Half Yearly Report 2021

a more prosperous and secure future.
Mission
ﬁnancial solutions to create and nurture long-term relationships with our
customers. In doing so, we ensure that our shareholders can invest with
conﬁdence in us.
Core Values
The standards and principles which determine our behavior and how we
interact with our customers and each other.
Credit Rating
Board of Directors:

Mian Mohammad Mansha Chairman
Mr. S.M. Muneer Vice-Chairman
Mr. Muhammad Tariq Rafi Director
Mian Umer Mansha Director
Mrs. Iqraa Hassan Mansha Director
Mr. Muhammad Ali Zeb Director
Mr. Mohd Suhail Amar Suresh bin Abdullah Director
Mr. Yahya Saleem Director
Mr. Salman Khalid Butt Director
Mr. Masood Ahmed Puri Director
Mr. Shahzad Hussain Director
Mr. Shariffuddin Bin Khalid Director
Mr. Imran Maqbool President & CEO
Audit Committee:

Mr. Shahzad Hussain Chairman
Mian Umer Mansha Member
Mr. Muhammad Ali Zeb Member
Mr. Shariffuddin Bin Khalid Member
Chief Financial Officer: Mr. Hammad Khalid
Company Secretary: Mr. Fida Ali Mirza
Auditors: M/s. A. F. Ferguson & Co.

Chartered Accountants
Legal Advisors: M/s. Khalid Anwer & Co.

Advocates & Legal Consultants
Registered /Principal Office: MCB Building, 15-Main Gulberg,

Jail Road, Lahore, Pakistan.
Contact us: UAN: + 92 42 111 000 622

E-mail: [email protected]
Visit us:
Registrar's and Share Registration Office(s): Head Office:

M/s. THK Associates (Pvt.) Limited
Plot No. 32-C, Jami Commercial Street 2,
D.H.A., Phase VII, Karachi, Pakistan.
Branch Office:
M/s. THK Associates (Pvt.) Limited
Siddique Trade Centre,
Office No. PL-29, PL Floor,
72 Main Boulevard Gulberg -2,
Lahore, Pakistan.
3
Directors’ Review - June 2021
On behalf of the Board of Directors, we are pleased to place before you, the financial statements of MCB Bank Limited (MCB) On the provision front, the equity scrip disposals resulted in net reversal of Rs. 529 million for the six month period ended June
for the six months period ended June 30, 2021. 30, 2021. Proactive monitoring and recovery efforts led to a net provision reversal against non-performing loans (NPL's)
aggregating to Rs. 1,387 million for the period under review.
Introduction
Despite the challenges posed to the operating environment by the recently witnessed resurgence in COVID-19 infections On the financial position side, the total asset base of the Bank on an unconsolidated basis was reported at Rs. 1,861 billion
amidst the most virulent wave of the outbreak, MCB remained operationally resilient and capitalized on the earlier gained (+6%). Analysis of the asset mix highlights that while the growth in gross advances remained subdued amidst a dearth of
business traction to post another period of sustainable financial growth for its stakeholders. quality lending opportunities, the excess liquidity was diverted towards the investment book; which in turn grew by Rs. 80 billion
and contributed the major share to the total increase. However, the consumer lending book grew by Rs. 3.98 billion (+14%) on
The Bank's exceptional performance has also been recognized by the globally coveted Finance Asia's Country Awards account of significant activity in the construction and auto segment.
wherein it has been bestowed with the “Best Bank in Pakistan” accolade for the year 2020.
Persistent focus on maintaining a robust risk management framework encompassing structured assessment models, effective
Performance Review pre-disbursement evaluation tools and an array of post disbursement monitoring systems has enabled MCB to effectively
Rs. in Million
manage its credit risks despite realization of systematic risks emanating from the evolving macroeconomic situation. The non-
Profit Before Taxation 25,013 performing loan (NPLs) base of the Bank hence registered a decline over December 2020 to report at Rs. 51.06 billion.
Taxation 10,270
Profit After Taxation 14,743 The Bank has not taken FSV benefit in calculation of specific provision and carries un-encumbered general provision reserve
Un-appropriated Profit Brought Forward 69,835 of Rs. 3.06 billion. The coverage and infection ratios of the Bank were reported at 95.67% and 9.98% respectively.
Re-measurement loss on defined benefit obligations - net of tax (166)
Surplus realized on disposal of revalued fixed assets - net of tax 6 On the liabilities side, achieving growth in no-cost current account base remained a key strategic objective for the Bank.
Surplus realized on disposal of non-banking assets - net of tax 209 Thereby, non-remunerative deposits grew by 20% to close at Rs. 589 billion; improving their mix in the total deposits to 41% in
Transfer in respect of incremental depreciation from surplus on absolute terms as at June 30, 2021 compared to 38% as at December 31, 2020. CASA mix was reported at 92% whereas the
revaluation of fixed assets to unappropriated profit - net of tax 41 total deposits of the Bank grew by 12% to close the period at Rs. 1.44 trillion.
69,925
Profit Available for Appropriation 84,668 Return on Assets and Return on Equity reported at 1.63% and 18.66% respectively, whereas the book value per share was
Appropriations: reported at Rs. 129.68.
Statutory Reserve (1,474)
Final Cash Dividend at Rs. 15.0 per share - December 2020 (17,776) Under Roshan Digital Account (RDA), the Bank has brought in over USD 125 million since the inception of the proposition in
First Interim Dividend at Rs. 4.5 per share - March 2021 (5,333) September 2020. The volume of foreign trade showed tremendous growth of 64% over H1'2020.
Total Appropriations (24,583)
Un-appropriated Profit Carried Forward 60,085 While complying with the regulatory capital requirements, the Bank's total Capital Adequacy Ratio (CAR) is 19.51% against the
requirement of 11.5% (including capital conservation buffer of 1.50% as reduced under the BPRD Circular Letter No. 12 of
MCB's unconsolidated Profit After Tax (PAT) for the six month period ended June 30, 2021 increased to Rs. 14.74 billion 2020). Quality of the capital is evident from Bank's Common Equity Tier-1 (CET1) to total risk weighted assets ratio which
(+12%); translating into an Earning Per Share (EPS) of Rs. 12.44 against an EPS of Rs. 11.15 reported in the corresponding comes to 16.07% against the requirement of 6%. Bank's capitalization also resulted in a Leverage Ratio of 6.33% which is well
period last year. above the regulatory limit of 3.0%. The Bank reported Liquidity Coverage Ratio (LCR) of 245.82% and Net Stable Funding
Ratio (NSFR) of 187.82% against requirement of 100%.
Net Interest income reported at Rs. 31.55 billion with a drop of 12% on account of decreased earning margins due to the
expansionary monetary policy regime adopted by the State Bank of Pakistan to combat the downside risks emanating from The Board of Directors has declared 2nd interim cash dividend of Rs. 5.0 per share i.e. 50% bringing the total cash dividend for
COVID-19 outbreak. Low policy rate diluted the impact of positive volumetric growth achieved by the Bank in its average the year ending 2021 to 95%, continuing with its highest dividend payout trend.
earning assets.
Non-markup income registered phenomenal growth of 34% and aggregated to Rs. 9.50 billion against Rs. 7.08 billion in the Ratings
corresponding period last year. Improved transactional volumes, surge in business activities, diversification of revenue The Bank enjoys highest local credit ratings of AAA / A1+ categories for long term and short term respectively, based on PACRA
streams through continuous enrichment of Bank's product suite, investments towards digital transformation and an notification dated June 23, 2021.
unrelenting focus on upholding the high service standards in the industry supplemented a growth of 17% in fee income while
the dividend income increased by 83%. Economy Review
During the last quarter of FY 2021, Pakistan's macroeconomic fundamentals remained largely robust. However, the spread of
On the operating expenses side, despite sustained inflationary pressures amidst currency devaluation, higher compliance the COVID-19 Delta variant and an increasing monthly current account deficit highlighted the developing challenges for the
related regulatory charges, expansion in branch outreach and regular performance and merit adjustments of the Human economy.
Capital, the Bank was able to contain the growth to 6%.
4 5
On the external front, Pakistan reported a current account deficit of USD 1.85 billion for FY 2021 as compared to a deficit of
USD 4.45 billion last year. For the full year, the increased remittances and export numbers kept the current account in check.
As aggregate demand in the economy improved, imports continued to rise at a faster pace compared to exports. To support the
balance of payments (BoP), the country issued EURO bonds in the International market. On March 30, 2021, Pakistan
received USD 2.5 billion through these bonds. Moreover, SBP's Roshan Digital Account (RDA) gained traction during the first
half of 2021. Inflows from RDA crossed the USD 1.5 billion market by end of the second quarter of the financial year.
The improved FX reserves helped stabilize the exchange rate. Starting the calendar year at PKR 159.8344, the USD/PKR
parity marginally appreciated to close at 157.54 on June 30, 2021. The headline inflation rate picked up during first half of 2021.
From the low reading of 5.65% in Jan'21, the headline inflation touched a high of 11.10% in April'21 before settling at 9.70% in
Jun'21. Increased aggregate demand, elevated global commodity prices and transitory disruptions in the food-chain were the
major triggers.
Nonetheless, SBP decided to keep the policy rate at 7% in order to support growth in the economy. SBP's strategy is in-line with
its global counterparts. It follows the widely held viewpoint that inflation is largely transitory and expected to normalize going
forward.
On the fiscal side, the Government in its budget targeted tax revenue of Rs. 5.829 trillion, envisioning a budget deficit of 6.30%.
The focus of the budget remained on supporting growth amidst the ongoing pandemic.
Future Outlook
Pakistan is currently entering the fourth wave of COVID-19 which poses threats to the ongoing economic rebound. The
comparatively slow speed of vaccinations and non-adherence to COVID-19 safety protocols in the country is a major challenge
and poses significant risk.
Pakistan is currently pursuing expansionary fiscal and monetary policies. These growth focused policies are beginning to exert
pressure on inflation and our trade and current-account balances. For this reason, successful negotiation of the IMF program
and implementation of structural reforms remain critical and will determine the likely course the economy will take going
forward.
Appreciation and Acknowledgements

The Board of Directors of MCB Bank Limited would like to thank the Government of Pakistan, the State Bank of Pakistan, the
Securities & Exchange Commission of Pakistan and other regulatory bodies for their continued support, all shareholders and
customers of the Bank for their trust, and our employees for their continuous dedication and commitment.
For and on behalf of the Board of Directors,
Imran Maqbool Muhammad Ali Zeb

Director
6 August 11, 2021 7

8 9
Independent Auditor's Review Report Unconsolidated Condensed Interim Statement of Financial Position
AS AT JUNE 30, 2021
To The Members of MCB Bank Limited
Report on Review of Unconsolidated Condensed Interim Financial Statements
Note Unaudited Audited
Introduction June 30, 2021 December 31, 2020
We have reviewed the accompanying unconsolidated condensed interim statement of financial position of MCB Bank Limited (“the
---------Rupees in '000---------
Bank”) as at June 30, 2021 and the related unconsolidated condensed interim profit and loss account, unconsolidated condensed
ASSETS
interim statement of comprehensive income, unconsolidated condensed interim statement of changes in equity, and Cash and balances with treasury banks 7 142,190,958 122,180,839
unconsolidated condensed interim cash flow statement, and notes to the unconsolidated condensed interim financial statements Balances with other banks 8 14,221,640 24,030,328
for the six-month period then ended (here-in-after referred to as the “interim financial statements”). Management is responsible for Lendings to financial institutions 9 32,494,214 17,139,453
the preparation and presentation of this interim financial statements in accordance with the accounting and reporting standards as Investments 10 1,096,213,219 1,015,869,448
Advances 11 462,537,916 462,941,787
applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these financial statements
Fixed assets 12 57,587,543 58,027,904
based on our review. The figures for the quarters ended June 30, 2021 and June 30, 2020 in the unconsolidated condensed interim Intangible assets 13 956,039 938,458
profit and loss account and unconsolidated condensed interim statement of comprehensive income have not been reviewed and Deferred tax assets - -
we do not express a conclusion on them. Other assets 14 54,721,830 56,334,253
1,860,923,359 1,757,462,470
Scope of Review
LIABILITIES
We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Bills payable 16 12,928,523 23,980,692
Information Performed by the Independent Auditor of the Entity”. A review of interim financial statements consists of making Borrowings 17 139,594,324 164,001,533
inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review Deposits and other accounts 18 1,441,208,405 1,289,502,304
procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing Liabilities against assets subject to finance lease - -
Subordinated debt - -
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
Deferred tax liabilities 19 6,989,155 6,975,158
identified in an audit. Accordingly, we do not express an audit opinion. Other liabilities 20 81,584,666 82,900,828
1,682,305,073 1,567,360,515
Conclusion NET ASSETS 178,618,286 190,101,955
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial
REPRESENTED BY
statements is not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in
Share capital 11,850,600 11,850,600
Pakistan for interim financial reporting. Reserves 21 81,744,621 80,696,335
Surplus on revaluation of assets 22 24,938,570 27,720,418
Other matter Unappropriated profit 60,084,495 69,834,602
178,618,286 190,101,955
The financial statements of the Bank for the year ended December 31, 2020 were audited by another firm of Chartered
Accountants who expressed an unqualified opinion thereon vide their report dated February 26, 2021.
CONTINGENCIES AND COMMITMENTS 23
The engagement partner on the review resulting in this independent auditor's review report is Hammad Ali Ahmad.
The annexed notes 1 to 41 form an integral part of these unconsolidated condensed interim financial statements.
A. F. Ferguson & Co
Chartered Accountants
Lahore
Dated: August 25, 2021
Imran Maqbool Hammad Khalid S. M. Muneer Salman Khalid Butt Muhammad Ali Zeb
10 President / CEO Chief Financial Officer Director Director Director 11
Unconsolidated Condensed Interim Profit & Loss Account (Un-audited) Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited)
For The Half Year Ended June 30, 2021 For The Half Year Ended June 30, 2021
Quarter Ended Half Year Ended Quarter Ended Half Year Ended
April 01 April 01 January 01 January 01
April 01 April 01 January 01 January 01 to to to to
to to to to June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Note
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 ---------Rupees in '000---------
Profit after taxation for the period 7,952,598 6,690,398 14,742,672 13,209,424
---------Rupees in '000---------
Other comprehensive income
Mark-up / return / interest earned 25 29,853,633 36,112,002 58,201,095 75,211,630 Items that may be reclassified to profit and loss account in subsequent periods:
26 13,544,944 16,406,846 26,652,061 39,198,774 Effect of translation of net investment in foreign branches 372,059 200,145 (425,981) 799,973
Mark-up / return / interest expensed
Movement in surplus on revaluation of investments - net of tax 1,250,183 7,012,604 (2,344,321) 15,550,063
Net mark-up / interest income 16,308,689 19,705,156 31,549,034 36,012,856 1,622,242 7,212,749 (2,770,302) 16,350,036
Items that will not be reclassified to profit and loss account in subsequent periods:
NON MARK-UP / INTEREST INCOME Remeasurement loss on defined benefit obligations - net of tax (166,181) (1,738,103) (166,181) (1,738,103)
Movement in surplus on revaluation of fixed/non-banking assets - net of tax (181,188) - (181,188) -
Fee and commission income (347,369) (1,738,103) (347,369) (1,738,103)
27 2,675,612 2,299,959 6,011,156 5,145,608
Dividend income 562,419 310,199 978,665 533,799 Total comprehensive income 9,227,471 12,165,044 11,625,001 27,821,357
Foreign exchange income 770,927 702,520 1,395,377 1,427,687

Income/ (loss) from derivatives (649) 3,502 8,545 (6,903) The annexed notes 1 to 41 form an integral part of these unconsolidated condensed interim financial statements.
Gain/ (loss) on securities 28 134,792 (138,186) 484,545 (67,047)

Other Income 29 606,568 17,093 620,317 49,628
Total non-markup / interest Income 4,749,669 3,195,087 9,498,605 7,082,772
Total Income 21,058,358 22,900,243 41,047,639 43,095,628
NON MARK-UP / INTEREST EXPENSES
Operating expenses 30 8,559,655 8,031,132 17,195,607 16,192,564

Workers Welfare Fund 274,742 227,788 500,263 445,087
Other charges 31 310,083 30,865 339,300 240,120
Total non-markup / interest expenses 9,144,480 8,289,785 18,035,170 16,877,771
Profit before provisions 11,913,878 14,610,458 23,012,469 26,217,857
Provisions / (reversals) and write offs - net 32 (1,823,217) 3,221,035 (2,000,682) 3,963,497
PROFIT BEFORE TAXATION 13,737,095 11,389,423 25,013,151 22,254,360
Taxation 33 5,784,497 4,699,025 10,270,479 9,044,936
PROFIT AFTER TAXATION 7,952,598 6,690,398 14,742,672 13,209,424
Basic and diluted earnings per share 34 6.71 5.65 12.44 11.15
Imran Maqbool Hammad Khalid S. M. Muneer Salman Khalid Butt Muhammad Ali Zeb Imran Maqbool Hammad Khalid S. M. Muneer Salman Khalid Butt Muhammad Ali Zeb
12 President / CEO Chief Financial Officer Director Director Director President / CEO Chief Financial Officer Director Director Director 13
14
Capital reserve Revenue reserve
Surplus/(deficit) on revaluation of
Statutory Unappropriated
Share capital Non-distributable Exchange Total
Share premium reserve General reserve Fixed / non- profit
capital reserve translation reserve Investments
banking assets
-----------------------------------------------------------------------------------------------Rupees in '000-----------------------------------------------------------------------------------------------
Balance as at December 31, 2019 (Audited) 11,850,600 23,751,114 908,317 2,675,131 31,656,691 18,600,000 4,217,747 19,477,694 55,777,489 168,914,783
Total comprehensive income for the period ended June 30, 2020
Imran Maqbool
President / CEO
Profit after taxation for the six months period ended June 30, 2020 - - - - - - - - 13,209,424 13,209,424
Other comprehensive income - net of tax - - - 799,973 - - 15,550,063 - (1,738,103) 14,611,933
- - - 799,973 - - 15,550,063 - 11,471,321 27,821,357
Transfer to statutory reserve - - - - 1,320,942 - - - (1,320,942) -
Transfer in respect of incremental depreciation from surplus on revaluation of
fixed assets to unappropriated profit - net of tax - - - - - - - (44,707) 44,707 -
Transactions with owners, recorded directly in equity

Final cash dividend at Rs. 5.0 per share - December 31, 2019 - - - - - - - - (5,925,300) (5,925,300)
Interim cash dividend at Rs. 5.0 per share - March 31, 2020 - - - - - - - - (5,925,300) (5,925,300)
- - - - - - - - (11,850,600) (11,850,600)
For The Half Year Ended June 30, 2021
Balance as at June 30, 2020 (Un-audited) 11,850,600 23,751,114 908,317 3,475,104 32,977,633 18,600,000 19,767,810 19,432,987 54,121,975 184,885,540
Hammad Khalid
Chief Financial Officer
Change in equity for six months period ended December 31, 2020
Total comprehensive income for the six months period ended December 31, 2020
Profit after taxation for the six months period ended December 31, 2020 - - - - - - - - 15,827,877 15,827,877
Other comprehensive income - net of tax - - - (598,621) - - (11,528,177) 119,544 1,395,792 (10,611,462)
- - - (598,621) - - (11,528,177) 119,544 17,223,669 5,216,415
Director
S. M. Muneer
Surplus realized on disposal of revalued fixed assets - net of tax - - - - - - - (22,544) 22,544 -
Surplus realized on disposal of non-banking assets - net of tax - - - - - - - (4,774) 4,774 -
Balance as at December 31, 2020 (Audited) 11,850,600 23,751,114 908,317 2,876,483 34,560,421 18,600,000 8,239,633 19,480,785 69,834,602 190,101,955
Profit after taxation for the six months period ended June 30, 2021 - - - - - - - - 14,742,672 14,742,672
Other comprehensive income - net of tax - - - (425,981) - - (2,344,321) (181,188) (166,181) (3,117,671)
- - - (425,981) - - (2,344,321) (181,188) 14,576,491 11,625,001
Director
Salman Khalid Butt

Surplus realized on disposal of revalued fixed assets - net of tax - - - - - - - (6,181) 6,181 -
Surplus realized on disposal of non-banking assets - net of tax - - - - - - - (209,067) 209,067 -

Unconsolidated Condensed Interim Statement of Changes In Equity (Un-audited)
Final cash dividend at Rs. 15.0 per share - December 31, 2020 - - - - - - - - (17,775,900) (17,775,900)
Interim cash dividend at Rs. 4.50 per share - March 31, 2021 - - - - - - - - (5,332,770) (5,332,770)
- - - - - - - - (23,108,670) (23,108,670)
Balance as at June 30, 2021 (Un-audited) 11,850,600 23,751,114 908,317 2,450,502 36,034,688 18,600,000 5,895,312 19,043,258 60,084,495 178,618,286
Director
For details of dividend declaration and appropriations, please refer note 39 to these unconsolidated condensed interim financial statements.
Muhammad Ali Zeb

For details of reserves, please refer note 21 to these unconsolidated condensed interim financial statements.
Deposits
Advances
Adjustments:
Dividend paid
Bills Payable
Amortization
Income tax paid
Dividends received
Profit before taxation
Defined benefits paid
Imran Maqbool
President / CEO
Less: Dividend income
Workers Welfare Fund
Held-for-trading securities
Depreciation on fixed assets
Investments in Intangible assets

Lendings to financial institutions
Investments in operating fixed assets

Depreciation on right-of-use assets
Net cash flow from operating activities

Borrowings from financial institutions
Charge for defined benefit plans - net
Net cash flow used in investing activities
Net cash flow used in financing activities
Increase in cash and cash equivalents

Decrease / (increase) in operating assets
Increase / (decrease) in operating liabilities

(Loss) / Gain on sale of fixed assets - net
Other liabilities (excluding current taxation)
Proceeds from sale of operating fixed assets

Provisions / (reversals) and write offs - net
Net investments in held-to-maturity securities

Others assets (excluding advance taxation)
Net investments in available-for-sale securities

CASH FLOW FROM INVESTING ACTIVITIES
Cash and cash equivalents at end of the period

CASH FLOW FROM FINANCING ACTIVITIES
CASH FLOW FROM OPERATING ACTIVITIES
Hammad Khalid
Payment of lease liability against right-of-use-assets
Cash and cash equivalents at beginning of the period

Effect of translation of net investment in foreign branches
Finance charges on lease liability against right-of-use assets
Effects of exchange rate changes on cash and cash equivalents

Gain on termination of lease liability against right of use assets
Depreciation on non-banking assets acquired in satisfaction of claims
Unrealized loss / (gain) on revaluation of investments - Held For Trading
Director
Proceeds from sale of non-banking assets acquired in satisfaction of claims
Gain on sale of non-banking assets acquired in satisfaction of claims - net
S. M. Muneer
28
29
26
29
29
32
30
30
30
30
Note
Unconsolidated Condensed Interim Cash Flow Statement (Un-audited)
Director
Salman Khalid Butt
to
January 01
June 30, 2021
1,518,881
22,246
3,393,910
114,070,683
1,876,710
26,956
18,721
1,054,729
9,335
155,741,251
144,924,406
151,706,101
10,816,845
889,448
977,434
44,322,685
24,650,199
615,713
290,438
500,263
528,558
158,332
609,702
24,034,486
25,013,151
(23,704,546)
(22,885,202)
(819,344)
(10,690,742)
(425,981)
(177,956)
(14,807,657)
(24,681,243)
(86,098,566)
(71,422,294)
(15,354,761)
(1,191,619)
(8,164,331)
(135,300)
(1,902,006)
(1,198,221)
(536,464)
(44,175)
(2,000,682)
(978,665)
(11,052,169)
Director
to
----------Rupees in '000--------
Muhammad Ali Zeb

-
-
-
January 01
June 30, 2020
3,766,686
28,597
8,562,322
2,214,965
6,895,439
3,963,497
15,675
158,233,548
140,130,903
176,094,943
127,818,876
129,918,919
18,102,645
799,973
506,135
24,437,832
26,932,450
32,275,576
28,616,000
161,546
445,087
605,176
155,492
600,945
980,049
21,720,561
22,254,360
(149,182,563)
(158,168,756)
(12,576,421)
(842,551)
(833,424)
(25,220,404)
(77,410)
(7,107,083)
(165,300)
(1,317,471)
(6,591,374)
(966,717)
(533,799)
(13,078)
(18,950)
(11,733,870)
15
Notes To The Unconsolidated Condensed Interim Financial Statements (Un-audited) Notes To The Unconsolidated Condensed Interim Financial Statements (Un-audited)
1. STATUS AND NATURE OF BUSINESS 3.6 Standards, interpretations of and amendments to approved accounting standards that are not yet effective
MCB Bank Limited (the 'Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related The following new standards and amendments to existing accounting standards will be effective from the dates mentioned below
services. The Bank's ordinary shares are listed on the Pakistan stock exchange. The Bank's Registered Office and Principal Office are against the respective standard or amendment:
situated at MCB -15 Main Gulberg, Lahore. The Bank operates 1419 branches (2020: 1418 branches) within Pakistan and 11 branches Effective date (annual periods
(2020: 11 branches) outside Pakistan (including the Karachi Export Processing Zone branch). beginning on or after)
2. BASIS OF PREPARATION Property, Plant and Equipment: Proceeds before intended use – Amendments to IAS 16 January 1, 2022
2.1 These unconsolidated condensed interim financial statements represent separate financial statements of MCB Bank Limited. The Cost of Fulfilling an Onerous Contracts – Amendments to IAS 37 January 1, 2022
consolidated condensed interim financial statements of the Group are being issued separately. Updating a Reference to the Conceptual Framework – Amendments to IFRS 3 January 1, 2022
2.2 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State Classification of Liabilities as Current or Non-current – Amendments to IAS 1 January 1, 2023
Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include Amended by Definition of Accounting Estimates – Amendments to IAS 8 January 1, 2023
purchase of goods by banks from their customers and immediate resale to them at appropriate profit in price on deferred payment
basis. The purchases and sales arising under these arrangements are not reflected in these unconsolidated condensed interim IFRS 9, Financial Instruments: Classification and Measurement, addresses recognition, classification, measurement and
financial statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of profit thereon. derecognition of financial assets and financial liabilities. The standard has also introduced a new impairment model for financial assets
which requires recognition of impairment charge based on an 'Expected Credit Losses' (ECL) approach rather than the 'incurred credit
losses' approach as currently followed. The ECL approach has an impact on all assets of the Bank which are exposed to credit risk.
2.3 The unconsolidated condensed interim financial statements are presented in Pak Rupees, which is the Bank's functional and
presentation currency. The amounts are rounded off to the nearest thousand.
As per the SBP's BPRD Circular Letter no. 24 dated July 5, 2021, the applicability of IFRS 9 to banks in Pakistan has been deferred to
2.4 accounting periods beginning on or after January 1, 2022. Therefore, these unconsolidated condensed interim financial statements
These unconsolidated condensed interim financial statements have been prepared under the historical cost convention except that
have been prepared in accordance with the existing prudential regime to the extent of the Bank's domestic operations, whereas the
certain classes of fixed assets and non-banking assets acquired in satisfaction of claims are stated at revalued amounts and certain
requirements of this standard are incorporated for overseas jurisdictions where IFRS 9 has been adopted.
investments and derivative financial instruments have been marked to market and are carried at fair value. In addition, obligations in
respect of staff retirement benefits are carried at present value.
There are other new and amended standards and interpretations that are mandatory for the Bank's accounting periods beginning on or
3. STATEMENT OF COMPLIANCE after January 1, 2022 but are considered not to be relevant or do not have any significant effect on the Bank's operations and are
3.1 therefore not detailed in these unconsolidated condensed interim financial statements.
These unconsolidated condensed interim financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for 4 SIGNIFICANT ACCOUNTING POLICIES
interim financial reporting comprise of:
The significant accounting policies and methods of computation adopted in the preparation of these unconsolidated condensed interim
- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards financial statements are consistent with those applied in the preparation of the audited annual unconsolidated financial statements of
Board (IASB) as notified under the Companies Act, 2017; the Bank for the year ended December 31, 2020.
5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are notified under
the Companies Act, 2017; The basis for accounting estimates adopted in the preparation of these unconsolidated condensed interim financial statements are the
same as that applied in the preparation of the unconsolidated financial statements for the year ended December 31, 2020.
- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and
6 FINANCIAL RISK MANAGEMENT
- Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP). The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the unconsolidated
financial statements for the year ended December 31, 2020. These risk management policies continue to remain robust and the Bank
Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the SBP is reviewing its portfolio regularly and conducts rapid portfolio reviews in line with emerging risks.
and the SECP differ with the requirements of IAS 34 or IFAS, the requirements of the Banking Companies Ordinance, 1962, the
Companies Act, 2017 and the said directives, shall prevail.
3.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standards 40, 'Investment Property' for Banking
Companies through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has
deferred applicability of IFRS-7 "Financial Instruments: Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008.
Accordingly, the requirements of these standards have not been considered in the preparation of these unconsolidated condensed
interim financial statements. However, investments have been classified and valued in accordance with the requirements prescribed
by the State Bank of Pakistan through various circulars.
3.3 The SECP vide its notification SRO 633 (I)/2014 dated 10 July 2014, adopted IFRS 10 effective from the periods starting from June 30,
2014. However, vide its notification SRO 56 (I)/2016 dated January 28, 2016, it has been notified that the requirements of IFRS 10 and
section 228 of the Companies Act, 2017 will not be applicable with respect to the investment in mutual funds established under trust
structure.
3.4 The disclosures made in these unconsolidated condensed interim financial statements have been limited based on a format prescribed
by the SBP vide BPRD Circular Letter No. 05 of 2019 dated March 22, 2019 and IAS 34, Interim Financial Reporting. These
unconsolidated condensed interim financial statements do not include all the information and disclosures required in the audited
annual financial statements, and should be read in conjunction with the audited annual unconsolidated financial statements for the
financial year ended December 31, 2020.
3.5 Amendments to approved accounting standards that are effective in the current period
There are certain new standards and interpretations of and amendments to existing accounting standards that have become
applicable to the Bank for accounting periods beginning on or after January 1, 2021. These are considered either to not be relevant or
16 not to have any significant impact on the Bank's unconsolidated condensed interim financial statements. 17
18
9.
8.
7.
In hand
Prize bonds
Local currency
Outside Pakistan
Foreign currencies
In current accounts
In deposit accounts
With other central banks in
Call / clean money lendings

With State Bank of Pakistan in
With National Bank of Pakistan in

Local currency current accounts
Local currency current accounts
BALANCES WITH OTHER BANKS

Foreign currency current accounts
Foreign currency current accounts
Foreign currency deposit accounts
LENDINGS TO FINANCIAL INSTITUTIONS
Repurchase agreement lendings (Reverse Repo)

CASH AND BALANCES WITH TREASURY BANKS
Unaudited
June 30, 2021
32,494,214
29,220,496
14,221,640
36,673,318
69,629,677
57,100,505
31,376,539
24,436,062
142,190,958
3,273,718
5,796,287
8,425,353
1,357,598
3,153,826
9,952,524
2,576,648
6,940,477
Notes To The Unconsolidated Condensed Interim Financial Statements (Un-audited)
---------Rupees in '000---------
Audited
937,889
17,139,453
24,030,328
21,798,363
21,673,576
59,439,961
10,215,984
47,257,342
28,278,102
22,094,317
122,180,839
6,137,258
11,002,195
2,231,965
11,851,311
1,966,635
6,183,785
December 31, 2020
10. INVESTMENTS Unaudited June 30, 2021 Audited December 31, 2020
Cost / Provision for Surplus / Cost / Provision for Surplus /

10.1 Investments by type: Carrying Value Carrying Value
Amortised cost diminution (Deficit) Amortised cost diminution (Deficit)
------------------------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------------------------
Federal Government Securities 72,605,846 - (7,949) 72,597,897 1,309,116 - (224) 1,308,892
Shares 125,340 - (1,386) 123,954 - - - -
72,731,186 - (9,335) 72,721,851 1,309,116 - (224) 1,308,892
Available-for-sale securities
Federal Government Securities 942,550,633 (5,028) 6,465,060 949,010,665 946,641,148 (4,719) 9,537,433 956,173,862
Shares and units 28,479,450 (9,609,358) 3,190,228 22,060,320 26,582,088 (10,116,283) 3,119,160 19,584,965
Non Government Debt Securities 1,797,840 - 14,889 1,812,729 1,797,840 - 2,252 1,800,092
Foreign Securities 6,255,820 (1,714) (5,731) 6,248,375 7,463,939 (1,714) 17,509 7,479,734
979,083,743 (9,616,100) 9,664,446 979,132,089 982,485,015 (10,122,716) 12,676,354 985,038,653
Held-to-maturity securities
Federal Government Securities 23,977,239 (10,801) - 23,966,438 4,612,390 (11,542) - 4,600,848
Provincial Government Securities 118 (118) - - 118 (118) - -

Non Government Debt Securities 6,662,763 (477,541) - 6,185,222 9,270,317 (490,341) - 8,779,976
Foreign Securities 1,200,009 (11,103) - 1,188,906 3,149,647 (27,281) - 3,122,366
31,840,129 (499,563) - 31,340,566 17,032,472 (529,282) - 16,503,190
Associates 700,401 - - 700,401 700,401 - - 700,401
Subsidiaries 12,319,037 (725) - 12,318,312 12,319,037 (725) - 12,318,312
Total Investments 1,096,674,496 (10,116,388) 9,655,111 1,096,213,219 1,013,846,041 (10,652,723) 12,676,130 1,015,869,448
Unaudited Audited
10.1.1 Investments given as collateral June 30, 2021 December 31, 2020
----------Rupees in '000--------
- Market Treasury Bills 14,022,219 91,279,273

- Pakistan Investment Bonds 45,768,292 1,000,283
59,790,511 92,279,556
10.2 Provision for diminution in value of investments
10.2.1 Opening balance 10,652,723 10,689,171

Exchange and other adjustments (7,362) 13,474
Charge / (reversals)
Charge for the period / year 357,514 1,956,360
Reversals for the period / year (13,614) (1,529)
Reversal on disposals (872,873) (2,004,753)
(528,973) (49,922)
Amounts written off - -
Closing Balance 10,116,388 10,652,723
10.2.2 Particulars of provision against debt securities

Category of classification Unaudited June 30, 2021 Audited December 31, 2020
NPI Provision NPI Provision
Domestic ----------Rupees in '000--------
Loss 477,659 477,659 490,459 490,459
10.2.3 In addition to the above, overseas branches hold a general provision of Rs 26.931 million (December 31, 2020: Rs 43.542 million) in accordance with the requirements of IFRS 9.
10.3 The market value of securities classified as held-to-maturity as at June 30, 2021 amounted to Rs. 31,382.008 million (December 31, 2020: Rs. 17,002.908 million).
19
11.3 Particulars of provision against advances
Unaudited June 30, 2021 Audited December 31, 2020
This represents non-performing portfolio of agricultural, small enterprise and Infrastructure Project Financing classified as "Other Assets Especially Mentioned" as per the
(5,465,459)
(45,142,956)
(50,608,415)
505
18,856,451
44,338,517
132,380
41,485,949
41,672,468
45,142,956
494,693,751
513,550,202
462,941,787
513,550,202
December 31, 2020
December 31, 2020
1,983
4,913
9,981
469,211,685
52,156
3,455,089
3,470,488
Specific General Total Specific General Total
-
-----------------------------------------------------------------------Ru pees in '000-----------------------------------------------------------------------
------------------------------------Rupees in '000-----------------------------------
Provision
----------Rupees in '000--------
Audited
Audited
Audited December 31, 2020

Opening balance 45,142,956 5,465,459 50,608,415 41,934,421 1,423,921 43,358,342
------------------------------------Ru pees in '000-----------------------------------

Exchange adjustments (67,350) (12,963) (80,313) 50,555 7,065 57,620
Charge for the period / year 1,723,824 20,038 1,743,862 5,703,057 4,097,524 9,800,581
Total
Reversals (1,622,620) (1,507,881) (3,130,501) (2,215,829) (63,051) (2,278,880)

101,204 (1,487,843) (1,386,639) 3,487,228 4,034,473 7,521,701
(3,964,653)
(44,883,675)
(48,848,328)
17,885,665
43,150,029
264,759
42,224,438
42,744,605
51,189,047
493,500,579
462,537,916
468,236,215
211,900
5,321
2,020
511,386,244
511,386,244
43,508
19,961
8,417,140
8,444,442
Non Performing
Amounts written off (293,135) - (293,135) (329,248) - (329,248)
June 30, 2021
June 30, 2021
-
Unaudited
Unaudited
Closing balance 44,883,675 3,964,653 48,848,328 45,142,956 5,465,459 50,608,415
Loans
Advances include Rs. 51,059.686 million (2020: Rs.51,189.047 million) which have been placed under the non-performing status as detailed below:
11.3.1 General provision against consumer loans represents provision maintained against fully secured performing portfolio and unsecured
performing portfolio as required by the Prudential Regulations issued by the SBP. General provision against Small Enterprise Finance
represents provision maintained at an amount equal to 1% of unsecured performing portfolio as required by the Prudential Regulations
issued by the SBP. General provisions pertaining to overseas advances are made in accordance with the requirements of the regulatory
(45,142,956)
(45,142,956)
December 31, 2020
961
71
50,524,753
664,294
51,189,047
102,537
41,358,140
41,524,347
44,883,675
4,048
4,567
6,046,091
59,622
3,353,729
3,359,328
authorities of the respective countries in which the overseas branches operate.
-
-
Provision
Audited
11.3.2 In addition, the Bank has also maintained an un-encumbered general provision of Rs 3,064 million (December 31, 2020: Rs 4,564
Unaudited June 30, 2021

million) against financing made on prudent basis. This general provision is in addition to the requirements of Prudential Regulations.
Non Performing
11.3.3 State Bank of Pakistan vide BSD Circular No. 2 dated January 27, 2009, BSD Circular No. 10 dated October 20, 2009, BSD Circular No.
02 of 2010 dated June 03, 2010 and BSD Circular No.1 of 2011 dated October 21, 2011 has allowed benefit of forced sale value (FSV) of
Plant & Machinery under charge, pledged stock and mortgaged residential, commercial & industrial properties (land and building only)
(44,883,675)
(44,883,675)
282
6,176,011
100,359
239,864
205,073
8,257,911
49,999,590
51,059,686
42,256,479
42,801,775
51,059,686
3,842
9,120
1,060,096
8,244,667
Non Performing
held as collateral against NPLs for five years from the date of classification. However, management has not taken the FSV benefit in
June 30, 2021
-
Unaudited
calculation of specific provision.

Loans
Unaudited Audited
Note June 30, 2021 December 31,
2020
12. FIXED ASSETS ----------Rupees in '000--------
(5,465,459)
(5,465,459)
December 31, 2020
18,192,157
444,168,998
462,361,155
456,895,696
Capital work-in-progress 12.1 1,158,792 802,966

-
Property and equipment 50,182,584 50,467,607
requirements of respective Prudential Regulations issued by the State Bank of Pakistan.

Audited
11.2.1
Note
Right-of-use assets 6,246,167 6,757,331

57,587,543 58,027,904
12.1 Capital work-in-progress
Performing
Civil works 587,652 418,187

Equipment 240,649 98,383
(3,964,653)
(3,964,653)
16,825,569
443,500,989
460,326,558
456,361,905
Advances to suppliers 321,691 283,029

June 30, 2021
-
Unaudited
Others 8,800 3,367

1,158,792 802,966
Unaudited Unaudited
Half Year ended Half Year
June 30, 2021 ended June 30,
2020
----------Rupees in '000--------
12.2 Additions to fixed assets
The following additions have been made to fixed assets during the period:
\
Capital work-in-progress - net additions 355,826 261,664

Other Assets Especially Mentioned
Property and equipment

Particulars of advances (Gross)
Loans, cash credits, running finances, etc.
Freehold land 35,108 25,327

Category of Classification
Building on freehold land 175,672 34,316

Not past due but impaired
Building on leasehold land 14,911 -

Electrical office and computer equipment 389,205 250,685
Bills discounted and purchased
In foreign currencies
Furniture and fixture 77,915 99,721

Provision against advances
Advances - net of provision
In local currency
181 to 365 days
Leasehold Improvements 109,340 107,016

91 to 180 days
Upto 90 days
Substandard
Vehicles 33,642 47,696

Overdue by:
˃ 365 days
Domestic
Overseas
Leasehold land - 6,999

Doubtful
Advances - gross
835,793 571,760
Loss
Total
11. ADVANCES
1,191,619 833,424
- General
- Specific
12.3 Disposal of fixed assets

11.2
11.2.1
The net book value of fixed assets disposed off during the period is as follows:
11.1
Vehicles 2,018 6,971

Furniture and fixture 1,005 130
Building on freehold land 43,149 -
20 49,202 9,647 21
Unaudited Audited
Audited June 30, 2021 December 31,
Unaudited
December 31, 2020
June 30, 2021
2020 ----------Rupees in '000--------
----------Rupees in '000--------
13. INTANGIBLE ASSETS 16. BILLS PAYABLE
Computer software 552,740 543,815
In Pakistan 12,132,845 23,912,803
Capital work-in-progress 403,299 394,643
Outside Pakistan 795,678 67,889
956,039 938,458
12,928,523 23,980,692
Unaudited Unaudited
Half Year ended Half Year ended 17. BORROWINGS
June 30, 2021 June 30, 2020 Secured
----------Rupees in '000--------
13.1 Additions to intangible assets Borrowings from State Bank of Pakistan
The following additions have been made to intangible assets during the period: Under export refinance scheme 32,784,572 34,998,802
Computer software 169,300 63,258 Under long term financing facility 22,152,006 22,150,335
Under renewable energy performance platform 1,035,699 74,760
177,956 77,410
Under payment of Wages & Salaries 8,257,075 10,074,011
Audited
Unaudited Under temporary economic refinance facility 12,356,336 1,694,659
Note December 31,
June 30, 2021 Under refinance facility for combating COVID-19 20,937 -
2020
----------Rupees in '000-------- Under financing facility for storage of agricultural produce 167,162 191,254
14. OTHER ASSETS
76,773,787 69,183,821
Income/ Mark-up accrued in local currency 19,614,597 17,085,615
Bai Muajjal 44,809,236 -
Income/ Mark-up accrued in foreign currencies 551,277 305,759
Repurchase agreement borrowings 14,798,148 92,225,530
Advances, deposits, advance rent and other prepayments 1,714,589 2,249,497
Non-banking assets acquired in satisfaction of claims 2,624,726 3,277,778 Total secured 136,381,171 161,409,351
Compensation for delayed income tax refunds 133,809 133,809 Unsecured

Branch adjustment account 263,289 276,102 Borrowings from other financial institution 60,807 1,712,914
Mark to market gain on forward foreign exchange contracts 2,225,445 4,854,527 Call borrowings 2,318,713 319,669
Unrealized gain on derivative financial instruments 276,993 517,033
Overdrawn nostro accounts 671,347 397,313
Acceptances 20 18,584,386 20,030,754
Others 162,286 162,286
Receivable from the pension fund 3,007,326 3,370,179
Total unsecured 3,213,153 2,592,182
Clearing and settlement accounts 4,560,383 2,698,271
139,594,324 164,001,533
Others 3,236,229 3,263,384
56,793,049 58,062,708 18. DEPOSITS AND OTHER ACCOUNTS
Less: Provision held against other assets 14.1 2,582,715 2,582,686 Unaudited June 30, 2021 Audited December 31, 2020
Other Assets (net of provision) 54,210,334 55,480,022 In Local In Foreign In Local In Foreign
Total Total
Surplus on revaluation of non-banking assets Currency currencies Currency currencies
-----------------------------------------------Rupees in '000-----------------------------------------------
acquired in satisfaction of claims 22 511,496 854,231
Customers
Other Assets - total 54,721,830 56,334,253
Current deposits 467,879,532 65,063,523 532,943,055 397,258,854 53,823,514 451,082,368
14.1 Provision held against other assets
Savings deposits 680,019,455 43,486,511 723,505,966 649,410,009 45,805,328 695,215,337
Non banking assets acquired in satisfaction of claims 89,745 95,095
Claims receivable against fraud and forgeries 493,733 478,773 Term deposits 96,304,947 13,119,263 109,424,210 71,492,234 14,103,734 85,595,968
Others 1,999,237 2,008,818 Others 41,279,645 3,015,917 44,295,562 23,319,545 3,218,232 26,537,777
2,582,715 2,582,686 1,285,483,579 124,685,214 1,410,168,793 1,141,480,642 116,950,808 1,258,431,450
14.1.1 Movement in provision held against other assets Financial Institutions
Opening balance 2,582,686 2,604,137 Current deposits 10,451,795 1,362,091 11,813,886 10,885,621 659,092 11,544,713
Charge for the period / year 24,898 54,269
Savings deposits 15,411,916 297,177 15,709,093 14,068,212 115,935 14,184,147
Reversals (23,889) (77,917)
1,009 (23,648) Term deposits 959,468 2,358,372 3,317,840 1,030,968 4,090,613 5,121,581
Amounts written off - (16,591)
Others - 198,793 198,793 - 220,413 220,413
Exchange and other adjustments (980) 18,788
Closing balance 2,582,715 2,582,686 26,823,179 4,216,433 31,039,612 25,984,801 5,086,053 31,070,854
1,312,306,758 128,901,647 1,441,208,405 1,167,465,443 122,036,861 1,289,502,304
15. CONTINGENT ASSETS
22 There were no contingent assets of the Bank as at June 30, 2021 (2020: NIL). 23
Audited
Unaudited 21.1 Under IFRS-3 a bargain purchase represents an economic gain which should be immediately recognized by the acquirer as income.
Note December 31,
June 30, 2021 However, the amount of bargain purchase gain was not been taken to the profit and loss account as the SBP, through its letter
2020
----------Rupees in '000-------- BPRD(R&PD)/2017/14330 dated June 13, 2017 recommended that the amount of gain may be routed directly into equity as a Non-
19. DEFERRED TAX LIABILITIES distributable Capital Reserve (NCR). The NCR may become available for distribution through a stock dividend only with prior approval
Deductible Temporary Differences on of the SBP. The Bank, before distribution of the gain as a stock dividend, may adjust any subsequent provisions/deficit, assessed by the
Bank or recommended by the Banking Inspection Department of SBP, in the acquired assets and liabilities of NIB Bank Limited against
- Provision against advances (2,256,969) (2,782,530) the NCR.
(2,256,969) (2,782,530)
Taxable Temporary Differences on 21.2 Statutory reserve represents amount set aside as per the requirements of section 21 of the Banking Companies Ordinance, 1962.
- Surplus on revaluation of fixed assets 1,403,211 1,286,416 Audited
Unaudited
- Surplus/deficit on revaluation of investments 3,769,134 4,436,721 Note December 31,
June 30, 2021
2020
- Surplus on revaluation of non-banking assets 199,483 298,982
----------Rupees in '000--------
- Accelerated tax depreciation 1,996,222 1,850,789 22. SURPLUS ON REVALUATION OF ASSETS
- Receivable from pension fund 1,172,856 1,179,562 Surplus / (deficit) on revaluation of
- Business combination 705,218 705,218 - Available for sale securities 10.1 9,664,446 12,676,354
- Fixed Assets 20,134,456 20,211,952
9,246,124 9,757,688
- Non-banking assets acquired in satisfaction of claims 14 511,496 854,231
6,989,155 6,975,158 30,310,398 33,742,537
Deferred tax on surplus / (deficit) on revaluation of:
20. OTHER LIABILITIES - Available for sale securities 19 3,769,134 4,436,721
- Fixed Assets 19 1,403,211 1,286,416
Mark-up/ return/ interest payable in local currency 3,433,914 2,272,650 - Non-banking assets acquired in satisfaction of claims 19 199,483 298,982
Mark-up/ return/ interest payable in foreign currencies 130,090 247,926 5,371,828 6,022,119
Unearned commission income 653,083 212,337 24,938,570 27,720,418
Accrued expenses 4,960,096 5,898,224 23. CONTINGENCIES AND COMMITMENTS
Current taxation (provisions less payments) 11,373,995 10,185,375 -Guarantees 23.1 181,681,521 178,571,960
Workers' welfare fund 20.1 9,338,947 8,838,684 -Commitments 23.2 505,584,578 507,506,107
Acceptances 14 18,584,386 20,030,754 -Other contingent liabilities 23.3 28,662,246 27,960,316
Unclaimed / dividends payable 1,916,410 1,692,942 715,928,345 714,038,383
Mark to market loss on forward foreign exchange contracts 1,860,373 4,485,302 23.1 Guarantees:
Unrealised loss on derivative financial instruments 273,411 513,343 Financial guarantees 157,215,086 149,925,920
Staff welfare fund 3,722 5,598 Performance guarantees 22,168,028 25,900,273
Provision for employees' compensated absences 1,145,701 919,407 Other guarantees 2,298,407 2,745,767
181,681,521 178,571,960
Provision for post retirement medical benefits 2,156,504 2,004,122
23.2 Commitments:
Provision for employees' contributory benevolent scheme 219,007 222,084 Documentary credits and short-term trade-related transactions
Retention money 12,473 20,657 - letters of credit 193,920,928 172,617,563
Insurance payable against consumer assets 665,370 698,949
Commitments in respect of:
Unclaimed balances 756,294 877,552
- forward foreign exchange contracts 23.2.1 191,771,547 318,420,575
Duties and taxes payable 1,809,238 1,846,580 - forward government securities transactions 23.2.2 114,002,109 11,089,775
Provision against off-balance sheet obligations 46,210 46,189 - derivatives 23.2.3 4,970,119 4,471,383
Security deposits against lease 665,500 569,756
Commitments for acquisition of:
Lease liability against right of use assets 7,779,310 8,035,048 - operating fixed assets 765,647 710,570
Clearing and settlement accounts 7,198,163 7,421,975 - intangible assets 154,228 196,241
Others 6,602,469 5,855,374 505,584,578 507,506,107
81,584,666 82,900,828 23.2.1 Commitments in respect of forward foreign exchange contracts
20.1 Supreme Court of Pakistan vide its order dated November 10, 2016 has held that the amendments made in the law Purchase 107,347,223 168,432,858
introduced by the Federal Government for the levy of Workers Welfare Fund were not lawful. The Federal Board of Revenue Sale 84,424,324 149,987,717
191,771,547 318,420,575
has filed review petitions against this order which are currently pending.
23.2.2 Commitments in respect of forward government securities transactions
Legal advice obtained on the matter indicates that consequent to filing of these review petitions the judgment may not Purchase 112,502,109 11,089,775
currently be treated as conclusive. Accordingly, the Bank maintained its provision in respect of WWF. Sale 1,500,000 -
Audited 114,002,109 11,089,775
Unaudited
Note December 31, 23.2.3 Commitments in respect of derivatives
June 30, 2021
2020 FX options
----------Rupees in '000-------- Purchase 1,356,125 182,800
21. RESERVES
Sale 1,356,125 182,800
Share premium 23,751,114 23,751,114
2,712,250 365,600
Non- distributable capital reserve - gain on bargain purchase option 21.1 908,317 908,317 Cross Currency Swaps
Exchange translation reserve 2,450,502 2,876,483 Purchase 1,090,187 1,975,311
Statutory reserve 21.2 36,034,688 34,560,421 Sale 1,167,682 2,130,472
2,257,869 4,105,783
General reserve 18,600,000 18,600,000
24 81,744,621 80,696,335 4,970,119 4,471,383 25
Unaudited Unaudited
23.2.4 The Bank makes commitments to extend credit in the normal course of its business but these being revocable commitments do not
Half Year ended Half Year ended
attract any significant penalty or expense if the facility is unilaterally withdrawn.
June 30, 2021 June 30, 2020
Unaudited Audited Note
----------Rupees in '000--------
Note June 30, December 31, 27. FEE & COMMISSION INCOME
2021 2020 Branch banking customer fees 1,351,456 941,135
----------Rupees in '000-------- Consumer finance related fees 251,823 187,430
23.3 Other contingent liabilities Card related fees (debit and credit cards) 1,376,263 1,511,464
Claims against the Bank not acknowledged as debts 23.3.1 28,662,249 27,960,316 Credit related fees 115,877 26,381
Investment banking fee 97,430 71,482
23.3.1 These mainly represent counter claims by borrowers for damages and other claims relating to banking transactions. Based on
legal advice and / or internal assessments, management is confident that the matters will be decided in the Bank’s favour and the Commission on trade 676,115 633,111
possibility of any adverse outcome is remote. Accordingly, no provision has been made in these unconsolidated condensed Commission on guarantees 321,196 295,762
interim financial statements. Commission on cash management 335,391 286,992
23.4 Taxation Commission on remittances including home remittances 473,537 514,359
For assessment year 1999-2000 through tax year 2020, the tax department disputed Bank's treatment on certain issues, where Commission on bancassurance 760,832 474,901
the Bank's appeals are pending at various appellate forums, entailing an additional tax liability of Rs. 2,400 million (2020: Rs. 6,033 Rent on lockers 116,347 102,233
million). Such issues inter alia principally include disallowance of expenses for non deduction of withholding tax and non Commission on utility bills 37,679 36,734
availability of underlying records, provision for non performing loans, attribution of expenses to heads of income other than income Commission on investments services 19,782 17,503
from business and disallowance of credit for taxes paid in advance / deducted at source.
Others 77,428 46,121
The Bank has filed appeals which are pending at various appellate forums. In addition, certain decisions made in favour of the 6,011,156 5,145,608
Bank are being contested by the department at higher forums. No provision has been made in these unconsolidated condensed
interim financial statements regarding the aforesaid additional tax demand and already issued favourable decisions where the 28. GAIN / (LOSS) ON SECURITIES
department is in appeal, as the management is of the view that the issues will be decided in the Bank's favour as and when these Realised 28.1 493,880 (80,125)
are taken up by the Appellate Authorities. Unrealised - Held For Trading 10.1 (9,335) 13,078
23.5 Amortisation of goodwill and other intangibles amounting to Rs 28.08 billion of Ex. NIB 484,545 (67,047)
28.1 Realised gain / (loss) on:
Issue of goodwill and other related assets amortization for few years has been assessed in Bank’s favour at appellate forums Federal Government Securities 345,791 183,380
during the year, however, the tax department has filed appeal against these decisions. The management has not recorded any tax
benefit because the issue has not attained finality. Shares 147,850 (266,359)
Others 239 2,854
24. DERIVATIVE INSTRUMENTS 493,880 (80,125)
29. OTHER INCOME
Cross Currency Swaps Interest Rate Swaps FX Options
Notional Mark to market Notional Mark to market Notional Mark to market Rent on property 66,634 30,678
Principal gain / loss Principal gain / loss Principal gain / loss Gain on termination of lease liability against right of use assets 44,175 -
-------------------------------------------Rupees in '000------------------------------------------- (Loss) / Gain on sale of fixed assets - net (26,956) 18,950
Total Gain on sale of non-banking assets acquired in satisfaction of claims - net 536,464 -
Hedging 1,090,187 268,785 - - 1,356,125 8,208
620,317 49,628
Market Making 1,167,682 (265,203) - - 1,356,125 (8,208)
Audited December 31, 2020 Unaudited Unaudited
-------------------------------------------Rupees in '000------------------------------------------- Half Year ended Half Year ended
Total June 30, 2021 June 30, 2020
Hedging 1,975,311 512,508 - - 182,800 4,525 ----------Rupees in '000--------
Market Making 2,130,472 (508,818) - - 182,800 (4,525) 30. OPERATING EXPENSES
Total compensation expense 8,610,124 7,936,780
Unaudited Unaudited
Half Year ended Half Year ended Property expense
June 30, 2021 June 30, 2020 Rent and taxes 104,564 82,632
----------Rupees in '000-------- Insurance 10,650 11,507
25. MARK-UP/RETURN/INTEREST EARNED Utilities cost 560,810 507,439
Loans and advances 15,721,650 25,962,430 Security (including guards) 682,774 621,515
Investments 42,240,046 48,366,469 Repair and maintenance (including janitorial charges) 320,324 310,135
Lendings to financial institutions 199,429 736,991 Depreciation on right-of-use assets 609,702 600,945
Balances with banks 39,970 145,740 Depreciation 360,618 304,520
58,201,095 75,211,630 Fuel expense generators 185,700 156,053
26. MARK-UP/RETURN/INTEREST EXPENSED 2,835,142 2,594,746
Information technology expenses
Deposits 21,399,893 33,820,985 Software maintenance 524,443 600,676
Borrowings 3,987,814 3,572,092 Hardware maintenance 83,773 116,075
Cost of foreign currency swaps against - Depreciation 287,333 262,974
foreign currency deposits / borrowings 735,796 1,200,521 Amortization 158,332 155,492
Finance charges on lease liability against right-of-use assets 528,558 605,176 Network charges 285,351 301,910
26,652,061 39,198,774 Insurance 1,729 1,876
26 1,340,961 1,439,003
27
Unaudited Unaudited
35. FAIR VALUE MEASUREMENTS
Note June 30, 2021 June 30, 2020 The fair value of traded investments is based on quoted market prices, except for tradable securities classified by the Bank as 'held to
maturity'. Quoted securities classified as held to maturity are carried at amortised cost. Fair value of unquoted equity investments other
Other operating expenses ----------Rupees in '000--------
than investments in associates and subsidiaries is determined on the basis of break up value of these investments as per the latest
Directors' fees and allowances 19,620 21,956 available financial statements.
Legal and professional charges 146,090 145,138
Fair value of fixed term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be calculated with sufficient
Outsourced services costs 346,516 340,925 reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar
Travelling and conveyance 112,280 119,966 instruments.
NIFT clearing charges 76,383 82,632
Depreciation 406,778 412,555 In the opinion of the management, the fair value of the financial assets and financial liabilities are not significantly different from their
carrying values since assets and liabilities are either short-term in nature or re-priced over short term.
Depreciation on non-banking assets acquired in satisfaction of claims 18,721 15,675
Training and development 10,267 13,749 35.1 Fair value of financial assets
Postage and courier charges 107,787 136,650 The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
Communication 169,549 164,080 measurements:
Stationery and printing 284,988 270,983
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Marketing, advertisement & publicity 291,099 330,612
Donations 6,600 112,596 Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or
Auditors' remuneration 33,488 16,298 liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Cash transportation charges 413,523 338,437 Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e.
Repair and maintenance 220,133 165,097 unobservable inputs).
Subscription 7,996 10,154
Entertainment 93,799 83,638 Valuation techniques used in determination of fair valuation of financial instruments within level 2
Remittance charges 95,691 95,524 Item Valuation approach and input used
Brokerage expenses 18,037 17,229 Federal Government The fair values of Federal Government securities are determined using the PKRV rates.
Card related expenses 475,423 419,694 securities
CNIC verification charges 106,385 53,129
Term Finance and Bonds Investments in debt securities (comprising term finance certificates, bonds and any other security issued
Insurance 836,767 743,134
by a company or a body corporate for the purpose of raising funds in the form of redeemable capital) are
Others 111,460 112,184 valued on the basis of the rates announced by the Mutual Funds Association of Pakistan (MUFAP) in
4,409,380 4,222,035 accordance with the methodology prescribed by the Securities and Exchange Commission of Pakistan.
17,195,607 16,192,564
31. OTHER CHARGES Foreign exchange The valuation has been determined by interpolating the mid rates announced by the State Bank of
Penalties of State Bank of Pakistan 314,286 183,541 contracts Pakistan.
VAT & National Building tax & Crop Insurance Levy 25,014 56,579
Derivatives The fair values of derivatives which are not quoted in active markets are determined by using valuation
339,300 240,120
techniques. The valuation techniques take into account the relevant underlying parameters including
32. PROVISIONS / (REVERSALS) & WRITE OFFS - NET foreign currency involved, interest rates, yield curves, volatilities, contracts duration etc.
Provision / (reversal) against balance with Banks 121 (1,813)
(Reversal) / provision for diminution in value of investments 10.2.1 (528,973) 190,967 Operating fixed assets and Land, buildings and non-banking assets acquired in satisfaction of claims are revalued on a periodic
(Reversal) / provision against loans and advances 11.3 (1,386,639) 3,856,662 Non-banking assets basis using professional valuers. The valuation is based on their assessment of the market value of the
acquired in satisfaction of assets. The effect of changes in the unobservable inputs used in the valuations cannot be determined
Provision / (reversal) against other assets 14.1.1 1,009 (17,877) with certainty. Accordingly, a qualitative disclosure of sensitivity has not been presented in these
Recovery of written off / charged off bad debts (86,200) (64,442) claims
unconsolidated financial statements.
(2,000,682) 3,963,497
33. TAXATION The Bank's policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change in
Current 9,429,146 10,576,822 circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the period.
Deferred 841,333 (1,531,886)
(a) Financial instruments in level 1
10,270,479 9,044,936
Financial instruments included in level 1 comprise of investments in listed ordinary shares and units of mutual funds.
34. BASIC AND DILUTED EARNINGS PER SHARE
----------Rupees in '000-------- (b) Financial instruments in level 2
Profit after tax 14,742,672 13,209,424 Financial instruments included in level 2 comprise of Sukuk Bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance
certificates, FX options, Cross Currency Swaps, Interest Rate Swaps and Forward Exchange Contracts.
----------Number--------
(c) Financial instruments in level 3
Weighted average number of ordinary shares 1,185,060,006 1,185,060,006
Currently, no financial instruments are classified in level 3.
----------Rupees-------
Basic and diluted earnings per share 12.44 11.15
28 29
36 SEGMENT INFORMATION
36.1 Segment details with respect to business activities
The table below analyses the financial and non-financial assets carried at fair values, by valuation methods. For financial assets, the Bank
essentially carries its investments in debt and equity securities at fair values. Valuation of investments is carried out as per guidelines specified The segment analysis with respect to business activity is as follows: Un audited
by the SBP. In case of non-financial assets, the Bank has adopted revaluation model (as per IAS 16) in respect of land and building. Half Year ended June 30, 2021
Consumer Corporate International
Retail Banking Treasury Others Sub-total Eliminations Total
Unaudited June 30, 2021 banking Banking Banking
Carrying / Notional Level 1 Level 2 Level 3 ----------------------------------------------------------------------Ru pees in '000----------------------------------------------------------------------
Total Profit & Loss
Value
Net mark-up/return/profit (17,518,820) 1,292,992 9,488,524 37,676,979 609,359 - 31,549,034 - 31,549,034
On balance sheet financial instruments ------------------------------------------Rupees in '000-------------------------------------- Inter segment revenue - net 36,173,493 (265,883) (7,312,833) (32,255,351) (58,971) 3,719,545 - - -
Non mark-up / return / interest income 3,280,854 1,227,386 1,680,845 2,192,578 423,629 693,313 9,498,605 - 9,498,605
Financial assets - measured at fair value Total Income 21,935,527 2,254,495 3,856,536 7,614,206 974,017 4,412,858 41,047,639 - 41,047,639
Investments
Segment direct expenses 11,733,247 841,928 331,985 216,929 580,590 4,330,491 18,035,170 - 18,035,170
Federal Government Securities 1,021,608,562 - 1,021,608,562 - 1,021,608,562 Inter segment expense allocation - - - - - - - - -
Shares 20,719,752 20,719,752 - - 20,719,752 Total expenses 11,733,247 841,928 331,985 216,929 580,590 4,330,491 18,035,170 - 18,035,170
Non-Government Debt Securities 1,812,729 1,812,729 - 1,812,729 Provisions 1,243,978 42,413 (83,724) (506,925) 90,918 (2,787,342) (2,000,682) - (2,000,682)
Foreign Securities 6,248,375 - 6,248,375 - 6,248,375 Profit before tax 8,958,302 1,370,154 3,608,275 7,904,202 302,509 2,869,709 25,013,151 - 25,013,151
Financial assets - disclosed but not measured

at fair value Balance Sheet
Cash & Bank balances 66,642,041 331,057 202,138 66,905,744 18,188,087 4,143,531 156,412,598 - 156,412,598
Investments (HTM, AFS, unlisted ordinary Investments - - 7,996,236 1,075,901,706 12,315,277 - 1,096,213,219 - 1,096,213,219
shares, subsidiaries and associates) 45,823,801 - - - - Net inter segment lending 1,176,501,277 - - - - 193,326,604 1,369,827,881 (1,369,827,881) -
Lendings to financial institutions - - - 3,373,718 29,120,496 - 32,494,214 - 32,494,214
Cash and balances with treasury banks 142,190,958 - - - - Advances - performing 88,921,889 30,960,301 318,829,658 - 17,650,057 - 456,361,905 - 456,361,905
Balances with other banks 14,221,640 - - - - - non performing 292,668 103,700 2,382 - 4,898,583 878,678 6,176,011 - 6,176,011
Lendings to financial institutions 32,494,214 - - - - Others 35,636,437 1,913,413 21,112,149 14,820,161 3,514,123 36,269,129 113,265,412 - 113,265,412
Total Assets 1,367,994,312 33,308,471 348,142,563 1,161,001,329 85,686,623 234,617,942 3,230,751,240 (1,369,827,881) 1,860,923,359
Advances 462,537,916 - - - -
Other assets 49,049,310 - - - - Borrowings 64,484,923 - 12,163,954 60,173,923 2,771,524 - 139,594,324 - 139,594,324
Deposits & other accounts 1,285,296,396 21,494,863 70,798,768 - 63,607,522 10,856 1,441,208,405 - 1,441,208,405
Non - Financial Assets measured at fair value Net inter segment borrowing - 7,757,087 248,314,174 1,100,008,505 13,748,115 - 1,369,827,881 (1,369,827,881) -
Others 18,212,993 4,056,521 16,865,667 818,901 5,559,462 55,988,800 101,502,344 - 101,502,344
Operating fixed assets (land and buildings) 44,172,826 - 44,172,826 - 44,172,826
Total liabilities 1,367,994,312 33,308,471 348,142,563 1,161,001,329 85,686,623 55,999,656 3,052,132,954 (1,369,827,881) 1,682,305,073
Non-banking assets 3,046,477 - 3,046,477 - 3,046,477 Equity - - - - - 178,618,286 178,618,286 - 178,618,286
Off-balance sheet financial instruments - measured Total Equity & liabilities 1,367,994,312 33,308,471 348,142,563 1,161,001,329 85,686,623 234,617,942 3,230,751,240 (1,369,827,881) 1,860,923,359
at fair value Contingencies & Commitments 61,877,293 - 310,113,602 308,422,611 5,702,184 29,812,655 715,928,345 - 715,928,345
Forward purchase of foreign exchange 107,347,223 - 990,932 - 990,932
Un audited
Forward sale of foreign exchange 84,424,324 - 1,356,004 - 1,356,004 Half Year ended June 30, 2020
Consumer Corporate International
Derivatives purchase 2,446,312 - 276,993 - 276,993 Retail Banking
banking Banking
Treasury
Banking
Others Sub-total Eliminations Total
Derivatives sale 2,523,807 - 273,411 - 273,411 ----------------------------------------------------------------------Ru pees in '000----------------------------------------------------------------------
Audited December 31, 2020 Profit & Loss
Net mark-up/return/profit (27,559,261) 1,413,318 17,388,362 44,012,291 758,146 - 36,012,856 - 36,012,856
Carrying / Notional Level 1 Level 2 Level 3
Total Inter segment revenue - net 51,405,696 (341,750) (14,511,898) (40,745,318) (40,431) 4,233,701 - - -
Value Non mark-up / return / interest income 3,001,626 839,091 1,560,124 1,081,216 389,622 211,093 7,082,772 - 7,082,772
On balance sheet financial instruments ------------------------------------------Rupees in '000-------------------------------------- Total Income 26,848,061 1,910,659 4,436,588 4,348,189 1,107,337 4,444,794 43,095,628 - 43,095,628
Financial assets - measured at fair value Segment direct expenses 10,709,498 734,317 291,724 205,675 658,988 4,277,569 16,877,771 - 16,877,771
Investments Inter segment expense allocation - - - - - - - - -
Federal Government Securities 957,482,754 - 957,482,754 - 957,482,754 Total expenses 10,709,498 734,317 291,724 205,675 658,988 4,277,569 16,877,771 - 16,877,771
Provisions 60,375 80,643 132,357 116,820 69,294 3,504,008 3,963,497 - 3,963,497
Shares 18,171,840 18,171,840 - - 18,171,840 Profit before tax 16,078,188 1,095,699 4,012,507 4,025,694 379,055 (3,336,783) 22,254,360 - 22,254,360
Non-Government Debt Securities 1,800,092 - 1,800,092 - 1,800,092
Foreign Securities 7,474,188 - 7,474,188 - 7,474,188 Balance Sheet Audited December 31, 2020
Cash & Bank balances 58,362,119 317,242 394,030 64,577,425 21,166,578 1,393,773 146,211,167 - 146,211,167
Financial assets - disclosed but not measured - Investments - - 10,578,310 990,720,067 14,571,071 - 1,015,869,448 - 1,015,869,448
at fair value
Net inter segment lending 1,050,376,236 - - - - 201,834,399 1,252,210,635 (1,252,210,635) -
Investments (HTM, AFS, unlisted ordinary Lendings to financial institutions - - - 6,137,258 11,002,195 - 17,139,453 - 17,139,453
shares, subsidiaries and associates) 30,940,574 - - - - Advances - performing 94,735,206 26,845,772 313,633,477 - 21,681,241 - 456,895,696 - 456,895,696
Cash and balances with treasury banks 122,180,839 - - - - - non performing 171,804 177,613 2,382 - 4,973,954 720,338 6,046,091 - 6,046,091
Balances with other banks 24,030,328 - - - - Others 35,621,546 2,370,726 22,789,948 12,206,991 4,580,374 37,731,030 115,300,615 - 115,300,615
Total Assets 1,239,266,911 29,711,353 347,398,147 1,073,641,741 77,975,413 241,679,540 3,009,673,105 (1,252,210,635) 1,757,462,470
Lendings to financial institutions 17,139,453 - - - -
Advances 462,941,787 - - - - Borrowings 58,910,004 - 10,372,566 91,069,170 3,649,793 - 164,001,533 - 164,001,533
Other assets 46,267,752 - - - - Deposits & other accounts 1,147,268,725 21,263,015 65,961,390 - 55,009,174 - 1,289,502,304 - 1,289,502,304
Net inter segment borrowing - 4,816,853 252,358,835 981,733,802 13,301,145 - 1,252,210,635 (1,252,210,635) -
Non - Financial Assets measured at fair value
Others 33,088,182 3,631,485 18,705,356 838,769 6,015,301 51,577,585 113,856,678 - 113,856,678
Operating fixed assets (land and buildings) 44,275,487 - 44,275,487 - 44,275,487 Total liabilities 1,239,266,911 29,711,353 347,398,147 1,073,641,741 77,975,413 51,577,585 2,819,571,150 (1,252,210,635) 1,567,360,515
Non-banking assets 4,036,914 - 4,036,914 - 4,036,914 Equity - - - - - 190,101,955 190,101,955 - 190,101,955

Total Equity & liabilities 1,239,266,911 29,711,353 347,398,147 1,073,641,741 77,975,413 241,679,540 3,009,673,105 (1,252,210,635) 1,757,462,470
Off-balance sheet financial instruments - measured -
at fair value Contingencies & Commitments 55,974,597 - 288,001,956 320,068,131 20,930,195 29,063,504 714,038,383 - 714,038,383
Forward purchase of foreign exchange 168,432,858 - 3,902,198 - 3,902,198
Forward sale of foreign exchange 149,987,717 - 4,271,423 - 4,271,423 36.2 Transactions between reportable segments are based on an appropriate transfer pricing mechanism using agreed rates. Furthermore, segment assets and liabilities include inter
segment balances. Costs which are not allocated to segments are included in the Head office. Income taxes are managed at bank level and are not allocated to operating segments.
Derivatives purchase 2,158,111 - 517,033 - 517,033
30 Derivatives sale 2,313,272 - 513,343 - 513,343 31
32
37 RELATED PARTY TRANSACTIONS
The Bank has related party relationship with its subsidiaries, associates, employee benefit plans, its directors and key management personnel and their close family members.
The Banks enters into transactions with related parties in the ordinary course of business and on substantially the same terms as for comparable transactions with person of similar standing. Contributions to and accruals in respect of staff retirement benefits
and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment.
Details of transactions with related parties during the period, other than those which have been disclosed elsewhere in these unconsolidated condensed interim financial statements are as follows:

Key Key
Other Related Other Related
Directors Management Subsidiaries Associates Directors Management Subsidiaries Associates
Parties Parties
Personnel Personnel
------------------------------------------------------------------------------------------------(Ru pees in '000)------------------------------------------------------------------------------------------------

Lendings to Financial Institutions

Opening balance - - - - - - - 880,853 - -
Addition during the period / year - - 23,900,000 - - - - 23,703,928 - -
Repaid during the period / year - - (23,900,000) - - - - (24,584,781) - -
Closing balance - - - - - - - - - -
Investments
Opening balance - - 12,319,037 700,401 254,253 - - 12,346,537 700,401 254,253
Investment made during the period / year - - - - - - - - - -
Investment disposed off during the period / year - - - - - - - (27,500) - -
Adjustment under amalgamation scheme - - - - - - - - - -
Closing balance - - 12,319,037 700,401 254,253 - - 12,319,037 700,401 254,253
Provision for diminution in value of investments - - 725 - 5,000 - - 725 - 5,000
Advances
Opening balance 1,042 166,757 856,704 356,898 152,147 1,722 129,048 889,811 - 339,520
Addition / exchange adjustment during the period / year 7,250 26,714 45,419 - 305,457 18,202 60,257 - 356,898 336,695
Repaid / exchange adjustment during the period / year (7,103) (38,144) - (89,225) (417,191) (18,882) (21,947) (33,107) - (303,183)
Transfer in / (out) - (24,462) - - - - (601) - - (220,885)
Closing balance 1,189 130,865 902,123 267,673 40,413 1,042 166,757 856,704 356,898 152,147
Provision held against advances - - - - - - - - - -

Key Key
Parties Parties
Personnel Personnel
------------------------------------------------------------------------------------------------(Ru pees in '000)------------------------------------------------------------------------------------------------
Other Assets
Markup receivable - 2,430 2,227 693 1,637 - 3,149 2,338 895 2,382
Advances, deposits, advance rent and other prepayments - - 9,977 184,941 28,987 - - 12,715 310,504 27,835
Receivable from Pension Fund - - - - 3,007,326 - - - - 3,370,179
Unrealized (loss)/ gain on forward foreign exchange contracts - outstanding - - (196) - - - - 39,415 - -
Provision held against other assets - - - - - - - - - -
Borrowings
Opening balance - - 25,356 - 77,139 - - 3,902 - 69,166

Borrowings / exchange adjustment during the period / year - - 278,697 - 13,677 - - 482,356 - 7,973
Settled during the period / year - - (279,231) - - - - (460,902) - -
Closing balance - - 24,822 - 90,816 - - 25,356 - 77,139
Deposits and other accounts

Opening balance 302,130 138,566 53,878 4,815,780 4,869,941 602,381 140,761 54,482 3,657,552 4,179,849
Received during the period / year 2,296,862 756,353 1,536,354 26,519,401 58,604,396 669,282 1,189,437 2,349,111 44,628,206 76,375,987
Withdrawn during the period / year (2,121,148) (720,088) (1,529,581) (27,291,714) (50,146,921) (969,533) (1,163,832) (2,346,830) (43,469,978) (75,154,115)
Transfer in / (out) - net - (701) - - 27 - (27,800) (2,885) - (531,780)
Closing balance 477,844 174,130 60,651 4,043,467 13,327,443 302,130 138,566 53,878 4,815,780 4,869,941
Other Liabilities
Markup payable 112 690 1 5,521 3,031 50 100 - 42,549 10,654
Accrued expenses and other payable - - 29,249 61,046 20 - - 22,850 62,624 32
Payable to MCB Employee Security Services - - - - 29,405 - - - - 27,031
Advance received against sale of property - - 20,000 - - - - 20,000 - -
Contingencies and Commitments

Letter of Credit - - - - 3,660,289 - - - - 1,361,776
Forward foreign exchange contracts (Notional) - - 223,772 - - - - 1,342,106 - -
Bank guarantee - - 86,200 10,390 494,360 - - 102,038 10,512 394,495

33
34
Unaudited June 30, 2021 Unaudited June 30, 2020
Key Key
Parties Parties
Personnel Personnel
------------------------------------------------------------------------------------------------(Ru pees in '000)------------------------------------------------------------------------------------------------
Income
Markup / return / interest earned 23 7,985 32,714 1,491 3,917 - 6,705 114,416 15 11,229
Fee and commission income - - 19,839 424,967 2,097 - - 17,564 418,858 836
Dividend income - - 83,153 87,500 50,645 - - 36,957 105,000 7,933
Gain / (loss) on forward foreign exchange contracts matured during the period - - - - 17,609 - - - - 43,062
Net gain / (loss) on sale of securities 3 - - 32 210 72 33 - 495 3,553
Gain on sale of fixed assets - 72 - - - - 17 - - -
Rent income - - 24,198 5,685 1,140 - - 19,509 4,455 1,140
Expense
Markup / return / interest expensed 8,927 1,487 553 61,727 187,476 22,774 1,202 1,466 110,421 108,478
- - - - - - - - - -
Other Operating expenses
Clearing expenses paid to NIFT - - - - 76,383 - - - - 82,632
Contribution to provident fund - - - - 216,847 - - - - 197,239
Rent expenses - - 5,750 21,688 23,263 - - 5,227 21,299 15,121
Cash sorting expenses - - - - 54,562 - - - - 56,415
Stationery expenses - - - - 128,424 - - - - 121,204
Security guards expenses - - - - 173,829 - - - - 165,324
Remuneration to key executives and non-executive directors fee 114,483 326,633 - - - 108,475 328,036 - - -
Outsourcing service expenses - - - 106,273 - - - - 138,301 -
Donation during the year - - - - - - - - - 95,000
E-dividend processing fee and CDC charges - - - - 3,100 - - - - 2,638
Travelling Expenses - - - - 22,681 - - - - 17,456
Hotel stay expenses - - - - 63 - - - - 3,110
Repair & Maintenance Charges - - - - 1,063 - - - - 938
Advertisement Expenses - - - - - - - - - 6,264
Miscellaneous expenses and payments - - - - 1,143 - - - - 889
Insurance premium-net of refund - - - 240,393 - - - - 270,375 -
Insurance claim settled - - - 11,741 - - - - 18,232 -
Other Transactions
Proceeds from sale of fixed assets - 72 - - - - 18 - - -
Purchase of fixed assets - - - 14,624 12,810 - - - 3,277 -
Sale of foreign currency - - 11,044,337 - - - - 21,656,614 - -
Purchase of foreign currency - - 7,211,829 - - - - 14,173,970 - -
Payments against home remittances - - 2,300,794 - - - - 1,709,813 - -

Reimbursement of other expenses - - 15,684 - - - - 14,536 - -
Sale of government securities 396,165 4,131 - 4,303,668 2,809,322 188,884 64,784 - 3,154,645 1,718,066
Purchase of government securities - - - 10,842,126 2,463,278 19,827 - - 631,712 546,800
Forward exchange contracts matured during the period - - - - 2,838,228 - - - - 10,494,150
The Chairman has been provided with free use of the Bank maintained car. The Chief Executive and certain executives are provided with free use of the Bank's maintained cars and household equipment in accordance with the terms of their employment.
Total
Credit Risk
Market Risk
Leverage Ratio
Total Exposures
Operational Risk
Capital Adequacy
Eligible Tier 2 Capital
Eligible Tier-1 Capital

Leverage Ratio (LR):
Total Net Cash Outflow

Liquidity Coverage Ratio
Net Stable Funding Ratio

Total Eligible Tier 1 Capital
Paid-up capital (net of losses)
Total Required Stable Funding

Total Available Stable Funding
Total Capital Adequacy Ratio
Total High Quality Liquid Assets

Tier 1 Capital Adequacy Ratio
Capital Adequacy Ratio (CAR):
Risk Weighted Assets (RWAs):
Liquidity Coverage Ratio (LCR):
Net Stable Funding Ratio (NSFR):

Total Eligible Capital (Tier 1 + Tier 2)
Eligible Additional Tier 1 (ADT 1) Capital
Minimum Capital Requirement (MCR):
Eligible Common Equity Tier 1 (CET 1) Capital
Common Equity Tier 1 Capital Adequacy ratio

38 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS
Unaudited
-
June 30, 2021
1,218,523,940
1,066,679,996
2,294,791,377
648,774,308
433,929,839
145,366,450
904,342,269
139,735,092
143,368,094
621,239,083
176,408,162
145,366,450
145,366,450
11,850,600
31,041,712
6.33%
19.51%
16.07%
16.07%
187.82%
245.82%
2020
Audited
----------Rupees in '000-------
-
December 31,
1,130,301,361
2,174,932,446
646,417,507
393,109,786
934,508,535
152,901,428
897,938,127
139,735,092
122,603,850
635,599,185
188,408,539
152,901,428
152,901,428
11,850,600
35,507,111
7.03%
20.98%
17.03%
17.03%
174.86%
237.72%
35
39 EVENTS AFTER THE REPORTING DATE

The Board of Directors in its meeting held on August 11, 2021 has announced a cash dividend in respect of half year ended June 30, 2021
of Rs.5.00 per share (June 30, 2020: Rs. Nil per share). These unconsolidated condensed interim financial statements for the period
ended June 30, 2021 do not include the effect of these appropriations which will be accounted for subsequent to the period end.
40 GENERAL
Comparative figures have been re-arranged and reclassified for comparison purposes. Figures have been rounded off to the nearest
thousand of rupees unless otherwise stated.
41 DATE OF AUTHORIZATION FOR ISSUE

These unconsolidated condensed interim financial statements were authorized for issue by the Board of Directors of the Bank in their
meeting held on August 11, 2021.
Consolidated Condensed Interim Financial Statements for the half year ended June 30, 2021
MCB Bank Limited & Subsidiary Companies MCB Bank Limited & Subsidiary Companies
Consolidated Condensed Interim Statement of Financial Position Consolidated Condensed Interim Profit & Loss Account (Un-audited)
As At June 30, 2021 For The Half Year Ended June 30, 2021
Note Unaudited Audited Quarter Ended Half Year Ended

June 30, 2021 December 31, 2020 April 01 April 01 January 01 January 01
to to to to
Note
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
---------Rupees in '000---------
ASSETS ---------Rupees in '000---------
Cash and balances with treasury banks 7 152,246,891 132,053,041
Balances with other banks 8 20,651,751 29,011,521 Mark-up / return / interest earned 25 32,131,944 38,752,021 62,733,431 80,408,589
Lendings to financial institutions 9 33,494,214 17,968,243 Mark-up / return / interest expensed 26 14,698,370 17,784,988 29,001,691 42,155,774
Investments 10 1,119,010,391 1,036,217,535 17,433,574 20,967,033 33,731,740 38,252,815
Net mark-up / interest income
Advances 11 544,884,427 547,685,708
Fixed assets 12 62,759,572 63,679,312 NON MARK-UP / INTEREST INCOME
Intangible assets 13 1,832,178 1,867,244
Deferred tax assets - - Fee and commission income 27 2,974,529 2,532,588 6,611,051 5,658,116
Other assets 14 61,390,283 62,793,791 Dividend income 505,138 215,236 853,078 415,562
1,996,269,707 1,891,276,395 Foreign exchange income 818,432 698,671 1,424,246 1,533,230
Income/ (loss) from derivatives (649) 3,502 8,545 (6,903)
LIABILITIES
Gain/ (loss) on securities 28 167,829 (51,410) 534,539 (57,664)
Bills payable 16 14,508,474 26,451,513
Other Income 29 660,771 60,513 669,132 84,159
Borrowings 17 147,348,602 184,577,340
Total non-markup / interest Income 5,126,050 3,459,100 10,100,591 7,626,500
Deposits and other accounts 18 1,556,166,735 1,388,737,961
Liabilities against assets subject to finance lease - - Total Income 22,559,624 24,426,133 43,832,331 45,879,315
Subordinated debt - -
NON MARK-UP / INTEREST EXPENSES
Deferred tax liabilities 19 7,773,005 7,491,040
Other liabilities 20 88,923,717 91,027,158 Operating expenses 30 9,901,885 9,292,038 19,731,252 18,683,734
1,814,720,533 1,698,285,012 Workers Welfare Fund 279,934 227,788 510,192 445,087
NET ASSETS 181,549,174 192,991,383
Other charges 31 347,178 30,867 376,395 240,180
Total non-markup / interest expenses 10,528,997 9,550,693 20,617,839 19,369,001
REPRESENTED BY
Share capital 11,850,600 11,850,600
Share of profit of associates 155,307 151,910 431,851 412,806
Reserves 21 82,075,452 81,060,051
Surplus on revaluation of assets 22 25,965,150 28,803,351 Profit before provisions 12,185,934 15,027,350 23,646,343 26,923,120
Unappropriated profit 60,877,459 70,498,820
Provisions / (reversals) and write offs - net 32 (1,786,565) 3,296,366 (1,999,908) 4,076,022
180,768,661 192,212,822
PROFIT BEFORE TAXATION 13,972,499 11,730,984 25,646,251 22,847,098
Non-controlling interest 780,513 778,561
181,549,174 192,991,383 Taxation 33 6,058,450 4,867,333 10,682,617 9,373,265
PROFIT AFTER TAXATION 7,914,049 6,863,651 14,963,634 13,473,833
(Profit) / loss attributable to non-controlling interest (43,139) (62,187) (80,804) (48,455)

CONTINGENCIES AND COMMITMENTS 23
PROFIT ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE BANK 7,870,910 6,801,464 14,882,830 13,425,378
Basic and diluted earnings per share 34 6.64 5.74 12.56 11.33
The annexed notes 1 to 42 form an integral part of these consolidated condensed interim financial statements.
Imran Maqbool Hammad Khalid S. M. Muneer Salman Khalid Butt Muhammad Ali Zeb Imran Maqbool Hammad Khalid S. M. Muneer Salman Khalid Butt Muhammad Ali Zeb
38 President / CEO Chief Financial Officer Director Director Director President / CEO Chief Financial Officer Director Director Director 39
40
Attributable to:
- Non-controlling interest
- Non-controlling interest
Imran Maqbool
President / CEO
Total comprehensive income
Other comprehensive income
- Equity shareholders of the bank

associated undertaking- net of tax

Profit after taxation for the period
Share of exchange translation reserve of associate
Movement in share of surplus / deficit on revaluation of

Remeasurement loss on defined benefit obligations - net of tax
Hammad Khalid
Movement in surplus/ (deficit) on revaluation of investments - net of tax
Effect of translation of net investment in foreign branches and subsidiaries
Movement in surplus on revaluation of fixed/non-banking assets - net of tax

Items that may be reclassified to profit and loss account in subsequent periods:
Items that will not be reclassified to profit and loss account in subsequent periods:
MCB Bank Limited & Subsidiary Companies
Director
S. M. Muneer
to
April 01
June 30, 2021
9,168,575
43,146
9,125,429
9,168,575
1,607,075
1,315,101
1,315,101
7
7,914,049
385,036
385,029
(76,089)
(16,973)
(352,549)
(186,368)
(166,181)
Quarter Ended
to
Director
April 01
-
June 30, 2020
62,191
12,548,112
7,484,755
7,107,527
7,107,527
22,343
4
6,863,651
12,610,303
12,610,303
150,837
204,048
204,044
(1,738,103)
(1,738,103)
Salman Khalid Butt

to
---------Rupees in '000---------
Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited)
January 01
June 30, 2021
11,745,309
80,800
11,664,509
11,745,309
14,963,634
(2,865,776)
(49,786)
(2,345,186)
(2,345,186)
(38,746)
(352,549)
(186,368)
(166,181)
(432,058)
(432,054)
(4)
Director
Half Year Ended
to
Muhammad Ali Zeb

-
January 01
June 30, 2020
48,475
832,119
27,783,008
27,734,533
27,783,008
16,047,278
15,446,405
15,446,405
7,189
832,139
20
13,473,833
(1,738,103)
(1,738,103)
(238,455)
Capital reserve Revenue reserve

Surplus/(deficit) on revaluation of
Statutory Unappropriated Non controlling
Share capital Non-distributable Exchange Sub total Grand Total
Share premium reserve General reserve Fixed / non- profit interest
capital reserve translation reserve Investments Associate
banking assets
-----------------------------------------------------------------------------------------------Ru
pees in '000-----------------------------------------------------------------------------------------------
Balance as at December 31, 2019 (Audited) 11,850,600 23,973,024 908,317 2,730,354 31,683,134 18,600,000 4,326,251 344,762 20,081,193 56,108,779 170,606,414 740,403 171,346,817
Profit after taxation for the six months period ended June 30, 2020 - - - - - - - - - 13,425,378 13,425,378 48,455 13,473,833
Imran Maqbool
President / CEO
Other comprehensive income - net of tax - - - 839,308 - - 15,446,405 (238,455) - (1,738,103) 14,309,155 20 14,309,175
- - - 839,308 - - 15,446,405 (238,455) - 11,687,275 27,734,533 48,475 27,783,008
Transfer to statutory reserve - - - - 1,330,972 - - - - (1,330,972) - - -

fixed assets to unappropriated profit - net of tax - - - - - - - - (45,539) 45,539 - - -

Final cash dividend at Rs. 5.0 per share - December 31, 2019 - - - - - - - - - (5,925,300) (5,925,300) - (5,925,300)
Interim cash dividend at Rs. 5.0 per share - March 31, 2020 - - - - - - - - - (5,925,300) (5,925,300) - (5,925,300)
- - - - - - - - - (11,850,600) (11,850,600) - (11,850,600)
Share of dividend attributable to Non-controlling interest - - - - - - - - - - - (35,043) (35,043)

Balance as at June 30, 2020 (Un-audited) 11,850,600 23,973,024 908,317 3,569,662 33,014,106 18,600,000 19,772,656 106,307 20,035,654 54,660,021 186,490,347 753,835 187,244,182
Hammad Khalid
Change in equity for six months period ended December 31, 2020
Total comprehensive income for the six months period ended December 31, 2020
Profit after taxation for the six months period ended December 31, 2020 - - - - - - - - - 15,984,849 15,984,849 103,587 16,088,436
Other comprehensive income - net of tax - - - (619,479) - - (11,371,863) 213,632 119,544 1,395,792 (10,262,374) (13) (10,262,387)
- - - (619,479) - - (11,371,863) 213,632 119,544 17,380,641 5,722,475 103,574 5,826,049

Surplus realized on disposal of revalued fixed assets - net of tax - - - - - - - - (22,544) 22,544 - - -
Director
Surplus realized on disposal of non-banking assets - net of tax - - - - - - - - (4,774) 4,774 - - -

S. M. Muneer
Balance as at December 31, 2020 (Audited) 11,850,600 23,973,024 908,317 2,950,183 34,628,527 18,600,000 8,400,793 319,939 20,082,619 70,498,820 192,212,822 778,561 192,991,383
Profit after taxation for the six months period ended June 30, 2021 - - - - - - - - - 14,882,830 14,882,830 80,804 14,963,634
Other comprehensive income - net of tax - - - (470,800) - - (2,345,186) (49,786) (186,368) (166,181) (3,218,321) (4) (3,218,325)
- - - (470,800) - - (2,345,186) (49,786) (186,368) 14,716,649 11,664,509 80,800 11,745,309

Director

Salman Khalid Butt
Surplus realized on disposal of revalued fixed assets - net of tax - - - - - - - - (6,181) 6,181 - - -
Surplus realized on disposal of non-banking assets - net of tax - - - - - - - - (209,067) 209,067 - - -
Consolidated Condensed Interim Statement of Changes In Equity (Un-audited)

Final cash dividend at Rs. 15.0 per share - December 31, 2020 - - - - - - - - - (17,775,900) (17,775,900) - (17,775,900)
Interim cash dividend at Rs. 4.50 per share - March 31, 2021 - - - - - - - - - (5,332,770) (5,332,770) - (5,332,770)
- - - - - - - - - (23,108,670) (23,108,670) - (23,108,670)
Balance as at June 30, 2021 (Un-audited) 11,850,600 23,973,024 908,317 2,479,383 36,114,728 18,600,000 6,055,607 270,153 19,639,390 60,877,459 180,768,661 780,513 181,549,174
For details of dividend declaration and appropriations, please refer note 40 to these consolidated condensed interim financial statements.
Director
For details of reserves, please refer note 21 to these consolidated condensed interim financial statements.
Muhammad Ali Zeb
41
Consolidated Condensed Interim Cash Flow Statement (Un-audited) Notes To The Consolidated Condensed Interim Financial Statements (Un-audited)
Note January 01 January 01
to to 1. STATUS AND NATURE OF BUSINESS
June 30, 2021 June 30, 2020
----------Rupees in '000-------- The Group consists of:
CASH FLOW FROM OPERATING ACTIVITIES - Holding Company - MCB Bank Limited
Profit before taxation 25,646,251 22,847,098 "Percentage holding of
Less: Dividend income and share of profit of associates (1,284,929) (828,368) Subsidiary Companies MCB Bank Limited"
24,361,322 22,018,730
Adjustments:
Depreciation on fixed assets 30 1,252,930 1,190,148 - MCB - Arif Habib Savings and Investments Limited 51.33%
Depreciation on right-of-use assets 30 868,303 820,537 - MCB Non-Bank Credit Organization " Closed Joint Stock Company" 99.94%
Depreciation on non-banking assets acquired in satisfaction of claims 30 18,721 15,675 - MCB Islamic Bank Limited 100%
Amortization 30 244,454 227,611 - Financial Management Services (Private) Limited 95.90%
Provisions / (reversals) and write offs - net 32 (1,999,908) 4,076,022
(Loss) / Gain on sale of fixed assets - net 29 26,411 (18,982)
Gain on sale of non-banking assets acquired in satisfaction of claims - net 29 (536,464) - MCB Bank Limited (the 'Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related
Finance charges on lease liability against right-of-use assets 26 710,926 804,608 services. The Bank's ordinary shares are listed on the Pakistan stock exchange. The Bank's Registered Office and Principal Office are
Workers Welfare Fund 510,192 445,087 situated at MCB -15 Main Gulberg, Lahore. The Bank operates 1419 branches (2020: 1418 branches) within Pakistan and 11
Charge for defined benefit plans - net 290,438 161,546 branches (2020: 11 branches) outside Pakistan (including the Karachi Export Processing Zone branch).
Gain on termination of lease liability against right of use assets 29 (106,537) -
Unrealized loss / (gain) on revaluation of investments - Held For Trading 28 (109,477) (62,676)
1.1 The board of directors of the Bank has approved the winding up of Financial & Management Services ( Private) Limited. The Bank
1,169,989 7,659,576
holds 95.90% shareholding of the Company.
25,531,311 29,678,306
Decrease / (increase) in operating assets
Lendings to financial institutions (15,525,971) 2,875,304 2. BASIS OF PREPARATION
Held-for-trading securities (71,358,392) (6,683,251)
Advances 4,195,393 14,022,050 2.1 These consolidated financial statements include the financial statements of MCB Bank Limited and its subsidiary companies.
Others assets (excluding advance taxation) (1,325,608) 1,419,719 a. Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies accompanying a
(84,014,578) 11,633,822 shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable are
Increase / (decrease) in operating liabilities considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control
Bills Payable (11,943,039) (182,428) is transferred to the Group. They are de-consolidated from the date when control ceases. The assets and liabilities of subsidiary
Borrowings from financial institutions (37,515,092) 24,923,181 companies have been consolidated on a line by line basis based in the financial statements for the six months ended June 30, 2021 and
Deposits 167,428,774 144,754,983 the carrying value of investments held by the parent is eliminated against the subsidiaries' shareholders' equity in these consolidated
Other liabilities (excluding current taxation) (2,341,864) (25,423,332) condensed interim financial statements. Material intra-Group balances and transactions have been eliminated.
115,628,779 144,072,404
Defined benefits paid (135,300) (165,300)
Income tax paid (8,274,301) (7,177,096) b. Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for
Net cash flow from operating activities 48,735,911 178,042,136 under the equity method of accounting and are initially recognised at cost, thereafter adjusted for the post-acquisition change in the
CASH FLOW FROM INVESTING ACTIVITIES Group's share of net assets of the associates. The cumulative post-acquisition movements are adjusted in the carrying amount of the
Net investments in available-for-sale securities 1,199,082 (166,762,830) investment. Accounting policies of the associates have been changed where necessary to ensure consistency with the policies
Net investments in held-to-maturity securities (14,692,657) 8,677,322 adopted by the Group. The Group's share in associates have been accounted for based on the financial statements for the half year
Dividends received 939,347 492,898 ended June 30, 2021.
Investments in operating fixed assets (1,370,871) (963,909)
Proceeds from sale of operating fixed assets 28,176 31,257 c. Non-controlling interest is that part of the net results of operations and of net assets of subsidiary companies attributable to interests
Investments in Intangible assets (205,203) (86,772) which are not owned by the Group.
Proceeds from sale of non-banking assets acquired in satisfaction of claims 1,518,881 -
Investments in non-banking assets acquired in satisfaction of claims - -
Effect of translation of net investment in foreign branches and subsidiaries (470,800) 839,308 2.2 In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State
Net cash flow used in investing activities (13,054,045) (157,772,726) Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include
purchase of goods by banks from their customers and immediate resale to them at appropriate profit in price on deferred payment
CASH FLOW FROM FINANCING ACTIVITIES basis. The purchases and sales arising under these arrangements are not reflected in these consolidated condensed interim financial
Payment of lease liability against right-of-use-assets (1,170,297) (1,129,551) statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of profit thereon.
Dividend paid (22,963,843) (11,741,428)
Net cash flow used in financing activities (24,134,140) (12,870,979)
The financial results of the Group's Islamic Banking business have been consolidated in these financial statements for reporting
Effects of exchange rate changes on cash and cash equivalents 889,448 3,766,686 purposes, after eliminating material inter-group transactions / balances. Key financial figures of the Islamic Banking business are
Increase in cash and cash equivalents 12,437,174 11,165,117 disclosed in note 39 to these consolidated condensed interim financial statements.
Cash and cash equivalents at beginning of the period 159,806,194 159,219,822
Cash and cash equivalents at end of the period 172,243,368 170,384,939 2.3 The consolidated condensed interim financial statements are presented in Pak Rupees, which is the Group's functional and
presentation currency. The amounts are rounded off to the nearest thousand.
2.4 These consolidated condensed interim financial statements have been prepared under the historical cost convention except that
certain classes of fixed assets and non-banking assets acquired in satisfaction of claims are stated at revalued amounts and certain
investments and derivative financial instruments have been marked to market and are carried at fair value. In addition, obligations in
respect of staff retirement benefits are carried at present value.
Notes To The Consolidated Condensed Interim Financial Statements (Un-audited) Notes To The Consolidated Condensed Interim Financial Statements (Un-audited)
3. STATEMENT OF COMPLIANCE There are other new and amended standards and interpretations that are mandatory for the Group's accounting periods beginning on
or after January 1, 2022 but are considered not to be relevant or do not have any significant effect on the Group's operations and are
3.1 These consolidated condensed interim financial statements have been prepared in accordance with the accounting and reporting therefore not detailed in these consolidated condensed interim financial statements.
standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan
for interim financial reporting comprise of: 4. SIGNIFICANT ACCOUNTING POLICIES
- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards The significant accounting policies and methods of computation adopted in the preparation of these consolidated condensed interim
Board (IASB) as notified under the Companies Act, 2017; financial statements are consistent with those applied in the preparation of the audited annual consolidated financial statements of the
Group for the year ended December 31, 2020.
- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are notified
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
under the Companies Act, 2017;
The basis for accounting estimates adopted in the preparation of these consolidated condensed interim financial statements are the
- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017; and same as that applied in the preparation of the consolidated financial statements for the year ended December 31, 2020.
- Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP). 6. FINANCIAL RISK MANAGEMENT
The financial risk management objectives and policies adopted by the Group are consistent with those disclosed in the consolidated
Whenever the requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 or the directives issued by the SBP financial statements for the year ended December 31, 2020. These risk management policies continue to remain robust and the Group
and the SECP differ with the requirements of IAS 34 or IFAS, the requirements of the Banking Companies Ordinance, 1962, the is reviewing its portfolio regularly and conducts rapid portfolio reviews in line with emerging risks.
Companies Act, 2017 and the said directives, shall prevail.
Audited
3.2 The State Bank of Pakistan has deferred the applicability of International Accounting Standards 40, 'Investment Property' for Banking Unaudited
December 31,
Companies through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has June 30, 2021
2020
deferred applicability of IFRS-7 "Financial Instruments: Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008. ----------Rupees in '000--------
Accordingly, the requirements of these standards have not been considered in the preparation of these consolidated condensed 7. CASH AND BALANCES WITH TREASURY BANKS
interim financial statements. However, investments have been classified and valued in accordance with the requirements prescribed In hand
by the State Bank of Pakistan through various circulars.
Local currency 27,121,832 25,039,386
Foreign currencies 7,761,047 7,088,257
3.3 The SECP vide its notification SRO 633 (I)/2014 dated 10 July 2014, adopted IFRS 10 effective from the periods starting from June 30,
2014. However, vide its notification SRO 56 (I)/2016 dated January 28, 2016, it has been notified that the requirements of IFRS 10 and 34,882,879 32,127,643
section 228 of the Companies Act, 2017 will not be applicable with respect to the investment in mutual funds established under trust With State Bank of Pakistan in
structure. Local currency current accounts 61,996,309 51,920,851
3.4 The disclosures made in these consolidated condensed interim financial statements have been limited based on a format prescribed Foreign currency current accounts 3,300,169 2,271,659
by the SBP vide BPRD Circular Letter No. 05 of 2019 dated March 22, 2019 and IAS 34, Interim Financial Reporting. These Foreign currency deposit accounts 9,952,524 10,532,776
consolidated condensed interim financial statements do not include all the information and disclosures required in the audited annual 75,249,002 64,725,286
financial statements, and should be read in conjunction with the audited annual consolidated financial statements for the financial year With other central banks in
ended December 31, 2020. Foreign currency current accounts 3,153,826 11,851,311
3.5 With National Bank of Pakistan in

Amendments to approved accounting standards that are effective in the current period
Local currency current accounts 37,463,073 22,308,442
There are certain new standards and interpretations of and amendments to existing accounting standards that have become
applicable to the Group for accounting periods beginning on or after January 1, 2021. These are considered either to not be relevant or Prize bonds 1,498,111 1,040,359
not to have any significant impact on the Group's consolidated condensed interim financial statements.
152,246,891 132,053,041
3.6 Standards, interpretations of and amendments to approved accounting standards that are not yet effective
8. BALANCES WITH OTHER BANKS
The following new standards and amendments to existing accounting standards will be effective from the dates mentioned below In Pakistan
against the respective standard or amendment: In current accounts 22,012 9,190
In deposit accounts 2,010,894 1,554
Effective date (annual periods
2,032,906 10,744
beginning on or after) Outside Pakistan
Property, Plant and Equipment: Proceeds before intended use – Amendments to IAS 16 January 1, 2022 In current accounts 12,822,553 26,768,812
Cost of Fulfilling an Onerous Contracts – Amendments to IAS 37 January 1, 2022
In deposit accounts 5,796,292 2,231,965
Updating a Reference to the Conceptual Framework – Amendments to IFRS 3 January 1, 2022
Classification of Liabilities as Current or Non-current – Amendments to IAS 1 January 1, 2023 18,618,845 29,000,777
Amended by Definition of Accounting Estimates – Amendments to IAS 8 January 1, 2023 20,651,751 29,011,521
IFRS 9, Financial Instruments: Classification and Measurement, addresses recognition, classification, measurement and 9. LENDINGS TO FINANCIAL INSTITUTIONS
derecognition of financial assets and financial liabilities. The standard has also introduced a new impairment model for financial assets Call / clean money lendings 29,220,496 11,002,195
which requires recognition of impairment charge based on an 'Expected Credit Losses' (ECL) approach rather than the 'incurred credit
losses' approach as currently followed. The ECL approach has an impact on all assets of the Bank which are exposed to credit risk. Repurchase agreement lendings (Reverse Repo) 3,273,718 6,137,258
Musharaka arrangements 1,000,000 -
As per the SBP's BPRD Circular Letter no. 24 dated July 5, 2021, the applicability of IFRS 9 to banks in Pakistan has been deferred to Bai Muajjal receivable - with State Bank of Pakistan - 828,790
accounting periods beginning on or after January 1, 2022. Therefore, these consolidated condensed interim financial statements have 33,494,214 17,968,243
been prepared in accordance with the existing prudential regime to the extent of the Group's domestic operations, whereas the
requirements of this standard are incorporated for overseas jurisdictions where IFRS 9 has been adopted.
44 45
December 31, 2020
(1,529)
(2,061,464)
(69,658)
1,308,892
1,269,445
2,578,337
2,858,620
7,479,734
7,301,675
9,124,976
3,122,366
4,479,360
1,000,283
13,474
1,993,335
20,654,493
1,009,610,821
19,549,017
1,036,217,535
91,279,273
92,279,556
978,617,974
11,747,618
11,691,434
------------------------------------------------------------------------------------------Rupees in '000------------------------------------------------------------------------------------------
Carrying Value
10.2.2 Particulars of provision against debt securities
-
----------Rupees in '000--------
Audited
Unaudited Audited
Category of classification
June 30, 2021 December 31, 2020
NPI Provision NPI Provision
Domestic ----------Rupees in '000--------
(7,362)
(224)
(13,614)
(950,878)
(606,978)
110,493
110,269
9,477,853
3,412,147
16,780
17,509
12,924,289
13,034,558
14,022,219
45,768,292
59,790,511
357,514
11,691,434
11,077,094
June 30, 2021
Unaudited
-
-
-
-
-
-
-
Surplus /
Loss 477,659 477,659 490,459 490,459

(Deficit)
477,659 477,659 490,459 490,459
10.2.3 In addition to the above, overseas branches hold a general provision of Rs 26.931 million (December 31, 2020: Rs
(118)
(4,719)
(1,714)
(27,281)
(490,341)
(529,282)
(11,542)
(11,155,719)
(11,162,152)
(11,691,434)
Provision for
43.542 million) in accordance with the requirements of IFRS 9.

diminution
-
-
-
-
10.3 The market value of securities classified as held-to-maturity as at June 30, 2021 amounted to Rs. 31,614.111 million
(December 31, 2020: Rs. 17,531.392 million).
Amortised cost
1,158,952
2,468,068
2,841,840
7,463,939
7,313,217
9,615,317
3,149,647
4,479,360
28,398,065
1,007,848,684
20,078,299
969,144,840
1,309,116
1,034,874,411
118
10.4 Investment of the Group in Adamjee Insurance Company Limited has been accounted for under the equity method of
Cost /
accounting in accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting
for Investments in Associates'. The market value of the investment in Adamjee Insurance Company Limited as at June
30, 2021 amounted to Rs. 2,902.900 million (2020: Rs. 2,752.400 million).
Carrying Value
Investment in Adamjee Insurance Company Limited under equity method - holding 20.00% (2020: 20.00%)
1,448,309
2,841,242
6,248,375
6,415,222
1,188,906
4,700,858
72,597,897
74,046,206
25,388,886
1,005,991,934
26,667,265
34,271,393
971,513,431
1,119,010,391
-
Audited
Unaudited
December 31,
June 30, 2021
2020
----------Rupees in '000--------
(7,949)
(5,731)
117,426
6,475,829
3,420,225
36,902
9,927,225
109,477
10,036,702
-
-
-
-
-
-
Surplus /
(Deficit)
Opening balance 4,435,075 4,211,707

Share of profit for the period / year before tax 411,273 585,968
Dividend from associate (87,500) (192,500)
(118)
(5,028)
(1,714)
(10,801)
(10,570,789)
(10,577,531)
(477,541)
(499,563)
(11,103)
(11,077,094)
Share of tax (16,888) (143,175)

Provision for
diminution
-
-
-
306,885 250,293
Share of other comprehensive income (96,972) (26,925)
Closing balance 4,644,988 4,435,075
Amortised cost
1,330,883
2,804,340
6,255,820
6,892,763
1,200,009
4,700,858
72,605,846
73,936,729
32,539,450
1,006,642,240
26,678,066
34,770,956
1,120,050,783
965,042,630
118
Share of other comprehensive income

Cost /
Share of unrealized surplus on assets -net of tax (58,226) (34,246)

Share of exchange translation reserve of associate (38,746) 7,321
(96,972) (26,925)
Provision for diminution in value of investments
10.5 Investment of the Group in Euronet Pakistan Private Limited has been accounted for under the equity method of
accounting in accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting
for Investments in Associates'.
Investment in Euronet Pakistan Private Limited under equity method - holding 30% (2020: 30.00%)
Audited
Provincial Government Securities
Non Government Debt Securities
Non Government Debt Securities
10.1.1 Investments given as collateral
Exchange and other adjustments
Unaudited
Federal Government Securities
Reversals for the period / year
December 31,
Available-for-sale securities
- Pakistan Investment Bonds

June 30, 2021

Charge for the period / year
2020
----------Rupees in '000--------
- Market Treasury Bills
Investments by type:
Reversal on disposals
Charge / (reversals)
Total Investments
Amounts written off

Foreign Securities
Foreign Securities
Opening balance 44,285 63,951

10.2.1 Opening balance
Shares and units
Shares and units
Closing Balance
INVESTMENTS
Associates
Share of profit for the period / year before tax 20,578 (12,890)
Share of tax (8,993) (6,776)
Closing balance 11,585 (19,666)
55,870 44,285
10.1
10.2
10.
46 47
11.3 Particulars of provision against advances
This represents non-performing portfolio of agricultural, small enterprise and Infrastructure Project Financing classified as "Other Assets Especially Mentioned" as per the
(45,168,351)
(50,680,067)
(5,511,716)
December 31, 2020
December 31, 2020
505
1,983
60,382
4,913
9,981
137,341
494,546,891
84,962,433
18,856,451
598,365,775
547,685,708
554,179,378
44,186,397
598,365,775
41,498,157
41,697,863
3,455,089
3,470,488
45,168,351
-
-----------------------------------------------------------------------Rupeesin '000-----------------------------------------------------------------------
Specific General Total Specific General Total
Provision
----------Rupees in '000--------

Audited
Audited
------------------------------------Rupees in '000-----------------------------------
------------------------------------Rupees in '000-----------------------------------
Opening balance 45,168,351 5,511,716 50,680,067 41,937,761 1,461,011 43,398,772
Exchange adjustments (67,350) (12,818) (80,168) 50,555 7,162 57,717
Charge for the period / year 1,745,044 60,963 1,806,007 5,730,579 4,106,594 9,837,173
Total
Reversals (1,629,453) (1,484,466) (3,113,919) (2,215,829) (63,051) (2,278,880)

(44,919,359)
(4,075,395)
(48,994,754)
115,591 (1,423,503) (1,307,912) 3,514,750 4,043,543 7,558,293
61,612
5,321
2,020
309,191
459,053
19,961
493,550,281
82,443,235
17,885,665
593,879,181
544,884,427
549,729,473
44,149,708
593,879,181
42,671,220
43,501,076
8,417,140
8,444,442
51,945,518
Non Performing
June 30, 2021
June 30, 2021
-
Amounts written off (297,233) - (297,233) (334,715) - (334,715)
Unaudited
Unaudited
Loans
Closing balance 44,919,359 4,075,395 48,994,754 45,168,351 5,511,716 50,680,067
Advances include Rs. 51,173.153 million (2020: Rs.51,945.518 million) which have been placed under the non-performing status as detailed below:
11.3.1 General provision against consumer loans represents provision maintained against fully secured performing portfolio and unsecured performing
portfolio as required by the Prudential Regulations issued by the SBP. General provision against Small Enterprise Finance represents provision
maintained at an amount equal to 1% of unsecured performing portfolio as required by the Prudential Regulations issued by the SBP. General
(45,168,351)
(45,168,351)
December 31, 2020
provisions pertaining to overseas advances are made in accordance with the requirements of the regulatory authorities of the respective countries in
961
71
4,048
756,471
664,294
63,187
4,567
50,524,753
51,945,518
6,777,167
41,374,435
41,560,031
3,353,729
3,359,328
44,919,359
118,361
which the overseas branches operate.
-
-
Provision
Audited

11.3.2 In addition, the Group has also maintained an un-encumbered general provision of Rs 3,094 million (December 31, 2020: Rs 4,564 million) against
financing made on prudent basis. This general provision is in addition to the requirements of Prudential Regulations.
Non Performing
11.3.3 State Bank of Pakistan vide BSD Circular No. 2 dated January 27, 2009, BSD Circular No. 10 dated October 20, 2009, BSD Circular No. 02 of 2010
dated June 03, 2010 and BSD Circular No.1 of 2011 dated October 21, 2011 has allowed benefit of forced sale value (FSV) of Plant & Machinery under
charge, pledged stock and mortgaged residential, commercial & industrial properties (land and building only) held as collateral against NPLs for five
(44,919,359)
(44,919,359)
282
3,842
9,120
109,084
254,124
279,415
49,999,590
1,060,096
51,173,153
6,253,794
42,272,619
42,915,242
8,244,667
51,173,153
8,257,911
113,467
Non Performing
years from the date of classification. The Bank (holding company) has not taken the FSV benefit in calculation of specific provision. However, one of
June 30, 2021
-
Unaudited
the subsidiary of the Bank has availed benefit of forced sale values amounting to Rs.21.964 million (December 31, 2020: Rs.543.151 million) in
Loans
determining the provisioning against non-performing Islamic financing and related assets as at June 30, 2021. The additional benefit on the Group's
statement of profit and loss arising from availing the FSV benefit - net of tax amounts to Rs 13.398 million as at June 30, 2021 (December 31, 2020: Rs
353.048 million). However, the additional impact on profitability arising from availing the benefit of forced sales value is not available for payment of
cash or stock dividends to shareholders.
Unaudited Audited
(5,511,716)
(5,511,716)
December 31, 2020

444,022,138
84,205,962
18,192,157
546,420,257
540,908,541
-
2020
requirements of respective Prudential Regulations issued by the State Bank of Pakistan.

12. FIXED ASSETS ----------Rupees in '000--------
Audited
11.2.1
Note
Capital work-in-progress 12.1 1,212,421 871,274

Property and equipment 52,899,053 53,190,768
Performing
Right-of-use assets 8,648,098 9,617,270

62,759,572 63,679,312
12.1 Capital work-in-progress
(4,075,395)
(4,075,395)
443,550,691
82,329,768
16,825,569
542,706,028
538,630,633
Civil works 611,395 472,314

June 30, 2021
Equipment 240,649 98,383

Unaudited
Advances to suppliers 333,268 296,456

Others 27,109 4,121
1,212,421 871,274
Unaudited Unaudited
Half Year ended Half Year
June 30, 2021 ended June 30,
2020
12.2 Additions to fixed assets ----------Rupees in '000--------
The following additions have been made to fixed assets during the period:
\

Other Assets Especially Mentioned
Particulars of advances (Gross)
Property and equipment

Loans, cash credits, running finances, etc.
Freehold land 35,108 25,327

Category of Classification
Building on freehold land 176,108 34,833

Not past due but impaired
Islamic financing and related assets
Building on leasehold land 14,911 -

Bills discounted and purchased
In foreign currencies
Furniture and fixture 91,906 103,916

Provision against advances
Advances - net of provision
In local currency

181 to 365 days
91 to 180 days
Vehicles 33,642 50,229

Upto 90 days
Substandard
Overdue by:
˃ 365 days
Leasehold land - 6,999

Domestic
Overseas
Doubtful
1,029,724 649,010
Advances - gross
Total
1,370,871 963,909
Loss
11. ADVANCES
12.3 Disposal of fixed assets

- General
- Specific
The net book value of fixed assets disposed off during the period is as follows:
11.2
11.2.1
Vehicles 2,018 6,971

11.1
Furniture and fixture 2,756 614

Building on freehold land 43,149 -
48 54,587 12,275 49
Audited Unaudited Audited
Unaudited
December 31, June 30, 2021 December 31,
June 30, 2021
2020 2020
----------Rupees in '000--------
----------Rupees in '000--------
13. INTANGIBLE ASSETS
16. BILLS PAYABLE
Computer software 1,109,429 1,157,787
In Pakistan 13,712,796 26,383,624
Goodwill 82,127 82,127
Outside Pakistan 795,678 67,889
Management rights 192,000 192,000
Capital work-in-progress 448,622 435,330 14,508,474 26,451,513
1,832,178 1,867,244 17. BORROWINGS
Unaudited Unaudited Secured
Borrowings from State Bank of Pakistan
June 30, 2021 June 30, 2020
----------Rupees in '000-------- Under export refinance scheme 35,739,169 37,844,720
13.1 Additions to intangible assets
Under long term financing facility 22,928,390 22,596,183
The following additions have been made to intangible assets during the period:
Computer software 175,390 72,242 Under renewable energy performance platform 1,035,699 74,760
Capital work-in-progress - net additions 29,813 14,530 Under payment of Wages & Salaries 9,662,331 11,789,824
205,203 86,772
Under temporary economic refinance facility 14,567,908 2,878,487
Unaudited Audited
Under refinance facility for combating COVID-19 48,455 -
2020 Under financing facility for storage of agricultural produce 167,162 191,254
----------Rupees in '000-------- 84,149,114 75,375,228
14. OTHER ASSETS
Bai Muajjal 44,809,236 -
Income/ Mark-up accrued in local currency 22,207,249 19,451,779
Repurchase agreement borrowings 14,798,148 92,225,530
Income/ Mark-up accrued in foreign currencies 598,814 311,024
Advances, deposits, advance rent and other prepayments 2,088,599 2,524,851 Total secured 143,756,498 167,600,758
Non-banking assets acquired in satisfaction of claims 2,624,726 3,277,778 Unsecured
Compensation for delayed income tax refunds 133,809 133,809 Borrowings from other financial institution 262,316 1,720,341
Branch adjustment account 303,692 421,204
Call borrowings 2,318,713 319,669
Mark to market gain on forward foreign exchange contracts 2,248,549 4,847,284
Unrealized gain on derivative financial instruments 276,993 517,033
Overdrawn nostro accounts 655,274 368,920
Acceptances 20 21,361,862 22,747,369 Musharaka arrangements 193,515 14,405,366
Receivable from the pension fund 3,007,326 3,370,179 Others 162,286 162,286
Clearing and settlement accounts 4,560,383 2,698,271 Total unsecured 3,592,104 16,976,582
Others 4,049,500 4,221,665 147,348,602 184,577,340
63,461,502 64,522,246
Less: Provision held against other assets 14.1 2,582,715 2,582,686 18. DEPOSITS AND OTHER ACCOUNTS
Other Assets (net of provision) 60,878,787 61,939,560
In Local In Foreign In Local In Foreign
Surplus on revaluation of non-banking assets Total Total
Currency currencies Currency currencies
acquired in satisfaction of claims 22 511,496 854,231 -----------------------------------------------Rupees in '000-----------------------------------------------
Customers
Other Assets - total 61,390,283 62,793,791
Current deposits 501,538,860 68,097,427 569,636,287 425,760,845 55,999,023 481,759,868
14.1 Provision held against other assets
Savings deposits 721,439,183 45,341,982 766,781,165 689,241,146 47,759,213 737,000,359
Non banking assets acquired in satisfaction of claims 89,745 95,095
Claims receivable against fraud and forgeries 493,733 478,773 Term deposits 119,435,457 13,129,026 132,564,483 89,353,999 14,182,837 103,536,836
Others 1,999,237 2,008,818 Others 46,747,127 3,015,917 49,763,044 26,013,457 3,218,232 29,231,689
2,582,715 2,582,686
1,389,160,627 129,584,352 1,518,744,979 1,230,369,447 121,159,305 1,351,528,752
14.1.1 Movement in provision held against other assets
Financial Institutions
Opening balance 2,582,686 2,604,137
Current deposits 10,588,226 1,362,204 11,950,430 11,033,694 659,230 11,692,924
Charge for the period / year 24,898 54,269
Reversals (23,889) (77,917) Savings deposits 17,153,897 298,796 17,452,693 16,530,222 117,569 16,647,791
1,009 (23,648)
Term deposits 5,461,468 2,358,372 7,819,840 4,557,468 4,090,613 8,648,081
Amounts written off - (16,591)
Exchange and other adjustments (980) 18,788 Others - 198,793 198,793 - 220,413 220,413
Closing balance 2,582,715 2,582,686 33,203,591 4,218,165 37,421,756 32,121,384 5,087,825 37,209,209
15. CONTINGENT ASSETS 1,422,364,218 133,802,517 1,556,166,735 1,262,490,831 126,247,130 1,388,737,961
There were no contingent assets of the Group as at June 30, 2021 (2020: NIL).
50 51
Audited
Unaudited 21.1 Under IFRS-3 a bargain purchase represents an economic gain which should be immediately recognized by the acquirer as income. However, the
Note December 31,
June 30, 2021 amount of bargain purchase gain was not been taken to the profit and loss account as the SBP, through its letter BPRD(R&PD)/2017/14330 dated June
2020 13, 2017 recommended that the amount of gain may be routed directly into equity as a Non-distributable Capital Reserve (NCR). The NCR may become
----------Rupees in '000-------- available for distribution through a stock dividend only with prior approval of the SBP. The Group, before distribution of the gain as a stock dividend, may
19. DEFERRED TAX LIABILITIES adjust any subsequent provisions/deficit, assessed by the Group or recommended by the Banking Inspection Department of SBP, in the acquired
Deductible Temporary Differences on assets and liabilities of NIB Bank Limited against the NCR.
- Provision against advances (2,264,655) (2,786,856) 21.2 Statutory reserve represents amount set aside as per the requirements of section 21 of the Banking Companies Ordinance, 1962.
- Tax losses carried forward (676,706) (772,357)
- Others (429,626) (366,547) Audited
Unaudited
(3,370,987) (3,925,760) Note December 31,
June 30, 2021
Taxable Temporary Differences on 2020
- Surplus on revaluation of fixed assets 1,450,732 1,329,511 ----------Rupees in '000--------
22. SURPLUS ON REVALUATION OF ASSETS
- Surplus/deficit on revaluation of investments 3,871,618 4,523,498
- Surplus on revaluation of non-banking assets 199,483 298,982 Surplus / (deficit) on revaluation of
- Accelerated tax depreciation 2,185,212 2,054,509 - Available for sale securities 10.1 9,927,225 12,924,291
- Receivable from pension fund 1,172,856 1,179,562 - Fixed Assets 20,778,109 20,856,881
- Investments in associated undertaking 1,558,873 1,325,520 - Non-banking assets acquired in satisfaction of claims 14 511,496 854,231
- Business combination 705,218 705,218 - Associated undertaking 518,775 577,001
11,143,992 11,416,800 31,735,605 35,212,404
Deferred tax on surplus / (deficit) on revaluation of:
7,773,005 7,491,040
- Available for sale securities 19 3,871,618 4,523,498
20. OTHER LIABILITIES - Fixed Assets 19 1,450,732 1,329,511
Mark-up/ return/ interest payable in local currency 3,857,823 2,884,255 - Non-banking assets acquired in satisfaction of claims 19 199,483 298,982
Mark-up/ return/ interest payable in foreign currencies 135,717 254,433 - Associated undertaking 248,622 257,062
Unearned commission income 697,722 252,312 5,770,455 6,409,053
Accrued expenses 5,824,344 6,888,435 25,965,150 28,803,351
Current taxation (provisions less payments) 11,339,783 10,130,229
Workers' welfare fund 20.1 9,338,947 8,838,684 23. CONTINGENCIES AND COMMITMENTS
Acceptances 14 21,361,862 22,747,369 -Guarantees 23.1 191,254,813 186,572,634
Unclaimed / dividends payable 1,921,083 1,697,408 -Commitments 23.2 524,800,624 525,404,920
Mark to market loss on forward foreign exchange contracts 1,867,827 4,618,138 -Other contingent liabilities 23.3 29,113,010 28,397,749
Unrealised loss on derivative financial instruments 273,411 513,343 745,168,447 740,375,303
Staff welfare fund 3,722 5,598 23.1 Guarantees:
Provision for employees' compensated absences 1,145,701 919,407
Provision for post retirement medical benefits 2,156,504 2,004,122 Financial guarantees 157,134,884 149,925,920
Provision for employees' contributory benevolent scheme 219,007 222,084 Performance guarantees 26,081,320 29,835,397
Retention money 12,473 20,657 Other guarantees 8,038,609 6,811,317
Insurance payable against consumer assets 665,370 698,949 191,254,813 186,572,634
Unclaimed balances 756,294 877,552 23.2 Commitments:
Duties and taxes payable 1,836,724 1,860,730 Documentary credits and short-term trade-related transactions
Charity fund balance 2,954 46,615 - letters of credit 209,391,045 180,272,534
Provision against off-balance sheet obligations 46,210 46,188
Commitments in respect of:
Security deposits against lease 1,405,095 1,354,666
- forward foreign exchange contracts 23.2.1 195,071,154 327,646,242
Lease liability against right of use assets 10,583,347 11,268,508
- forward government securities transactions 23.2.2 114,002,109 11,089,775
Clearing and settlement accounts 7,198,163 7,421,975
Others 6,273,634 5,455,501
- derivatives 23.2.3 4,970,119 4,471,383
88,923,717 91,027,158 - commitments to extent credit 426,086 1,007,451
20.1 Supreme Court of Pakistan vide its order dated November 10, 2016 has held that the amendments made in the law Commitments for acquisition of:
introduced by the Federal Government for the levy of Workers Welfare Fund were not lawful. The Federal Board of - operating fixed assets 765,647 710,570
Revenue has filed review petitions against this order which are currently pending. - intangible assets 174,464 206,965
Legal advice obtained on the matter indicates that consequent to filing of these review petitions the judgment may not 524,800,624 525,404,920
currently be treated as conclusive. Accordingly, the Bank maintained its provision in respect of WWF. 23.2.1 Commitments in respect of forward foreign exchange contracts
Audited
Unaudited Purchase 107,726,251 172,137,589
Note December 31,
June 30, 2021 Sale 87,344,903 155,508,653
2020
----------Rupees in '000-------- 195,071,154 327,646,242
21. RESERVES
Share premium 23,973,024 23,973,024 23.2.2 Commitments in respect of forward government securities transactions
Non- distributable capital reserve - gain on bargain purchase option 21.1 908,317 908,317 Purchase 112,502,109 11,089,775
Exchange translation reserve 2,479,383 2,950,183 Sale 1,500,000 -
Statutory reserve 21.2 36,114,728 34,628,527 114,002,109 11,089,775
General reserve 18,600,000 18,600,000
82,075,452 81,060,051
52 53
Audited Unaudited Unaudited
Unaudited
December 31, Half Year ended Half Year ended
June 30, 2021
2020 June 30, 2021 June 30, 2020
----------Rupees in '000-------- Note
23.2.3 Commitments in respect of derivatives ----------Rupees in '000--------
25. MARK-UP/RETURN/INTEREST EARNED
FX options Loans and advances 19,118,798 29,887,052
Purchase 1,356,125 182,800
Investments 43,323,374 49,453,561
Sale 1,356,125 182,800
Lendings to financial institutions 216,073 797,002
Cross Currency Swaps 2,712,250 365,600
Balances with banks 75,186 270,974
Purchase 1,090,187 1,975,311 62,733,431 80,408,589
Sale 1,167,682 2,130,472
2,257,869 4,105,783 26. MARK-UP/RETURN/INTEREST EXPENSED
4,970,119 4,471,383 Deposits 23,161,664 36,456,056
Borrowings 4,393,305 3,694,589
23.2.4 The Group makes commitments to extend credit in the normal course of its business but these being revocable
Cost of foreign currency swaps against
commitments do not attract any significant penalty or expense if the facility is unilaterally withdrawn.
Audited foreign currency deposits / borrowings 735,796 1,200,521
Unaudited
Note December 31, Finance charges on lease liability against right-of-use assets
June 30, 2021 710,926 804,608
2020
----------Rupees in '000-------- 29,001,691 42,155,774
23.3 Other contingent liabilities
27. FEE & COMMISSION INCOME
Claims against the Group not acknowledged as debts 23.3.1 29,113,010 28,397,749
Branch banking customer fees 1,358,544 946,071
23.3.1 These mainly represent counter claims by borrowers for damages and other claims relating to banking transactions. Based Consumer finance related fees 260,726 191,363
on legal advice and / or internal assessments, management is confident that the matters will be decided in the Group’s Card related fees (debit and credit cards) 1,428,972 1,556,444
favour and the possibility of any adverse outcome is remote. Accordingly, no provision has been made in these Credit related fees 123,519 14,765
consolidated condensed interim financial statements. Investment banking fee 105,760 71,482
23.4 Taxation Commission on trade 720,528 665,174
For assessment year 1999-2000 through tax year 2020, the tax department disputed Group's treatment on certain issues, Commission on guarantees 344,598 317,793
where the Group's appeals are pending at various appellate forums, entailing an additional tax liability of Rs. 2,400 million Commission on cash management 336,089 286,992
(2020: Rs. 6,033 million). Such issues inter alia principally include disallowance of expenses for non deduction of Commission on remittances including home remittances 477,768 519,685
withholding tax and non availability of underlying records, provision for non performing loans, attribution of expenses to Commission on bancassurance 789,453 498,653
heads of income other than income from business and disallowance of credit for taxes paid in advance / deducted at
Rent on lockers 123,119 106,977
source.
Commission on utility bills 37,679 36,734
The Group has filed appeals which are pending at various appellate forums. In addition, certain decisions made in favour of
Commission on investments services 383,392 360,833
the Group are being contested by the department at higher forums. No provision has been made in these consolidated
condensed interim financial statements regarding the aforesaid additional tax demand and already issued favourable Others 120,904 85,150
decisions where the department is in appeal, as the management is of the view that the issues will be decided in the 6,611,051 5,658,116
Group's favour as and when these are taken up by the Appellate Authorities. 28. GAIN / (LOSS) ON SECURITIES
23.5 Amortisation of goodwill and other intangibles amounting to Rs 28.08 billion of Ex. NIB Realised 28.1 425,062 (120,340)
Issue of goodwill and other related assets amortization for few years has been assessed in Group’s favour at appellate Unrealised - Held For Trading 10.1 109,477 62,676
forums during the year, however, the tax department has filed appeal against these decisions. The management has not
534,539 (57,664)
recorded any tax benefit because the issue has not attained finality.
28.1 Realised gain / (loss) on:
24. DERIVATIVE INSTRUMENTS Federal Government Securities 345,791 183,380
Shares and units 79,032 (315,800)
Cross Currency Swaps Interest Rate Swaps FX Options Others 239 12,080
Notional Mark to market Notional Mark to market Notional Mark to market 425,062 (120,340)
Principal gain / loss Principal gain / loss Principal gain / loss
-------------------------------------------Rupees in '000------------------------------------------- 29. OTHER INCOME
Total Rent on property 41,780 12,628
Hedging 1,090,187 268,785 - - 1,356,125 8,208
Market Making 1,167,682 (265,203) - - 1,356,125 (8,208)
Gain on conversion of Ijarah agreements 10,762 52,549
Gain on termination of lease liability against right of use assets 106,537 -
(Loss) / Gain on sale of fixed assets - net (26,411) 18,982
-------------------------------------------Rupees in '000-------------------------------------------
Total Gain on sale of non-banking assets acquired in satisfaction of claims - net 536,464 -
Hedging 1,975,311 512,508 - - 182,800 4,525 669,132 84,159
Market Making 2,130,472 (508,818) - - 182,800 (4,525)
54 55
Unaudited Unaudited Unaudited Unaudited
Half Year ended Half Year ended Note Half Year ended Half Year ended
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
----------Rupees in '000--------
----------Rupees in '000--------
30. OPERATING EXPENSES
Total compensation expense 9,759,911 9,151,578
31. OTHER CHARGES
Property expense
Rent and taxes 112,346 116,291 Penalties of State Bank of Pakistan 351,381 183,601
Insurance 33,052 29,563 VAT & National Building tax & Crop Insurance Levy 25,014 56,579
Utilities cost 622,890 552,665 376,395 240,180
Security (including guards) 792,336 717,700
Repair and maintenance (including janitorial charges) 374,900 360,166
Depreciation on right-of-use assets 868,303 820,537 32. PROVISIONS / (REVERSALS) & WRITE OFFS - NET
Depreciation 474,450 403,281
Fuel expense generators 185,700 156,053
3,463,977 3,156,256 Provision / (reversal) against balance with Banks 173 (1,658)
(Reversal) / provision for diminution in value of investments 10.2.1 (606,978) 200,967
Information technology expenses (Reversal) / provision against loans and advances 11.3 (1,307,912) 3,959,032
Software maintenance 659,035 657,788 Provision / (reversal) against other assets 14.1.1 1,009 (17,877)
Hardware maintenance 95,260 186,999 Recovery of written off / charged off bad debts (86,200) (64,442)
Depreciation 356,741 336,149 (1,999,908) 4,076,022
Amortization 244,454 227,611
Network charges 338,953 361,367 33. TAXATION
Insurance 3,572 3,070
1,698,015 1,772,984 Current 9,563,497 10,719,826
Other operating expenses Prior years (3,447) (7,658)
Directors' fees and allowances 24,630 21,956 Deferred 1,096,686 (1,437,013)
Remuneration to shariah board members 5,501 5,080 Share of tax of associates 25,881 98,110
Legal and professional charges 171,534 167,249 10,682,617 9,373,265
Outsourced services costs 423,893 437,240
Travelling and conveyance 140,470 146,697 34. BASIC AND DILUTED EARNINGS PER SHARE
NIFT clearing charges 88,802 95,164 ----------Rupees in '000--------
Depreciation 421,739 450,718
Depreciation on non-banking assets acquired in satisfaction of claims 18,721 15,675 Profit after tax attributable to Equity Shareholders of the Bank 14,882,830 13,425,378
Training and development 13,080 15,898 ----------Number--------
Postage and courier charges 130,345 166,202
Communication 189,573 167,607 Weighted average number of ordinary shares 1,185,060,006 1,185,060,006
Stationery and printing 316,903 296,161
----------Rupees-------
Marketing, advertisement & publicity 305,743 344,796
Donations 6,600 112,596 Basic and diluted earnings per share 12.56 11.33
Auditors' remuneration 38,132 21,730
Cash transportation charges 413,523 338,437
Repair and maintenance 221,191 165,693
Subscription 19,093 21,603
Entertainment 117,267 100,963
Remittance charges 95,691 95,524
Brokerage expenses 35,942 23,419
Card related expenses 475,423 419,694
CNIC verification charges 106,385 53,129
Insurance 891,560 788,743
Others 137,608 130,942
4,809,349 4,602,916
19,731,252 18,683,734
56 57
35. FAIR VALUE MEASUREMENTS The table below analyses the financial and non-financial assets carried at fair values, by valuation methods. For financial assets, the Group
essentially carries its investments in debt and equity securities at fair values. Valuation of investments is carried out as per guidelines specified by
The fair value of traded investments is based on quoted market prices, except for tradable securities classified by the Group as 'held to the SBP. In case of non-financial assets, the Group has adopted revaluation model (as per IAS 16) in respect of land and building.
maturity'. Quoted securities classified as held to maturity are carried at amortised cost. Fair value of unquoted equity investments other
than investments in associates is determined on the basis of break up value of these investments as per the latest available financial
statements. Total
Value
Fair value of fixed term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be calculated with sufficient On balance sheet financial instruments ------------------------------------------Rupees in '000--------------------------------------
reliability due to absence of current and active market for such assets and liabilities and reliable data regarding market rates for similar Financial assets - measured at fair value
instruments. Investments
Federal Government Securities 1,044,111,328 - 1,044,111,328 - 1,044,111,328
In the opinion of the management, the fair value of the financial assets and financial liabilities are not significantly different from their
carrying values since assets and liabilities are either short-term in nature or re-priced over short term. Shares 25,372,673 25,372,673 - - 25,372,673
Non-Government Debt Securities 2,841,242 2,841,242 - 2,841,242
35.1 Fair value of financial assets Foreign Securities 6,248,375 - 6,248,375 - 6,248,375
Financial assets - disclosed but not
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
measured at fair value
measurements:
Investments (HTM, AFS, unlisted ordinary shares
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities. and associates) 40,436,773 - - - -
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or Cash and balances with treasury banks 152,246,891 - - - -
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Balances with other banks 20,651,751 - - - -
Lendings to financial institutions 33,494,214 - - - -
Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable Advances 544,884,427 - - - -
inputs). Other assets - - - - -
Valuation techniques used in determination of fair valuation of financial instruments within level 2 Non - Financial Assets measured at fair value
Item Valuation approach and input used Non-banking assets 3,046,477 - 3,046,477 - 3,046,477
Federal Government The fair values of Federal Government securities are determined using the PKRV rates. Off-balance sheet financial instruments
securities - measured at fair value
Term Finance and Bonds Investments in debt securities (comprising term finance certificates, bonds and any other security issued Forward purchase of foreign exchange 107,726,251 - 2,248,549 - 2,248,549
by a company or a body corporate for the purpose of raising funds in the form of redeemable capital) are Forward sale of foreign exchange 87,344,903 - 1,867,827 - 1,867,827
valued on the basis of the rates announced by the Mutual Funds Association of Pakistan (MUFAP) in
accordance with the methodology prescribed by the Securities and Exchange Commission of Pakistan. Derivatives purchase 2,446,312 - 276,993 - 276,993
Derivatives sale 2,523,807 - 273,411 - 273,411
Foreign exchange The valuation has been determined by interpolating the mid rates announced by the State Bank of
contracts Pakistan.
Total
Value
Derivatives The fair values of derivatives which are not quoted in active markets are determined by using valuation ------------------------------------------Rupees in '000--------------------------------------
On balance sheet financial instruments
techniques. The valuation techniques take into account the relevant underlying parameters including
foreign currency involved, interest rates, yield curves, volatilities, contracts duration etc. Financial assets - measured at fair value
Investments
Operating fixed assets and Land, buildings and non-banking assets acquired in satisfaction of claims are revalued on a periodic basis Federal Government Securities 979,926,866 - 979,926,866 - 979,926,866
Non-banking assets using professional valuers. The valuation is based on their assessment of the market value of the assets. Shares 20,510,813 20,510,813 - - 20,510,813
acquired in satisfaction of The effect of changes in the unobservable inputs used in the valuations cannot be determined with Non-Government Debt Securities 2,858,620 - 2,858,620 - 2,858,620
claims certainty. Accordingly, a qualitative disclosure of sensitivity has not been presented in these consolidated Foreign Securities 7,474,190 - 7,474,190 - 7,474,190
financial statements.
Financial assets - disclosed but not measured at fair value -
Investments (HTM, AFS, unlisted ordinary
The Group's policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change in
shares,and associates) 25,447,046 - - - -
circumstances that caused the transfer occurred. There were no transfers between levels 1 and 2 during the period.
Cash and balances with treasury banks 132,053,041 - - - -
(a) Financial instruments in level 1 Balances with other banks 29,011,521 - - - -
Financial instruments included in level 1 comprise of investments in listed ordinary shares and units of mutual funds. Lendings to financial institutions 17,968,243 - - - -
Advances 547,685,708 - - - -
(b) Financial instruments in level 2
Other assets 52,518,097 - - - -
Financial instruments included in level 2 comprise of Sukuk Bonds, Pakistan Investment Bonds, Market Treasury Bills, Term Finance
Non - Financial Assets measured at fair value
certificates, FX options, Cross Currency Swaps, Interest Rate Swaps and Forward Exchange Contracts.
(c) Financial instruments in level 3 Non-banking assets 4,036,914 - 4,036,914 - 4,036,914
-
Currently, no financial instruments are classified in level 3. Off-balance sheet financial instruments
- measured at fair value --
Forward purchase of foreign exchange 172,137,589 - 4,011,602 - 4,011,602
Forward sale of foreign exchange 155,508,653 - 4,240,748 - 4,240,748
Derivatives purchase 2,158,111 - 517,033 - 517,033
Derivatives sale 2,313,272 - 513,343 - 513,343
58 59
60
36 SEGMENT INFORMATION
36.1 Segment details with respect to business activities
The segment analysis with respect to business activity is as follows:
Un audited
Half Year ended June 30, 2021
Consumer Corporate International Asset
Retail Banking Treasury Islamic Banking Others Sub-total Eliminations Total
banking Banking Banking Management
----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------
Profit & Loss
Net mark-up/return/profit (17,518,820) 1,292,992 9,488,524 37,676,979 609,359 2,132,368 (2,964) 53,302 33,731,740 - 33,731,740
Inter segment revenue - net 36,173,493 (265,883) (7,312,833) (32,255,351) (58,971) - - 3,719,545 - - -
Non mark-up / return / interest income 3,280,854 1,227,386 1,680,845 2,192,578 423,629 342,933 450,158 934,059 10,532,442 - 10,532,442
Total Income 21,935,527 2,254,495 3,856,536 7,614,206 974,017 2,475,301 447,194 4,706,906 44,264,182 - 44,264,182
Segment direct expenses 11,733,247 841,928 331,985 216,929 580,590 2,353,939 227,405 4,331,816 20,617,839 - 20,617,839
Inter segment expense allocation - - - - - - - - - - -
Total expenses 11,733,247 841,928 331,985 216,929 580,590 2,353,939 227,405 4,331,816 20,617,839 - 20,617,839
Provisions 1,243,978 42,413 (83,724) (506,925) 90,918 (22,693) (2,763,875) (1,999,908) - (1,999,908)
Profit before tax 8,958,302 1,370,154 3,608,275 7,904,202 302,509 144,055 219,789 3,138,965 25,646,251 - 25,646,251
Balance Sheet
Cash & Bank balances 66,642,041 331,057 202,138 66,905,744 18,188,087 16,460,443 43,929 4,125,203 172,898,642 - 172,898,642
Investments - - 7,996,236 1,063,495,893 12,315,277 29,790,672 1,324,355 4,087,958 1,119,010,391 - 1,119,010,391
Net inter segment lending 1,176,501,277 - - - - - - 193,636,474 1,370,137,751 (1,370,137,751) -
Lendings to financial institutions - - - 3,373,718 29,120,496 1,000,000 - - 33,494,214 - 33,494,214
Advances - performing 88,921,889 30,960,301 317,927,533 - 17,650,057 82,247,996 2,378 920,479 538,630,633 - 538,630,633
- non performing 292,668 103,700 2,382 - 4,898,583 77,783 - 878,678 6,253,794 - 6,253,794
Others 35,636,437 1,913,413 22,014,274 14,820,161 3,514,123 11,728,335 965,699 35,389,591 125,982,033 - 125,982,033
Total Assets 1,367,994,312 33,308,471 348,142,563 1,148,595,516 85,686,623 141,305,229 2,336,361 239,038,383 3,366,407,458 (1,370,137,751) 1,996,269,707
Borrowings 64,484,923 - 12,163,954 59,842,762 2,771,524 7,568,842 - 516,597 147,348,602 - 147,348,602

Deposits & other accounts 1,285,283,528 21,494,863 70,798,768 - 63,607,522 114,971,198 - 10,856 1,556,166,735 - 1,556,166,735
Net inter segment borrowing - 7,757,087 248,314,174 1,087,933,853 13,748,115 10,781,393 1,603,129 - 1,370,137,751 (1,370,137,751) -
Others 18,225,861 4,056,521 16,865,667 818,901 5,559,462 7,983,796 733,232 56,961,756 111,205,196 - 111,205,196
Total liabilities 1,367,994,312 33,308,471 348,142,563 1,148,595,516 85,686,623 141,305,229 2,336,361 57,489,209 3,184,858,284 (1,370,137,751) 1,814,720,533
Equity - - - - - - - 181,549,174 181,549,174 - 181,549,174
Total Equity & liabilities 1,367,994,312 33,308,471 348,142,563 1,148,595,516 85,686,623 141,305,229 2,336,361 239,038,383 3,366,407,458 (1,370,137,751) 1,996,269,707
Contingencies & Commitments 61,877,293 - 310,113,602 308,118,637 5,702,184 29,544,075 - 29,812,656 745,168,447 - 745,168,447
Notes To The Consolidated Condensed Interim Financial Statements (Un-audited)
Un audited
Half Year ended June 30, 2020
Consumer Corporate International Asset
Retail Banking Treasury Islamic Banking Others Sub-total Eliminations Total
banking Banking Banking Management
----------------------------------------------------------------------Rupees in '000----------------------------------------------------------------------
Profit & Loss
Net mark-up/return/profit (27,559,260) 1,413,318 17,388,362 44,012,291 758,146 2,191,922 (5,347) 53,383 38,252,815 - 38,252,815
Inter segment revenue - net 51,405,698 (341,750) (14,511,898) (40,745,318) (40,431) - - 4,233,699 - - -
Non mark-up / return / interest income 3,001,626 839,091 1,560,124 1,081,216 389,622 333,032 362,326 472,269 8,039,306 - 8,039,306
Total Income 26,848,064 1,910,659 4,436,588 4,348,189 1,107,337 2,524,954 356,979 4,759,351 46,292,121 - 46,292,121
Segment direct expenses 10,709,498 734,317 291,724 205,675 658,988 2,274,495 202,921 4,291,383 19,369,001 - 19,369,001
Inter segment expense allocation - - - - - - - - - - -
Total expenses 10,709,498 734,317 291,724 205,675 658,988 2,274,495 202,921 4,291,383 19,369,001 - 19,369,001
Provisions 60,374 80,643 132,357 116,820 69,294 114,237 - 3,502,297 4,076,022 - 4,076,022
Profit before tax 16,078,192 1,095,699 4,012,507 4,025,694 379,055 136,222 154,058 (3,034,329) 22,847,098 - 22,847,098
Balance Sheet Audited December 31, 2020

Cash & Bank balances 58,362,119 317,242 394,030 64,577,425 21,166,578 14,868,799 25,853 1,352,516 161,064,562 - 161,064,562
Investments - - 10,578,310 978,209,256 14,571,071 27,617,997 1,269,444 3,971,457 1,036,217,535 - 1,036,217,535
Net inter segment lending 1,050,376,236 - - - - - - 202,001,071 1,252,377,307 (1,252,377,307) -
Lendings to financial institutions - - - 6,137,258 11,002,195 828,790 - - 17,968,243 - 17,968,243

Advances - performing 94,735,206 26,845,772 313,362,719 - 21,361,572 84,165,115 5,260 432,897 540,908,541 - 540,908,541
- non performing 171,804 177,613 2,382 - 4,973,954 731,076 - 720,338 6,777,167 - 6,777,167
Others 35,621,546 2,370,727 23,382,913 12,206,991 4,577,833 12,079,087 986,042 37,115,208 128,340,347 - 128,340,347
Total Assets 1,239,266,911 29,711,354 347,720,354 1,061,130,930 77,653,203 140,290,864 2,286,599 245,593,487 3,143,653,702 (1,252,377,307) 1,891,276,395
Borrowings 58,910,004 - 10,694,773 90,718,570 3,330,124 20,596,773 - 327,096 184,577,340 - 184,577,340

Deposits & other accounts 1,147,251,222 21,263,015 65,961,390 - 55,009,174 99,253,160 - - 1,388,737,961 - 1,388,737,961
Net inter segment borrowing - 4,816,853 252,358,835 969,573,590 13,301,145 10,727,772 1,599,112 - 1,252,377,307 (1,252,377,307) -
Others 33,105,685 3,631,486 18,705,356 838,770 6,012,760 9,713,159 687,487 52,275,008 124,969,711 - 124,969,711
Total liabilities 1,239,266,911 29,711,354 347,720,354 1,061,130,930 77,653,203 140,290,864 2,286,599 52,602,104 2,950,662,319 (1,252,377,307) 1,698,285,012
Equity - - - - - - - 192,991,383 192,991,383 - 192,991,383

Total Equity & liabilities 1,239,266,911 29,711,354 347,720,354 1,061,130,930 77,653,203 140,290,864 2,286,599 245,593,487 3,143,653,702 (1,252,377,307) 1,891,276,395
Contingencies & Commitments 55,974,597 - 288,001,956 320,068,131 20,930,195 29,021,132 - 26,379,292 740,375,303 - 740,375,303
36.2 Transactions between reportable segments are based on an appropriate transfer pricing mechanism using agreed rates. Furthermore, segment assets and liabilities include inter segment balances. Costs which
are not allocated to segments are included in the Head office. Income taxes are managed at bank level and are not allocated to operating segments.
61
62
37 RELATED PARTY TRANSACTIONS
The Group has related party relationship with its associates, employee benefit plans, its directors and key management personnel and their close family members.
The Group enters into transactions with related parties in the ordinary course of business and on substantially the same terms as for comparable transactions with person of similar standing. Contributions to and accruals
in respect of staff retirement benefits and other benefit plans are made in accordance with the actuarial valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance
with the terms of their appointment.
Details of transactions with related parties during the period, other than those which have been disclosed elsewhere in these consolidated condensed interim financial statements are as follows:

Key Key
Directors Management Associates Directors Management Associates
Parties Parties
Personnel Personnel
--------------------------------------------------------------------(Ru pees in '000)---------------------------------------------------------------------
Investments
Opening balance - - 4,479,360 254,253 - - 4,275,658 254,253
Equity method adjustments - - 221,498 - - - 203,702 -
Closing balance - - 4,700,858 254,253 - - 4,479,360 254,253
Provision for diminution in value of investments - - - 5,000 - - - 5,000
Advances
Opening balance 1,042 166,757 356,898 152,147 1,722 129,048 - 339,520
Addition / exchange adjustment during the period / year 7,250 26,714 - 305,457 18,202 60,257 356,898 336,695
Repaid / exchange adjustment during the period / year (7,103) (38,144) (89,225) (417,191) (18,882) (21,947) - (303,183)
Transfer in / (out) - (24,462) - - - (601) - (220,885)

Closing balance 1,189 130,865 267,673 40,413 1,042 166,757 356,898 152,147
Provision held against advances - - - - - - - -

Key Key
Parties Parties
Personnel Personnel
----------------------------------------------------------------------(Ru pees in '000)-----------------------------------------------------------------------------

Other Assets
Markup receivable - 2,430 693 1,637 - 3,149 895 2,382
Advances, deposits, advance rent and other prepayments - - 184,941 28,987 - - 310,504 27,835
Receivable from Pension Fund - - - 3,007,326 - - - 3,370,179
Unrealized (loss)/ gain on forward foreign exchange contracts - outstanding - - - - - - - -
Provision held against other assets - - - - - - - -
Borrowings
Opening balance - - - 77,139 - - - 69,166

Borrowings / exchange adjustment during the period / year - - - 13,677 - - - 7,973
Closing balance - - - 90,816 - - - 77,139
Deposits and other accounts

Opening balance 302,130 138,566 4,815,780 4,869,941 602,381 140,761 3,657,552 4,179,849
Received during the period / year
2,296,862 756,353 26,519,401 58,604,396 669,282 1,189,437 44,628,206 76,375,987

Withdrawn during the period / year (2,121,148) (720,088) (27,291,714) (50,146,921) (969,533) (1,163,832) (43,469,978) (75,154,115)
Transfer in / (out) - net - (701) - 27 - (27,800) - (531,780)
Closing balance 477,844 174,130 4,043,467 13,327,443 302,130 138,566 4,815,780 4,869,941
Other Liabilities
Markup payable 112 690 5,521 3,031 50 100 42,549 10,654
Accrued expenses and other payable - - 61,046 20 - - 62,624 32
Payable to MCB Employee Security Services - - - 29,405 - - - 27,031
Advance received against sale of property - - - - - - - -
Contingencies and Commitments

Letter of Credit - - - 3,660,289 - - - 1,361,776

Forward foreign exchange contracts (Notional) - - - - - - - -
Bank guarantee - - 10,390 494,360 - - 10,512 394,495
63
64
Unaudited June 30, 2021 Unaudited June 30, 2020
Key Key
Parties Parties
Personnel Personnel
------------------------------------------------------------------------(Ru pees in '000)----------------------------------------------------------------------
Income
Markup / return / interest earned 23 7,985 1,491 3,917 - 6,705 15 11,229
Fee and commission income - - 424,967 2,097 - - 418,858 836
Dividend income - - 87,500 50,645 - - 105,000 7,933
Gain / (loss) on forward foreign exchange contracts matured during the period - - - 17,609 - - - 43,062
Net gain / (loss) on sale of securities 3 - 32 210 72 33 495 3,553
Gain on sale of fixed assets - 72 - - - 17 - -
Rent income - - 5,685 1,140 - - 4,455 1,140
Expense
Markup / return / interest expensed 8,927 1,487 61,727 187,476 22,774 1,202 110,421 108,478
- - - - - - - -
Other Operating expenses
Clearing expenses paid to NIFT - - - 76,383 - - - 82,632
Contribution to provident fund - - - 216,847 - - - 197,239
Rent expenses - - 21,688 23,263 - - 21,299 15,121
Cash sorting expenses - - - 54,562 - - - 56,415
Stationery expenses - - - 128,424 - - - 121,204
Security guards expenses - - - 173,829 - - - 165,324
Remuneration to key executives and non-executive directors fee 114,483 326,633 - - 108,475 328,036 - -
Outsourcing service expenses - - 106,273 - - - 138,301 -

Donation during the year - - - - - - - 95,000
E-dividend processing fee and CDC charges - - - 3,100 - - - 2,638
Travelling Expenses - - - 22,681 - - - 17,456
Hotel stay expenses - - - 63 - - - 3,110
Repair & Maintenance Charges - - - 1,063 - - - 938
Advertisement Expenses - - - - - - - 6,264
Miscellaneous expenses and payments - - - 1,143 - - - 889
Insurance premium-net of refund - - 240,393 - - - 270,375 -
Insurance claim settled - - 11,741 - - - 18,232 -
Other Transactions
Proceeds from sale of fixed assets - 72 - - - 18 - -
Purchase of fixed assets - - 14,624 12,810 - - 3,277 -
Sale of foreign currency - - - - - - - -
Purchase of foreign currency - - - - - - - -
Payments against home remittances - - - - - - - -

Reimbursement of other expenses - - - - - - - -
Sale of government securities 396,165 4,131 4,303,668 2,809,322 188,884 64,784 3,154,645 1,718,066
Purchase of government securities - - 10,842,126 2,463,278 19,827 - 631,712 546,800
Forward exchange contracts matured during the period - - - 2,838,228 - - - 10,494,150
The Chairman has been provided with free use of the Group's maintained car. The Chief Executive and certain executives are provided with free use of the Group's maintained cars and household equipment in
accordance with the terms of their employment.
Total
Credit Risk
Market Risk
Leverage Ratio
Total Exposures
Operational Risk
Capital Adequacy
Eligible Tier 2 Capital
Eligible Tier-1 Capital

Leverage Ratio (LR):
Total Net Cash Outflow

Liquidity Coverage Ratio
Net Stable Funding Ratio

Total Eligible Tier 1 Capital
Paid-up capital (net of losses)
Total Required Stable Funding

Total Available Stable Funding
Total Capital Adequacy Ratio
Total High Quality Liquid Assets

Tier 1 Capital Adequacy Ratio
Capital Adequacy Ratio (CAR):
Risk Weighted Assets (RWAs):

Liquidity Coverage Ratio (LCR):
Net Stable Funding Ratio (NSFR):

Total Eligible Capital (Tier 1 + Tier 2)
Eligible Additional Tier 1 (ADT 1) Capital
Minimum Capital Requirement (MCR):
Eligible Common Equity Tier 1 (CET 1) Capital
Common Equity Tier 1 Capital Adequacy ratio

38 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS

Unaudited
-
June 30, 2021
1,308,436,013
1,098,285,227
2,450,843,720
720,550,201
462,016,872
141,778,224
958,013,946
148,348,258
154,254,584
173,986,139
141,778,224
141,778,224
11,850,600
32,207,915
655,411,104
5.78%
18.16%
14.80%
14.80%
181.59%
237.72%
2020
Audited
----------Rupees in '000-------
-
December 31,
1,212,910,470
2,323,456,613
715,405,667
415,665,992
962,045,524
149,417,496
945,154,076
148,348,258
128,392,302
668,413,516
186,127,497
149,417,496
149,417,496
11,850,600
36,710,001
6.43%
19.69%
15.81%
15.81%
169.54%
231.45%
65
39 ISLAMIC BANKING BUSINESS The profit and loss account of the Group's Islamic banking branches for the three months period ended June 30, 2021 is as
follows:
The Group through a wholly owned subsidiary (MCB Islamic Bank Limited ) is operating 173 branches in Pakistan Quarter Ended Half Year Ended
(December 31, 2020: 187 branches). The statement of financial position of the Group's Islamic Banking Business as at
June 30, 2021 is as follows: April 01, 2021 April 01, 2020 January 01, January 01,
Audited Note to June 30, to June 30, 2021 to June 2020 to June
Unaudited 2021 2020 30, 2021 30, 2020
December 31,
June 30, 2021
Note 2020 ------------------------------Rupees in '000------------------------------
----------Rupees in '000-------
ASSETS Profit / return earned 39.6 2,248,685 2,671,478 4,495,274 5,233,242
Profit / return expensed 39.7 1,151,547 1,436,452 2,362,906 3,041,319
Cash and balances with treasury banks 10,055,928 9,872,197 Net spread earned 1,097,138 1,235,026 2,132,368 2,191,923
Balances with other banks 6,404,515 4,996,602
OTHER INCOME
Due from financial institutions 39.1 1,000,000 828,790
Investments - net 39.2 29,790,672 27,617,997 Fee and commission income 100,331 69,063 192,897 141,987
Dividend income 25,141 10,033 37,556 17,799
Islamic financing and related assets - net 39.3 82,325,779 84,896,191
Foreign exchange income 47,504 (3,756) 28,868 105,543
Fixed assets 5,088,190 5,548,894 Gain on securities - 9,226 3,602 9,590
Intangible assets 591,482 639,428 Other income 71,743 55,226 80,010 58,113
Total other income 244,719 139,792 342,933 333,032
Deferred tax assets - net 840,939 874,878
Other assets - net 6,050,237 5,895,909 Total income 1,341,857 1,374,818 2,475,301 2,524,955
Total Assets 142,147,742 141,170,886
OTHER EXPENSES
LIABILITIES
Operating expenses 1,236,755 1,177,191 2,311,415 2,268,619
Bills payable 1,579,951 2,470,821 Workers welfare fund 2,692 4,145 5,429 5,816
Other charges 37,095 - 37,095 60
Due to financial institutions 7,568,842 20,596,773
Total other expenses 1,276,542 1,181,336 2,353,939 2,274,495
Deposits and other accounts 39.4 114,971,198 99,253,161
Liabilities against assets subject to finance lease - - Profit before provisions 65,315 193,482 121,362 250,460
Provisions and write offs - net 12,869 79,812 (22,693) 114,236
Sub-ordinated debts - -
Extra ordinary / unusual items - - - -
Deferred tax liabilities - net - -
Other liabilities 7,246,358 8,122,359 PROFIT BEFORE TAXATION 52,446 113,670 144,055 136,224
131,366,349 130,443,114
Taxation 47,548 69,721 84,387 86,073
NET ASSETS 10,781,393 10,727,772
PROFIT AFTER TAXATION 4,898 43,949 59,668 50,151

REPRESENTED BY
Audited
Share capital 11,550,000 11,550,000 Unaudited
December 31,
June 30, 2021
Reserves 80,041 68,107 2020
39.1 DUE FROM FINANCIAL INSTITUTIONS
Surplus on revaluation of assets - net of tax 466,747 473,316
Secured
Accumulated loss (1,315,395) (1,363,651)
Bai Muajjal receivable - with State Bank of Pakistan - 828,790
10,781,393 10,727,772
Unsecured
CONTINGENCIES AND COMMITMENTS 39.5 Musharaka arrangements 1,000,000 -
1,000,000 828,790
66 67
Audited Audited
Unaudited June 30, 2021 December 31, 2020
Unaudited December 31,
Cost/ Provision for Surplus / Carrying Cost Provision for Surplus / Carrying June 30, 2021 2020
Amortised cost diminution (Deficit) Value /Amortised cost diminution (Deficit) Value
39.2 Investments by type: ----------Rupees in '000-------
-------------------------------------------------------------Rupees in '000-------------------------------------------------------------
Available-for-sale securities 39.5 Contingencies and Commitments
Federal Government securities 22,491,997 - 10,769 22,502,766 22,503,692 - (59,578) 22,444,114
Shares 4,060,000 961,431 229,997 3,328,566 1,815,977 1,039,436 292,987 1,069,528 -Guarantees 9,653,494 8,000,674
Non Government securities 1,006,500 - 22,013 1,028,513 1,044,000 - 14,528 1,058,528 -Commitments 19,439,818 20,583,025
27,558,497 961,431 262,779 26,859,845 25,363,669 1,039,436 247,937 24,572,170
-Other contingent liabilities 450,763 437,433
29,544,075 29,021,132
Federal Government securities 2,700,827 - - 2,700,827 2,700,827 - - 2,700,827
Non Government securities 230,000 - - 230,000 345,000 - - 345,000 Half Year Half Year
2,930,827 - - 2,930,827 3,045,827 - - 3,045,827 ended June ended June
30, 2021 30, 2020
Total Investments 30,489,324 961,431 262,779 29,790,672 28,409,496 1,039,436 247,937 27,617,997
----------Rupees in '000-------
Audited 39.6 Profit/Return Earned of Financing, Investments and Placement
Unaudited December 31,
June 30, 2021 2020 Profit earned on:
39.3 Islamic financing and related assets ----------Rupees in '000------- Financing 3,336,989 3,858,022
Murabaha 14,069,965 12,055,820 Investments 1,083,328 1,087,092
Musawamah - - Musharaka arrangements with financial institutions 40,426 164,561
Istisna 3,289,789 3,455,789 Deposits with financial institutions 34,531 123,567
Salam - - 4,495,274 5,233,242
Ijarah 2,422,762 2,815,368 39.7 Profit on Deposits and other Dues Expensed
Running Musharaka 36,425,515 40,757,574
Deposits and other accounts 1,762,323 2,635,071
Diminishing Musharaka 25,035,072 24,693,571
Musharaka arrangements with the State Bank of Pakistan under IERS 40,310 29,194
Staff finance 1,200,132 1,184,311
Musharaka arrangements with other financial institutions 372,002 171,847
Gross Islamic financing and related assets 82,443,235 84,962,433
Musharaka arrangements with other institution 7,747 7,900
Less: provision against Islamic financings
- Specific (35,684) (25,395)
Unwinding of liability against ROU asset 180,524 197,307
2,362,906 3,041,319
- General (81,772) (40,847)
(117,456) (66,242) Audited
Islamic financing and related assets - net of provision 82,325,779 84,896,191 Unaudited December 31,
39.4 Deposits June 30, 2021 2020
Audited ----------Rupees in '000-------
Unaudited December 31, 39.8 Islamic Banking Business Unappropriated Profit
June 30, 2021 2020 Opening Balance (1,363,651) (1,531,969)
Customers ----------Rupees in '000-------
Movement during the period / year
Current deposits 36,693,232 30,677,500 Islamic Banking profit for the period / year 144,055 393,079
Savings deposits 43,276,311 41,802,208 Taxation (84,387) (184,763)
Term deposits 23,140,273 17,940,868 Other Adjustments (11,412) (39,998)
Others 5,467,482 2,693,912 48,256 168,318
108,577,298 93,114,488
Financial Institutions Closing Balance (1,315,395) (1,363,651)
Current deposits 136,544 148,529

Savings deposits 1,755,356 2,463,644
Term deposits 4,502,000 3,526,500
6,393,900 6,138,673
114,971,198 99,253,161
68 69

40 EVENTS AFTER THE REPORTING DATE
The Board of Directors in its meeting held on August 11, 2021 has announced a cash dividend in respect of half year ended June 30, 2021
of Rs.5.00 per share (June 30, 2020: Rs. Nil per share). These consolidated condensed interim financial statements for the period ended
June 30, 2021 do not include the effect of these appropriations which will be accounted for subsequent to the period end.
41 GENERAL
Comparative figures have been re-arranged and reclassified for comparison purposes. Figures have been rounded off to the nearest
thousand of rupees unless otherwise stated.
42 DATE OF AUTHORIZATION FOR ISSUE

These consolidated condensed interim financial statements were authorized for issue by the Board of Directors of the Bank in their
meeting held on August 11, 2021.
70 President / CEO Chief Financial Officer Director Director Director

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a more prosperous and secure future.

Chief Financial Officer: Mr. Hammad Khalid

Company Secretary: Mr. Fida Ali Mirza

Auditors: M/s. A. F. Ferguson & Co.

Legal Advisors: M/s. Khalid Anwer & Co.

Registered /Principal Office: MCB Building, 15-Main Gulberg,

Contact us: UAN: + 92 42 111 000 622

Registrar's and Share Registration Office(s): Head Office:

Appreciation and Acknowledgements

For and on behalf of the Board of Directors,

Imran Maqbool Muhammad Ali Zeb

6 August 11, 2021 7

Foreign exchange income 770,927 702,520 1,395,377 1,427,687

Gain/ (loss) on securities 28 134,792 (138,186) 484,545 (67,047)

NON MARK-UP / INTEREST EXPENSES

Operating expenses 30 8,559,655 8,031,132 17,195,607 16,192,564

Profit before provisions 11,913,878 14,610,458 23,012,469 26,217,857

Taxation 33 5,784,497 4,699,025 10,270,479 9,044,936

PROFIT AFTER TAXATION 7,952,598 6,690,398 14,742,672 13,209,424

Transactions with owners, recorded directly in equity

Transfer to statutory reserve - - - - 1,582,788 - - - (1,582,788) -

Transfer in respect of incremental depreciation from surplus on revaluation of

Transfer to statutory reserve - - - - 1,474,267 - - - (1,474,267) -

Salman Khalid Butt

Transactions with owners, recorded directly in equity

Muhammad Ali Zeb

Income tax paid

Defined benefits paid

Workers Welfare Fund

Investments in Intangible assets

Investments in operating fixed assets

Net cash flow from operating activities

Net cash flow used in investing activities

Net cash flow used in financing activities

Increase in cash and cash equivalents

Increase / (decrease) in operating liabilities

Other liabilities (excluding current taxation)

Proceeds from sale of operating fixed assets

Net investments in held-to-maturity securities

Net investments in available-for-sale securities

Cash and cash equivalents at end of the period

Cash and cash equivalents at beginning of the period

Chief Financial Officer

Effects of exchange rate changes on cash and cash equivalents

Unrealized loss / (gain) on revaluation of investments - Held For Trading

June 30, 2021

Muhammad Ali Zeb

June 30, 2020

5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Call / clean money lendings

With National Bank of Pakistan in

Local currency current accounts

BALANCES WITH OTHER BANKS

LENDINGS TO FINANCIAL INSTITUTIONS

Repurchase agreement lendings (Reverse Repo)

Cost / Provision for Surplus / Cost / Provision for Surplus /

Provincial Government Securities 118 (118) - - 118 (118) - -

- Market Treasury Bills 14,022,219 91,279,273