decreasing to 5.2% (CY24: 9.1%), supported by monetary easing and the Bank’s strong low-cost deposit franchise. Nevertheless, the decline in asset yields outpaced the reduction in funding costs, resulting in a contraction in spread to 5.1% in CY25 (CY24: 6.2%). In this context, total income declined modestly to PKR 181.4bln in CY25 (CY24: PKR 186.5bln), reflecting the Bank’s ability to maintain a resilient earnings profile despite a materially lower interest rate environment.

In CY25, the Bank’s non-markup income moderated to PKR 35.8bln (CY24: PKR 37.4bln), primarily due to a decline in fee and commission income, which decreased to PKR 19.3bln (CY24: PKR 21.2bln), primarily due to heightened competition in the home remittance segment. Nonetheless, the reduction was partially offset by stronger foreign exchange income, which increased to PKR 10.2bln (CY24: PKR 9.2bln), supported by improved treasury and foreign exchange-related business. On the expense side, non-markup expenses rose to PKR 71.2bln (CY24: PKR 63.8bln), driven mainly by an increase in operating expenses to PKR 68.4bln (CY24: PKR 60.9bln). The rise in operating expenses was primarily attributable to higher personnel costs, with total compensation expense increasing to PKR 31.0bln (CY24: PKR 25.9bln), reflecting annual salary adjustments, inflationary pressures, and continued investment in human resources and branch operations. As a result of the modest decline in non-markup income and elevated operating costs, the Bank’s profitability softened slightly, with profit before tax declining to PKR 115.4bln (CY24: PKR 118.4bln) and profit after tax decreasing to PKR 54.2bln (CY24: PKR 57.6bln). Nevertheless, the Bank continued to demonstrate a strong earnings capacity, supported by its diversified revenue streams and robust core banking franchise. MCB retained its position as a leading player in the home remittances segment, processing USD 4.4bln in inflows during CY25. While the Bank's market share moderated to 10.9% (CY24: 13.3%) amid an increasingly competitive landscape, it remained one of the foremost participants in the segment. MCB’s sustained presence supports remittance flows and contributes to Pakistan’s external account stability.

MCB maintained a strong financial and franchise position in CY25, supported by a stable balance sheet, healthy market share, and continued focus on low-cost deposit mobilisation. Current account concentration increased to 51.6% (CY24: 47.1%), reflecting sustained CASA-driven strategy and disciplined deposit mobilisation efforts. Net markup income moderated during CY25, mainly due to lower overall markup earnings amid a declining interest rate environment. This was partially offset by a gradual shift towards investment-based income; however, pressure on yields weighed on profitability. Despite this, the Bank’s strong CASA base and efficient funding mix helped cushion margin compression. Overall, MCB continued to demonstrate financial stability, sound asset quality, and a resilient operating profile in CY25.

MCB Bank remains exposed to credit risk arising from its lending and investment activities, which is managed through a combination of financial and non-financial assessment tools, including internal and external ratings, environmental risk evaluations, and behavioral analytics, as highlighted in its credit risk framework. The Bank's asset quality indicators reflected measurable pressure in CY25. The infection ratio (Gross NPLs / Gross Advances) increased to 6.76% (CY24: 4.89%). This deterioration is primarily denominator-driven: gross advances contracted by 33% YoY to PKR 736bn, while absolute NPLs declined only marginally by 7% to PKR 49.8bn. Sector-specific stress is evident in Traders (17.1bn), Textiles (PKR 10.1bn), Food & Beverage (PKR 5.1bn), and Sugar (PKR 3.1bn). The specific provision coverage ratio (Stage 3 ECL (Incl. General Provision / Stage 3 NPLs) stood at 88.4% in CY25 (CY24: 93.3%). The decline in specific coverage is attributable to a reduction in NPLs classified under the 'Loss' category, which carry 100% provisioning. The Bank’s Advance (net) -to-Deposit Ratio (ADR) declined significantly to 30.53% in CY25 from 54.1% in CY24, indicating a more conservative deployment of deposits and a shift in balance sheet mix. Concentration risk remained contained, with the top 20 advances accounting for 36% of the portfolio, highlighting manageable borrower concentration. Sector-wise exposure to Agriculture, Forestry, and Fishing increased, with gross advances rising to PKR 12.7bln in CY25 (CY24: PKR 6.8bln). Correspondingly, NPLs in this segment increased to PKR 397mln from PKR 291mln, primarily driven by sector-specific stress factors, including climate-related risks, input cost pressures, and cyclical weakness impacting repayment capacity. Overall, while MCB continues to maintain a structured and well-defined credit risk management framework, the CY25 indicators reflect some pressure on asset quality metrics, primarily stemming from portfolio contraction and sector-specific stress, though the overall risk profile remains within manageable bounds supported by prudent underwriting standards.

MCB Bank is exposed to market risk arising from its trading and investment portfolios, which are managed through a well-defined risk management structure ensuring strict adherence to approved qualitative and quantitative risk limits. During CY25, the Bank’s investment portfolio expanded significantly to PKR 1,947.2bn (CY24: PKR 1,167.5bn), driven by a strategic reallocation from advances. Concentration risk has increased: Government securities (PIBs & TBs) now constitute 91% of the total investment portfolio (CY24: 88%). Within this, fixed-rate Pakistan Investment Bonds (PIBs) stood at PKR 404bn with a weighted average time to maturity of 2.28 years (purchase yield: 12.62%). Floating-rate PIBs increased by PKR 518bn to PKR 1.2trn, partially hedging interest rate risk. ~~indicating a relatively moderate duration risk profile. In a rising interest rate scenario, the fixed-rate PIB portfolio would incur mark-to-market losses, directly reducing Tier-II capital. The Bank's sovereign concentration – while credit risk-free from a domestic regulatory perspective – introduces duration risk and sovereign concentration risk that merit ongoing monitoring.

MCB Bank manages liquidity risk through active monitoring of funding sources, intraday liquidity positions, and structural balance sheet mismatches. The Bank regularly tracks key regulatory and internal indicators, including Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), and early warning liquidity indicators, ensuring a strong liquidity risk management framework. During CY25, the Bank’s liquidity position strengthened further, supported by a significant improvement in its liquid assets coverage. The Liquid Assets / (Deposits + Borrowings net of repo) ratio increased to 72.2% (CY24: 54.3%), reflecting a stronger liquidity buffer driven by expansion in high-quality liquid assets and controlled balance sheet deployment. The top 20 deposit concentration stood at 9% in CY25 (CY24: 8%), indicating a slight increase in depositor concentration; however, the level remains manageable and reflects a broadly diversified funding profile. On the funding side, customer deposits remained the cornerstone of the Bank’s liability structure, increasing by 18.0% to PKR 2,207.3bln (CY24: PKR 1,870.6bln) and accounting for approximately 97.6% of the total deposit base, highlighting strong franchise strength and funding stability. The deposit mix also reflected a shift in composition, with Current Account concentration improving to 51.6% (CY24: 47.1%), while Savings Account concentration moderated to 43.5% (CY24: 48.1%). Overall, MCB’s liquidity profile remained robust in CY25, underpinned by a strong deposit franchise, improving liquidity buffers, and prudent liquidity risk management practices, enabling the Bank to comfortably absorb balance sheet and market-related stresses.

MCB Bank has consistently maintained a strong capitalization profile, with Capital Adequacy Ratio (CAR) remaining well above regulatory requirements, reflecting a sound and resilient capital base. The equity base increased to PKR 315bln in CY25 (CY24: PKR 270bln), primarily driven by higher surplus on revaluation of assets, which rose to PKR 72bln (CY24: PKR 43bln), supporting overall capital strength. The Bank’s CAR improved marginally to 19.53% in CY25 (CY24: 19.35%), indicating sustained capital adequacy despite balance sheet growth and evolving risk-weighted assets. The increase in CAR was driven largely by mark-to-market gains on the investment portfolio, which flow into Tier-II capital, rather than core equity accretion from retained earnings. This introduces sensitivity to interest rate movements. MCB continues to operate without any Tier I or Tier II capital instruments, with its capital structure fully supported by core equity, highlighting a conservative and high-quality capital base. Overall, the Bank’s capitalization remains strong, providing adequate buffers to support future growth while maintaining compliance with regulatory thresholds and internal risk appetite.