Bank AL Habib Limited ("BAHL" or the "Bank") was incorporated in October 1991 as a public limited company and commenced operations in 1992. The Bank operates as a scheduled commercial bank and is listed on the Pakistan Stock Exchange (PSX).

The Bank’s registered office is located in the city of Multan in Punjab and its principal office is located in Karachi.

The Bank's principal activities are to provide commercial banking services to individuals and institutional clients. The Bank has an existing branch network of 1,323 as of the end-Dec25 (end-Dec24: 1,221) branches /sub-branches, including 392 (end-Dec24: 276) Islamic banking branches. BAHL has been operating 2 overseas branches in the Kingdom of Bahrain and Malaysia (Labuan) and 3 representative office one each in Dubai, Istanbul and Beijing.

Bank AL Habib Limited is principally associated with the Habib Group, one of Pakistan’s well-established business groups with longstanding presence in banking, trading, and industrial sectors. The Bank’s shares are listed on the Pakistan Stock Exchange, while the sponsor family maintains effective control and strategic oversight over the institution.

The ownership structure of the Bank is seen as stable as the majority stake rests with the sponsors.

Sponsors are members of the Habib Family - one of the oldest and most distinguished names in Pakistan's banking sector. Their significant experience and business acumen in commercial banking have been of value, as their background has allowed them to proactively deal with the changing dynamics of the industry and demonstrate consistent performance.

The Bank’s financial strength is considered strong, supported by its sizeable deposit base, healthy capitalization, strong market reputation, and sustained profitability generation over the years. The Bank also benefits from diversified revenue streams and access to domestic capital markets.

The overall control of the Bank vests with a ten-member Board of Directors comprising independent, non-executive, executive, and female representation. The Board includes experienced professionals from banking, finance, industry, and business backgrounds. The governance framework remains aligned with the Code of Corporate Governance and State Bank of Pakistan’s regulatory requirements.

The board members have extensive experience in the banking and commercial industries of Pakistan and are actively involved in providing strategic input and guidance to the management. CEO is a seasoned professional banker, who has been with the Bank for almost 3 decades.

The Board exercises its oversight function through six specialized sub-committees: (i) Audit Committee, (ii) Human Resource & Remuneration Committee, (iii) Credit Risk Management Committee, (iv) Risk Management Committee, (v) IT Committee, and (vi) Islamic Banking Conversion Committee. During CY25, the Board held five meetings, with strong attendance records across all Directors.

The Bank maintains a satisfactory financial transparency framework supported by strong internal controls, independent audit functions, and compliance mechanisms. M/s. KPMG Taseer Hadi & Co., Chartered Accountants, classified in category ‘A’ by SBP and having satisfactory QCR ratings, are the external auditors of the Bank. The auditors expressed an unqualified opinion on the financial statements for the year ended December 31, 2025.

The Bank has established well-developed management tiers and robust succession planning frameworks to ensure leadership continuity across all key positions. Its organizational structure is designed to be horizontal, promoting collaboration and efficient decision-making. Operational responsibilities are strategically distributed among Division Heads, each overseeing distinct functional areas, which fosters accountability, enhances operational oversight, and supports the Bank's long-term strategic goals. This structure enables the Bank to remain agile, responsive, and well-positioned to manage growth and risk effectively.

The strength of the Bank comes from the core team of experienced senior banking professionals, who have sizable experience in commercial banking, locally and abroad.

The Bank has established five internal committees at the management level to oversee day-to-day operations and ensure effective execution of strategic objectives. These committees facilitate informed decision-making, promote operational efficiency, and enhance governance across key functional areas.

The Bank’s technological infrastructure remains strong and supports its expanding operational scale. The Bank utilizes integrated core banking systems and digital platforms to facilitate real-time transaction processing, reporting, risk monitoring, and customer services. Continuous investment in digital banking infrastructure and information security reflects management’s focus on operational efficiency and cybersecurity.

Bank AL Habib (BAHL) has a robust risk management framework designed to effectively identify, assess, and mitigate the various risks the Bank is exposed to. The overall responsibility for risk oversight rests with the Board of Directors, which discharges this role through its specialized committees. To support this framework, the Bank has established a dedicated Risk Management Division (RMD) that operates independently to monitor and manage risk across all business areas.

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 due to higher risk-weighted assets and a shift toward low-yield government securities, yet 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).

BAHL is among the leading private sector banks in Pakistan and is designated as a Domestic Systemically Important Bank, reflecting the significance of its national financial system. At end-CY25, the Bank reported total deposits of PKR 2,599.1bln, while customer deposits stood at PKR 2,503.9bln, highlighting the strength of its funding base. With a deposit market share of 10%, BAHL remains one of the leading private commercial banks in Pakistan, supported by its extensive branch network, strong brand, and long-standing customer relationships.

In CY25, total markup income declined to PKR 337.1 billion from PKR 478.0 billion in CY24, reflecting compression in asset yields amid the SBP’s monetary easing cycle. On the expense side, markup expenses decreased more sharply to PKR 206.5 billion (CY24: PKR 321.8 billion), driven by faster repricing of the Bank’s deposit base and effective mobilization of current accounts. As a result, Net Markup Income (NIM) contracted to PKR 130.6 billion (CY24: PKR 156.2 billion), reflecting a 16.4% YoY decline, primarily due to a faster decline in earning asset yields compared to liability costs. Non-markup income remained relatively stable at PKR 28.4 billion (CY24: PKR 25.5 billion), supported by fee and commission income of PKR 19.1 billion and a strong increase in foreign exchange income to PKR 7.4 billion, driven by improved trade activity and exchange management. Consequently, total non-markup income partially offset the pressure on core profitability. On the yield side, the average advances yield declined to 10.8% in CY25 from 13.7% in CY24, while average investment yield decreased to 12.1% from 19.9% over the same period, reflecting the impact of lower interest rate environment across earning assets.

During CY25, BAHL's total income stood at PKR 159.1 billion (CY24: PKR 181.7 billion), reflecting a 12.5% decline primarily driven by lower net markup income amid the rate reduction cycle. Operating expenses increased to PKR 94.5 billion (CY24: PKR 81.0 billion), reflecting investments in branch network expansion (102 new branches opened in 2025), personnel growth, technology infrastructure upgrades, and digital banking capabilities. Net taxation amounted to PKR 34.9 billion (CY24: PKR 43.9 billion), resulting in Profit After Taxation of PKR 30.6 billion (CY24: PKR 39.8 billion).

The Bank continues to strengthen its ESG and sustainability framework through implementation of green banking initiatives, environmental and social risk assessments, digitalization, and responsible banking practices. Recognition through ESG-related awards and sustainability initiatives reflects management’s commitment toward long-term sustainable growth.

At end-December 2025, BAHL’s net advances stood at PKR 792.1 billion (CY24: PKR 910.9 billion), reflecting a 13.1% decline driven by a strategic shift towards high-quality government securities and short-term lending amid a lower-rate environment, while gross advances were recorded at PKR 839.4 billion. Consequently, the Advances-to-Deposit Ratio (ADR) moderated to 30.5% (CY24: ~40%), reflecting stronger deposit growth relative to lending activity. The Bank’s non-performing loans remained broadly stable at PKR 35.8 billion, with credit loss allowance of PKR 47.4 billion providing strong coverage well above 100%, supporting prudent IFRS 9-based provisioning. As a result, the infection ratio remained contained at 4.3%, underpinned by disciplined underwriting, proactive NPL management, and the Bank’s internal Obligor Risk Rating (ORR) framework along with regular stress testing of the credit portfolio.

At end-December 2025, BAHL's investment portfolio stood at PKR 2,028.5 billion (end-December 2024: PKR 1,924.7 billion), reflecting a 5.4% YoY increase. Government securities continued to dominate the portfolio composition, consistent with the sector-wide trend of risk-averse asset deployment. Pakistan Investment Bonds (PIBs), Market Treasury Bills (T-Bills), and Ijarah Sukuk constitute the core of the investment book. BAHL manages through active duration management, deployment of floating-rate instruments, and hedging strategies under ALCO oversight. Foreign exchange risk is managed within SBP-prescribed limits through active treasury operations.

BAHL maintains a strong liquidity position, supported by its large and stable deposit and conservative investment strategy. Total deposits increased to PKR 2,599.1 billion at end-December 2025 (CY24: PKR 2,279.0 billion), reflecting a 14.1% growth and providing a solid funding base. While CASA deposits continue to form a key component of the deposit mix, the CASA ratio witnessed some moderation in CY25 as term deposits increased due to customers locking in higher yields; however, the Bank is actively managing its mix to optimize funding costs as these deposits reprice in CY26. Borrowings declined sharply to PKR 290.3 billion (CY24: PKR 667.0 billion), This decline happened mainly because the bank stopped its repo-based PIB arbitrage strategy as SBP interest rate cuts reduced profit margins, making it unattractive. strong deposit growth of PKR 320 billion provided ample low-cost funding, eliminating the need for expensive wholesale borrowings The Bank remains compliant with SBP’s LCR and NSFR requirements, while top 20 depositors accounted for 7.5% of total deposits, reflecting a well-diversified depositor base.

As of end-December 2025, BAHL's shareholders' equity (excluding surplus on revaluation of assets) amounted to PKR 141.8 billion (CY24: PKR 130.4 billion), reflecting PKR 11.4 billion in equity accretion despite substantial dividend payouts. Total equity including revaluation surplus stood at PKR 171.3 billion (CY24: PKR 151.9 billion). Share capital is PKR 11.1 billion. The Bank's Capital Adequacy Ratio (CAR) is expected to remain comfortably above SBP's minimum requirements of 11.5% (including capital conservation buffer), supported by strong internal capital generation and the Bank's issuance of Basel III-compliant Tier II Term Finance Certificates (TFCs) — TFC VIII and TFC IX are currently outstanding — to augment regulatory capital. BAHL's consistently sound earnings, high dividend payout capacity (PKR 15.00 per share / 150% for CY25), and strong equity base collectively support its capitalization assessment as solid.