Bafl Q1 23

Q U A R T E R LY R E P O R T - M A R C H 3 1 , 2 0 2 3
(UN-AUDITED)
The Way Forward

Contents
Company Information 2
Directors’ Review - English 6
Directors’ Review - Urdu 11
Unconsolidated Condensed Interim Financial Statements 12
Unconsolidated Condensed Interim Statement of Financial Position 13
Unconsolidated Condensed Interim Profit and Loss Account (Un-audited) 14
Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited) 15
Unconsolidated Condensed Interim Statement of Changes in Equity (Un-audited) 16
Unconsolidated Condensed Interim Cash Flow Statement (Un-audited) 17
Notes to and Forming Part of the Unconsolidated Condensed Interim Financial

Statements (Un-audited) 18
Consolidated Condensed Interim Financial Statements 51
Consolidated Condensed Interim Statement of Financial Position 52
Consolidated Condensed Interim Profit and Loss Account (Un-audited) 53
Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited) 54
Consolidated Condensed Interim Statement of Changes in Equity (Un-audited) 55
Consolidated Condensed Interim Cash Flow Statement (Un-audited) 56
Notes to and Forming Part of the Consolidated Condensed Interim Financial

Statements (Un-audited) 57
QUARTERLY REPORT - MARCH 31, 2023 01

Company Information
Board of Directors
HH Sheikh Nahayan Mabarak Al Nahayan
Chairman/Director
Abdulla Nasser Hawaileel Al Mansoori

Director
Abdulla Khalil Al Mutawa

Director
Khalid Mana Saeed Al Otaiba

Director
Khalid Qurashi
Director
Dr. Gyorgy Tamas Ladics

Director
Dr. Ayesha Khan

Director
Atif Aslam Bajwa

President/CEO and Director
02 BANK ALFALAH
Senior Management Team
Atif Aslam Bajwa Chief Financial Officer
President and Chief Executive Officer Anjum Hai
Aasim Wajid Jawad

Group Head, Strategy, Transformation and Customer Experience
Company Secretary
Anjum Hai Muhammad Akram Sawleh
Chief Financial Officer
Faisal Farooq Khan Chief Internal Auditor

Group Head, Human Resource and Learning
Tahir Khurshid
Faisal Rabbani
Chief Risk Officer
Auditors
Haroon Khalid A. F. Ferguson & Co.
Group Head, Compliance and Control Chartered Accountants
Khawaja Muhammad Ahmad

Group Head, Operations and Corporate Services
Registered/Head Office
Mehreen Ahmed B. A. Building
Group Head, Retail Banking I. I. Chundrigar Road
Karachi, Pakistan
Mohib Hasan Khan bankalfalah.com
Chief Information Officer
Muhammad Akram Sawleh

Company Secretary and Group Head, Legal and Corporate Affairs Share Registrar
F. D. Registrar Services (Pvt.) Limited
1705, 17th Floor, Saima Trade Tower-A
Dr. Muhammad Imran I. I. Chundrigar Road
Group Head, Islamic Banking
Karachi, Pakistan.
Muhammad Yahya Khan
Group Head, Digital Banking
Pervez Shahbaz Khan

Legal Advisor
Mandviwalla & Zafar
Group Head, Treasury and Financial Markets Advocates and Legal Consultants
Saad ur Rahman Khan

Group Head, Corporate, Investment Banking and International Business
Tahir Khurshid
Group Head, Audit and Inspection
Zahid Anjum
Group Head, Special Assets Management

Board Committees
Board Audit Committee (BAC) Board Risk Management Committee (BRMC)
Khalid Qurashi Khalid Mana Saeed Al Otaiba

Chairman Chairman
Abdulla Khalil Al Mutawa Abdulla Khalil Al Mutawa

Member Member
Khalid Mana Saeed Al Otaiba Khalid Qurashi

Member Member
Dr. Ayesha Khan Atif Aslam Bajwa

Member Member
Mr. Tahir Khurshid Mr. Farhan Ali

Secretary Secretary
Board Human Resources, Remuneration & Board Compensation Committee (BCC)

Nominations Committee (BHR&NC)
Dr. Ayesha Khan Dr. Ayesha Khan

Chairperson Chairperson

Member Member
Khalid Mana Saeed Al Otaiba Khalid Mana Saeed Al Otaiba

Member Member
Dr. Gyorgy Tamas Ladics Mr. Muhammad Akram Sawleh

Member Secretary
Khalid Qurashi
Member
Mr. Muhammad Akram Sawleh

Secretary
04 BANK ALFALAH
Board Committees
Board Strategy and Finance Committee Board Crisis Management Committee
(BS&FC) (BCMC)

Chairman Chairman
Khalid Mana Saeed Al Otaiba Khalid Mana Saeed Al Otaiba

Member Member
Dr. Gyorgy Tamas Ladics Khalid Qurashi

Member Member
Dr. Ayesha Khan Dr. Ayesha Khan

Member Member
Khalid Qurashi Dr. Gyorgy Tamas Ladics

Member Member
Atif Aslam Bajwa Atif Aslam Bajwa

Member Member
Mr. Aasim Wajid Jawad Mr. Muhammad Akram Sawleh

Secretary Secretary
Board Information Technology Board Real Estate Committee (BREC)

Committee (BITC)
Dr. Gyorgy Tamas Ladics Mr. Abdulla Khalil Al Mutawa

Chairman Chairman
Abdulla Khalil Al Mutawa Mr. Khalid Mana Saeed Al Otaiba

Member Member
Khalid Mana Saeed Al Otaiba Mr. Atif Aslam Bajwa

Member Member
Atif Aslam Bajwa Mr. Muhammad Akram Sawleh

Member Secretary
Mr. Aasim Wajid Jawad

Secretary

Directors’ Review
On behalf of the Board of Directors, we are energy (up 48.8% YoY) prices, reflecting
pleased to present the unconsolidated condensed domestic currency devaluation, elevated
interim financial statements of Bank Alfalah commodity prices, and higher input costs. Core
Limited for the quarter ended March 31, 2023. inflation (non-food non-energy) also crossed
the 20% YoY growth mark, indicating
broad-based inflationary pressures that are
Economic Review likely to recede at a slow pace. The State Bank
of Pakistan continued the monetary tightening
First quarter 2023 continued to present significant cycle as it increased the policy rate to an
challenges: political instability in the country, global all-time high level of 21% in an attempt to rein
economic slowdown, soaring inflation pressures, in the record high inflationary trend.
currency devaluation, and supply chain imbalance.
The decision making on economic conditions Administrative measures by SBP have paid off. The
continued to be influenced by politics during the current account balance improved due to the
Election Year. With a stalled IMF program and trimmed trade deficit. During 8M FY2023, the
vulnerable forex reserves amid looming debt import bill declined by 21% YoY to USD 37.4
repayments, the Pakistani rupee continued to billion, while exports were lower by 9.7% at USD
depreciate, and inflation touched multi-decade high 18.6 billion, resulting in a trade deficit that
levels. Growth momentum significantly slowed reduced by 29.8% to USD 18.7 billion. However,
down, resulting in a serious blow to income levels workers’ remittances also slowed down by 10.9%
and purchasing power. During the period, Moody’s to USD 18.0 billion. The current account deficit
Investor Service and Fitch further downgraded nevertheless contracted by 68% to the
Pakistan’s sovereign credit rating by one notch to manageable level of USD 3.9 billion in 8M FY2023.
Caa3 and CCC- respectively.
Pakistan’s fiscal deficit for 1H FY2023 was
Foreign exchange reserves dropped to USD 4.2 recorded at 2.0% of GDP, while the primary
billion as of Mar 31, 2023 with limited inflows balance reported a surplus of 0.2%. However, with
and higher debt repayments. Arranging foreign sustained inflation, higher interest rates, and
inflows to finance the current account and debt below-target tax collection amid economic
repayments remains the primary challenge for slowdown, the fiscal deficit is expected to remain
the Government, particularly as the IMF program elevated in the coming quarters.
remains unascertained amid the economic
crisis. Reflecting the same, the Pakistani rupee Reflecting the weak economic scenario and
remained extremely volatile, depreciating by heated politics, the KSE100 index declined by
20% against the USD during 1Q 2023. Recent 1.04% during 1Q 2023.
inflows from China and the announcement by
Saudi Arabia to support Pakistan are welcome Going forward, while economic challenges are
developments, however the IMF program likely to persist, serious efforts are needed to
remains critical for sustainability. implement reforms alongside creating fiscal
space for development. The revival of the IMF
Inflation touched 35.4% (YoY) in Mar 2023, program remains essential to restore
mainly driven by food (up 48.4% YoY) and confidence in the economy.
06 BANK ALFALAH
Review of the Bank’s Performance
The highlights of Bank’s financial results for the quarter ended March 31, 2023, are presented as follows:
Financial Position March 31, 2023 December 31, 2022

Rupees in Millions
Shareholders’ Equity 104,139 100,015
Total Assets 2,532,315 2,253,197
Deposits 1,554,035 1,486,845
Advances – net 697,993 732,375
Investments – net 1,283,986 1,114,407
Quarter ended Quarter ended
Financial Performance March 31, 2023 March 31, 2022
Rupees in Millions
Net Interest Income and Non-Markup Income 34,489 18,671
Non-Markup Expenses 14,993 10,444
Provisions and write offs (net) 522 387
Profit before tax 18,974 7,839
Profit after tax 10,743 5,019
Basic and Diluted earnings per share – Rupees 6.81 2.82
The first quarter 2023 results reflect strong acquiring income doubled due to phenomenal
growth momentum in line with the Bank’s increase in e-commerce spend and POS merchant
strategy. The bank posted profit after tax of Rs. sale value, which is up by 52%. Trade, guarantees,
10.743 billion for the period ended March 31, 2023 and remittance income also increased on back of
being 114.1% up against same period last year significant volume growth in Rupee terms. The
(SPLY). The Earning Per Share (EPS) stood at Rs. Bank is ranked amongst top three banks in the
6.81 (Mar 2022: Rs. 2.82). Our market share country for home remittance flows. Rich growth in
increased for several of our products and we digital transactions volume and resumption of
continued to make significant investments in charges on interbank fund transfers led to
people and technology while exercising strict increase in alternate delivery channel income.
credit discipline.
The Bank continues to keep a check on expenses
Bank’s revenue increased by 84.7% as compared and manage costs prudently while focusing on
to same period last year. Key contribution was building revenue momentum through expansion
from markup income which grew significantly by without compromising on investments in new
95.5% and stood at Rs. 27.937 billion. The ventures. As a result of the bank’s strategy to
increase in markup income is driven by a open new branches, invest in digital technologies
combination of net earning assets growth and and information technology platforms alongside
re-pricing of the asset book. Non-markup income flood relief donation, PKR depreciation and
stood at Rs. 6.552 billion, higher by 49.5% from inflation related effects led to higher operating
same period last year. FX income increased mainly expenses. During last 15 months, the Bank opened
due to higher market volatility. 100+ new branches, which are helping us in
customer acquisition, deposit mobilization and
Fee and commission income showed a robust hence revenue growth. The Bank is also investing
growth of 33.6% year on year (YoY). Significant in digital technologies with a focus on areas
contributions are from branch banking fee due to where we can deepen our relationships and gain
increase in business activity and number of market share. The best evidence of that success is
customers despite free of charge services offered our market share growth over the last three years.
to the account holders. Combined debit and credit The Bank’s cost to income ratio improved to
card spend increased by 55% with travel, fuel, 42.3% as against 55.1% SPLY, taking support from
grocery and dining spend remained high. Card strong revenue growth.

The bank’s deposits closed at Rs. 1.554 trillion at unparalleled services to our customers while
the end of Mar ‘23, with YoY growth of 31.9%. The reaching a wider audience.
current accounts grew by 24.0% YoY. This is
reflective of the bank’s well thought and applied In alignment with the economic goals of the
strategy of increasing its market share. Government and SBP, and considering
macroeconomic situations, the Bank will assess its
The Bank’s loan book closed at Rs. 731.863 billion, course of action which may include prioritising
while maintaining credit discipline amid consumer space, assisting SMEs in growing their
challenging market fundamentals. As at the business, whilst we continue towards harnessing
quarter end, our gross advances to deposits ratio technology to meet customers’ banking needs,
(ADR) stood at 47.1%. Our underwriting discipline boosting trade volumes and increasing
and rigorous client selection continued to serve penetration in cash management.
us well which reflects in our non-performing loans
ratio which stood at 4.5% despite some prudent To adapt to changing business dynamics, we are
classifications. Further non-performing loans accelerating our digital transformation journey,
remain fully covered with coverage being 103.2%. focusing on re-engineering our business
processes and redesigning customer journeys to
As at March 31, 2023, the Bank remains adequately improve operational efficiencies and TATs. We are
capitalised with CAR at 14.66%. also partnering with fintech companies to
leverage their disruptive technologies and
solutions, gain a technological edge, and
Credit Rating accelerate digital adoption while using our core
competencies.
The Bank has been assigned following ratings by
PACRA: Most importantly, we continue to invest in our
- Entity rating: ‘AA+’ (Double A Plus) for the human capital and cultivate a culture of care
long-term and ‘A1+’ (A-One Plus) for the collaboration, creativity and innovation. By doing
short-term, with Outlook assigned as ‘Stable’. so, we remain confident that Bank Alfalah will
- Instruments rating: Unsecured Tier 1 Capital thrive and grow in the future.
instruments (Term Finance Certificates) of the
Bank have been awarded a credit rating of
‘AA-’ (Double A Minus), with ‘Stable’ Outlook. Acknowledgment
The assigned ratings reflect the Bank’s diversified
operations, healthy financial risk profile, strong On behalf of the Board, we would like to thank the
sponsors, and existing market presence. These State Bank of Pakistan, the Securities and
ratings denote a very low expectation of credit risk, Exchange Commission of Pakistan, the Ministry of
a strong capacity for timely repayment of financial Finance and other regulatory authorities for their
commitments in the long term and the highest continuous guidance and support. At the same
capacity for timely repayment in the short term, time, we would like to express our gratitude to
respectively. our shareholders, our customers and business
partners for their continued patronage.
Future Outlook Over the years, we have laid the foundations to

deliver great value and service to our customers,
Bank Alfalah is strategically positioned for while improving profitability and strengthening
sustainable growth and building long-term our balance sheet. We will remain focused on
shareholder value, even in the face of serving our customers and playing a key role in
macroeconomic challenges. Our focus is to supporting economic recovery. In doing this, we
strengthen our deposit base and grow our market will be mindful of our responsibilities to our staff
share in low-cost deposits. Additionally, we aim to and communities, and of continuing to deliver
expand our domestic footprint, providing high returns to our shareholders.
Atif Aslam Bajwa Khalid Qurashi

President & Chief Executive Officer Director
April 27, 2023
Abu Dhabi
08 BANK ALFALAH
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‫ �‬ ‫ �ز�‬ ‫�‬ ‫ ا‬‫ �‬
‫�‬ ‫�‬ ‫�‬
‫ ‬ ‫��‬
‫� � �‬
‫ �ر� � ‬
‫ �� ‬ ‫ �� ط �� او ر� �� وا� ڈ�ز� � � ا� �‬ ‫�� ا� ڈ�زٹ � � ‬
‫��‬
‫�� ‬ ‫�� ا� � �� ہ � � �‬
‫��‬
‫�‬ ‫ ڈا��‬ ‫ آ��‬ ‫ � � ا� � �‬
‫�� ‬ ‫�ر اور � �‬
‫ ا��‪2023 ،‬‬ ‫‪� 27‬‬
‫ا��‬
‫‪QUARTERLY REPORT - MARCH 31, 2023‬‬ ‫‪09‬‬

‫��‬
‫� � �ر�د� � ��ہ ‬‫�‬
‫�‬ ‫�‬
‫� ��ں �ر� � ذ� � � �‪ :‬‬
‫� ‬ ‫ � � � ‬
‫ �� ‬ ‫�� ‬
‫ �رچ‪ �� 2023 ،‬وا �� ‬
‫‪� 31‬رچ‪2022 ،‬‬ ‫‪� 31‬رچ‪2023 ،‬‬ ‫�� ‬
‫ �ز�‬
‫� �‬
‫ � �‬
‫ � ‬ ‫رو�‬
‫� �‬
‫‪100,015‬‬ ‫‪104,139‬‬ ‫�� رز � � �‬
‫ ا�� ‬
‫‪2,253,197‬‬ ‫‪2,532,315‬‬ ‫ُ� ا�� ‬
‫‪1,486,845‬‬ ‫‪1,554,035‬‬ ‫ ڈ�ز� ‬
‫�‬
‫‪732,375‬‬ ‫‪697,993‬‬ ‫ا�� وا� ۔ ��‬
‫‪1,114,407‬‬ ‫‪1,283,986‬‬ ‫�� ر ��ں ۔ ��‬
‫‪� 31‬رچ‪ � � 2022،‬‬ ‫‪� 31‬رچ‪ � � 2023،‬‬ ‫�� ر�د� ‬

‫�� وا� � �� ‬ ‫�� وا� � �� ‬
‫� �‬
‫ � �‬
‫ � ‬ ‫رو�‬
‫‪18,671‬‬ ‫‪34,489‬‬ ‫�� رك اَپ آ�� اور�ن �رك اَپ آ�� ‬
‫‪10,444‬‬ ‫‪14,993‬‬ ‫ �ن �رك اَپ ا�ا�ت ‬
‫�‬
‫‪387‬‬ ‫‪522‬‬ ‫�و�� اور را� آ� )��(‬
‫‪7,839‬‬ ‫‪18,974‬‬ ‫� از � � � �� ‬
‫‪10,743‬‬ ‫�� از � � � �� ‬
‫� �‬
‫‪5,019‬‬
‫‪2.82‬‬ ‫‪6.81‬‬ ‫��دى اور ڈا�� آ�� ۔ رو� ‬
‫� �‬
‫�‬ ‫��‬
‫س� ا�ا�ت ‬ ‫�� ا�ا�ت ز ��دہ ر�۔ اى �� ‬ ‫�‪ � ،‬ا��‪� ،‬و�ى اور � ‬ ‫ � � � � � �� ط �� ر�ر � ‬ ‫� � �� ‪� �� 2023‬‬
‫ و� �‬ ‫�‬ ‫� ��‬
‫�� رڈ �� ‬ ‫�� و � � ‬
‫ �� ا� ‬ ‫ � �‬ ‫ � � � ��‬ ‫�� ‬ ‫او ر� او ا� � ‬ ‫� ‬
‫� � ‪� 3� 1‬رچ ‪ �� 2023‬وا� �ت � �‬ ‫�� ۔ �‬
‫ ��‪ ،‬اور � �‬
‫ ��ت ز ر � ‬ ‫� � ‪ �� 52‬ز ��دہ �۔ �رت‪� ،‬‬ ‫وا� آ�� د� �� ‪ ،‬‬ ‫� � � �� ل � ا� �ت ‬ ‫�‬
‫ � رو� � � از � � �� ‬ ‫‪� � � 10.743‬‬
‫�‬ ‫�‬
‫ �� ر� ‬ ‫�� ا�� ا۔ � � ‬ ‫�� و ‬
‫� ‬‫ں ‬ ‫� �� ظ� �� ‬ ‫ �� رو ‬ ‫آ�� ‬ ‫ �� )‪ EPS) 6.81‬‬‫ � ز ��دہ �۔ � �‬ ‫)‪� �� (SPLY‬‬
‫ � ‪� � 114.1‬‬
‫ � � � �۔ ‬
‫ ��ت ز ر� � ؤ� �‬ ‫�� ‬ ‫� ‬‫� ‬ ‫ � � � ‬ ‫ �ں �‬ ‫� �� ‬
‫ � � � �‬ ‫ � �رے ‬ ‫ )�رچ ‪ 2.82 :2022‬رو�( ر�۔ �رى � �وڈ� � �‬ ‫رو�‬
‫��‬ ‫ڈ �� ‬ ‫�‬ ‫� � �‬
‫� � �ر� دو�رہ ‬ ‫� ‬ ‫ ا�� ز ‬ ‫ ��ر ا�� اور �‬ ‫� � � �‬
‫ د� �‬ ‫ � � � ‬ ‫ � ا�� ا اور � � � �� ٹ ڈ� � ا�ل �� ‬ ‫ �� ‬ ‫�ر� �‬
‫�‬
‫��‬
‫�� آ�� ا�� ا۔‬ ‫ى� �� ‬ ‫�� دل � �‬
‫ ڈ��ر ‬ ‫�وع � ‬ ‫ � ا� �� رى �رى ر�۔‬‫ �� ‬ ‫��ں اور‬
‫�‬ ‫�‬ ‫�‬ ‫��‬
‫ن� ر�ر ‬ ‫ ذر� آ� � ‬ ‫ �� ‬ ‫ �� ‬ ‫ � � �‬ ‫ى� �� ‬ ‫ � �� ر ‬ ‫�� ں �‬ ‫�� ‬ ‫ � ‪ � �� 84.7‬ا�� ا۔ ‬ ‫ � �� ل � ا� �ت � �� ‬ ‫� � آ�� ‬ ‫�‬
‫ ا� ط� ‬ ‫ت� �‬ ‫�� اور ا�ا� ‬ ‫ت �� ر ‬ ‫�� ز �� ا�ا� ‬ ‫�� ‬ ‫ � � ��ں �ر � ‪ �� 95.5‬ا�� ‬ ‫��ى �ا� �رك اپ آ�� ‬
‫�� ‬ ‫�� ‬
‫ � �‬ ‫ �� ‪ ،‬ڈ � �‬ ‫�� ‬ ‫��‬ ‫ � رو� ر�۔ �رك اپ آ�� ‬ ‫�ا اور ‪� � � 27.937‬‬
‫ �� ‬ ‫�� اور ا�ر�‬ ‫��‬ ‫ ‬ ‫ �‬
‫ ‬ ‫�‬ ‫۔‬ ‫ �‬ ‫�‬‫ �‬ ‫ا�م‬ ‫ � ا�� آ�� وا� ‬ ‫�� ‬
‫ت � �� ‬ ‫� �� ‬‫ت ‬ ‫ب � � ‬ ‫ � ‬ ‫ � � �‬ ‫ � �‬‫ى� � �‬ ‫ � �� ر ‬ ‫�� ر� �‬ ‫ � ا�� اور ا��ں � �ب � دو�رہ ��ں � ا�اج � �� ۔ ‬ ‫ا��ں �‬
‫��‬ ‫�ن �رك اپ آ�� ‪� � � 6.552‬‬
‫ آ�� ا�ا�ت � � ‬
‫ �‬ ‫� � ا�ات‬ ‫ ا�اط ز ر ‬ ‫ � � اور �‬ ‫� � �ر � ‬ ‫�� رو ‬ ‫� �ل � ا� �ت � �� ‬ ‫�‬ ‫ �‬ ‫�‬‫ ‬ ‫�‬ ‫ ر‬ ‫�‬ ‫ رو‬ ‫ �‬ ‫�‬
‫�‬ ‫� �‬
‫ �� ‪ � 100‬ز ��د ہ� � ‬
‫ ��‬ ‫ں� دوران‪ � � ،‬‬ ‫�� ۔� ‪ �� 15‬‬ ‫ا� ‬ ‫ �ر� � ز ��دہ ‬ ‫ � ا�� ‬
‫ ��دى �ر �‬ ‫ � ز ��دہ �۔ ‪ FX‬آ�� ‬ ‫� ‪� � 49.5‬‬ ‫�‬
‫ � ا�� ‬ ‫ٹ� �ك �� اور آ�� ‬ ‫ � � ز� �ل �‪ ،‬ڈ�ز ‬ ‫�� ‪� � �،‬‬ ‫ا�ر ��ؤ � و� � �ا۔‬
‫� � � �� ‬ ‫�‬
‫ى� ر �� او �ر ان ‬ ‫ �� ر ‬ ‫�� ‬ ‫ � �‬ ‫ � ڈ � �‬ ‫�� ر� � �۔ �‬ ‫� �د �ا ‬ ‫�‬ ‫�‬ ‫�‬
‫� �‬
‫ �ر� � �� ‬ ‫�� اور �‬ ‫ت �� ا ‬ ‫ں� ا� � ‬ ‫ں� �� ز� ر �� ‬ ‫� ‬ ‫ �� ط �� ‬ ‫ل � �ل( ‪ � 33.6‬‬ ‫ )� � ‬
‫ل � �ل � �‬‫� � � ‬ ‫�� اور � � ‬
‫ � � آ� ‬
‫�‬ ‫ت� � �‬ ‫ �۔ اس �� ‬
‫ � �رے � ‬
‫ �ر�‬ ‫ � ��ں �‬
‫�‬ ‫ �� ‬ ‫�� ‬ ‫� ‬ ‫�� ‬ ‫ � � �و�د �رو�رى � �‬
‫ ��ں اور ‬ ‫ت� � ‬ ‫د��۔ ا�ؤ� ��ر ز � � �� ‬ ‫�‬
‫ � � آ� � � �� ‪ � �� SPLY �� 55.1‬‬
‫ �‬
‫�‬
‫ � ا�� ۔ � � ‬ ‫�� ‬ ‫ � � ‬
‫�� ‬
‫� � ا� �ا� � �ا� �‬ ‫�ر� � �اد �‬ ‫�‬
‫� ‬
‫�� ‬ ‫ � � �� ‬ ‫� � و ‬
‫ � ا� ‬
‫�‬ ‫�۔ � � �‬
‫�� ون �� ا۔‬ ‫�‪� ،‬ط آ�� ا� ‬ ‫� �‬ ‫� ‬ ‫� ‬ ‫ �� ‬‫‪ � 42.3‬‬ ‫ ڈ� اور �� ٹ �ر ڈ� �� ا�ا�ت � � ‪ �� 55‬ا�� ا� � ‬
‫ �‬
‫‪10‬‬ ‫‪BANK ALFALAH‬‬

‫��‬
‫ڈا��ز ��ہ‬
‫�‬
‫�‬ ‫�‬ ‫�‬ ‫��‬
‫ت� ‬ ‫��ں او ر ا�ا� ‬ ‫� ‬ ‫ � �‪ ،‬ا�� ء ‬ ‫�� ر �‬ ‫ں� و� � ‪ � �،‬‬ ‫�� ‬ ‫ ڈا��ز � �� ‪� 31‬رچ ‪ �� 2023‬وا� � � ‬ ‫� �رڈ آف‬
‫�‬ ‫�‬ ‫�� ‬ ‫�‬ ‫��‬ ‫��‬
‫ل� �ل ‬ ‫�� ‪ � �� 20‬‬ ‫ ��دى ا�اط زر )�ن �ڈ �ن ا�� ( ‬ ‫�� ۔ � �‬ ‫ � �رى �� ا�� رى �ر� � � �۔ ‬
‫ � ا�ح � �‬
‫ � �‬
‫�� ‬
‫�‬
‫�� و� � �� د� ا�اط ز ر� د� ؤ� �� ‬
‫� � ‬ ‫�‬ ‫�� ‪ ،‬‬ ‫ن� � ر ‬ ‫�� ‬ ‫� ‬
‫� � ��‬
‫�� ‬ ‫ن� �� ‬ ‫ � آف �� ‬ ‫ ا� �‬ ‫�� ا�ن �۔ �‬ ‫�� ‬ ‫ى ‬‫� ر�ر ‬ ‫�� ہ ‬
‫� � ‬ ‫ن � �م � ‬ ‫ ر��ر ڈ � ا�اط ز ر � ر� ‬ ‫س� �‬ ‫�‬
‫ � � �رى ر� �� ا ‬
‫�‬ ‫�� ‬
‫�� د ��۔‬ ‫�� ‬
‫ �� ‬ ‫� ‬‫ب ‬‫ �� ا ‬ ‫ ر�� ‪ � 21‬‬ ‫ �� ‬ ‫�� ‬ ‫�� م ‬
‫� �‬‫� �� ر�‪� � :‬‬‫� � �� ‪ � 2023‬ا� � � �� ‬
‫ا�م‪ �� ،‬ا�دى � روى‪ �� ،‬د�ؤ‪� � �� ،‬ر ‬
‫��‬ ‫� � ��‬ ‫�� ‬
‫ � � ‬ ‫ � ا� �� ۔ �ر� �رے �‬ ‫ � � ا�� ا�ا�ت � � �‬ ‫ا� �‬ ‫�‬ ‫ � �م �ازن۔ ا�� ل � دوران �� ت ‬ ‫ � �‬ ‫� �‪ ،‬اور ��‬ ‫�‬
‫�‬ ‫�‬
‫�‬
‫��‬ ‫�‬‫�‬ ‫�‬
‫� و� � �� ا�ؤ� � � �ا۔ ‪ � 8M FY2023‬دوران‪ ،‬‬ ‫� � � �زى �� ر�۔ ‪ � IMF‬ر� �� و�ام اور ‬
‫�‬ ‫�‬
‫ ا�� ڈا� � ��‪ � �� ،‬‬‫ � �‬ ‫درآ�ى � �ل � �ل ‪� � � 37.4 � � � �� 21‬‬ ‫ �� زر�د� � ذ�� ‪ ،‬‬‫��ں � ادا��ں � در��ن �ور �‬
‫�‬ ‫�آ�ات ‪� � � 18.6 � � � �� 9.7‬‬ ‫�‬
‫ � ‬ ‫ � �‬ ‫ � �‬ ‫ د��ں � � � �‬
‫ �� ‬ ‫�� رو� � �ر � �� ر�‪ ،‬اور �� ‬
‫ ا�� ڈا� ر�‪� � � � ،‬‬ ‫��‬
‫ � �‬ ‫�ر� �رہ ‪� � � 18.7 � � � �� 29.8‬‬ ‫ � آ�� اور ‬‫ � �‬
‫ ��‪� ،‬ر�ں � ‬ ‫ ا�� ڈا� � ��۔ �‬ ‫� �۔ �� ر�ر ��ں �ر � � ��‪� � � � ،‬‬
‫ �۔ اس � ‬ ‫ ا�� ڈا� رہ �‬‫ � �‬ ‫��ت زر � ‪� � � 18.0 � � � �� 10.9‬‬ ‫�‬ ‫�ت �� د� �۔ اس �� دوران‪ Moody's Investor ،‬‬
‫ � �‬ ‫�‬ ‫�‬ ‫� ��‬
‫ � ‪� � 3.9 � � � �� 68‬‬ ‫�و�د �� ا�ؤ� �رہ ‪� 8M FY2023‬‬ ‫ ر� � � �‬
‫ �� ‪ Caa3‬‬ ‫‪ Service‬اور ‪�� Fitch‬ن � �د�ر �� ٹ‬
‫�‬
‫��۔‬ ‫�‬
‫ا�� ڈا� � �� ا�م � � آ �‬ ‫ ا� در� � � �‬
‫ � � د ��۔‬ ‫اور ‪� CCC -‬‬
‫�‬ ‫�‬
‫� ‬ ‫ � ��ن � �� رہ � ڈى � � ‪� �� 2.0‬‬
‫ ر��رڈ �‬ ‫‪� � 1H FY2023‬‬ ‫ � �‬
‫ ا�� ڈا� ‬ ‫�� زر�د� � ذ�� ‪� 31‬رچ ‪� � � 4.2 � � � � 2023‬‬ ‫�‬
‫�‬ ‫�‬ ‫�‬
‫�‬
‫ ��دى �ازن � ‪�� 0.2‬۔ ��‪ � �� ،‬‬‫�‬ ‫�‬ ‫��‪� � � ،‬‬ ‫� �ود ان �ز اور ��ں � ز ��دہ ادا��ں � �� آ �۔ �� ‬
‫�‬ ‫�‬ ‫�‬
‫�‬
‫روى � در��ن � ا�اط زر‪� � ،‬ح �د‪ ،‬اور �ف � � � و�� ‬ ‫ �� اِن �ز � �و� �� ‬ ‫ � �‬‫ ادا� � �‬ ‫ا�ؤ� اور ��ں � �‬
‫� � �‬
‫ � �� رہ � ر� � �� ۔‬ ‫� ��‪ ،‬آ� وا� � � � �‬
‫ ��ں �‬ ‫ � � �� ‪� ،‬ص �ر � � � �� ان � دوران ‬ ‫ ��دى � �‬
‫ � � �‬
‫� �‬
‫� � �‬ ‫� �‬
‫�‬
‫آ� ا� � ا� � �و�ام �� ۔ ا� � �� ‪� � �� ،‬‬
‫ رو� ‬ ‫�‬
‫�ور �� اور �� م �� ‪ �� ،‬‬ ‫ا�� ا�ر ��ؤ � �ر ر�‪ � 2023 �� ،‬دوران �‬
‫ ا�� ڈا� � �� ‬
‫�‬ ‫�� ‬ ‫�‬
‫‪ � 2023‬دوران ‪ KSE100‬ا�� ‬
‫ � ‪ � � �� 1.04‬وا� ��۔‬ ‫ �� ر�م اور �دى �ب � �� ‬
‫ � � �ف � �‬ ‫� ‪� � �� 20‬ا۔‬‫�‬
‫� �‬ ‫��‬ ‫� �‬
‫ � ر� � �‬
‫ �‪ �� ،‬آ� ا� �‬
‫ ا� ‬ ‫ �� ا�ن �ش آ� �‬ ‫� ��ن �‬
‫�� ‬ ‫�‬
‫آ� �� ‪ � ،‬ا�دى � �� ار ر� � ا�ن �‪ � �� ،‬‬ ‫ � ا� �۔‬ ‫�و�ام �‬
‫ ��ارى � �‬
‫ � ‬
‫ ��ا �� ا��ت � �� ‬ ‫� �� ‬‫�‬
‫�� ‬ ‫�‬ ‫�‬ ‫�‬
‫ � آ� ا� �‬
‫��ہ ��ں � �ورت �۔ � � ا�د �ل �� ‬ ‫��‬ ‫� � �‪� � ،‬‬
‫ ��دى � ر � ‬ ‫ � ا�اط زر ‪ �) �� 35.4‬‬
‫ل � �ل ( ‬ ‫�رچ ‪� 2023‬‬
‫�‬ ‫�‬ ‫�‬
‫�ا� �و�ام � �� ورى �۔‬ ‫ل� �ل ‪ �� 48.8‬ا�� (� ‬ ‫�راك )‪� � 48.4‬‬
‫ � �� ا��( اور �ا�� )� ‬
‫‪QUARTERLY REPORT - MARCH 31, 2023‬‬ ‫‪11‬‬

BANK ALFALAH LIMITED
UNCONSOLIDATED CONDENSED
INTERIM FINANCIAL STATEMENTS
QUARTER ENDED MARCH 31, 2023
Unconsolidated Condensed Interim
Statement of Financial Position
As at March 31, 2023 UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT MARCH 31, 2023
Note (Un-audited) (Audited)

March 31, December 31,
2023 2022
----------(Rupees in '000)----------
ASSETS
Cash and balances with treasury banks 7 153,729,207 140,613,348

Balances with other banks 8 18,399,846 9,485,380
Lendings to financial institutions 9 210,799,979 115,353,599
Investments 10 1,283,986,288 1,114,406,758
Advances 11 697,992,597 732,374,851
Fixed assets 12 50,254,752 48,424,722
Intangible assets 13 1,373,601 1,296,297
Deferred tax assets 14 14,596,997 9,012,648
Other assets 15 101,181,791 82,229,125
2,532,315,058 2,253,196,728
LIABILITIES
Bills payable 16 25,464,860 40,033,806

Borrowings 17 672,466,496 491,179,531
Deposits and other accounts 18 1,554,034,983 1,486,845,346
Liabilities against assets subject to finance lease - -
Subordinated debt 19 14,000,000 14,000,000
Other liabilities 20 162,210,203 121,123,422
2,428,176,542 2,153,182,105
NET ASSETS 104,138,516 100,014,623
REPRESENTED BY
Share capital 15,771,651 15,771,651

Reserves 39,680,824 34,283,201
(Deficit) / Surplus on revaluation of assets 21 (2,162,360) 4,858,723
Unappropriated profit 50,848,401 45,101,048
104,138,516 100,014,623
CONTINGENCIES AND COMMITMENTS 22
The annexed notes 1 to 42 form an integral part of these unconsolidated condensed interim financial statements.
President & Chief Executive Officer Chief Financial Officer Director Director Director
Profit and Loss Account (Un-audited) BANK ALFALAH LIMITED
UNCONSOLIDATED CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (Un-audited)
For the quarter ended March 31, 2023
FOR THE QUARTER ENDED MARCH 31, 2023
Note Quarter ended Quarter ended

March 31, March 31,
2023 2022
-----------(Rupees in '000)-----------
Mark-up/Return/Interest Earned 24 75,588,730 35,816,838

Mark-up/Return/Interest Expensed 25 47,651,510 21,527,785
Net Mark-up/Return/Interest Income 27,937,220 14,289,053
NON MARK-UP/RETURN/INTEREST INCOME
Fee and Commission Income 26 3,305,003 2,473,525

Dividend Income 273,950 224,511
Foreign Exchange Income 3,324,964 1,430,821
(Loss) / gain from derivatives (100,717) 80,457
(Loss) / gain on securities 27 (315,549) 11,505
Other income 28 64,183 160,769
Total non-mark-up / interest income 6,551,834 4,381,588
Total income 34,489,054 18,670,641
NON MARK-UP/INTEREST EXPENSES
Operating expenses 29 14,584,336 10,282,188

Workers' Welfare Fund 30 397,746 160,162
Other charges 31 10,973 1,803
Total non-mark-up / interest expenses 14,993,055 10,444,153
Profit before provisions 19,495,999 8,226,488

Provisions and write offs - net 32 521,775 387,150
Extra ordinary / unusual items - -
PROFIT BEFORE TAXATION 18,974,224 7,839,338
Taxation 33 8,231,574 2,820,667
PROFIT AFTER TAXATION 10,742,650 5,018,671
--------------(Rupees)--------------
Basic and Diluted Earnings per share 34 6.81 2.82
14 BANK ALFALAH
Statement of Comprehensive Income (Un-audited)
For the quarterUNCONSOLIDATED
ended MarchCONDENSED
31, 2023 INTERIM STATEMENT OF COMPREHENSIVE INCOME (Un-audited)

March 31, March 31,
2023 2022
-----------(Rupees in '000)-----------
Profit after taxation for the period 10,742,650 5,018,671
Other comprehensive income
Items that may be reclassified to profit and loss account in subsequent periods:
Effect of translation of net investment in foreign branches 4,323,358 623,545
Movement in surplus / (deficit) on revaluation of investments - net of tax (6,989,843) (886,923)
(2,666,485) (263,378)
Items that will not be reclassified to profit and loss account in subsequent periods:
Movement in surplus / (deficit) on revaluation of operating fixed assets - net of tax (8,961) (29,201)
Movement in surplus / (deficit) on revaluation of non-banking assets - net of tax (398) 17,504
(9,359) (11,697)
Total comprehensive income 8,066,806 4,743,596

Statement of Changes in Equity (Un-audited)
UNCONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Un-audited)
Capital
Reserves Surplus/(Deficit) on revaluation
Exchange
Share Share Statutory Unappropriated
translation Investments Fixed Assets Non Banking Total
capital premium reserve profit
reserve Assets
--------------------------------------------------------------------------------(Rupees in '000)--------------------------------------------------------------------------------
Balances as at January 01, 2022 17,771,651 4,731,049 8,211,089 17,011,825 (1,227,301) 12,580,193 87,688 40,836,487 100,002,681
Changes in equity for the quarter ended March 31, 2022
Profit after taxation - - - - - - - 5,018,671 5,018,671
Other comprehensive income - net of tax - - 623,545 - (886,923) (7,298) 17,534 - (253,142)
Transfer to statutory reserve - - - 501,867 - - - (501,867) -
Transfer of revaluation surplus upon change in use - net of tax - - - - - 36,884 (36,884) - -
Transfer from surplus on revaluation of

assets to unappropriated profit - net of tax - - - - - (21,903) (30) 21,933 -
Transactions with owners, recorded directly in equity
Final cash dividend for the year ended December 31, 2021 - 20% - - - - - - - (3,554,330) (3,554,330)
Balance as at March 31, 2022 17,771,651 4,731,049 8,834,634 17,513,692 (2,114,224) 12,587,876 68,308 41,820,894 101,213,880
Changes in equity for nine months ended December 31, 2022
Other comprehensive income - net of tax - - 1,885,048 - (5,430,650) (74,938) 14,289 (294,012) (3,900,263)
Transfer to statutory reserve - - - 1,318,778 - - - (1,318,778) -

assets to unappropriated profit - net of tax - - - - - (191,846) (92) 191,938 -
Interim cash dividend for the half year ended June 30, 2022 - 25% - - - - - - - (4,442,913) (4,442,913)
Own shares purchased during the year (2,000,000) - - - - - - (4,043,855) (6,043,855)
Balance as at December 31, 2022 15,771,651 4,731,049 10,719,682 18,832,470 (7,544,874) 12,321,092 82,505 45,101,048 100,014,623
Other comprehensive income - net of tax - - 4,323,358 - (6,989,843) (8,961) (398) - (2,675,844)
Transfer to statutory reserve - - - 1,074,265 - - - (1,074,265) -

assets to unappropriated profit - net of tax - - - - - (21,881) - 21,881 -
Final cash dividend for the year ended December 31, 2022 - 25% - - - - - - - (3,942,913) (3,942,913)
Balance as at March 31, 2023 15,771,651 4,731,049 15,043,040 19,906,735 (14,534,717) 12,290,250 82,107 50,848,401 104,138,516
16 BANK ALFALAH
Cash Flow Statement (Un-audited)
For the quarter ended March 31, 2023 BANK ALFALAH LIMITED
UNCONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
------------(Rupees in '000)---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 18,974,224 7,839,338
Dividend income (273,950) (224,511)
18,700,274 7,614,827
Adjustments
Depreciation 1,570,076 1,209,533
Amortisation 78,082 88,207
Provisions and write offs - net 521,775 387,150
Unrealised loss on revaluation of investments
classified as held for trading-net 396,921 292,849
Gain on sale of operating fixed assets and non banking assets - net (29,067) (36,283)
Gain on termination of leases (IFRS 16) - net (8,634) (107,901)
Borrowing cost on lease liability 584,685 422,649
Workers' Welfare Fund 397,746 160,162
Charge for defined benefit plan 116,750 88,855
Charge for staff compensated absences 47,499 45,000
3,675,833 2,550,221
22,376,107 10,165,048
(Increase) / decrease in operating assets
Lendings to financial institutions (87,868,430) 11,719,917
Held for trading securities (126,751,333) 15,237,903
Advances 33,757,081 (12,896,674)
Other assets (excluding advance taxation) (18,959,239) (12,483,360)
(199,821,921) 1,577,786
Increase / (decrease) in operating liabilities
Bills payable (14,568,946) 4,208,174
Borrowings 182,952,296 58,999,382
Deposits 67,189,637 39,113,983
Other liabilities (excluding current taxation) 33,551,364 6,078,188
269,124,351 108,399,727
91,678,537 120,142,561
Income tax paid (4,999,319) (2,359,923)
Net cash generated from operating activities 86,679,218 117,782,638
CASH FLOWS FROM INVESTING ACTIVITIES
Net investments in available-for-sale securities (53,108,320) (110,126,677)
Net investments in held-to-maturity securities (2,288,699) (5,972,730)
Dividends received 207,269 174,349
Investments in operating fixed assets (1,731,447) (3,419,805)
Proceeds from sale of fixed assets and non banking assets 37,886 44,161
Net cash used in investing activities (52,559,953) (118,677,157)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of lease obligations (973,480) (757,517)
Dividend paid (1,872,474) (44,318)
Net cash used in financing activities (2,845,954) (801,835)
Increase / (decrease) in cash and cash equivalents 31,273,311 (1,696,354)
Cash and cash equivalents at beginning of the year 204,174,265 136,286,215
Effects of exchange rate changes on cash and cash equivalents - (gain) (18,686,135) (1,692,827)
185,488,130 134,593,388
Cash and cash equivalents at end of the period 216,761,441 132,897,034

Notes to and Forming Part of the Unconsolidated
Condensed Interim Financial Statements (Un-audited)
NOTES TO AND FORMING PART OF THE UNCONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Un-audited)
1 STATUS AND NATURE OF BUSINESS
Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan and is engaged in commercial banking and
related services in Pakistan and overseas. The Bank's registered office is located at B. A. Building, I. I. Chundigar Road,
Karachi and its shares are listed on the Pakistan Stock Exchange. The Bank is engaged in banking services as described in
the Banking Companies Ordinance, 1962. The Bank is operating through 889 branches (December 31, 2022: 877 branches)
and 17 sub-branches (December 31, 2022: 17 sub-branches). Out of the 889 branches, 587 (December 31, 2022: 586) are
conventional, 291 (December 31, 2022: 280) are Islamic, 10 (December 31, 2022: 10) are overseas and 1 (December 31,
2022: 1) is an offshore banking unit.
2 BASIS OF PRESENTATION
2.1 The disclosures made in these condensed interim unconsolidated financial statements have been limited based on the
format prescribed by the SBP vide BPRD Circular Letter No. 5 dated March 22, 2019 and IAS 34. These condensed interim
unconsolidated financial statements do not include all the information and disclosures required for annual unconsolidated
financial statements and should be read in conjunction with the unconsolidated financial statements for the year ended
December 31, 2022.
2.2 STATEMENT OF COMPLIANCE
These unconsolidated financial statements have been prepared in accordance with the accounting and reporting standards
as applicable in Pakistan. The accounting and reporting standards comprise of:
- International Financial Reporting Standard 34 "Interim Financial Reporting" issued by the International Accounting
Standards Board (IASB) as notified under Companies Act 2017;
- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are
notified under the Companies Act, 2017.
- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017.
- Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).
Whenever the requirements of the Banking Companies Ordinance, 1962, Companies Act, 2017 or the directives issued by
the SBP and the SECP differ with the requirements of IFRS or IFAS, requirements of the Banking Companies Ordinance,
1962, the Companies Act, 2017 and the said directives shall prevail.
The SBP has deferred the applicability of International Accounting Standard (IAS) 40, 'Investment Property' for banking
companies through BSD Circular Letter No. 10 dated August 26, 2002 till further instructions. Further, the SECP has
deferred the applicability of International Financial Reporting Standard (IFRS) 7, 'Financial Instruments: Disclosures' on
banks through its notification S.R.O 411(I)/2008 dated April 28, 2008. The State Bank of Pakistan through BPRD Circular
No. 04 of 2015 dated February 25, 2015 has deferred applicability of Islamic Financial Accounting Standard-3 for Profit and
Loss Sharing on Deposits (IFAS-3) issued by the ICAP and notified by the SECP, vide their SRO No. 571 of 2013 dated June
12, 2013 for Institutions offering Islamic Financial Services (IIFS). Further, SBP has deferred the applicability of International
Accounting Standard (IAS) 39, 'Financial Instruments: Recognition and Measurement'.
Moreover, the Bank has not adopted IFRS 9 in preparation of these accounts, as allowed by SBP BPRD circular no 7 of
2023 dated April 13, 2023.
Accordingly, the requirements of these standards have not been considered in the preparation of these unconsolidated
condensed interim financial statements; except for overseas branches where such standards are applicable.
2.2.1 These unconsolidated condensed interim financial statements represent separate financial statements of Bank Alfalah
Limited in which investment in subsidiaries and associates are accounted for on the basis of cost less accumulated
impairment losses, if any.
2.2.2 Key financial figures of the Islamic Banking branches are disclosed in note 39 to these unconsolidated condensed interim
financial statements.
2.2.3 The Bank believes that there is no significant doubt on the ability to continue as a going concern. Therefore, the
unconsolidated financial statements have been prepared on the going concern basis.
18 BANK ALFALAH
2.3 Standards, interpretations of and amendments to published approved accounting standards that are effective in the
current period:
There are certain new and amended standards, issued by International Accounting Standards Board (IASB), interpretations
and amendments that are mandatory for the Bank's accounting periods beginning on or after January 1, 2023 but are
considered not to be relevant or do not have any significant effect on the Bank's operations and therefore not detailed in
these unconsolidated financial statements.
2.4 Standards, interpretations of and amendments to published approved accounting standards that are not yet
effective
The following standards, amendments and interpretations as notified under the Companies Act, 2017 will be effective for
the accounting periods as stated below:
Standard, Interpretation or Amendment Effective date (annual periods

beginning on or after)
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 January 01, 2024
Non current liabilities with covenants - Amendment to IAS 1 January 01, 2024
3 BASIS OF MEASUREMENT
3.1 Accounting convention
These unconsolidated condensed interim financial statements have been prepared under the historical cost convention
except for certain fixed assets and non banking assets acquired in satisfaction of claims which are stated at revalued
amounts; held for trading, available for sale investments and derivative financial instruments which are measured at fair
value; defined benefit obligations which are carried at present value and right of use of assets and related lease liability
measured at present value.
3.2 Functional and Presentation Currency
These unconsolidated financial statements are presented in Pakistani Rupees, which is the Bank's functional and
presentation currency. The amounts are rounded off to the nearest thousand rupees except as stated otherwise.
4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these unconsolidated condensed interim financial
statements are consistent with those applied in the preparation of the annual unconsolidated financial statements of the
Bank for the year ended December 31, 2022.
5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The basis for accounting estimates adopted in the preparation of this unconsolidated condensed interim financial
statements is the same as that applied in the preparation of the annual unconsolidated financial statements of the Bank
for the year ended December 31, 2022.
6 FINANCIAL RISK MANAGEMENT
The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the
annual unconsolidated financial statements for the year ended December 31, 2022.

(Un-audited) (Audited)
2023 2022
---------(Rupees in 000)---------
7 CASH AND BALANCES WITH TREASURY BANKS
In hand
Local currency 33,311,760 34,295,195
Foreign currency 6,561,906 3,692,104
39,873,666 37,987,299
With State Bank of Pakistan in
Local currency current accounts 54,913,282 46,845,917
Foreign currency current accounts 7,737,535 3,528,124
Foreign currency deposit accounts 11,964,085 687,240
74,614,902 51,061,281
With other central banks in
Foreign currency deposit accounts 1,810,773 1,679,531
37,651,943 51,376,796
With National Bank of Pakistan in local currency current account 1,465,444 92,097
Prize bonds 123,252 95,875
153,729,207 140,613,348
8 BALANCES WITH OTHER BANKS
In Pakistan in current account 24,082 17,994
Outside Pakistan
In current account 18,340,648 9,438,572
In deposit account 35,116 28,814
18,375,764 9,467,386
18,399,846 9,485,380
9 LENDINGS TO FINANCIAL INSTITUTIONS
Call / clean money lendings 47,952,031 40,384,136

Repurchase agreement lendings (Reverse Repo) 162,847,948 74,969,700
210,799,979 115,353,836
Less: expected credit loss - overseas branches - (237)
Lending to Financial Institutions - net of provision 210,799,979 115,353,599
20 BANK ALFALAH
10 INVESTMENTS Note March 31, 2023 (Un-audited) December 31, 2022 (Audited)
Provision for Provision for

10.1 Investments by type: diminution / diminution /
Cost / Surplus / Cost / Surplus /
expected Carrying Value expected Carrying Value
Amortised cost (Deficit) Amortised cost (Deficit)
credit loss credit loss
(ECL) (ECL)
-----------------------------------------------------(Rupees in '000)-----------------------------------------------------
Held-for-trading securities
Federal Government Securities
Market Treasury Bills 70,157,267 - (89,256) 70,068,011 2,074,210 - (2,994) 2,071,216
Pakistan Investment Bonds 64,588,544 - (266,312) 64,322,232 4,173,096 - 33,445 4,206,541
Government of Pakistan Sukuks 261,027 - (11,515) 249,512 3,059,648 - 7,862 3,067,510
Shares
Ordinary shares / units - Listed 455,719 - (25,154) 430,565 567,811 - (49,754) 518,057
Foreign Securities
Overseas Bonds - Sovereign 4,845,673 - (4,684) 4,840,989 3,698,451 - (4,878) 3,693,573
140,308,230 - (396,921) 139,911,309 13,573,216 - (16,319) 13,556,897
Available-for-sale securities
Market Treasury Bills 142,544,964 - 69,603 142,614,567 2,402 - (7) 2,395
Pakistan Investment Bonds 693,413,528 - (15,385,700) 678,027,828 831,017,092 - (7,636,247) 823,380,845
Government of Pakistan Sukuks 135,263,527 - (3,196,513) 132,067,014 104,886,109 - (939,360) 103,946,749
Government of Pakistan Euro Bonds 14,875,102 (2,506,086) (6,486,920) 5,882,096 11,917,603 (2,012,101) (4,753,348) 5,152,154
Naya Pakistan Certificates 7,279,977 - - 7,279,977 4,779,075 - - 4,779,075
Shares
Ordinary shares - Listed 5,931,706 (610,612) (378,775) 4,942,319 7,205,583 (829,340) (453,569) 5,922,674
Ordinary shares - Unlisted 1,211,363 (88,038) - 1,123,325 1,211,363 (88,038) - 1,123,325
Preference Shares - Listed 108,835 (108,835) - - 108,835 (108,835) - -
Preference Shares - Unlisted 25,000 (25,000) - - 25,000 (25,000) - -
Non Government Debt Securities
Term Finance Certificates 3,233,166 (363,744) - 2,869,422 2,986,517 (411,218) (48) 2,575,251
Sukuks 16,669,677 (96,511) 85,267 16,658,433 16,676,056 (96,511) 129,707 16,709,252
Foreign Securities
Overseas Bonds - Sovereign 34,562,048 (53,010) (1,964,933) 32,544,105 26,861,689 (64,732) (1,679,122) 25,117,835
Overseas Bonds - Others 30,209,468 (6,652) (2,438,870) 27,763,946 25,310,922 (10,416) (2,074,381) 23,226,125
Redeemable Participating Certificates 10.1.1 5,437,604 - - 5,437,604 4,338,537 - - 4,338,537
REIT Fund - Unlisted 700,000 - - 700,000 700,000 - - 700,000
1,091,465,965 (3,858,488) (29,696,841) 1,057,910,636 1,038,026,783 (3,646,191) (17,406,375) 1,016,974,217
Held-to-maturity securities
Pakistan Investment Bonds 68,873,146 - - 68,873,146 68,564,798 - - 68,564,798
Term Finance Certificates 848,013 (214,680) - 633,333 864,680 (24,680) - 840,000
Sukuks 2,302,962 (78,076) - 2,224,886 1,895,679 (80,722) - 1,814,957
Foreign Securities
Overseas Bonds - Sovereign 12,993,348 (212) - 12,993,136 11,216,215 (168) - 11,216,047
85,017,469 (292,968) - 84,724,501 82,541,372 (105,570) - 82,435,802
Associates 1,177,606 - - 1,177,606 1,177,606 - - 1,177,606
Subsidiary 305,217 (42,981) - 262,236 305,217 (42,981) - 262,236
Total Investments 1,318,274,487 (4,194,437) (30,093,762) 1,283,986,288 1,135,624,194 (3,794,742) (17,422,694) 1,114,406,758
10.1.1 The adoption of IFRS 9 at Bahrain Operations of the Bank has resulted in investments in Redeemable Participating Certificates held abroad, being mandatorily measured at Value
through Profit and Loss However, based on the clarification received from the State Bank of Pakistan (SBP) vide their letter No. BPRD/RPD/2018-16203 dated July 26, 2018,

10.2 Investments given as collateral 2023 2022
-------(Rupees in 000)-------
Market Treasury Bills 88,419,520 -

Pakistan Investment Bonds 409,371,000 307,049,207
Overseas Bonds 7,640,074 4,981,480
505,430,594 312,030,687
10.2.1 The market value of securities given as collateral is Rs. 495,589.102 million (December 31, 2022: 308,263.867 million).
2023 2022
10.3 Provision for diminution in value of investments -------(Rupees in 000)-------
10.3.1 Opening balance 3,794,742 1,228,991

Exchange and other adjustments 518,260 66,733
Charge / (reversals)
Charge for the period / year 287,300 2,668,843
Reversals for the period / year (61,547) (9,397)
Reversal on disposals (344,318) (160,428)
(118,565) 2,499,018
Closing balance 4,194,437 3,794,742
10.3.2 Particulars of provision against debt securities
Category of classification March 31, 2023 (Un-audited) December 31, 2022 (Audited)
NPI Provision NPI Provision
Domestic -----------------------(Rupees in '000)-----------------------
Loss 753,011 753,011 613,131 613,131
10.3.2.1 The overseas branches hold a provision of Rs. 2,565.960 million (December 31, 2022: Rs. 2,087.417 million) against
investments in accordance with ECL requirements of IFRS 9.
10.3.3 The market value of securities classified as held-to-maturity as at March 31, 2023 amounted to Rs. 73,190.099 million
(December 31, 2022: Rs. 73,518.445 million).
22 BANK ALFALAH
11 ADVANCES
Note Performing Non Performing Total

December 31, December 31, December 31,
March 31, 2023 March 31, 2023 March 31, 2023
2022 2022 2022
(Un-audited) (Un-audited) (Un-audited)
(Audited) (Audited) (Audited)
------------------------------------------------------------------(Rupees in '000)------------------------------------------------------------
Loans, cash credits, running finances, etc. 521,785,003 570,301,605 26,254,396 22,797,118 548,039,399 593,098,723
Islamic financing and related assets 39.3 164,597,110 149,839,163 4,895,628 4,893,861 169,492,738 154,733,024
Bills discounted and purchased 12,675,415 14,580,885 1,655,526 3,280,234 14,330,941 17,861,119
Advances - gross 699,057,528 734,721,653 32,805,550 30,971,213 731,863,078 765,692,866
Provision against advances

- Specific 11.4 - - (27,263,637) (25,396,608) (27,263,637) (25,396,608)
- General / expected credit loss 11.4 (6,606,844) (7,921,407) - - (6,606,844) (7,921,407)
(6,606,844) (7,921,407) (27,263,637) (25,396,608) (33,870,481) (33,318,015)
Advances - net of provision 692,450,684 726,800,246 5,541,913 5,574,605 697,992,597 732,374,851
11.1 Advances include an amount of Rs. 360.676 million (December 31, 2022: Rs. 339.983 million), being Employee Loan facilities allowed to Citibank,
N.A, employees, which were either taken over by the Bank, or were granted afresh, under a specific arrangement executed between the
Bank and Citibank, N.A, Pakistan. The said arrangement is subject to certain relaxations as specified vide SBP Letter BPRD/BRD/Citi/2017/21089
dated September 11, 2017.
The said arrangement covers only existing employees of Citibank, N.A, Pakistan, and the relaxations allowed by the SBP are on continual basis, but
subject to review by BID and OSED departments. These loans carry mark-up at the rates ranging from 15.84% to 30.43% (December 31,
2022: 13.37% to 27.25%) with maturities up to February 2043 (December 31, 2022: October 2042).
2023 2022
-------(Rupees in '000)-------
11.2 Particulars of advances (Gross)
In local currency 664,109,817 713,973,693

In foreign currencies 67,753,261 51,719,173
731,863,078 765,692,866
11.3 Advances include Rs. 32,805.550 million (December 31, 2022: Rs. 30,971.213 million) which have been placed under non-performing status as
detailed below:
March 31, 2023 December 31, 2022

Category of Classification
Non- Non-
Performing Provision Performing Provision
Loans Loans
------------------------------------------------------------------(Rupees in '000)-----------------------------------------
Domestic
Other Assets Especially Mentioned 146,566 3,055 178,723 15,814
Substandard 1,440,093 349,248 2,352,882 683,787
Doubtful 8,375,853 4,419,195 6,885,829 3,407,905
Loss 22,061,515 21,903,406 20,896,541 20,794,387
32,024,027 26,674,904 30,313,975 24,901,893
Overseas
Overdue by:
91 to 180 days 43,512 31,737 35,903 21,952
181 to 365 days 170,087 144,257 139,472 119,706
Above 365 days 567,924 412,739 481,863 353,057
781,523 588,733 657,238 494,715
Total 32,805,550 27,263,637 30,971,213 25,396,608

12 BANK ALFALAH LIMITED
11.4 Particulars of provision against advances

March 31, 2023 (Un-audited) December 31, 2022 (Audited)
General / General /
Specific expected Total Specific expected Total
credit loss credit loss
------------------------------------------------------------------(Rupees in '000)------------------------------------------------------------
Opening balance 25,396,608 7,921,407 33,318,015 21,125,068 4,067,236 25,192,304

Exchange and other adjustments 100,242 71,016 171,258 32,240 22,887 55,127
Charge for the period / year 2,757,391 (1,385,579) 1,371,812 7,544,341 3,831,284 11,375,625
Reversals for the period / year (746,639) - (746,639) (2,431,826) - (2,431,826)
2,010,752 (1,385,579) 625,173 5,112,515 3,831,284 8,943,799
Amounts written off (243,965) - (243,965) (497,192) - (497,192)

Amounts charged off - agriculture financing - - - (69,791) - (69,791)
Amounts charged off - balance sheet cleaning - - - (306,232) - (306,232)
(243,965) - (243,965) (873,215) - (873,215)
Closing balance 27,263,637 6,606,844 33,870,481 25,396,608 7,921,407 33,318,015
11.4.1 The additional profit arising from availing the forced sales value (FSV) benefit - net of tax as at March 31, 2023 which is not available for
distribution as either cash or stock dividend to shareholders/ bonus to employees amounted to Rs. 113.735 million (December 31, 2022: Rs. 94.554
million).
11.4.2 General provision includes:

(i) Provision held in accordance with SBP's prudential regulations against:
- Conventional consumer loans being maintained at an amount equal to 1% of the secured auto loans, 0.5% of secured house loans performing
portfolio and 4% of the unsecured (personal loans and credit cards) performing portfolio;
- Islamic auto loans being maintained at an amount equal to 1% of the secured performing portfolio and for Islamic house loans, at an amount
equal to 0.5% of the secured performing portfolio;
- Small Enterprises (SE) portfolio being maintained at an amount equal to 1% against unsecured performing SE portfolio;
(ii) Provision held at overseas branches to meet the requirements of regulatory authorities of the respective countries in which overseas branches
operates; and
(iii) Provision of Rs. 4,595.000 million (December 31, 2022: Rs. 4,595.000 million) against the high risk portfolio, which is showing higher economic
vulnerability. The portfolio excludes GoP backed exposures, staff loans and loans secured against liquid collaterals. Provision against flood
impacted portfolio of Rs. 1,376 million held as at December 31, 2022 was reversed during the period.
11.4.3 Although the Bank has made provision against its non-performing portfolio as per the category of classification of the loan, the Bank holds
enforceable collateral in the event of recovery through litigation. These securities comprise of charge against various tangible assets of the
borrower including land, building and machinery, stock in trade etc.

2023 2022
--------(Rupees in '000)--------
12 FIXED ASSETS
Capital work-in-progress 12.1 1,400,481 944,206
Property and equipment 12.2 32,394,610 32,090,993
Right-of-use assets 16,459,661 15,389,523
50,254,752 48,424,722
12.1 Capital work-in-progress
Civil works 1,097,557 706,019

Equipment 259,590 214,126
Others 43,334 24,061
1,400,481 944,206
12.2 It includes land and buildings carried at revalued amount of Rs. 21,875.881 million (December 31, 2022: Rs. 21,661.195 million).
24 BANK ALFALAH
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-----------(Rupees in 000)-----------
12.3 Additions to fixed assets
The following additions were made to fixed assets during the period:
Capital work-in-progress - net of transferred out for capitalisation 456,275 523,586
Property and equipment

Freehold land 244 912,286
Leasehold land 116,000 -
Buildings on freehold land 119,965 490,384
Buildings on leasehold land 32,971 3,482
Leasehold improvement 105,035 213,737
Furniture and fixtures 49,812 36,958
Office equipment 638,992 691,134
Vehicles 32,244 -
1,095,263 2,347,981
Total additions to fixed assets 1,551,538 2,871,567
12.4 Disposals of fixed assets
The net book value of fixed assets disposed off during the period is as follows:
Leasehold improvements 7,003 1,864

Furniture and fixtures 291 31
Total disposal of fixed assets 8,819 7,878
2023 2022
------(Rupees in '000)------
13 INTANGIBLE ASSETS
Capital work-in-progress / Advance payment to suppliers 606,369 455,945

Software 767,232 840,352
1,373,601 1,296,297
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
13.1 Additions to intangible assets ------(Rupees in '000)------
The following additions were made to intangible assets during the period:
Directly purchased 4,590 183,957
Total additions to intangible assets 155,014 323,395
13.2 There were no disposal of intangible assets during the periods ended March 31, 2023 and March 31, 2022.

2023 2022
--------(Rupees in '000)--------
14 DEFERRED TAX ASSETS
Deductible Temporary Differences on:

- Provision against investments 1,825,750 1,702,211
- Provision against advances 2,844,774 3,096,128
- Unrealised loss on revaluation of held for trading investments 170,676 7,017
- Deficit on revaluation of available for sale investments 10,964,788 5,691,747
- Provision against other assets 1,029,154 1,001,744
- Provision against lending to financial institutions - 32
- Workers' Welfare Fund 775,131 604,100
17,610,273 12,102,979
Taxable Temporary Differences on:
- Surplus on revaluation of fixed assets (495,850) (486,889)
- Surplus on revaluation of non banking assets (62,807) (63,108)
- Accelerated tax depreciation (2,454,619) (2,540,334)
(3,013,276) (3,090,331)
14,596,997 9,012,648
15 OTHER ASSETS
Income/ Mark-up accrued in local currency - net of provision 56,368,087 42,710,321

Income/ Mark-up accrued in foreign currency - net of provision 2,475,609 2,011,398
Advances, deposits, advance rent and other prepayments 5,336,102 3,542,062
Advance against subscription of share 270,454 -
Non-banking assets acquired in satisfaction of claims 15.1 1,438,374 1,439,606
Dividend receivable 66,681 -
Mark to market gain on forward foreign exchange contracts 4,140,062 922,573
Mark to market gain on derivatives 23.1 4,314,471 4,795,545
Stationery and stamps on hand 18,081 23,253
Defined benefit plan 36,957 153,707
Branch adjustment account - 24,430
Due from card issuing banks 3,350,822 4,544,609
Account receivable 4,854,259 5,180,427
Claims against fraud and forgeries 123,324 119,455
Acceptances 20,869,541 19,090,181
Receivable against DSC/SSC and overseas government securities 29,352 131,517
Others 78,914 66,212
103,771,090 84,755,296
Less: Provision held against other assets 15.2 (2,734,213) (2,671,784)
Other assets (net of provision) 101,036,877 82,083,512
Surplus on revaluation of non-banking assets acquired in
satisfaction of claims - net 15.1 144,914 145,613
101,181,791 82,229,125
15.1 The revalued amount of non-banking assets acquired in satisfaction of claims is Rs. 1,583.288 million (December 31, 2022: Rs.
1,585.219 million).
26 BANK ALFALAH
2023 2022
--------(Rupees in '000)--------
15.2 Provision held against other assets
Impairment against overseas operation 2,148,582 2,114,963

Expected credit loss (overseas operation) 28,173 10,397
Fraud and forgeries 139,147 119,455
Account receivable 51,618 38,349
Others 366,693 388,620
2,734,213 2,671,784
15.2.1 Movement in provision held against other assets
Opening balance 2,671,784 1,309,288


59,665 1,329,167
Amount written off - (2,355)
16 BILLS PAYABLE
In Pakistan 22,549,425 37,705,524

Outside Pakistan 2,915,435 2,328,282
25,464,860 40,033,806
17 BORROWINGS
Secured
Borrowings from State Bank of Pakistan under:
Export Refinance Scheme 50,348,109 53,477,830
Long-Term Finance Facility 27,585,314 28,643,178
Financing Facility for Renewable Energy Projects 12,010,374 11,917,647
Financing Facility for Storage of Agriculture Produce (FFSAP) 692,241 738,979
Refinance for Wages & Salaries 44,613 300,821
Temporary Economic Refinance Facility (TERF) 50,576,242 49,721,502
Export Refinance under Bill Discounting 5,760,281 10,633,712
SME Asaan Finance (SAAF) 1,748,471 949,413
Refinance Facility for Combating COVID (RFCC) 717,919 692,957
Refinance and Credit Guarantee Scheme for Women Entrepreneurs 148,599 279,374
Modernization of Small and Medium Entities (MSMES) 1,040,267 871,659
Other refinance schemes 806 890
Repurchase agreement borrowings 438,699,520 256,900,000
589,372,756 415,127,962

Bai Muajjal 43,266,806 42,113,040
Medium Term Note 11,000,000 11,000,000
Total secured 659,794,575 473,071,899
Unsecured
Call borrowings 4,478,139 5,766,732
Overdrawn nostro accounts 3,219,582 4,884,913
Others
- Pakistan Mortgage Refinance Company 2,603,303 2,180,208
- Karandaaz Risk Participation 2,370,897 2,331,958
- Other financial institutions - 2,943,821
Total unsecured 12,671,921 18,107,632
672,466,496 491,179,531

18 DEPOSITS AND OTHER ACCOUNTS

In Local In Foreign In Local In Foreign
Total Total
Currency Currencies Currency Currencies
------------------------------------------(Rupees in '000)-----------------------------------------
Customers
Current deposits 528,668,378 147,238,913 675,907,291 523,834,695 131,267,950 655,102,645
Savings deposits 317,976,224 41,623,110 359,599,334 294,762,649 37,937,222 332,699,871
Term deposits 336,309,324 53,769,153 390,078,477 287,557,414 49,767,276 337,324,690
Others 39,993,231 12,546,088 52,539,319 35,941,042 8,943,974 44,885,016
1,222,947,157 255,177,264 1,478,124,421 1,142,095,800 227,916,422 1,370,012,222
Financial Institutions
Term deposits 51,101,000 2,904,938 54,005,938 38,073,100 354,319 38,427,419
Others 620,467 84,104 704,571 404,457 76,261 480,718
68,010,728 7,899,834 75,910,562 110,425,533 6,407,591 116,833,124
1,290,957,885 263,077,098 1,554,034,983 1,252,521,333 234,324,013 1,486,845,346
18.1 Current deposits include remunerative current deposits of Rs. 14,422.298 million (December 31, 2022: Rs. 14,325.601 million).
19 SUBORDINATED DEBT March 31, December 31,
2023 2022
'----------(Rupees in '000)----------
Term Finance Certificates (VI) - Additional Tier-I (ADT-1) - Quoted, Unsecured
The Bank issued listed, fully paid up, rated, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt
instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of redeemable capital under Section 66 of the
Companies Act, 2017 which qualify as Additional Tier 1 Capital (ADT 1) as outlined by the State Bank of Pakistan (SBP) under BPRD
Circular No. 6 dated August 15, 2013. Summary of terms and conditions of the issue are:
Issue amount Rs. 7,000,000,000 7,000,000 7,000,000

Issue date March 2018
Maturity date Perpetual
Rating "AA-" (double A minus) by The Pakistan Credit Rating Agency Limited.
Security Unsecured
Ranking Subordinated to all other indebtedness of the Bank including deposits
but superior to equity.
Profit payment frequency Payable semi-annually in arrears.
Redemption Perpetual
Mark-up For the period at end of which the Bank is in compliance with Minimum
Capital Requirement (MCR) and Capital Adequacy Ratio (CAR)
requirements of SBP, mark-up rate will be Base Rate + 1.50% with no
step up feature.
(Base Rate is defined as the six months KIBOR (Ask side) prevailing on
one (1) business day prior to previous profit payment date.
Lock-in-clause Mark-up will only be paid from the current earning and if
the Bank is in compliance of regulatory MCR and CAR requirements set
by SBP from time to time.
Loss absorbency clause In conformity with SBP Basel III Guidelines, the TFCs shall, if directed by
the SBP, be permanently converted into ordinary shares upon: (i) the
CET 1 Trigger Event; (ii) the point of non-viability Trigger Event; or (iii)
failure by the Bank to comply with the Lock-In Clause. The SBP will
have full discretion in declaring the point of non-viability Trigger Event.
Call Option The Bank may, at its sole discretion, exercise call option any time after
five years from the Issue Date, subject to prior approval of SBP and
instrument is replaced with capital of same and better quality.
28 BANK ALFALAH
2023 2022
'----------(Rupees in '000)----------
Term Finance Certificates VIII - Additional Tier-I (ADT-1) - Quoted, Unsecured
The Bank issued Rs. 7,000 million of privately placed, listed, fully paid up, rated, perpetual, unsecured, subordinated, non-cumulative
and contingent convertible debt instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of redeemable
capital under Section 66 of the Companies Act, 2017 which qualify as Additional Tier 1 Capital (ADT 1) as outlined by State Bank of
Pakistan (SBP) under BPRD circular No. 06 dated August 15, 2013. Summary of terms and conditions of the issue are:
Issue amount Rs. 7,000,000,000 7,000,000 7,000,000
Issue date December 2022
Rating "AA-" (double A minus) by The Pakistan Credit Rating Agency Limited.
Security Unsecured
Ranking Subordinated to all other indebtedness of the Bank including deposits

but superior to equity.
Profit payment frequency Payable semi-annually in arrears.
Mark-up For the period at end of which the Bank is in compliance with Minimum
Capital Requirement (MCR) and Capital Adequacy Ratio (CAR)
requirements of SBP, mark-up rate will be Base Rate + 2.00% with no
step up feature.
Lock-in-clause Mark-up will only be paid from the current earning and if
the Bank is in compliance of regulatory MCR and CAR requirements set
by SBP from time to time.
Loss absorbency clause In conformity with SBP Basel III Guidelines, the TFCs shall, if directed by
the SBP, be permanently converted into ordinary shares upon: (i) the
CET 1 Trigger Event; (ii) the point of non-viability Trigger Event; or (iii)
failure by the Bank to comply with the Lock-In Clause. The SBP will
have full discretion in declaring the point of non-viability Trigger Event.
Call Option The Bank may, at its sole discretion, exercise call option any time after
five years from the Issue Date, subject to prior approval of SBP and
instrument is replaced with capital of same and better quality.
14,000,000 14,000,000

2023 2022
--------(Rupees in '000)--------
20 OTHER LIABILITIES
Mark-up/ Return/ Interest payable in local currency 25,866,158 16,617,807

Mark-up/ Return/ Interest payable in foreign currency 1,633,990 1,443,987
Unearned fee commission and income on bills discounted and guarantees 2,967,848 2,591,163
Accrued expenses 10,990,841 12,576,602
Current taxation 16,442,378 12,890,155
Acceptances 20,869,541 19,090,181
Dividends payable 6,837,649 4,767,210
Mark to market loss on forward foreign exchange contracts 1,578,562 455,164
Mark to market loss on derivatives 23.1 102,690 -
Branch adjustment account 41,857 -
ADC settlement accounts 2,734,655 2,035,378
Provision for compensated absences 748,991 701,492
Payable against redemption of customer loyalty / reward points 659,653 607,208
Charity payable 73,696 65,998
Provision against off-balance sheet obligations 20.1 102,202 62,948
Security deposits against leases, lockers and others 15,779,002 13,300,923
Workers' Welfare Fund 3,776,643 3,378,897
Payable to vendors and suppliers 465,310 556,205
Margin deposits on derivatives 4,214,437 4,077,091
Payable to merchants (card acquiring) 2,121 16,536
Indirect taxes payable 2,369,557 2,360,341
Lease liabilities against right-of-use assets 18,929,950 17,495,747
Payable against marketable securities 470,942 339,679
Trading Liability 19,869,324 2,638,773

Others 4,682,206 3,053,937
162,210,203 121,123,422
20.1 Provision against off-balance sheet obligations
Opening balance 62,948 137,639

Charge / (reversal) for the period / year 33,307 (87,039)
Closing balance 102,202 62,948
30 BANK ALFALAH
2023 2022
------------(Rupees in 000)------------
21 (DEFICIT) / SURPLUS ON REVALUATION OF ASSETS
(Deficit) / surplus on revaluation of:

- Available for sale securities 10.1 (29,696,841) (17,406,375)
- Fixed Assets 12,786,100 12,807,981
- Non-banking assets acquired in satisfaction of claims 144,914 145,613
(16,765,827) (4,452,781)
Less: Deferred tax asset / (liability) on surplus / (deficit) on revaluation of:

- Available for sale securities 12,769,642 7,484,741
- Fixed Assets (495,850) (486,889)
- Non-banking assets acquired in satisfaction of claims (62,807) (63,108)
12,210,985 6,934,744
Derivatives (Deficit) / Surplus (4,197,336) (4,169,754)

Less: Deferred tax asset / (liability) on derivative 1,804,854 1,792,994
(2,392,482) (2,376,760)
(2,162,360) 4,858,723
22 CONTINGENCIES AND COMMITMENTS
-Guarantees 22.1 159,532,486 140,370,087

-Commitments 22.2 557,417,637 436,883,552
-Other contingent liabilities 22.3.1 24,595,327 6,903,292
741,545,450 584,156,931
22.1 Guarantees:
Performance guarantees 56,722,059 53,798,209

Other guarantees 102,810,427 86,571,878
159,532,486 140,370,087
22.2 Commitments:
Documentary credits and short-term trade-related transactions

- Letters of credit 177,802,114 171,719,857
Commitments in respect of:

- forward foreign exchange contracts 22.2.1 255,130,490 170,721,451
- forward government securities transactions 22.2.2 50,301,688 17,438,813
- derivatives 22.2.3 49,929,421 46,734,911
- forward lending 22.2.4 20,974,215 26,798,555
Commitments for acquisition of:

- operating fixed assets 2,791,737 3,004,717
- intangible assets 487,972 465,248
557,417,637 436,883,552
22.2.1 Commitments in respect of forward foreign exchange contracts
Purchase 144,949,923 120,494,702

Sale 110,180,567 50,226,749
255,130,490 170,721,451
22.2.2 Commitments in respect of forward government securities transactions
Purchase 31,755,224 12,990,116

Sale 18,546,464 4,448,697
50,301,688 17,438,813

2023 2022
---------(Rupees in '000)---------
22.2.3 Commitments in respect of derivatives

Interest Rate Swaps
Purchase 23.1 49,226,770 46,160,838
Sale - -
49,226,770 46,160,838
Cross Currency Swaps

Purchase - -
Sale 23.1 702,651 574,073
702,651 574,073
Total commitments in respect of derivatives 49,929,421 46,734,911
22.2.4 Commitments in respect of forward lending
Undrawn formal standby facilities, credit lines and other commitments to lend 22.2.4.1 16,241,704 21,639,590
Commitments in respect of investments 4,732,511 5,158,965
20,974,215 26,798,555
22.2.4.1 These represent commitments that are irrevocable because they cannot be withdrawn at the discretion of the Bank without the
risk of incurring significant penalty or expense.
22.3 Other contingent liabilities
22.3.1 Claims against the Bank not acknowledged as debts 24,595,327 6,903,292
These mainly represents counter claims filed by the borrowers for restricting the Bank from disposal of collateral assets (such as
hypothecated / mortgaged / pledged assets kept as security), damage to reputation and cases filed by Ex. employees of the Bank
for damages. Based on legal advice and / or internal assessment, management is confident that the matters will be decided in
Bank's favour and the possibility of any outcome against the Bank is remote and accordingly no provision has been made in these
financial statements.
22.4 Contingency for tax payable

22.4.1 There were no tax related contingencies other than as disclosed in note 33.1.
23 DERIVATIVE INSTRUMENTS
Derivatives are a type of financial contract, the value of which is determined by reference to one or more underlying assets or
indices. The major categories of such contracts include futures, swaps and options. Derivatives also include structured financial
products that have one or more characteristics of forwards, futures, swaps and options.
23.1 Product Analysis March 31, 2023 (Un-audited)

Interest Rate Swaps Cross Currency Swap
Counterparties No. of Notional Mark to No. of Notional Mark to
contracts Principal market gain contracts Principal market loss
-----------------------------------------(Rupees in '000)----------------------------------------
With Banks for
Hedging 48 49,226,770 4,308,567 - - -
With other entities
Market making - - - 2 702,651 (96,786)
48 49,226,770 4,308,567 2 702,651 (96,786)
December 31, 2022 (Audited)

No. of Notional Mark to No. of Notional Mark to
contracts Principal market gain contracts Principal market gain
-----------------------------------------(Rupees in '000)----------------------------------------
With Banks for
Hedging 51 46,160,838 4,761,605 - - -
With other entities
Market making - - - 1 574,073 33,940
51 46,160,838 4,761,605 1 574,073 33,940
32 BANK ALFALAH
Note (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
--------------(Rupees in '000)--------------
24 MARK-UP/RETURN/INTEREST EARNED
On:
a) Loans and advances 25,893,271 14,497,086
b) Investments 45,766,944 20,306,425
c) Lendings to financial institutions / Bai Muajjal 841,974 348,518
d) Balances with banks 39,866 7,890
e) On securities purchased under resale agreements 3,046,675 656,919
75,588,730 35,816,838
25 MARK-UP/RETURN/INTEREST EXPENSED
On:
a) Deposits 27,888,683 12,659,996
b) Borrowings 3,658,824 2,042,895
c) Securities sold under repurchase agreements 13,978,721 5,412,173
d) Sub ordinated debt 638,273 170,802
e) Cost of foreign currency swaps against foreign currency deposits / borrowings 810,749 768,308
f) Borrowing cost on leased properties 584,685 422,649
g) Reward points / customer loyalty 91,575 50,962
47,651,510 21,527,785
26 FEE & COMMISSION INCOME

Branch banking customer fees 292,175 254,104
Consumer finance related fees 140,150 119,702
Card related fees (debit and credit cards) 637,552 449,086
Credit related fees 142,211 52,845
Investment banking fees 26,243 43,563
Commission on trade 546,182 484,245
Commission on guarantees 200,128 120,511
Commission on cash management 14,726 10,798
Commission on remittances including home remittances 300,487 228,721
Commission on bancassurance 125,869 160,300
Card acquiring business 337,348 171,472
Wealth Management Fee 31,966 22,969
Commission on Employees' Old-Age Benefit Institution (EOBI) - 11,868
Commission on Benazir Income Support Programme (BISP) 143,233 146,921
Alternate Delivery Channels (ADC) 306,104 160,936
Others 60,629 35,484
3,305,003 2,473,525
27 (LOSS) / GAIN ON SECURITIES
Realised 27.1 81,372 304,354

Unrealised - held for trading 10.1 (396,921) (292,849)
(315,549) 11,505
27.1 Realised gain / (loss) on:
Federal Government Securities 240,324 110,671
Shares (422,655) (10,806)
Non Government Debt Securities - 2,993
Foreign Securities 263,703 201,496
81,372 304,354
28 OTHER INCOME
Rent on property 7,328 6,057

Gain on sale of fixed assets-net 29,067 27,083
Gain on sale of non banking assets 28.1 - 9,200
Profit on termination of leased contracts (Ijarah) 19,154 10,528
Gain on termination of leases (IFRS 16) 8,634 107,901
64,183 160,769
28.1 In 2022, the Bank earned an income of Rs. 9.200 million against sale of membership shares / cards.

Note (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-------------(Rupees in '000)-------------
29 OPERATING EXPENSES
Total compensation expense 29.1 7,141,913 4,924,586
Property expense
Rates and taxes 32,515 24,115
Utilities cost 443,993 314,121
Security (including guards) 247,898 227,092
Repair and maintenance (including janitorial charges) 244,958 213,007
Depreciation on right-of-use assets 761,494 631,636
Depreciation on non-banking assets acquired in satisfaction of claims 1,232 1,075
Depreciation on owned assets 202,228 150,465
1,934,318 1,561,511
Information technology expenses
Software maintenance 431,569 470,256
Hardware maintenance 260,527 145,593
Depreciation 257,417 157,626
Network charges 142,674 133,290
Consultancy and support services 15,573 39,329
1,185,842 1,034,301
Other operating expenses
Directors' fees and allowances 40,977 50,500
Fees and allowances to Shariah Board 3,780 3,345
Legal and professional charges 82,235 202,511
Outsourced services costs 218,786 170,115
Travelling and conveyance 276,619 172,493
Clearing and custodian charges 40,676 25,860
Training and development 32,272 28,662
Postage and courier charges 114,056 122,745
Communication 384,935 131,261
Stationery and printing 293,221 227,130
Marketing, advertisement and publicity 379,730 266,965
Donations 944,500 2,600
Auditors' remuneration 18,604 13,540
Brokerage and commission 75,115 65,573
Entertainment 145,190 80,280
Repairs and maintenance 172,849 146,909
Insurance 300,821 320,677
Cash handling charges 255,714 251,769
CNIC verification 64,973 43,763
Others 129,505 166,361
4,322,263 2,761,790
14,584,336 10,282,188
29.1 Total compensation expense
Managerial remuneration
i) Fixed 4,752,761 3,622,299
ii) Variable:
a) Cash Bonus / Awards etc. 1,425,765 616,669
b) Bonus and Awards in Shares etc. 81,249 60,000
Contribution to defined contribution plan 179,206 149,114
Medical 327,145 188,608
Conveyance 127,030 87,287
Staff compensated absences 47,499 45,000
Others 69,979 44,024
Sub-total 7,127,384 4,901,856
Sign-on bonus 14,529 17,730
Severance allowance - 5,000
Grand Total 7,141,913 4,924,586
34 BANK ALFALAH
30 WORKERS' WELFARE FUND
The Supreme Court of Pakistan vide its order dated November 10, 2016 has held that the amendments made in the law introduced
by Federal Government through Finance Act, 2008 for the levy of Workers' Welfare Fund (WWF) on banks were not lawful. The
Federal Board of Revenue has filed review petitions against this order, which are currently pending. A legal advice was obtained by
the Pakistan Banking Association which highlights that consequent to filing of these review petitions, a risk has arisen and the
judgment is not conclusive until the review petition is decided. Accordingly, the amount charged for Workers' Welfare Fund since
2008 has not been reversed.
Note (Un-audited)
Quarter ended
March 31, March 31,

2023 2022
31 OTHER CHARGES -------------(Rupees in '000)-------------
Penalties imposed by State Bank of Pakistan 10,973 1,803
32 PROVISIONS & WRITE OFFS - NET
Reversal against lending to financial institutions (IFRS 9 - ECL) 9 (295) -
(Reversal) / provision for diminution in value of investments / IFRS 9 - ECL 10.3.1 (118,565) 13,420
Provision against loans & advances / IFRS 9 - ECL 11.4 625,173 422,766
Provision against other assets / IFRS 9 - ECL 15.2.1 59,665 2,664
Provision against off-balance sheet obligations / IFRS 9 - ECL 20.1 33,307 37,053
Other provisions / write off - net 2,235 2,665
Recovery of written off / charged off bad debts (79,745) (91,418)

521,775 387,150
33 TAXATION
Charge / (reversal) :
Current 8,551,542 3,126,333
Prior years - (1,420,539)
Deferred (319,968) 1,114,873
8,231,574 2,820,667

33.1 a) The income tax assessments of the Bank have been finalized upto and including tax year 2022. Certain addbacks have been
made by tax authorities for various assessment years appeals against which are pending with the Commissioner of Inland
Revenue (Appeals), Appellate Tribunal Inland Revenue (ATIR), High Court of Sindh and Supreme Court of Pakistan.
In respect of tax years 2008, 2014, 2017, 2019 to 2022, the tax authorities have raised certain issues including default in
payment of WWF, allocation of expenses to dividend and capital gains, dividend income from mutual funds not being taken
under income from business and disallowance of Leasehold improvements resulting in tax demand of Rs. 639.939 million net
of relief provided in appeal (December 31, 2022: Rs. 639.939). Bank has filed appeals on these issues which are pending
before Commissioner Appeals. The management is confident that these matters will be decided in favour of the Bank and
consequently has not made any provision in respect of these amounts.
b) The Bank had received orders from a provincial tax authority for the periods from July 2011 to December 2020 wherein tax
authority demanded sales tax on banking services and penalty amounting to Rs.763.312 million [excluding default surcharge]
by disallowing certain exemptions of sales tax on banking services and allegedly for short payment of sales tax. Appeals
against these orders are pending before Commissioner Appeals. The Bank has not made any provision against these orders
and the management is of the view that these matters will be settled in Bank's favour through appellate process.
c) The bank had received an order from a tax authority wherein Sales tax and penalty amounting to Rs.5.191 million [excluding
default surcharge] was demanded allegedly for non-payment of sales tax on certain transactions relating to accounting year
2016 and appeal against this order is pending before Commissioner Appeals. Another order previously received for the same
accounting year wherein Sales tax and Further Tax amounting to Rs.8.601 million [excluding default surcharge and penalty]
was demanded allegedly for non-payment of sales tax on certain transactions is pending before Appellate Tribunal. The Bank
has not made any provision against these orders and the management is of the view that this matter will be favourably
settled through appellate process.
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
34 BASIC AND DILUTED EARNINGS PER SHARE ------------(Rupees in '000)------------
Profit for the period 10,742,650 5,018,671
-------(Number of shares in '000)-------
Weighted average number of ordinary shares 1,577,165 1,777,165
--------------(Rupees)--------------
Basic and diluted earnings per share 6.81 2.82
34.1 Diluted earnings per share has not been presented separately as the Bank does not have any convertible instruments in issue.
36 BANK ALFALAH
35 FAIR VALUE MEASUREMENTS
Fair value measurement defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in
an orderly transaction between market participant at the measurement date. The fair value of quoted securities other than those
classified as held to maturity, is based on quoted market price. Quoted securities classified as held to maturity are carried at cost. The
fair value of unquoted equity securities, other than investments in associates and subsidiaries, is determined on the basis of the break-
up value of these investments as per their latest available audited financial statements. The fair value of unquoted debt securities, fixed
term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be calculated with sufficient reliability due to the
absence of a current and active market for these assets and liabilities and reliable data regarding market rates for similar instruments. In
the opinion of the management, the fair value of the remaining financial assets and liabilities are not significantly different from their
carrying values since these are either short-term in nature or, in the case of customer loans and deposits, are frequently repriced.
35.1 Fair value of financial instruments

The Bank measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
measurements:
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable
inputs).
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into
which the fair value measurement is categorised:
March 31, 2023 (Un-audited)
Level 1 Level 2 Level 3 Total
On balance sheet financial instruments ---------------------------(Rupees in '000)---------------------------
Financial assets - measured at fair value
Investments
Federal Government Securities - 1,100,511,237 - 1,100,511,237
Shares 5,372,884 - - 5,372,884
Non-Government Debt Securities 14,937,000 4,590,855 - 19,527,855
Foreign Securities - 70,586,644 - 70,586,644
Financial assets - not measured at fair value
Investments - held to maturity securities - 73,190,099 - 73,190,099
Off-balance sheet financial instruments - measured at fair value
Forward purchase of foreign exchange - 4,140,062 - 4,140,062
Forward sale of foreign exchange - 1,578,562 - 1,578,562
Forward purchase of government securities - (30,900) - (30,900)
Forward sale government securities - 42,303 - 42,303
Derivatives purchases - 4,308,567 - 4,308,567
Derivatives sales - (96,786) - (96,786)

Investments
Federal Government Securities - 946,606,485 - 946,606,485
Shares 6,440,731 - - 6,440,731


Forward purchase of foreign exchange - 922,573 - 922,573
Forward sale of foreign exchange - 455,164 - 455,164
Forward purchase of government securities - 4,432 - 4,432
Forward sale government securities transactions - (7,946) - (7,946)
Derivatives sales - 33,940 - 33,940

35.2 The Bank's policy is to recognize transfers into and out of the different fair value hierarchy levels at the date of the event or change in
circumstances that caused the transfer, occurred. There were no transfers between levels 1 and 2 during the current period.
35.3 Valuation techniques used in determination of fair values:

35.3.1 Fair value of financial assets
(a) Financial instruments in level 1
Financial instruments included in level 1 comprise of investments in ordinary shares of listed companies and listed non government
debt securities.
(b) Financial instruments in level 2
Financial instruments included in level 2 comprise of Market Treasury Bills, Pakistan Investment Bonds, GoP Sukuks, GoP Euro Bonds,
Overseas Government Sukuks, Overseas Bonds, Term Finance Certificates, and other than Government Sukuks, forward foreign
exchange contracts, forward government securities contracts, cross currency swap and interest rate swaps.
(c) Financial instruments in level 3
Currently, no financial instruments are classified in level 3 except as disclosed in 35.3.2.
The fair value of unquoted debt securities, fixed term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be
calculated with sufficient reliability due to the absence of a current and active market for these assets and liabilities and reliable data
regarding market rates for similar instruments.
35.3.2 Fair value of non-financial assets
Certain categories of fixed assets (land and buildings) and non banking assets acquired in satisfaction of claims are carried at revalued
amounts (level 3 measurement) determined by professional valuers based on their assessment of the market values as disclosed in notes
12 and 15. The valuations are conducted by the valuation experts appointed by the Bank which are also on the panel of State Bank of
Pakistan.
35.3.3 Valuation techniques

Item Valuation approach and input used
Market Treasury Bills(MTB) / Pakistan The fair value of MTBs and PIBs are derived using PKRV rates. GIS are revalued using
Investment Bonds(PIB), and GoP Sukuks (GIS) PKISRV rates. Floating rate PIBs are revalued using PKFRV rates.
including their forward contracts
Overseas Sukuks, Overseas and GoP Euro The fair value of Overseas Government Sukuks, and Overseas Bonds are valued on the
Bonds basis of price available on Bloomberg.
Debt Securities (TFCs and Sukuk other than Investment in WAPDA Sukuks, debt securities (comprising term finance certificates, bonds
Government) and any other security issued by a company or a body corporate for the purpose of
raising funds in the form of redeemable capital) are 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.
Ordinary shares - listed The fair value of investments in listed equity securities are valued on the basis of closing
quoted market price available at the Pakistan Stock Exchange.
Forward foreign exchange contracts The valuation has been determined by interpolating the FX revaluation rates announced
by the State Bank of Pakistan.
Derivative Instruments Derivatives that are valued using valuation techniques based on market observable inputs
are mainly interest rate swaps and cross currency swaps. The most frequently applied
valuation techniques include forward pricing and swap models using present value
calculations.
Fixed assets and non banking assets The valuation experts used a market based approach to arrive at the fair value of the
acquired in satisfaction of claims Bank's properties. The market approach used prices and other relevant information
generated by market transactions involving identical, comparable or similar properties.
These values are adjusted to reflect the current condition of the properties. The effect of
changes in the unobservable inputs used in the valuations cannot be determined with
certainty accordingly a qualitative disclosure of sensitivity has not been presented in
these financial statements.
38 BANK ALFALAH
36 SEGMENT INFORMATION
36.1 Segment details with respect to Business Activities

For the period ended March 31, 2023 (Un-audited)
Retail Corporate Islamic (Domestic) Treasury Digital Overseas Others * Total
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Profit and loss
Net mark-up/return/profit (10,898,287) 5,686,906 5,155,677 26,469,629 2,702 1,834,992 (314,399) 27,937,220
Inter segment revenue - net 26,277,320 (1,926,747) 295,741 (25,638,296) 396,466 359,232 236,284 -
Non mark-up / return / interest income 1,921,800 859,648 502,258 2,678,605 219,464 291,944 78,115 6,551,834
Total Income / (loss) 17,300,833 4,619,807 5,953,676 3,509,938 618,632 2,486,168 - 34,489,054
Segment direct expenses 5,952,854 532,950 2,244,363 210,326 631,787 833,401 4,587,374 14,993,055
Inter segment expense allocation 2,774,429 423,957 773,782 242,056 254,294 118,856 (4,587,374) -
Total expenses 8,727,283 956,907 3,018,145 452,382 886,081 952,257 - 14,993,055
Provisions / (reversals) 1,123,426 669,250 317,165 (218,872) 6,119 928 (1,376,241) 521,775
Profit / (loss) before tax 7,450,124 2,993,650 2,618,366 3,276,428 (273,568) 1,532,983 1,376,241 18,974,224
As at March 31, 2023 (Un-audited)

-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Balance Sheet
Cash and bank balances 82,370,014 14,581,399 25,228,057 - 886,735 49,062,848 - 172,129,053
Investments - 3,152,755 126,685,066 1,063,283,451 - 89,066,528 1,798,488 1,283,986,288
Net inter segment lending 722,865,872 - - - 12,584,367 - 116,001,237 851,451,476
Lendings to financial institutions - - 10,500,061 188,037,544 - 12,262,374 - 210,799,979
Advances - performing 189,970,303 284,507,793 164,454,142 - 118,981 40,843,642 12,555,823 692,450,684
Advances - non-performing 3,060,632 1,792,664 404,123 - 5,362 192,791 86,341 5,541,913
Others 19,141,361 32,649,157 32,895,024 43,606,754 1,388,818 17,903,993 19,822,034 167,407,141
Total assets 1,017,408,182 336,683,768 360,166,473 1,294,927,749 14,984,263 209,332,176 150,263,923 3,383,766,534
Borrowings 25,511,041 91,677,534 45,760,766 498,062,234 - 11,454,921 - 672,466,496

Subordinated debt - - - - - - 14,000,000 14,000,000
Deposits and other accounts 957,650,756 185,682,580 254,690,637 - 14,778,912 141,205,812 26,286 1,554,034,983
Net inter segment borrowing - 19,516,031 16,686,957 770,139,980 - 45,108,508 - 851,451,476
Others 34,246,385 39,807,623 41,435,848 35,669,661 205,351 16,285,072 20,025,123 187,675,063
Total liabilities 1,017,408,182 336,683,768 358,574,208 1,303,871,875 14,984,263 214,054,313 34,051,409 3,279,628,018
Net assets - - 1,592,265 (8,944,126) - (4,722,137) 116,212,514 104,138,516
Equity 104,138,516
Contingencies and commitments 95,264,389 213,690,152 60,336,091 270,589,016 3,557 97,388,127 4,274,118 741,545,450
* Others include head office related activities.
QUARTERLY REPORT - MARCH 31, 2023

39
40
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Profit and loss
BANK ALFALAH
Net mark-up/return/profit (1,794,999) 2,238,091 2,255,707 10,968,255 1,039 738,504 (117,544) 14,289,053
Inter segment revenue - net 9,721,586 (795,636) 86,427 (9,240,721) 211,923 120,588 (104,167) -
Non mark-up / return / interest income 1,504,472 575,947 375,678 1,200,498 193,227 310,055 221,711 4,381,588
Total income 9,431,059 2,018,402 2,717,812 2,928,032 406,189 1,169,147 - 18,670,641
Segment direct expenses 4,307,463 284,663 1,429,604 128,907 414,423 530,882 3,348,211 10,444,153
Inter segment expense allocation 1,997,913 302,923 555,913 126,110 287,213 78,139 (3,348,211) -
Total expenses 6,305,376 587,586 1,985,517 255,017 701,636 609,021 - 10,444,153
Provisions / (reversals) 450,099 (146,657) 53,058 20,898 3,563 6,189 - 387,150
Profit before tax 2,675,584 1,577,473 679,237 2,652,117 (299,010) 553,937 - 7,839,338
As at December 31, 2022 (Audited)

-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Balance sheet
Cash and bank balances 54,369,186 13,662,612 22,294,976 - 1,380,127 58,391,827 - 150,098,728
Investments - 3,065,299 123,324,033 913,838,262 - 72,564,199 1,614,965 1,114,406,758
Net inter segment lending 609,918,002 - - - 20,415,823 - 108,578,156 738,911,981
Lendings to financial institutions - - 30,000,061 81,309,765 - 4,043,773 - 115,353,599
Advances - performing 221,934,495 307,817,003 149,691,195 - 73,590 36,726,043 10,557,920 726,800,246
Advances - non-performing 2,942,331 1,660,287 726,449 - 3,985 162,523 79,030 5,574,605
Others 21,320,626 28,322,398 27,309,005 28,284,908 1,483,080 15,012,516 19,230,259 140,962,792
Total assets 910,484,640 354,527,599 353,345,719 1,023,432,935 23,356,605 186,900,881 140,060,330 2,992,108,709
Borrowings 26,937,622 95,851,939 39,964,773 314,660,326 - 13,764,871 - 491,179,531

Subordinated debt - - - - - - 14,000,000 14,000,000
Deposits and other accounts 860,878,106 210,843,465 255,671,950 - 23,002,118 136,392,013 57,694 1,486,845,346
Net inter segment borrowing - (1,059,219) 15,379,744 698,037,054 - 26,554,402 - 738,911,981
Others 27,112,775 48,891,414 40,321,510 15,282,535 354,487 12,816,381 16,378,126 161,157,228
Total liabilities 914,928,503 354,527,599 351,337,977 1,027,979,915 23,356,605 189,527,667 30,435,820 2,892,094,086
Net Assets (4,443,863) - 2,007,742 (4,546,980) - (2,626,786) 109,624,510 100,014,623
Equity 100,014,623
Contingencies and commitments 94,420,516 188,433,780 63,199,284 158,500,073 5,014 76,880,088 2,718,176 584,156,931
* Others include head office related activities.

37 RELATED PARTY TRANSACTIONS
The Bank has related party transactions with its parent, subsidiary, associates, joint ventures, employee benefit plans, its directors, key management personnel and other related parties.
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 financial statements are as follows:
Key Key
Other related Other related
Directors/ CEO management Subsidiary Associates Directors/ CEO management Subsidiary Associates
parties parties
personnel* personnel*
As at March 31, 2023 (Un-audited) As at December 31, 2022 (Audited)

-----------------------------------(Rupees in '000)-----------------------------------
------------------------------------------(Rupees in '000)---------------------------------------
.
Lendings to financial institutions
Opening balance - - - - - - - - - 2,330,078
Addition during the period / year - - - - 3,984,159 - - - - 25,964,631
Repaid during the period / year - - - - (3,984,159) - - - - (28,294,709)
Closing balance - - - - - - - - - -
Investments
Opening balance - - 305,217 1,177,606 1,119,230 - - 300,000 1,177,606 1,119,230
Investment made during the period / year - - - - - - - 5,217 - -
Closing balance - - 305,217 1,177,606 1,119,230 - - 305,217 1,177,606 1,119,230
Provision for diminution in value of investments - - 42,981 - - - - 42,981 - -
Advances
Opening balance 18,062 672,608 - - 2,367,924 77 1,184,057 - - 1,997,552
Addition during the period / year 454 132,943 - - 19,504,134 20,498 605,570 - - 37,536,790
Repaid during the period / year (1,174) (201,588) - - (19,424,928) (2,513) (173,521) - - (38,264,097)
Transfer in / (out) - net - - - - - - (943,498) - - 1,097,679
Closing balance 17,342 603,963 - - 2,447,130 18,062 672,608 - - 2,367,924
Provision held against advances - - - - 1,097,028 - - - - 1,097,028
Other assets
Interest / mark-up accrued 1,349 50,888 - - 24,743 944 54,009 - - 26,069

Receivable from staff retirement fund - - - - 36,957 - - - - 153,707
Prepayment / rent receivable - - - 1,950 - - - - 975 -
41
42
Key Key
Other related Other related
Directors/ CEO management Subsidiary Associates Directors/ CEO management Subsidiary Associates
parties parties
personnel* personnel*
-----------------------------------(Rupees in '000)-----------------------------------
------------------------------------------(Rupees in '000)----------------------------------------
Borrowings
Opening balance - - - - 2,180,207 - - - - 2,280,921
Borrowings during the period / year - - - - 449,936 - - - - 21,218,496
BANK ALFALAH
Settled during the period / year - - - - (26,840) - - - - (21,319,210)
Closing balance - - - - 2,603,303 - - - - 2,180,207
Deposits and other accounts

Opening balance 38,466 184,994 9,086 3,078,698 12,308,779 59,026 371,960 34,986 13,465,080 6,410,266
Received during the period / year 345,343 1,256,195 489,040 157,881,382 46,999,244 517,842 4,736,925 3,347,215 255,922,837 92,145,150
Withdrawn during the period / year (272,726) (1,001,920) (496,932) (157,603,703) (46,788,053) (538,402) (4,728,582) (3,373,115) (266,309,219) (87,581,596)
Transfer in / (out) - net - - - - - - (195,309) - - 1,334,959
Closing balance 111,083 439,269 1,194 3,356,377 12,519,970 38,466 184,994 9,086 3,078,698 12,308,779
Other liabilities
Interest / mark-up payable 394 5,442 - 5,548 80,446 253 158 - - 13,231
Dividend payable 2,590,007 - - - 2,232,892 1,146,264 39 - - 2,201,513
Others - - 6,183 - 82,252 - - 4,701 - 70,267
Contingencies and commitments

Other contingencies - - - - - - - - - -
For the period ended March 31, 2023 (Un-audited) For the period ended March 31, 2022 (Un-audited)
-----------------------------------------(Rupees in '000)---------------------------------------
-----------------------------------------(Rupees in '000)---------------------------------------
Income
Mark-up / return / interest earned 398 5,387 - - 30,567 - 12,769 - - 11,898
Fee and commission income - - - 29,633 - - - - 21,053 -
Dividend income - - - 66,000 - - - - 30,000 -
Gain on sale of securities - 1 - - - - - - - -
Other income - 36 - 3,114 - - 9 - 19,358 -
Expenses
Mark-up / return / interest paid 1,030 5,333 114 96,081 436,425 318 6,152 49 95,051 178,122
Directors fee 40,977 - - - - 50,500 - - - -
Managerial remuneration 172,907 581,021 - - - 187,264 783,056 - - -
Software maintenance - - - - 82,546 - - - - 23,250
Communication cost - - - - 42,566 - - - - 8,511
Brokerage and commission - - 3,477 - - - - 583 - -
Legal and professional charges - - - - - - - 1,388 - -
Charge for defined benefit plan - - - - 116,750 - - - - 67,204
Contribution to defined contribution plan - - - - 179,206 - - - - 141,926
Others - - - - 163 - - - - 5,428
Other Information
Dividend paid 2,177 5,019 - 5,903 134,203 - - - - -
Insurance premium paid - - - 1,019,962 - - - - 672,066 -
Insurance claims settled - - - 163,751 - - - - 165,638 -
* The definition of Key Management Personels has been changed in light of the SBP Corporate Governance Regulatory Framework with effect from June 2022.
2023 2022
38 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS ---------(Rupees in '000)---------
Minimum Capital Requirement (MCR):

Paid-up capital (net of losses) 15,771,651 15,771,651
Capital Adequacy Ratio (CAR):

Eligible Common Equity Tier 1 (CET 1) Capital 81,023,127 81,419,248
Eligible Additional Tier 1 (ADT 1) Capital 13,550,000 13,550,000
Total Eligible Tier 1 Capital 94,573,127 94,969,248
Eligible Tier 2 Capital 23,445,984 23,447,310
Total Eligible Capital (Tier 1 + Tier 2) 118,019,111 118,416,558
Risk Weighted Assets (RWAs):

Credit risk 672,234,952 727,196,837
Market risk 12,552,600 8,784,588
Operational risk 120,042,363 120,042,363
Total 804,829,915 856,023,788
Common Equity Tier 1 Capital Adequacy ratio 10.07% 9.51%

Tier 1 Capital Adequacy Ratio 11.75% 11.09%
Total Capital Adequacy Ratio 14.66% 13.83%
In line with Basel III Capital Adequacy guidelines, following capital requirements are applicable to the Bank:

For Capital adequacy calculation, Bank has adopted Standardized Approach for Credit & Market Risk related exposures and
Alternate Standardized Approach (ASA) for operational risk.
Leverage Ratio (LR):
Eligible Tier-1 Capital* 95,707,705 95,911,585
Total exposures 2,744,517,637 2,706,795,649

Leverage ratio 3.49% 3.54%
Liquidity Coverage Ratio (LCR):

Total High Quality Liquid Assets 865,173,042 688,048,074
Total Net Cash Outflow 397,163,006 371,947,384
Liquidity coverage ratio 218% 185%
Net Stable Funding Ratio (NSFR):
Total Available Stable Funding 1,335,677,593 1,275,978,211
Total Required Stable Funding 881,005,540 849,343,576

Net Stable Funding Ratio 152% 150%
*Eligible Tier -1 Capital measure for calculation of Leverage Ratio is based on three months average.

39 ISLAMIC BANKING BUSINESS
The Bank operates 291 Islamic banking branches (December 31, 2022: 280 branches) and 5 sub branches (December 31, 2022:
5 sub branch) as at March 31, 2023.
STATEMENT OF FINANCIAL POSITION
Note 2023 2022
-----------(Rupees in '000)-----------
ASSETS
Cash and balances with treasury banks 24,034,376 20,521,711
Balances with other banks 1,193,681 1,773,265
Due from financial institutions 39.1 10,500,061 30,000,061
Investments 39.2 126,685,066 123,324,033
Islamic financing and related assets - net 39.3 164,858,265 150,417,644
Fixed assets 12,744,968 12,336,223
Intangible assets 33,761 32,914
Deferred tax assets 257,191 -
Other assets 19,859,104 14,939,868
Total Assets 360,166,473 353,345,719
LIABILITIES
Bills payable 4,540,624 4,673,534
Due to financial institutions 45,760,766 39,964,773
Deposits and other accounts 39.4 254,690,637 255,671,950
Deferred tax liabilities - 158,892
Other liabilities 36,895,224 35,489,084
341,887,251 335,958,233
NET ASSETS 18,279,222 17,387,486
REPRESENTED BY
Islamic Banking Fund 3,950,000 3,950,000
Surplus on revaluation of assets 1,592,266 2,007,741
Unappropriated/ Unremitted profit 39.5 12,736,956 11,429,745
18,279,222 17,387,486
CONTINGENCIES AND COMMITMENTS 39.6
44 BANK ALFALAH
PROFIT AND LOSS ACCOUNT
(Un-audited)
Quarter ended
March 31, March 31,
Note 2023 2022
-----------(Rupees in '000)-----------
Profit / return earned 39.7 10,380,104 4,784,743

Profit / return expensed 39.8 5,224,427 2,529,036
Net Profit / return 5,155,677 2,255,707
Fee and Commission Income 324,081 270,495

Foreign Exchange Income 158,929 93,398
(Loss) / gain on securities (5,496) 48
Other Income 24,744 11,737
Total other income 502,258 375,678
Total Income 5,657,935 2,631,385
Other expenses
Operating expenses 2,965,689 1,973,407
Other charges 423 12
Total other expenses 3,018,145 1,985,517
Profit before provisions 2,639,790 645,868

Profit before taxation 2,322,625 592,810
Taxation 1,015,754 219,248

Profit after taxation 1,306,871 373,562

Total Total
39.1 Due from Financial Institutions ---------------------------------------(Rupees in '000)-------------------------------------
Musharaka Placements 10,500,061 - 10,500,061 30,000,061 - 30,000,061
39.2 Investments

Cost/
Cost/ Provision for Surplus / Carrying Provision for Surplus / Carrying
Amortised
Amortised cost diminution (Deficit) Value diminution (Deficit) Value
cost
By segment & type: ------------------------------------------------(Rupees in '000)-------------------------------------------------

Ijarah Sukuks 102,130,640 - (1,608,870) 100,521,770 100,945,854 - (925,105) 100,020,749
109,410,617 - (1,608,870) 107,801,747 105,724,929 - (925,105) 104,799,824
Other Federal Government Securities - - - - - - - -
Sukuks - Unlisted 16,573,166 - 85,267 16,658,433 16,579,545 - 129,707 16,709,252
Sukuks - Unlisted 2,302,962 (78,076) - 2,224,886 1,895,679 (80,722) - 1,814,957
Total Investments 128,286,745 (78,076) (1,523,603) 126,685,066 124,200,153 (80,722) (795,398) 123,324,033
2023 2022
--------(Rupees in '000)--------
39.3 Islamic financing and related assets
Ijarah 21,273,995 21,842,453
Murabaha 3,684,104 4,427,417
Musharaka 41,259,494 42,074,849
Diminishing Musharaka 4,006,728 3,747,820
Salam 4,181,665 3,561,970
Muajjal Financing 19,999,868 -
Musawama Financing 6,346,939 6,215,478
Islamic Staff financing 3,761,147 3,494,484
SBP Islamic Export Refinance 11,340,072 11,638,939
SBP Refinance Scheme For Wages & Salaries 46,416 306,658
Islamic Long Term Finance Facility Plant & Machinery 3,928,880 1,484,760
Islamic Refinance Renewable Energy 137,257 127,342
Islamic Temporary Economic Refinance Facility (ITERF) 11,924,510 10,119,342
Naya Pakistan Home Financing 3,502,455 3,548,291
Islamic Refinance Facility for Combating COVID 749,049 605,195
Advances against Islamic assets 19,591,491 29,243,089
Refinance Facility Under Bills Discounting 1,362,203 3,476,879
Inventory related to Islamic financing 10,109,676 6,597,230
Other Islamic modes 2,286,789 2,220,828
169,492,738 154,733,024
Less: provision against Islamic financings

- Specific (4,491,505) (4,167,412)
- General (142,968) (147,968)
(4,634,473) (4,315,380)
Islamic financing and related assets - net of provision 164,858,265 150,417,644
46 BANK ALFALAH
39.4 Deposits March 31, 2023 (Un-audited) December 31, 2022 (Audited)
Total Total
--------------------------------------------(Rupees in '000)--------------------------------------------
Customers
Term deposits 35,162,100 263,855 35,425,955 45,821,709 212,069 46,033,778
Other deposits 4,213,605 1,471,048 5,684,653 2,290,176 465,542 2,755,718
218,834,923 13,598,865 232,433,788 220,125,031 10,676,923 230,801,954
Current deposits 501,373 - 501,373 244,430 - 244,430
Savings deposits 250,476 - 250,476 270,566 - 270,566
Term deposits 21,505,000 - 21,505,000 24,355,000 - 24,355,000
22,256,849 - 22,256,849 24,869,996 - 24,869,996
241,091,772 13,598,865 254,690,637 244,995,027 10,676,923 255,671,950
39.4.1 Current deposits include remunerative current deposits of Rs. 14,422.298 million (December 31, 2022: Rs. 14,325.601 million).
2023 2022
----------(Rupees in '000)----------
39.5 Islamic Banking Business Unappropriated Profit
Opening Balance 11,429,745 8,924,121
Add: Islamic Banking profit before taxation for the period / year 2,322,625 4,945,055
Less: Taxation for the period / year (1,015,754) (2,440,810)
Add: Transfer from surplus on revaluation of assets to unappropriated profit - net 340 1,379
Closing Balance 12,736,956 11,429,745
39.6 Contingencies and Commitments

-Guarantees 4,141,167 4,306,277
-Commitments 56,194,924 58,893,007
60,336,091 63,199,284
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-----------(Rupees in '000)-----------
39.7 Profit/Return Earned of Financing, Investments and Placement
Financing 5,425,313 2,334,114
Investments 4,708,887 2,296,783
Placements 245,904 153,846
10,380,104 4,784,743
39.8 Profit on Deposits and other Dues Expensed

Deposits and other accounts 4,471,940 1,992,364
Due to financial institutions 520,450 367,792
Cost of foreign currency swaps against foreign currency deposits / borrowings 8,941 14,775
Reward points / customer loyalty 7,588 3,862
5,224,427 2,529,036

39.9 PLS Pool Management- Islamic Banking Group (IBG)
39.9.1 The pools, their key features and risk and reward characteristics.
The profit and loss sharing between the Rabbul Maal (depositor) and Mudarib (Bank - IBG) is based upon the underlying principles of
Mudaraba, where Bank also contributes its equity to general pool of funds, and becomes the capital provider.
Currently IBG is managing following pools:
1) General Pool for LCY Depositors
2) FCY Pool for Foreign Currency (USD, GBP, EURO,AED, SAR and CAD) depositors
3) FIs Pool for Treasury Purposes
4) IERS Pool for Islamic Export Refinance Scheme facilities
5) Special pool
6) PMRC Musharikah Pool
All the Mudaraba based Remunerative deposits shall be considered as an investment from Rabbul Maal in the pool, along with IBG's own
share of equity, which is also commingled in the pool. The applications of these funds are on Advances, Investments, and Placements for
generating profits to be shared among the depositors as per the Weightage system.
The IERS pool is maintained as per the guideline under SBP IERS Scheme.
The assets, liabilities, equities, income and expenses are segregated for each of the pool. No pool investment is intermingled with each other.
The risk associated with each pool is thus equally distributed among the pools.
39.9.2 Avenues/sectors where Mudaraba based deposits have been deployed. March 31, December 31,
2023 2022
------(Rupees in '000)------
Agriculture, Forestry, Hunting and Fishing 20,766,521 784,589

Automobile and transportation equipment 7,090,335 7,595,658
Cement 3,674,435 4,622,222
Chemical and Pharmaceuticals 7,040,609 9,349,258
Construction 2,832,733 2,877,944
Electronics and electrical appliances 1,359,751 1,553,152
Exports / Imports 390 556
Financial 147,917 220,000
Food & Allied Products 8,731,630 9,398,453
Footwear and Leather garments 791,380 871,411
Glass and Ceramics 56,551 127,652
Individuals 33,494,557 33,543,245
Insurance 783 783
Metal & Allied industries 2,673,014 2,445,184
Mining and Quarrying 506,975 507,314
Oil and Allied 4,689,264 4,427,967
Paper and Board 667,740 957,214
Plastic and Allied Industries 2,975,788 2,979,808
Power (electricity), Gas, Water, Sanitary 7,240,785 7,923,231
Services 2,478,863 2,657,917
Sugar 3,680,074 2,778,838
Technology and Related services 57,506 56,530
Textile 46,265,070 46,702,510
Transport, Storage and Communication 7,024,242 6,289,478
Wholesale and Retail Trade 3,472,456 4,226,059
Others 1,773,369 1,836,051
Total Gross Islamic Financing and Related Assets 169,492,738 154,733,024
Total gross investments (at cost) 128,286,745 124,200,153
Total Islamic placements 10,500,061 30,000,061
Total Invested Funds 308,279,544 308,933,238
48 BANK ALFALAH
39.9.3 The major components of Profit distribution and charging of the expenses.
Profit is distributed among the Mudaraba deposits on the basis of underlying principles of weightage mechanism which are announced before the beginning of the
relevant period. Only direct attributable expenses such as depreciation on ijarah assets, brokerage, CIB Charges, bad debts write off on advances and loss on sale
of investments etc are charged to the pool. Expenses of pool(s) do not include general and specific provisioning created against non-performing financings and
diminution in the value of investments.
39.9.4 The Bank manages the following general and specific pools:
Profit rate /
return
Profit rate and Profit sharing ratio Percentage of Amount of
distributed to
Remunerative Depositors' weightage Profit rate / Mudarib Mudarib share Mudarib Share
remunerative
Pools announcement return earned share transferred transferred
deposits
period through Hiba through Hiba
Mudarib Share Rabbul Maal (Savings and
/ Fee Share fixed)
(Rupees in (Rupees in
(In %) (In %) (In %) (In %) (In %)
'000) '000)
General Pools
PKR Pool Monthly 14.19% 50.00% 50.00% 2,024,251 9.18% 0.27% 21,092
USD Pool Monthly 6.00% 85.00% 15.00% 37,620 0.79% 0.00% -
GBP Pool Monthly 4.15% 85.00% 15.00% 3,197 0.67% 0.00% -
EUR Pool Monthly 3.29% 85.00% 15.00% 2,438 0.71% 0.00% -
AED Pool Monthly 2.73% 85.00% 15.00% 119 0.19% 0.00% -
SAR Pool Monthly 3.22% 85.00% 15.00% 187 0.25% 0.00% -
CAD Pool Monthly 7.22% 85.00% 15.00% 99 0.38% 0.00% -
Specific Pools
Special Pool (Saving & TDRs) Monthly 15.24% 3.58% 96.42% 38,252 15.19% 11.17% 9,340
Profit rate
Profit sharing return
Profit rate and Percentage of Amount of
ratio distributed to
SBP Refinance Borrowing weightage Profit rate Mudarib Mudarib share Mudarib Share
remunerative
pool announcement return earned share transferred transferred
deposits
period through Hiba through Hiba
Bank Share SBP Share (Savings and
fixed)
(Rupees in (Rupees in
(In %) (In %) (In %) (In %) (In %)
'000) '000)
Islamic Export Refinance
(IERS) Pool Monthly 14.54% 69.84% 30.16% 597,766 Nil 0.00% -
40 AFGHANISTAN OPERATIONS
Bank Alfalah maintains a two-branch presence in Afghanistan. The board and management of the Bank continue to closely monitor the evolving situation in
Afghanistan which has been hampered due to country's frozen reserves and uncertainty regarding international recognition which prevent normal flows in and out
of Afghanistan. The Bank has taken impairment against assets where there is an indication that carrying amount may be higher than its recoverable amount. The
Bank remains focused on maintaining its control standards i.e. both onshore and through Head Office oversight.

41 DATE OF AUTHORISATION
These unconsolidated condensed interim financial statements were authorised for issue on April 27, 2023 by the Board of Directors
of the Bank.
42 GENERAL
42.1 Comparative information has been re-classified, re-arranged or additionally incorporated in these unconsolidated condensed interim
financial statements, wherever necessary to facilitate comparison.
42.2 The effect of reclassification, rearrangement, restatement in the comparative information presented in these
unconsolidated financial statements is as follows:
Description of item Nature (Rupees in '000) From To
Net interest On Interest Rate Swap Income 125,560 Mark-Up/Return/Interest Mark-Up/Return/Interest

Expensed - Borrowings Earned - Investments
50 BANK ALFALAH
CONSOLIDATED CONDENSED
INTERIM FINANCIAL STATEMENTS
QUARTER ENDED MARCH 31, 2023
Consolidated Condensed Interim
Statement of Financial Position
As at March 31, 2023 CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
AS AT MARCH 31, 2023

2023 2022
--------------(Rupees in '000)--------------
ASSETS
Cash and balances with treasury banks 7 153,729,351 140,613,751

Balances with other banks 8 18,756,880 10,105,449
Lendings to financial institutions 9 210,799,979 115,353,599
Investments 10 1,287,252,908 1,117,616,363
Advances 11 698,015,183 732,385,815
Fixed assets 12 50,321,904 48,493,284
Intangible assets 13 1,381,618 1,304,181
Deferred tax assets 14 13,110,875 7,550,773
Other assets 15 102,067,082 83,296,493
2,535,435,780 2,256,719,708
LIABILITIES
Bills payable 16 25,464,860 40,033,806

Borrowings 17 673,053,309 491,649,941
Deposits and other accounts 18 1,554,033,789 1,486,836,260
Liabilities against assets subject to finance lease - -
Subordinated debt 19 14,000,000 14,000,000
Other liabilities 20 162,668,959 122,136,332
2,429,220,917 2,154,656,339
NET ASSETS 106,214,863 102,063,369
REPRESENTED BY
Share capital 15,771,651 15,771,651

Reserves 39,680,824 34,283,201
(Deficit) / surplus on revaluation of assets 21 (2,174,421) 4,847,101
Unappropriated profit 52,810,712 47,033,616
Total equity attributable to the equity holders of the Holding Company 106,088,766 101,935,569
Non-controlling interest 22 126,097 127,800

106,214,863 102,063,369
CONTINGENCIES AND COMMITMENTS 23
The annexed notes 1 to 42 form an integral part of these consolidated condensed interim financial statements.
President
President & Chief
& Chief Executive
Executive Officer
Officer Chief
Chief Financial
Financial Officer
Officer Director
Director Director
Director Director
Director
52 BANK ALFALAH
Profit and Loss Account (Un-audited)
For the quarter ended March 31, CONDENSED
CONSOLIDATED 2023 INTERIM PROFIT AND LOSS ACCOUNT (Un-audited)
Note Quarter ended Quarter ended

March 31, March 31,
2023 2022
------------(Rupees in '000)------------
Mark-up/Return/Interest Earned 25 75,600,919 35,826,601

Mark-up/Return/Interest Expensed 26 47,687,134 21,547,631
Net Mark-up/Return/Interest Income 27,913,785 14,278,970
NON MARK-UP/RETURN/INTEREST INCOME
Fee and Commission Income 27 3,425,331 2,537,304

Dividend Income 207,950 194,511
Foreign Exchange Income 3,324,964 1,430,821
(Loss) / gain from derivatives (100,717) 80,457
(Loss) / gain on securities 28 (312,459) 11,068
Share of profit from associates 123,158 61,268
Other Income 29 64,201 160,787
Total non-markup/interest Income 6,732,428 4,476,216
Total Income 34,646,213 18,755,186
NON MARK-UP/INTEREST EXPENSES
Operating expenses 30 14,686,579 10,341,029

Workers' Welfare Fund 31 397,746 160,162
Other charges 32 10,973 1,803
Total non-markup/interest expenses 15,095,298 10,502,994
Profit before provisions 19,550,915 8,252,192

Provisions and write offs - net 33 521,775 385,859
Extra ordinary / unusual items - -
PROFIT BEFORE TAXATION 19,029,140 7,866,333
Taxation 34 8,258,450 2,836,174
PROFIT AFTER TAXATION 10,770,690 5,030,159
Profit / (loss) attributable to:

Equity holders of the Holding Company 10,772,393 5,033,102
Non-controlling interest (1,703) (2,943)
10,770,690 5,030,159
-----------------(Rupees)-----------------
Basic and Diluted Earnings per share 35 6.83 2.83
Statement of Comprehensive
BANK ALFALAHIncome
LIMITED (Un-audited)
CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (Un-audited)

March 31, March 31,
2023 2022
-----------(Rupees in '000)-----------
Profit after taxation for the period 10,770,690 5,030,159
Other comprehensive income
Items that may be reclassified to profit and loss account in subsequent periods:
Movement in surplus / (deficit) on revaluation of investments - net of tax (6,989,843) (886,923)
Movement in surplus / (deficit) on revaluation of investments - net of tax (share of associates) (439) (2,183)
(2,666,924) (265,561)
Items that will not be reclassified to profit and loss account in subsequent periods:
Movement in surplus/ (deficit) on revaluation of operating fixed assets - net of tax (8,961) (29,201)
Movement in surplus / (deficit) on revaluation of non-banking assets - net of tax (398) 17,504
(9,359) (11,697)
Total comprehensive income 8,094,407 4,752,901
Total comprehensive income / (loss) attributable to:

Equity holders of the Holding Company 8,096,110 4,755,844
Non-controlling interest (1,703) (2,943)
8,094,407 4,752,901
54 BANK ALFALAH
Statement of Changes in Equity (Un-audited)
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Un-audited)
Capital
Surplus/(Deficit) on revaluation
Reserves
Exchange Non
Share Share Statutory Non Banking Unappropria
translation Investments Fixed Assets Sub-total Controlling Total
capital premium reserve Assets ted profit
reserve Interest
--------------------------------------------------------------------------------(Rupees in '000)--------------------------------------------------------------------------------
Balances as at January 01, 2022 17,771,651 4,731,049 8,211,089 17,011,825 (1,227,635) 12,580,193 87,688 42,578,350 101,744,210 129,889 101,874,099
Profit / (loss) after taxation - - - - - - - 5,033,102 5,033,102 (2,943) 5,030,159
Other comprehensive income - net of tax - - 623,545 - (889,106) (7,298) 17,534 - (255,325) - (255,325)
Transfer to statutory reserve - - - 501,867 - - - (501,867) - - -
Transfer of revaluation surplus upon change in use - net of tax - - - - - 36,884 (36,884) - - - -

assets to unappropriated profit - net of tax - - - - - (21,903) (30) 21,933 - - -
Final cash dividend for the year ended December 31, 2021 - 20% (3,554,330) (3,554,330) (3,554,330)
Balance as at March 31, 2022 17,771,651 4,731,049 8,834,634 17,513,692 (2,116,741) 12,587,876 68,308 43,577,188 102,967,657 126,946 103,094,603
Changes in equity for nine months ended December 31, 2022
Profit after taxation - - - - - - - 13,361,664 13,361,664 5,641 13,367,305
Other comprehensive income - net of tax - - 1,885,048 - (5,435,731) (74,938) 14,289 (294,691) (3,906,023) (531) (3,906,554)
Transfer to statutory reserve - - - 1,318,778 - - - (1,318,778) - - -

assets to unappropriated profit - net of tax - - - - (4,024) (191,846) (92) 195,962 - - -
Sale of shares by Non-controlling interest - - - - - - - - - (5,217) (5,217)
Movement in reserve due to capital injection - - - - - - - (961) (961) 961 -
Interim cash dividend for the half year ended June 30, 2022 - 25% - - - - - - - (4,442,913) (4,442,913) - (4,442,913)
Own shares purchased during the year (2,000,000) - - - - - - (4,043,855) (6,043,855) - (6,043,855)
Balance as at December 31, 2022 15,771,651 4,731,049 10,719,682 18,832,470 (7,556,496) 12,321,092 82,505 47,033,616 101,935,569 127,800 102,063,369
Profit / (loss) after taxation - - - - - - - 10,772,393 10,772,393 (1,703) 10,770,690
Other comprehensive income - net of tax - - 4,323,358 - (6,990,282) (8,961) (398) - (2,676,283) - (2,676,283)
Transfer to statutory reserve - - - 1,074,265 - - - (1,074,265) - - -

assets to unappropriated profit - net of tax - - - - - (21,881) - 21,881 - - -
Final cash dividend for the year ended December 31, 2022 - 25% - - - - - - - (3,942,913) (3,942,913) - (3,942,913)
Balance as at March 31, 2023 15,771,651 4,731,049 15,043,040 19,906,735 (14,546,778) 12,290,250 82,107 52,810,712 106,088,766 126,097 106,214,863
Cash Flow Statement (Un-audited)
CONSOLIDATED CONDENSED INTERIM CASH FLOW STATEMENT (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
---------(Rupees in '000)---------
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 19,029,140 7,866,333
Dividend income (207,950) (194,511)
Share of profit from associates (123,158) (61,268)
18,698,032 7,610,554
Adjustments
Depreciation 1,577,110 1,215,565
Unrealised loss on revaluation of investments classified as held for trading - net 396,293 294,980
Gain on sale of operating fixed assets and non banking assets - net (29,085) (36,301)
Gain on termination of leases (IFRS 16) - net (8,634) (107,901)
Charge for staff compensated absences 47,499 45,000
3,683,093 2,558,118
22,381,125 10,168,672
(Increase) / decrease in operating assets
Lendings to financial institutions (87,868,430) 11,719,917
Held for trading securities (126,751,333) 15,237,904
Advances 33,745,459 (12,908,408)
Other assets (excluding advance taxation) (18,777,161) (12,583,938)
(199,651,465) 1,465,475
Increase/ (decrease) in operating liabilities
Bills payable (14,568,946) 4,208,174
Borrowings 183,068,699 59,306,814
Deposits 67,197,529 39,141,714
Other liabilities (excluding current taxation) 32,998,509 6,063,020
268,695,791 108,719,722
91,425,451 120,353,869
Income tax paid (5,004,213) (2,362,754)
Net cash generated from operating activities 86,421,238 117,991,115
CASH FLOWS FROM INVESTING ACTIVITIES
Net investments in available-for-sale securities (53,108,320) (110,126,677)
Net investments in held-to-maturity securities (2,288,699) (5,972,730)
Dividends received from associates 66,000 30,000
Dividends received 141,269 144,349
Investments in operating fixed assets (1,735,596) (3,434,177)
Proceed from sale proceeds of fixed assets 37,904 44,179
Net cash used in investing activities (52,564,084) (118,691,511)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of leased obligations (974,663) (758,162)
Dividend paid (1,872,474) (44,318)
Net cash used in financing activities (2,847,137) (802,480)
Increase / (decrease) in cash and cash equivalents 31,010,017 (1,502,876)
Cash and cash equivalents at beginning of the year 204,794,737 136,485,549
Effects of exchange rate changes on cash and cash equivalents - (gain) (18,686,135) (1,692,827)
186,108,602 134,792,722
Cash and cash equivalents at end of the period 217,118,619 133,289,846
56 BANK ALFALAH
Notes to and Forming Part of the Consolidated
Condensed Interim Financial Statements (Un-audited)
NOTES TO AND FORMING PART OF THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS (Un-audited)
1 STATUS AND NATURE OF BUSINESS
1.1 The "Group" consists of:
Holding Company : Bank Alfalah Limited, Pakistan
Bank Alfalah Limited (the Bank) is a banking company incorporated in Pakistan and is engaged in commercial banking and related services
in Pakistan and overseas. The Bank's registered office is located at B. A. Building, I. I. Chundrigar Road, Karachi and its shares are listed
on the Pakistan Stock Exchange. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962. The
Bank is operating through 889 branches (December 31, 2022: 877 branches) and 17 sub-branches (December 31, 2022: 17 sub-branches).
Out of the 889 branches, 587 (December 31, 2022: 586) are conventional, 291 (December 31, 2022: 280) are Islamic, 10 (December 31,
2022: 10) are overseas and 1 (December 31, 2022: 1) is an offshore banking unit.
Percentage of Holding
March 2023 December 2022
Subsidiary
Alfalah CLSA Securities (Private) Limited, Pakistan 62.50% 62.50%
1.2 In addition, the Group maintains investments in the following:
Associates
Alfalah Insurance Company Limited 30.00% 30.00%
Sapphire Wind Power Company Limited 30.00% 30.00%
Alfalah Asset Management Limited (Formerly Alfalah GHP Investment Management Limited) 40.22% 40.22%
2 BASIS OF PRESENTATION
2.1 These consolidated condensed interim financial statements represent financial statements of the Holding Company - Bank Alfalah Limited
and its subsidiary. The assets and liabilities of subsidiary have been consolidated on a line-by-line basis and the investment held by the
holding company is eliminated against the corresponding share capital of subsidiary in these consolidated condensed interim financial
statements. These consolidated condensed interim financial statements have been prepared in conformity with the format of financial
statements prescribed by the State Bank of Pakistan (SBP) vide BPRD Circular Letter No. 5 dated March 22, 2019.
2.1.1 The disclosures made in these condensed interim consolidated financial statements have been limited based on the format prescribed by
the SBP vide BPRD Circular Letter No. 5 dated March 22, 2019 and IAS 34. These condensed interim consolidated financial statements do
not include all the information and disclosures required for annual consolidated financial statements and should be read in conjunction
with the consolidated financial statements for the year ended December 31, 2022.
2.2 STATEMENT OF COMPLIANCE
These consolidated condensed interim financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards comprise of:
- International Financial Reporting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board (IASB)
as notified under Companies Act 2017;
- Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan (ICAP) as are notified under
the Companies Act, 2017.
- Provisions of and directives issued under the Banking Companies Ordinance, 1962 and the Companies Act, 2017.
- Directives issued by the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP).
Whenever the requirements of the Banking Companies Ordinance, 1962, Companies Act, 2017 or the directives issued by the SBP and the
SECP differ with the requirements of IFRS or IFAS, requirements of the Banking Companies Ordinance, 1962, the Companies Act, 2017 and
the said directives shall prevail.
The SBP has deferred the applicability of International Accounting Standard (IAS) 40, 'Investment Property' for banking companies
through BSD Circular Letter No. 10 dated August 26, 2002 till further instructions. Further, the SECP has deferred the applicability of
International Financial Reporting Standard (IFRS) 7, 'Financial Instruments: Disclosures' on banks through its notification S.R.O 411(I)/2008
dated April 28, 2008. The State Bank of Pakistan through BPRD Circular No. 04 of 2015 dated February 25, 2015 has deferred
applicability of Islamic Financial Accounting Standard-3 for Profit and Loss Sharing on Deposits (IFAS-3) issued by the ICAP and notified
by the SECP, vide their SRO No. 571 of 2013 dated June 12, 2013 for Institutions offering Islamic Financial Services (IIFS). Further, SBP has
deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments: Recognition and Measurement'.

Moreover, the Holding Company has not adopted IFRS 9 in preparation of these accounts, as allowed by SBP BPRD circular no 7 of 2023
dated April 13, 2023.
Accordingly, the requirements of these standards have not been considered in the preparation of these consolidated condensed interim
financial statements; except for overseas branches, subsidiary and associates where such standards are applicable.
2.2.1 Basis of consolidation
A subsidiary is an entity controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns from its
investment with the investee and has the ability to affect those return through its power over the investee.
These consolidated condensed interim financial statements incorporate the financial statements of subsidiary from the date that control
commences until the date that control ceases.
Associates are those entities on which the Group has significant influence, but not control, over the financial and operating polices.
Associates as well as investment in mutual funds established under trust structure are accounted for using the equity method.
Non-controlling interests are that part of the net results of operations and of net assets of subsidiary which are not owned by the
Holding Company. Material intra-group balances and transactions are eliminated.
2.2.2 Key financial figures of the Islamic Banking branches are disclosed in note 39 to the unconsolidated condensed interim financial
statements.
2.2.3 The Group company believes that there is no significant doubt on the Group company's ability to continue as a going concern. Therefore,
the consolidated financial statements have been prepared on the going concern basis.
2.3 Standards, interpretations of and amendments to published approved accounting standards that are effective in the current period
There are certain new and amended standards, issued by International Accounting Standards Board (IASB), interpretations and
amendments that are mandatory for the Group's accounting periods beginning on or after January 1, 2023 but are considered not to be
relevant or do not have any significant effect on the Group's operations and therefore not detailed in these consolidated financial
statements.
2.4 Standards, interpretations of and amendments to published approved accounting standards that are not yet effective
The following standards, amendments and interpretations as notified under the Companies Act, 2017 will be effective for the accounting
periods as stated below:
Standard, Interpretation or Amendment Effective date (annual periods

beginning on or after)
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16 January 01, 2024
Non current liabilities with covenants - Amendment to IAS 1 January 01, 2024
3 BASIS OF MEASUREMENT
3.1 Accounting convention
These consolidated condensed interim financial statements have been prepared under the historical cost convention except for certain
fixed assets and non banking assets acquired in satisfaction of claims which are stated at revalued amounts; held for trading, available for
sale investments and derivative financial instruments which are measured at fair value; defined benefit obligations which are carried at
present value and right of use of assets and related lease liability measured at present value.
3.2 Functional and Presentation Currency
These consolidated condensed interim financial statements are presented in Pakistani Rupees, which is the Group's functional and
presentation currency. The amounts are rounded off to the nearest thousand rupees except as stated otherwise.
4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated condensed interim financial statements are consistent
with those applied in the preparation of the annual consolidated financial statements of the Group for the year ended December 31, 2022.
5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The basis for accounting estimates adopted in the preparation of this consolidated condensed interim financial information is the same as
that applied in the preparation of the annual consolidated financial statements for the year ended December 31, 2022.
6 FINANCIAL RISK MANAGEMENT
The financial risk management objectives and policies adopted by the Bank are consistent with those disclosed in the annual consolidated
financial statements for the year ended December 31, 2022.
58 BANK ALFALAH
2023 2022
---------(Rupees in '000)---------
7 CASH AND BALANCES WITH TREASURY BANKS
In hand
Local currency 33,311,904 34,295,288
Foreign currency 6,561,906 3,692,104
39,873,810 37,987,392
With State Bank of Pakistan in
Local currency current accounts 54,913,282 46,845,917
Foreign currency deposit accounts 11,964,085 687,240
74,614,902 51,061,281
With other central banks in
Foreign currency deposit accounts 1,810,773 1,679,531
37,651,943 51,376,796
With National Bank of Pakistan in local currency current account 1,465,444 92,407
Prize bonds 123,252 95,875
153,729,351 140,613,751
8 BALANCES WITH OTHER BANKS
In Pakistan
In current account 377,538 625,050
381,116 638,063
Outside Pakistan
In current account 18,340,648 9,438,572
18,375,764 9,467,386
18,756,880 10,105,449
9 LENDINGS TO FINANCIAL INSTITUTIONS
Call / clean money lendings 47,952,031 40,384,136

Repurchase agreement lendings (Reverse Repo) 162,847,948 74,969,700
210,799,979 115,353,836
Less: expected credit loss - overseas branches - (237)
Lending to Financial Institutions - net of provision 210,799,979 115,353,599

10 INVESTMENTS Note March 31, 2023 (Un-audited) December 31, 2022 (Audited)
Provision for Provision for

10.1 Investments by type:
diminution / Cost / diminution /
Cost / Surplus / Surplus /
expected Carrying Value Amortised expected Carrying Value
Amortised cost (Deficit) (Deficit)
credit loss cost credit loss
(ECL) (ECL)
------------------------------------------------------------------(Rupees in '000)------------------------------------------------------------------
Held-for-trading securities
Market Treasury Bills 70,157,267 - (89,256) 70,068,011 2,074,210 - (2,994) 2,071,216

Pakistan Investment Bonds 64,588,544 - (266,312) 64,322,232 4,173,096 - 33,445 4,206,541
Government of Pakistan Sukuks 261,027 - (11,515) 249,512 3,059,648 - 7,862 3,067,510
Shares
Ordinary shares / units - Listed 471,095 - (24,526) 446,569 593,977 - (60,544) 533,433
Foreign Securities
Overseas Bonds - Sovereign 4,845,673 - (4,684) 4,840,989 3,698,451 - (4,878) 3,693,573

140,323,606 - (396,293) 139,927,313 13,599,382 - (27,109) 13,572,273
Market Treasury Bills 142,544,964 - 69,603 142,614,567 2,402 - (7) 2,395

Pakistan Investment Bonds 693,413,528 - (15,385,700) 678,027,828 831,017,092 - (7,636,247) 823,380,845
Government of Pakistan Sukuks 135,263,527 - (3,196,513) 132,067,014 104,886,109 - (939,360) 103,946,749
Government of Pakistan Euro Bonds 14,875,102 (2,506,086) (6,486,920) 5,882,096 11,917,603 (2,012,101) (4,753,348) 5,152,154
Shares
Ordinary shares - Listed 5,931,706 (610,612) (378,775) 4,942,319 7,205,583 (829,340) (453,569) 5,922,674
Ordinary shares - Unlisted 1,211,363 (88,038) - 1,123,325 1,211,363 (88,038) - 1,123,325
Preference Shares - Listed 108,835 (108,835) - - 108,835 (108,835) - -
Preference Shares - Unlisted 25,000 (25,000) - - 25,000 (25,000) - -
Term Finance Certificates 3,233,166 (363,744) - 2,869,422 2,986,517 (411,218) (48) 2,575,251
Sukuks 16,669,677 (96,511) 85,267 16,658,433 16,676,056 (96,511) 129,707 16,709,252
Foreign Securities
Overseas Bonds - Sovereign 34,562,048 (53,010) (1,964,933) 32,544,105 26,861,689 (64,732) (1,679,122) 25,117,835
Overseas Bonds - Others 30,209,468 (6,652) (2,438,870) 27,763,946 25,310,922 (10,416) (2,074,381) 23,226,125
Redeemable Participating Certificates 10.1.1 5,437,604 - - 5,437,604 4,338,537 - - 4,338,537
REIT Fund - Unlisted 700,000 - - 700,000 700,000 - - 700,000
1,091,465,965 (3,858,488) (29,696,841) 1,057,910,636 1,038,026,783 (3,646,191) (17,406,375) 1,016,974,217
Pakistan Investment Bonds 68,873,146 - - 68,873,146 68,564,798 - - 68,564,798

Term Finance Certificates 848,013 (214,680) - 633,333 864,680 (24,680) - 840,000

Sukuks 2,302,962 (78,076) - 2,224,886 1,895,679 (80,722) - 1,814,957
Foreign Securities
Overseas Bonds - Sovereign 12,993,348 (212) - 12,993,136 11,216,215 (168) - 11,216,047

85,017,469 (292,968) - 84,724,501 82,541,372 (105,570) - 82,435,802
Associates (valued at equity method)

Alfalah Insurance Company Limited 637,538 - - 637,538 601,034 - - 601,034
Sapphire Wind Power Company Limited 3,445,135 - - 3,445,135 3,436,726 - - 3,436,726
Alfalah Asset Management Limited 607,785 - - 607,785 596,311 - - 596,311
4,690,458 - - 4,690,458 4,634,071 - - 4,634,071
Total Investments 1,321,497,498 (4,151,456) (30,093,134) 1,287,252,908 1,138,801,608 (3,751,761) (17,433,484) 1,117,616,363
10.1.1 The adoption of IFRS 9 at Bahrain Operations of the Bank has resulted in investments in Redeemable Participating Certificates held abroad, being mandatorily measured at
Value through Profit and Loss However, based on the clarification received from the State Bank of Pakistan (SBP) vide their letter No. BPRD/RPD/2018-16203 dated July
60 BANK ALFALAH
10.2 Investments given as collateral 2023 2022
-------(Rupees in 000)-------
Market Treasury Bills 88,419,520 -

Pakistan Investment Bonds 409,371,000 307,049,207
Overseas Bonds 7,640,074 4,981,480
505,430,594 312,030,687
10.2.1 The market value of securities given as collateral is Rs. 495,589.102 million (December 31, 2022: Rs.
308,263.867 million).
2023 2022
10.3 Provision for diminution in value of investments -------(Rupees in 000)-------
10.3.1 Opening balance 3,751,761 1,186,010

Charge / (reversals)
Reversal on disposals (344,318) (160,428)
(118,565) 2,499,018
Closing Balance 4,151,456 3,751,761
10.3.2 Particulars of provision against debt securities
Category of classification March 31, 2023 (Un-audited) December 31, 2022 (Audited)
NPI Provision NPI Provision
Domestic --------------------------(Rupees in '000)--------------------------
Loss 753,011 753,011 613,131 613,131
10.3.2.1 The overseas branches hold a provision of Rs. 2,565.960 million (December 31, 2022: Rs. 2,087.417 million)
against investments in accordance with ECL requirements of IFRS 9.
10.3.3 The market value of securities classified as held-to-maturity as at March 31, 2023 amounted to Rs. 73,190.099
million (December 31, 2022: Rs. 73,518.446 million).

11 ADVANCES
Note Performing Non Performing Total

March 31, March 31,
March 31, 2023 December 31, December 31, December 31,
2023 2023
(Un-audited) 2022 (Audited) 2022 (Audited) 2022 (Audited)
(Un-audited) (Un-audited)
------------------------------------------------------------------(Rupees in '000)-------------------------------------------------------------
Loans, cash credits, running finances, etc. 521,807,590 570,312,570 26,255,665 22,798,387 548,063,255 593,110,957
Islamic financing and related assets 164,597,110 149,839,163 4,895,628 4,893,861 169,492,738 154,733,024
Bills discounted and purchased 12,675,415 14,580,885 1,655,526 3,280,234 14,330,941 17,861,119
Advances - gross 699,080,115 734,732,618 32,806,819 30,972,482 731,886,934 765,705,100
Provision against advances

- Specific 11.4 - - (27,264,907) (25,397,878) (27,264,907) (25,397,878)
- General / expected credit loss 11.4 (6,606,844) (7,921,407) - - (6,606,844) (7,921,407)
(6,606,844) (7,921,407) (27,264,907) (25,397,878) (33,871,751) (33,319,285)
Advances - net of provision 692,473,271 726,811,211 5,541,912 5,574,604 698,015,183 732,385,815
11.1 Advances include an amount of Rs. 360.676 million (December 31, 2022: Rs. 339.983 million), being Employee Loan facilities allowed to Citibank, N.A,
employees, which were either taken over by the Holding Company, or were granted afresh, under a specific arrangement executed between
the Holding Company and Citibank, N.A, Pakistan. The said arrangement is subject to certain relaxations as specified vide SBP Letter
BPRD/BRD/Citi/2017/21089 dated September 11, 2017.
The said arrangement covers only existing employees of Citibank, N.A, Pakistan, and the relaxations allowed by the SBP are on continual basis, but
subject to review by BID and OSED departments. These loans carry mark-up at the rates ranging from 15.84% to 30.43% (December 31, 2022:
13.37% to 27.25%) with maturities up to February 2043 (December 31, 2022: October 2042).
2023 2022
-------(Rupees in '000)-------
11.2 Particulars of advances (Gross)
In local currency 664,133,673 713,985,927

In foreign currencies 67,753,261 51,719,173
731,886,934 765,705,100
11.3 Advances include Rs. 32,806.819 million (December 31, 2022: Rs. 30,972.482 million) which have been placed under non-performing status as detailed
below:
Category of Classification March 31, 2023 (Un-audited) December 31, 2022 (Audited)
Non- General / Non- General /

Performing expected credit Performing expected credit
Loans loss Loans loss
------------------------------------------------------------------(Rupees in '000)------------------------------------------
Domestic
Other Assets Especially Mentioned 146,566 3,055 178,723 15,814
Substandard 1,440,093 349,248 2,352,882 683,787
Doubtful 8,375,853 4,419,195 6,885,829 3,407,905
Loss 22,062,784 21,904,676 20,897,810 20,795,657
32,025,296 26,676,174 30,315,244 24,903,163
Overseas
Overdue by:
91 to 180 days 43,512 31,737 35,903 21,952
181 to 365 days 170,087 144,257 139,472 119,706
Above 365 days 567,924 412,739 481,863 353,057
781,523 588,733 657,238 494,715
Total 32,806,819 27,264,907 30,972,482 25,397,878
62 BANK ALFALAH
12 BANK ALFALAH LI
11.4 Particulars of provision against advances

Specific General Total Specific General Total
--------------------------------------------------------(Rupees in '000)--------------------------------------------------------
Opening balance 25,397,878 7,921,407 33,319,285 21,126,338 4,067,236 25,193,574

Exchange and other adjustments 100,242 71,016 171,258 32,240 22,887 55,127
Charge for the period / year 2,757,391 (1,385,579) 1,371,812 7,544,341 3,831,284 11,375,625
Reversals for the period / year (746,639) - (746,639) (2,431,826) - (2,431,826)
2,010,752 (1,385,579) 625,173 5,112,515 3,831,284 8,943,799
Amounts written off (243,965) - (243,965) (497,192) - (497,192)

Amounts charged off - agriculture financing - - - (69,791) - (69,791)
Amounts charged off - balance sheet cleaning - - - (306,232) - (306,232)
(243,965) - (243,965) (873,215) - (873,215)
Closing balance 27,264,907 6,606,844 33,871,751 25,397,878 7,921,407 33,319,285
11.4.1 The additional profit arising from availing the forced sales value (FSV) benefit - net of tax as at March 31, 2023 which is not available for distribution as
either cash or stock dividend to shareholders/ bonus to employees amounted to Rs. 113.735 million (December 31, 2022: Rs. 94.554 million).
11.4.2 General provision includes:
(i) Provision held in accordance with SBP's prudential regulations against:

- Conventional consumer loans being maintained at an amount equal to 1% of the secured auto loans, 0.5% of secured house loans performing portfolio
and 4% of the unsecured (personal loans and credit cards) performing portfolio;
- Islamic auto loans being maintained at an amount equal to 1% of the secured performing portfolio and for Islamic house loans, at an amount equal to
0.5% of the secured performing portfolio;
- Small Enterprises (SE) portfolio being maintained at an amount equal to 1% against unsecured performing SE portfolio;
(ii) Provision held at overseas branches to meet the requirements of regulatory authorities of the respective countries in which overseas branches
operates; and
(iii) Provision of Rs. 4,595.000 million (December 31, 2022: Rs. 4,595.000 million) against the high risk portfolio, which is showing higher economic
vulnerability. The portfolio excludes GoP backed exposures, staff loans and loans secured against liquid collaterals. Provision against flood impacted
portfolio of Rs. 1,376 million held as at December 31, 2022 was reversed during the period.
11.4.3 Although the Holding Company has made provision against its non-performing portfolio as per the category of classification of the loan, the Bank holds
enforceable collateral in the event of recovery through litigation. These securities comprise of charge against various tangible assets of the borrower
including land, building and machinery, stock in trade etc.

2023 2022
--------(Rupees in '000)--------
12 FIXED ASSETS
Capital work-in-progress 12.1 1,400,481 944,206
Property and equipment 12.2 32,437,399 32,132,604
Right-of-use assets 16,484,024 15,416,474
50,321,904 48,493,284
12.1 Capital work-in-progress
Civil works 1,097,557 706,019

Equipment 259,590 214,126
Others 43,334 24,061
1,400,481 944,206
12.2 It includes land and buildings carried at revalued amount of Rs. 21,875.881 million (December 31, 2022: Rs. 21,661.195 million).

(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-----------(Rupees in 000)-----------
12.3 Additions to fixed assets
The following additions were made to fixed assets during the period:
Property and equipment

Freehold land 244 912,286
Leasehold land 116,000 -
Buildings on freehold land 119,965 490,384
Buildings on leasehold land 32,971 3,482
Leasehold improvement 105,035 213,737
Furniture and fixtures 51,785 41,081
Vehicles 32,244 -
1,099,103 2,362,353
Total additions to fixed assets 1,555,378 2,885,939
12.4 Disposals of fixed assets
The net book value of fixed assets disposed off during the period is as follows:
Leasehold improvements 7,003 1,864

Furniture and fixtures 291 31
Office equipments 1,525 5,983
Total disposal of fixed assets 8,819 7,878
2023 2022
------(Rupees in '000)------
13 INTANGIBLE ASSETS
Capital work-in-progress / Advance payment to suppliers 606,369 455,945

Software 769,249 842,236
Membership Card 6,000 6,000
1,381,618 1,304,181
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
13.1 Additions to intangible assets ------(Rupees in '000)------
The following additions were made to intangible assets during the period:
Directly purchased 4,899 183,957
Total additions to intangible assets 155,323 323,395
13.2 There were no disposal of intangible assets during the periods ended March 31, 2023 and March 31, 2022.
64 BANK ALFALAH
14 DEFERRED TAX ASSETS 2023 2022
--------(Rupees in '000)--------
Deductible Temporary Differences on:
- Provision against investments 1,825,750 1,702,211
- Provision against advances 2,844,774 3,096,128
- Unrealised loss on revaluation of held for trading investments 170,676 7,472
- Deficit on revaluation of available for sale investments 10,964,788 5,690,672
- Provision against other assets 1,029,154 1,002,851
- Provision against lending to financial institutions - 32
- Workers' Welfare Fund 775,131 604,100
- Others 24,404 24,404
17,634,677 12,127,870
Taxable Temporary Differences on:
- Surplus on revaluation of fixed assets (495,850) (486,889)
- Surplus on revaluation of non banking assets (62,807) (63,108)
- Share of profit and other comprehensive income from associates (1,510,526) (1,486,280)
- Accelerated tax depreciation (2,454,619) (2,540,820)
(4,523,802) (4,577,097)
13,110,875 7,550,773
15 OTHER ASSETS
Income/ Mark-up accrued in local currency - net of provision 56,368,087 42,711,601

Income/ Mark-up accrued in foreign currency - net of provision 2,475,609 2,011,398
Advances, deposits, advance rent and other prepayments 5,412,944 3,748,465
Advance against subscription of share 270,454 -
Non-banking assets acquired in satisfaction of claims 15.1 1,438,374 1,439,606
Dividend receivable 66,681 -
Mark to market gain on forward foreign exchange contracts 4,140,062 922,573
Mark to market gain on derivatives 24.1 4,314,471 4,795,545
Stationery and stamps on hand 18,081 23,253
Defined benefit plan 36,957 153,707
Branch adjustment account - 24,430
Due from card issuing banks 3,350,822 4,544,609
Account receivable 5,364,019 5,690,187
Claims against fraud and forgeries 123,324 119,455
Acceptances 20,869,541 19,090,181
Receivable against DSC/SSC and overseas government securities 29,352 131,517
Receivable against tradeable marketable securities 808,449 860,261
Others 78,914 65,636
105,166,141 86,332,424
Less: Provision held against other assets 15.2 (3,243,973) (3,181,544)
Other assets (net of provision) 101,922,168 83,150,880
Surplus on revaluation of non-banking assets acquired in
satisfaction of claims - net 15.1 144,914 145,613
102,067,082 83,296,493
15.1 The revalued amount of non-banking assets acquired in satisfaction of claims is Rs. 1,583.288 million (December 31, 2022: Rs. 1,585.219
million).

15.2 Provision held against other assets (Un-audited) (Audited)
2023 2022
--------(Rupees in '000)--------
Impairment against overseas operation 2,148,582 2,114,963

Expected credit loss (overseas operation) 28,173 10,397
Fraud and forgeries 139,147 119,455
Account receivable 561,378 548,109
Others 366,693 388,620
3,243,973 3,181,544
15.2.1 Movement in provision held against other assets

Opening balance 3,181,544 1,848,407

59,665 1,327,876
Amount written off - (30,423)
16 BILLS PAYABLE
In Pakistan 22,549,425 37,705,524

Outside Pakistan 2,915,435 2,328,282
25,464,860 40,033,806
17 BORROWINGS
Secured
Borrowings from State Bank of Pakistan under:
Export Refinance Scheme 50,348,109 53,477,830
Long-Term Finance Facility (LTFF) 27,585,314 28,643,178
Financing Facility for Renewable Energy Projects 12,010,374 11,917,647
Financing Facility for Storage of Agriculture Produce (FFSAP) 692,241 738,979
Refinance for Wages & Salaries 44,613 300,821
Temporary Economic Refinance Facility (TERF) 50,576,242 49,721,502
Export Refinance under Bill Discounting 5,760,281 10,633,712
SME Asaan Finance (SAAF) 1,748,471 949,413
Refinance Facility for Combating COVID (RFCC) 717,919 692,957
Refinance and Credit Guarantee Scheme for Women Entrepreneurs 148,599 279,374
Modernization of Small and Medium Entities (MSMES) 1,040,267 871,659
Other refinance schemes 806 890
589,372,756 415,127,962

Bai Muajjal 43,266,806 42,113,040
Medium Term Note 11,000,000 11,000,000
Others 586,813 470,410
Total secured 660,381,388 58,414,347
Unsecured
Call borrowings 4,478,139 5,766,732
Overdrawn nostro accounts 3,219,582 4,884,913
Others
- Pakistan Mortgage Refinance Company 2,603,303 2,180,208
- Karandaaz Risk Participation 2,370,897 2,331,958
- Other financial institutions - 2,943,821
Total unsecured 12,671,921 18,107,632
673,053,309 491,649,941
66 BANK ALFALAH
18 DEPOSITS AND OTHER ACCOUNTS

Total Total
-----------------------------------------------------(Rupees in '000)-------------------------------------------------
Customers
Term deposits 336,309,324 53,769,153 390,078,477 287,557,414 49,767,276 337,324,690
Others 39,993,231 12,546,088 52,539,319 35,941,042 8,943,974 44,885,016
1,222,947,157 255,177,264 1,478,124,421 1,142,095,800 227,916,422 1,370,012,222
Term deposits 51,101,000 2,904,938 54,005,938 38,073,100 354,319 38,427,419
Others 620,467 84,104 704,571 404,457 76,261 480,718
68,009,534 7,899,834 75,909,368 110,416,447 6,407,591 116,824,038
1,290,956,691 263,077,098 1,554,033,789 1,252,512,247 234,324,013 1,486,836,260
18.1 Current deposits include remunerative current deposits of Rs. 14,422.298 million (December 31, 2022 : Rs. 14,325.601 million).
2023 2022
-------(Rupees in '000)-------
19 SUBORDINATED DEBT
Term Finance Certificates VI - Additional Tier-I (ADT-1) - Quoted, Unsecured
The Holding Company issued listed, fully paid up, rated, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt
instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of redeemable capital under Section 66 of the Companies
Act, 2017 which qualify as Additional Tier 1 Capital (ADT 1) as outlined by the State Bank of Pakistan (SBP) under BPRD Circular No. 6 dated
August 15, 2013. Summary of terms and conditions of the issue are:
Issue amount Rs. 7,000,000,000 7,000,000 7,000,000

Issue date March 2018
Rating "AA-" (double A minus) by The Pakistan Credit Rating Agency Limited
Security Unsecured
Ranking Subordinated to all other indebtedness of the Holding Company
including deposits but superior to equity.
Profit payment frequency Payable semi-annually in arrears
Mark-up For the period at end of which the Holding Company is in compliance
with Minimum Capital Requirement (MCR) and Capital Adequacy Ratio
(CAR) requirements of SBP, mark-up rate will be Base Rate + 1.50%
with no step up feature.
Lock-in-clause Mark-up will only be paid from the Holding current

earning and if the Bank is in compliance of regulatory MCR and CAR
requirements set by SBP from time to time.
Loss absorbency clause In conformity with SBP Basel III Guidelines, the TFCs shall, if directed
by the SBP, be permanently converted into ordinary shares upon: (i)
the CET 1 Trigger Event; (ii) the point of non-viability Trigger Event; or
(iii) failure by the Bank to comply with the Lock-In Clause. The SBP
will have full discretion in declaring the point of non-viability Trigger
Event.
Call Option The Holding Company may, at its sole discretion, exercise call option
any time after five years from the Issue Date, subject to prior
approval of SBP and instrument is replaced with capital of same and
better quality.

2023 2022
-------(Rupees in '000)-------
Term Finance Certificates VIII - Additional Tier-I (ADT-1) - Quoted, Unsecured
The Holding Company issued Rs. 7,000 million of privately placed, listed, fully paid up, rated, perpetual, unsecured, subordinated, non-
cumulative and contingent convertible debt instruments in the nature of Term Finance Certificates (TFCs) issued as instruments of
redeemable capital under Section 66 of the Companies Act, 2017 which qualify as Additional Tier 1 Capital (ADT 1) as outlined by State Bank
of Pakistan (SBP) under BPRD circular No. 06 dated August 15, 2013. Summary of terms and conditions of the issue are:
Issue amount Rs. 7,000,000,000 7,000,000 7,000,000
Issue date December 2022
Rating "AA-" (double A minus) by The Pakistan Credit Rating Agency Limited
Security Unsecured
Ranking Subordinated to all other indebtedness of the Holding Company

including deposits but superior to equity.
Profit payment frequency Payable semi-annually in arrears
Mark-up For the period at end of which the Holding Company is in compliance
with Minimum Capital Requirement (MCR) and Capital Adequacy Ratio
(CAR) requirements of SBP, mark-up rate will be Base Rate + 2.00%
with no step up feature.
Lock-in-clause Mark-up will only be paid from the Holding current
earning and if the Holding Company is in compliance of regulatory
MCR and CAR requirements set by SBP from time to time.
Loss absorbency clause In conformity with SBP Basel III Guidelines, the TFCs shall, if directed
by the SBP, be permanently converted into ordinary shares upon: (i)
the CET 1 Trigger Event; (ii) the point of non-viability Trigger Event; or
(iii) failure by the Bank to comply with the Lock-In Clause. The SBP
will have full discretion in declaring the point of non-viability Trigger
Event.
Call Option The Holding Company may, at its sole discretion, exercise call option
any time after five years from the Issue Date, subject to prior
approval of SBP and instrument is replaced with capital of same and
better quality.
14,000,000 14,000,000
68 BANK ALFALAH
20 OTHER LIABILITIES 2023 2022

--------(Rupees in '000)--------
Mark-up/ Return/ Interest payable in local currency 25,866,158 16,650,129

Mark-up/ Return/ Interest payable in foreign currency 1,633,990 1,443,987
Unearned fee commission and income on bills discounted and guarantees 2,967,848 2,591,163
Accrued expenses 11,059,984 12,610,353
Current taxation 16,393,192 12,843,565
Acceptances 20,869,541 19,090,181
Dividends payable 6,837,649 4,767,210
Mark to market loss on forward foreign exchange contracts 1,578,562 455,164
Mark to market loss on derivatives 24.1 102,690 -
Branch adjustment account 41,857 -
ADC settlement accounts 2,734,655 2,035,378
Provision for compensated absences 748,991 701,492
Payable against redemption of customer loyalty / reward points 659,653 607,208
Charity payable 73,696 65,998
Provision against off-balance sheet obligations 20.1 102,202 62,948
Security deposits against leases, lockers and others 15,779,002 13,300,923
Workers' Welfare Fund 3,776,643 3,378,897
Payable to vendors and suppliers 465,310 556,205
Margin deposits on derivatives 4,214,437 4,077,091
Payable to merchants (card acquiring) 2,121 16,536
Indirect Taxes Payable 2,369,557 2,360,341
Lease liabilities against right-of-use assets 18,949,701 17,514,201
Payable against marketable securities 849,345 1,277,915
Trading Liability 19,869,324 2,638,773
Others 4,722,851 3,090,674
162,668,959 122,136,332
20.1 Provision against off-balance sheet obligations
Opening balance 62,948 137,639

- 10,468
Charge / (reversal) for the period / year 33,307 (87,039)
Closing balance 102,202 62,948

2023 2022
----------(Rupees in '000)----------
21 (DEFICIT) / SURPLUS ON REVALUATION OF ASSETS
(Deficit) / surplus on revaluation of:

- Available for sale securities 10.1 (29,696,841) (17,406,375)
- Available for sale securities of associates (21,160) (20,389)
- Fixed Assets 12,786,100 12,807,981
- Non-banking assets acquired in satisfaction of claims 15 144,914 145,613
(16,786,987) (4,473,170)
Less: Deferred tax asset / (liability) on surplus / (deficit) on revaluation of:

- Available for sale securities 12,769,642 7,484,741
- Available for sale securities of associates 9,099 8,767
- Fixed Assets (495,850) (486,889)
- Non-banking assets acquired in satisfaction of claims (62,807) (63,108)
12,220,084 6,943,511
Derivatives (Deficit) / Surplus (4,197,336) (4,169,754)

Less: Deferred tax asset / (liability) on derivative 1,804,854 1,792,994
(2,392,482) (2,376,760)
-
(2,174,421) 4,847,101
22 NON-CONTROLLING INTEREST
2023 2022
Principal Principal place Ownership interest held by NCI
Name activity of Business
Alfalah CLSA Securities (Private) Limited, Pakistan Stock Brokerage Pakistan 37.50% 37.50%
Key financial information of the subsidiary (Un-audited) (Audited)

2023 2022
----------(Rupees in '000)----------
Assets 1,439,321 1,875,409

Liabilities 1,103,064 1,534,610
Net Assets 336,257 340,799
Non-Controlling Interest (NCI) 126,097 127,800
(Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-------------(Rupees in '000)-------------
Revenue 139,232 76,411

Expenses 141,474 80,683
Loss before tax (2,242) (4,272)
Loss after tax (4,538) (7,585)
Other Comprehensive (loss) / income for the period (4,538) (7,585)
Cash Flows:
Cash Flows used in Operating Activities (379,573) (125,641)
Cash Flows used in Investing Activities (5,915) (14,417)
Cash Flows from / (used in) Financing Activities 602 (581)
Net decrease in cash and cash equivalent (384,886) (140,639)
70 BANK ALFALAH
2023 2022
---------(Rupees in '000)---------
23 CONTINGENCIES AND COMMITMENTS
-Guarantees 23.1 159,532,486 140,370,087

-Commitments 23.2 557,867,637 437,333,552
-Other contingent liabilities 23.3.1 24,595,327 6,903,292
741,995,450 584,606,931
23.1 Guarantees:
Performance guarantees 56,722,059 53,798,209

Other guarantees 102,810,427 86,571,878
159,532,486 140,370,087
23.2 Commitments:
Documentary credits and short-term trade-related transactions

- Letters of credit 177,802,114 171,719,857
Commitments in respect of:

- forward foreign exchange contracts 23.2.1 255,130,490 170,721,451
- forward government securities transactions 23.2.2 50,301,688 17,438,813
- derivatives 23.2.3 49,929,421 46,734,911
- forward lending 23.2.4 20,974,215 26,798,555
Commitments for acquisition of:

- operating fixed assets 2,791,737 3,004,717
- intangible assets 487,972 465,248
Other commitments 23.2.5 450,000 450,000

557,867,637 437,333,552
23.2.1 Commitments in respect of forward foreign exchange contracts

Purchase 144,949,923 120,494,702
Sale 110,180,567 50,226,749
255,130,490 170,721,451
23.2.2 Commitments in respect of forward government securities transactions
Purchase 31,755,224 12,990,116
Sale 18,546,464 4,448,697
50,301,688 17,438,813
23.2.3 Commitments in respect of derivatives
Interest rate swap

Purchase 24.1 49,226,770 46,160,838
Sale - -
49,226,770 46,160,838
Cross Currency Swaps

Purchase - -
Sale 24.1 702,651 574,073
702,651 574,073
Total commitments in respect of derivatives 49,929,421 46,734,911

2022 2021
23.2.4 Commitments in respect of forward lending

Undrawn formal standby facilities, credit lines and other commitments to lend 23.2.4.1 16,241,704 21,639,590
Commitments in respect of investments 4,732,511 5,158,965
20,974,215 26,798,555
23.2.4.1 These represent commitments that are irrevocable because they cannot be withdrawn at the discretion of the Holding Company without the
risk of incurring significant penalty or expense.
23.2.5 Other Commitments
A commercial bank on behalf of Alfalah CLSA Securities (Private) Limited, Pakistan has given a guarantee of Rs. 450 million (December 31, 2022:
450 million) to National Clearing Company of Pakistan Limited (NCCPL) in respect of margin eligible securities. The guarantee facility is for one
year and is secured by 1st Pari Passu charge on current assets of the subsidiary.
23.3 Other contingent liabilities
23.3.1 Claims against the Bank not acknowledged as debts 24,595,327 6,903,292
These mainly represents counter claims filed by the borrowers for restricting the Holding Company from disposal of assets (such as
hypothecated / mortgaged / pledged assets kept as security), damage to reputation and cases filed by ex. employees of the Holding Company
for damages sustained by them consequent to the termination from the Holding Company's employment. Based on legal advice and / or
internal assessment, management is confident that the matters will be decided in Holding Company's favour and the possibility of any outcome
against the Holding Company is remote and accordingly no provision has been made in these financial statements. and the possibility of any
outcome against the Bank is remote and accordingly no provision has been made in these financial statements.
23.4 Contingency for tax payable
There were no tax related contingencies other than as disclosed in note 34.1.
24 DERIVATIVE INSTRUMENTS
Derivatives are a type of financial contract, the value of which is determined by reference to one or more underlying assets or indices. The
major categories of such contracts include futures, swaps and options. Derivatives also include structured financial products that have one or
more characteristics of forwards, futures, swaps and options.
24.1 Product Analysis March 31, 2023 (Un-audited)

contracts Principal market gain contracts Principal market loss
--------------------------------------(Rupees in '000)--------------------------------------
With Banks for

Hedging 48 49,226,770 4,308,567 - - -
With other entities

Market making - - - 2 702,651 (96,786)
48 49,226,770 4,308,567 2 702,651 (96,786)

contracts Principal market gain contracts Principal market gain
-----------------------------------------(Rupees in '000)----------------------------------------
With Banks for
Hedging 51 46,160,838 4,761,605 - - -
With other entities

Market making - - - 1 574,073 33,940
51 46,160,838 4,761,605 1 574,073 33,940
72 BANK ALFALAH
Note (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
--------------(Rupees in '000)--------------
25 MARK-UP/RETURN/INTEREST EARNED
On:
a) Loans and advances 25,893,552 14,497,124
b) Investments 45,766,944 20,306,425
c) Lendings to financial institutions / Bai Muajjal 841,974 348,518
d) Balances with banks / financial institutions 51,774 17,614
e) On securities purchased under resale agreements 3,046,675 656,920
75,600,919 35,826,601
26 MARK-UP/RETURN/INTEREST EXPENSED
On:
a) Deposits 27,888,569 12,659,947
b) Borrowings 3,693,866 2,061,801
c) Securities sold under repurchase agreements 13,978,721 5,412,173
d) Subordinated debt 638,273 170,802
e) Cost of foreign currency swaps against foreign currency deposits / borrowings 810,749 768,308
f) Borrowing cost on leased properties 585,381 423,638
g) Reward points / customer loyalty 91,575 50,962
47,687,134 21,547,631
27 FEE & COMMISSION INCOME
Branch banking customer fees 292,159 254,104

Consumer finance related fees 140,150 119,702
Card related fees (debit and credit cards) 637,552 449,086
Credit related fees 142,211 52,845
Investment banking fees 26,743 45,451
Commission on trade 546,182 484,245
Commission on guarantees 200,128 120,511
Commission on cash management 14,726 10,798
Commission on remittances including home remittances 300,487 228,721
Commission on bancassurance 125,869 160,300
Card acquiring business 337,348 171,472
Wealth Management Fee 31,966 22,969
Commission on Employees' Old-Age Benefit Institution (EOBI) - 11,868
Commission on Benazir Income Support Programme (BISP) 143,233 146,921
Alternate Delivery Channels (ADC) 306,104 160,936
Brokerage/ Commission Income 119,844 61,891
Others 60,629 35,484
3,425,331 2,537,304
28 (LOSS) / GAIN ON SECURITIES
Realised 28.1 83,834 306,048

Unrealised - held for trading 10.1 (396,293) (294,980)
(312,459) 11,068
28.1 Realised gain / (loss) on:
Federal Government Securities 240,324 110,671
Shares (420,193) (9,112)
Non Government Debt Securities - 2,993
Foreign Securities 263,703 201,496
83,834 306,048
29 OTHER INCOME
Rent on property 7,328 6,057
Gain on sale of fixed assets-net 29,085 27,101
Gain on sale of non banking assets 29.1 - 9,200
Profit on termination of leased contracts (Ijarah) 19,154 10,528
Gain on termination of leases (IFRS 16) 8,634 107,901
64,201 160,787
29.1 In 2022, The Holding Company earned an income of Rs. 9.200 million against sale of membership shares / cards.

Note (Un-audited)
Quarter ended
March 31, March 31,
2023 2022
-------------(Rupees in '000)-------------
30 OPERATING EXPENSES
Total compensation expense 30.1 7,214,673 4,959,185
Property expense
Rent and taxes 32,515 24,115
Utilities cost 445,462 315,095
Security (including guards) 247,898 227,092
Repair and maintenance (including janitorial charges) 244,958 213,007
Depreciation on right-of-use assets 765,866 635,674
Depreciation on non-banking assets acquired in satisfaction of claims 1,232 1,075
Depreciation on owned assets 202,228 150,465
1,940,159 1,566,523
Information technology expenses
Software maintenance 432,700 471,137
Hardware maintenance 260,531 145,663
Network charges 144,637 134,566
Consultancy and support services 16,875 39,329
1,190,418 1,036,582
Directors' fees and allowances 40,977 50,500
Fees and allowances to Shariah Board 3,780 3,345
Legal and professional charges 83,538 203,151
Outsourced services costs 218,786 170,115
Travelling and conveyance 276,668 172,743
Clearing and custodian charges 49,863 33,058
Training and development 32,272 28,662
Postage and courier charges 114,094 122,829
Communication 389,340 134,681
Stationery and printing 293,836 227,586
Marketing, advertisement and publicity 379,732 267,364
Donations 944,500 2,600
Auditors' remuneration 18,734 14,029
Brokerage and commission 71,683 66,889
Entertainment 145,653 80,721
Repairs and maintenance 174,262 147,905
Insurance 301,683 321,371
Cash Handling charges 255,714 251,769
CNIC verification 64,973 43,763
Others 130,874 164,933
4,341,329 2,778,739
14,686,579 10,341,029
30.1 Total compensation expense
Managerial Remuneration
i) Fixed 4,789,485 3,655,679
ii) Variable:
a) Cash Bonus / Awards etc. 1,452,022 617,888
b) Bonus and Awards in Shares etc. 81,249 60,000
Contribution to defined contribution Plan 179,206 149,114
Medical 327,155 188,608
Conveyance 127,030 87,287
Staff compensated absences 47,499 45,000
Others 79,748 44,024
Sub-total 7,200,144 4,936,455
Sign-on Bonus 14,529 17,730
Severance Allowance - 5,000
Grand Total 7,214,673 4,959,185
74 BANK ALFALAH
31 WORKERS' WELFARE FUND
The Supreme Court of Pakistan vide its order dated November 10, 2016 held that the amendments made in the law introduced by
Federal Government through Finance Act, 2008 for the levy of Workers' Welfare Fund (WWF) on banks were not lawful. The Federal
Board of Revenue filed review petitions against this order, which are currently pending. A legal advice was obtained by the Pakistan
Banking Association which highlights that consequent to filing of these review petitions, a risk has arisen and the judgment is not
conclusive until the review petition is decided. Accordingly, the amount charged for Workers' Welfare Fund since 2008 has not been
reversed.
Note (Un-audited)
Quarter ended
March 31, March 31,

2023 2022
32 OTHER CHARGES -------------(Rupees in '000)-------------
Penalties imposed by State Bank of Pakistan 10,973 1,803
33 PROVISIONS & WRITE OFFS - NET
Reversal against lending to financial institutions (IFRS 9 - ECL) 9 (295) -

(Reversal) / provision for diminution in value of investments / IFRS 9 - ECL 10.3.1 (118,565) 13,420
Provision against loans & advances / IFRS 9 - ECL 11.4 625,173 422,766
Provision against other assets / IFRS 9 - ECL 15.2.1 59,665 1,373
Provision against off-balance sheet obligations / IFRS 9 - ECL 20.1 33,307 37,053
Other provisions / write off - net 2,235 2,665
Recovery of written off / charged off bad debts (79,745) (91,418)
521,775 385,859
34 TAXATION
Charge / (reversal) :
Current 8,553,840 3,129,646
Prior years - (1,420,539)
Deferred (295,390) 1,127,067
8,258,450 2,836,174
34.1 a) The income tax assessments of the Holding Company have been finalized upto and including tax year 2022. Certain
addbacks have been made by tax authorities for various assessment years appeals against which are pending with the
Commissioner of Inland Revenue (Appeals), Appellate Tribunal Inland Revenue (ATIR), High Court of Sindh and Supreme Court
of Pakistan.

In respect of tax years 2008, 2014, 2017, 2019 to 2022, the tax authorities have raised certain issues including default in
payment of WWF, allocation of expenses to dividend and capital gains, dividend income from mutual funds not being taken
under income from business and disallowance of Leasehold improvements resulting in tax demand of Rs. 639.939 million net
of relief provided in appeal (December 31, 2022: Rs. 639.939). The Holding Company has filed appeals on these issues which
are pending before Commissioner Appeals. The management is confident that these matters will be decided in favour of the
Bank and consequently has not made any provision in respect of these amounts.
b) The Holding Company had received orders from a provincial tax authority for the periods from July 2011 to December 2020
wherein tax authority demanded sales tax on banking services and penalty amounting to Rs. 763.312 million (excluding
default surcharge) by disallowing certain exemptions of sales tax on banking services and allegedly for short payment of
sales tax. Appeals against these orders are pending before Commissioner Appeals. The Bank has not made any provision
against these orders and the management is of the view that these matters will be settled in Holding Company's favour
through appellate process.
c) The Holding Company had received an order from a tax authority wherein Sales tax and penalty amounting to Rs. 5.191
million (excluding default surcharge) was demanded allegedly for non-payment of sales tax on certain transactions relating
to accounting year 2016 and appeal against this order is pending before Commissioner Appeals. Another order previously
received for the same accounting year wherein Sales tax and Further Tax amounting to Rs. 8.601 million (excluding default
surcharge and penalty) was demanded allegedly for non-payment of sales tax on certain transactions is pending before
Appellate Tribunal. The Holding Company has not made any provision against these orders and the management is of the
view that this matter will be favourably settled through appellate process.
(Un-audited)
Quarter ended
March 31, March 31,

2023 2022
35 BASIC AND DILUTED EARNINGS PER SHARE ------------(Rupees in '000)------------
Profit for the period attributable to equity holders of the Holding Company 10,772,393 5,033,102
-------(Number of shares in '000)-------
Weighted average number of ordinary shares 1,577,165 1,777,165
--------------(Rupees)--------------
Basic and diluted earnings per share 6.83 2.83
35.1 Diluted earnings per share has not been presented separately as the Group does not have any convertible instruments in issue.
76 BANK ALFALAH
36 FAIR VALUE MEASUREMENTS
Fair value measurement defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an
orderly transaction between market participant at the measurement date. The fair value of quoted securities other than those classified as
held to maturity, is based on quoted market price. Quoted securities classified as held to maturity are carried at cost. The fair value of
unquoted equity securities, other than investments in associates and subsidiaries, is determined on the basis of the break-up value of these
investments as per their latest available audited financial statements. The fair value of unquoted debt securities, fixed term loans, other
assets, other liabilities, fixed term deposits and borrowings cannot be calculated with sufficient reliability due to the absence of a current
and active market for these assets and liabilities and reliable data regarding market rates for similar instruments. In the opinion of the
management, the fair value of the remaining financial assets and liabilities are not significantly different from their carrying values since
these are either short-term in nature or, in the case of customer loans and deposits, are frequently repriced.
36.1 Fair value of financial instruments
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
measurements:
Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into which
the fair value measurement is categorised:
March 31, 2023 (Un-audited)


Investments
Federal Government Securities - 1,100,511,237 - 1,100,511,237
Shares 5,388,888 - - 5,388,888
Forward purchase of foreign exchange - 4,140,062 - 4,140,062
Forward sale of foreign exchange - 1,578,562 - 1,578,562
Forward purchase of government securities - (30,900) - (30,900)
Forward sale government securities - 42,303 - 42,303
Derivatives purchases - 4,308,567 4,308,567
Derivatives Sales - (96,786) - (96,786)


Investments
Federal Government Securities - 946,606,485 - 946,606,485
Shares 6,456,107 - - 6,456,107
Forward purchase of foreign exchange - 922,573 - 922,573
Forward sale of foreign exchange - 455,164 - 455,164
Forward purchase of government securities - 4,432 - 4,432
Forward sale of government securities - (7,946) - (7,946)
Derivatives sales - 33,940 - 33,940

36.2 The Group's policy is to recognize transfers into and out of the different fair value hierarchy levels at the date of the event or change in
circumstances that caused the transfer, occurred. There were no transfers between levels 1 and 2 during the current period.
36.3 Valuation techniques used in determination of fair values:
36.3.1 Fair value of financial assets
(a) Financial instruments in level 1
Financial instruments included in level 1 comprise of investments in ordinary shares of listed companies and listed non government debt
securities.
(b) Financial instruments in level 2
Financial instruments included in level 2 comprise of Market Treasury Bills, Pakistan Investment Bonds, GoP Sukuks, GoP Euro Bonds,
Overseas Government Sukuks, Overseas Bonds, Term Finance Certificates, and other than Government Sukuks, forward foreign exchange
contracts, forward government securities contracts, cross currency swap and interest rate swaps.
(c) Financial instruments in level 3
Currently, no financial instruments are classified in level 3 except as disclosed in 36.3.2.
The fair value of unquoted debt securities, fixed term loans, other assets, other liabilities, fixed term deposits and borrowings cannot be
calculated with sufficient reliability due to the absence of a current and active market for these assets and liabilities and reliable data
regarding market rates for similar instruments.
36.3.2 Fair value of non-financial assets
Certain categories of fixed assets (land and buildings) and non banking assets acquired in satisfaction of claims are carried at revalued
amounts (level 3 measurement) determined by professional valuers based on their assessment of the market values as disclosed in notes 12
and 15. The valuations are conducted by the valuation experts appointed by the Holding Company which are also on the panel of State Bank
of Pakistan.
36.3.3 Valuation techniques
Item Valuation approach and input used

Market Treasury Bills(MTB) / Pakistan Investment The fair value of MTBs and PIBs are derived using PKRV rates. GIS are revalued
Bonds(PIB), and GoP Sukuks (GIS) including their forward using PKISRV rates. Floating rate PIBs are revalued using PKFRV rates.
contracts
Overseas Sukuks, Overseas and GoP Euro Bonds The fair value of Overseas Government Sukuks, and Overseas Bonds are valued
on the basis of price available on Bloomberg.
Debt Securities (TFCs and Sukuk other than Government) Investment in WAPDA Sukuks, debt securities (comprising term finance
certificates, bonds and any other security issued by a company or a body
corporate for the purpose of raising funds in the form of redeemable capital) are
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.
Ordinary shares - listed The fair value of investments in listed equity securities are valued on the basis of
closing quoted market price available at the Pakistan Stock Exchange.
Forward foreign exchange contracts The valuation has been determined by interpolating the FX revaluation rates
announced by the State Bank of Pakistan.
Derivative Instruments Derivatives that are valued using valuation techniques based on market
observable inputs are mainly interest rate swaps and cross currency swaps. The
most frequently applied valuation techniques include forward pricing and swap
models using present value calculations.
Fixed assets and non banking assets acquired in The valuation experts used a market based approach to arrive at the fair value
satisfaction of claims of the Holding Company's properties. The market approach used prices and
other relevant information generated by market transactions involving identical,
comparable or similar properties. These values are adjusted to reflect the
current condition of the properties. The effect of changes in the unobservable
inputs used in the valuations cannot be determined with certainty accordingly a
qualitative disclosure of sensitivity has not been presented in these financial
statements.
78 BANK ALFALAH
37 SEGMENT INFORMATION
37.1 Segment details with respect to Business Activities
Islamic
Retail Corporate Treasury Digital Overseas Brokerage Others* Total
(Domestic)
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Profit & Loss
Net mark-up/return/profit (10,898,287) 5,686,906 5,155,677 26,469,629 2,702 1,834,992 (23,435) (314,399) 27,913,785
Inter segment revenue - net 26,277,320 (1,926,747) 295,741 (25,638,296) 396,466 359,232 - 236,284 -
Non mark-up/return/interest income 1,921,800 859,648 502,258 2,678,605 219,464 291,944 123,436 135,273 6,732,428
Total Income 17,300,833 4,619,807 5,953,676 3,509,938 618,632 2,486,168 100,001 57,158 34,646,213
Segment direct expenses 5,952,854 532,950 2,244,363 210,326 631,787 833,401 102,243 4,587,374 15,095,298
Inter segment expense allocation 2,774,429 423,957 773,782 242,056 254,294 118,856 - (4,587,374) -
Total expenses 8,727,283 956,907 3,018,145 452,382 886,081 952,257 102,243 - 15,095,298
Provisions / (reversals) 1,123,426 669,250 317,165 (218,872) 6,119 928 - (1,376,241) 521,775
Profit / (loss) before tax 7,450,124 2,993,650 2,618,366 3,276,428 (273,568) 1,532,983 (2,242) 1,433,399 19,029,140
As at March 31, 2023 (Un-audited)

Islamic
(Domestic)
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Balance Sheet
Cash & Bank balances 82,366,694 14,581,399 25,228,057 - 886,735 49,062,848 360,498 - 172,486,231
Investments - 3,152,755 126,685,066 1,063,283,451 - 89,066,528 16,004 5,049,104 1,287,252,908
Net inter segment lending 722,865,872 - - - 12,584,367 - - 116,001,237 851,451,476
Lendings to financial institutions - - 10,500,061 188,037,544 - 12,262,374 - - 210,799,979
Advances - performing 189,970,304 284,507,793 164,454,142 - 118,981 40,843,642 22,586 12,555,823 692,473,271
Advances - non-performing 3,060,631 1,792,664 404,123 - 5,362 192,791 - 86,341 5,541,912
Others 19,144,681 32,649,157 32,895,024 43,606,754 1,388,818 17,903,993 1,040,233 18,252,819 166,881,479
Total Assets 1,017,408,182 336,683,768 360,166,473 1,294,927,749 14,984,263 209,332,176 1,439,321 151,945,324 3,386,887,256
Borrowings 25,511,041 91,677,534 45,760,766 498,062,234 - 11,454,921 586,813 - 673,053,309

Subordinated debt - - - - - - - 14,000,000 14,000,000
Deposits & other accounts 957,650,756 185,682,580 254,690,637 - 14,778,912 141,205,812 - 25,092 1,554,033,789
Net inter segment borrowing - 19,516,031 16,686,957 770,139,980 - 45,108,508 - - 851,451,476
Others 34,246,385 39,807,623 41,435,848 35,669,661 205,351 16,285,072 516,251 19,967,628 188,133,819
Total liabilities 1,017,408,182 336,683,768 358,574,208 1,303,871,875 14,984,263 214,054,313 1,103,064 33,992,720 3,280,672,393
Net Assets - - 1,592,265 (8,944,126) - (4,722,137) 336,257 117,952,604 106,214,863
Equity 106,214,863
Contingencies & Commitments 95,264,389 213,690,152 60,336,091 270,589,016 3,557 97,388,127 450,000 4,274,118 741,995,450

* Others include head office related activities and share of profit from associates.
79
80
Islamic
(Domestic)
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Profit & Loss
Net mark-up/return/profit (1,794,999) 2,238,091 2,255,707 10,968,255 1,039 738,504 (10,083) (117,544) 14,278,970
BANK ALFALAH
Inter segment revenue - net 9,721,586 (795,636) 86,427 (9,240,721) 211,923 120,588 - (104,167) -
Non mark-up/return/interest income 1,504,472 575,947 375,678 1,200,498 193,227 310,055 65,308 251,031 4,476,216
Total Income 9,431,059 2,018,402 2,717,812 2,928,032 406,189 1,169,147 55,225 29,320 18,755,186
Segment direct expenses 4,305,515 284,664 1,429,604 128,907 414,423 530,882 60,788 3,348,211 10,502,994
Inter segment expense allocation 1,997,913 302,923 555,913 126,110 287,213 78,139 - (3,348,211) -
Total expenses 6,303,428 587,587 1,985,517 255,017 701,636 609,021 60,788 - 10,502,994
Provisions / (reversals) 450,099 (146,657) 53,058 20,898 3,563 6,189 (1,291) - 385,859
Profit / (loss) before tax 2,677,532 1,577,472 679,237 2,652,117 (299,010) 553,937 (4,272) 29,320 7,866,333
As at December 31, 2022 (Audited)

Islamic
(Domestic)
-----------------------------------------------------------------------------(Rupees in '000)-----------------------------------------------------------------------------
Balance Sheet
Cash & Bank balances 54,360,676 13,662,612 22,294,976 - 1,380,127 58,391,827 628,982 - 150,719,200
Investments - 3,065,299 123,324,033 913,838,262 - 72,564,199 15,376 4,809,194 1,117,616,363
Net inter segment lending 609,918,002 - - - 20,415,823 - - 108,578,156 738,911,981
Lendings to financial institutions - - 30,000,061 81,309,765 - 4,043,773 - - 115,353,599
Advances - performing 221,934,495 307,817,003 149,691,195 - 73,590 36,726,043 10,965 10,557,920 726,811,211
Advances - non-performing 2,942,330 1,660,287 726,449 - 3,985 162,523 - 79,030 5,574,604
Others 21,320,625 28,322,398 27,309,005 28,284,908 1,483,080 15,012,516 1,220,086 17,692,113 140,644,731
Total Assets 910,476,128 354,527,599 353,345,719 1,023,432,935 23,356,605 186,900,881 1,875,409 141,716,413 2,995,631,689
Borrowings 26,937,622 95,851,939 39,964,773 314,660,326 - 13,764,871 470,410 - 491,649,941

Subordinated debt - - - - - - - 14,000,000 14,000,000
Deposits & other accounts 860,878,106 210,843,465 255,671,950 - 23,002,118 136,392,013 - 48,608 1,486,836,260
Net inter segment borrowing - (1,059,219) 15,379,744 698,037,054 - 26,554,402 - - 738,911,981
Others 27,112,775 48,891,414 40,321,510 15,282,535 354,487 12,816,381 1,064,200 16,326,836 162,170,138
Total liabilities 914,928,503 354,527,599 351,337,977 1,027,979,915 23,356,605 189,527,667 1,534,610 30,375,444 2,893,568,320
Net Assets (4,452,375) - 2,007,742 (4,546,980) - (2,626,786) 340,799 111,340,969 102,063,369
Equity 102,063,369
Contingencies & Commitments 94,420,516 188,433,780 63,199,284 158,500,073 5,014 76,880,088 450,000 2,718,176 584,606,931
* Others include head office related activities and share of profit from associates.
38 RELATED PARTY TRANSACTIONS
The Group has related party transactions with its parent, associates, employee benefit plans, its directors, Key Management Personnel and other related parties.
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 financial statements are as follows:
Key management Other related Key management Other related

Directors/ CEO Associates Directors/ CEO Associates
personnel* parties personnel parties
-----------------------------------(Rupees in '000)----------------------------------- -----------------------------------(Rupees in '000)-----------------------------------
Lendings to financial institutions

Opening balance - - - - - - - 2,330,078
Addition during the period / year - - - 3,984,159 - - - 25,964,631
Repaid during the period / year - - - (3,984,159) - - - (28,294,709)
Closing balance - - - - - - - -
Investments
Opening balance - - 4,634,071 1,119,230 - - 4,118,122 1,119,230
Equity method adjustment - - 56,387 - - - 515,949 -
Closing balance - - 4,690,458 1,119,230 - - 4,634,071 1,119,230
Advances
Opening balance 18,062 672,608 - 2,367,924 77 1,184,057 - 1,997,552
Addition during the period / year 454 132,943 - 19,504,134 20,498 605,570 - 37,536,790
Repaid during the period / year (1,174) (201,588) - (19,424,928) (2,513) (173,521) - (38,264,097)
Transfer in / (out) - net - - - - - (943,498) - 1,097,679
Closing balance 17,342 603,963 - 2,447,130 18,062 672,608 - 2,367,924
Provision held against advances - - - 1,097,028 - - - 1,097,028
Other Assets
Interest / mark-up accrued 1,349 50,888 - 24,743 944 54,009 - 26,069
Receivable from staff retirement fund - - - 36,957 - - - 153,707
Prepayment / rent receivable - - 2,341 - - - 975 -

81
82
Key management Other related Key management Other related
Directors/ CEO Associates Directors/ CEO Associates
personnel* parties personnel parties
Borrowings
Opening balance - - - 2,180,207 - - - 2,280,921
Borrowings during the period / year - - - 449,936 - - - 21,218,496
BANK ALFALAH
Settled during the period / year - - - (26,840) - - - (21,319,210)
Closing balance - - - 2,603,303 - - - 2,180,207
Deposits and other accounts

Opening balance 38,466 184,994 3,078,698 12,308,779 59,026 371,859 13,465,085 6,410,266
Received during the period / year 345,343 1,256,195 157,881,382 46,999,244 517,842 4,736,925 255,922,837 92,145,150
Withdrawn during the period / year (272,726) (1,001,920) (157,603,703) (46,788,053) (538,402) (4,728,481) (266,309,224) (87,581,596)
Transfer in / (out) - net - - - - - (195,309) - 1,334,959
Closing balance 111,083 439,269 3,356,377 12,519,970 38,466 184,994 3,078,698 12,308,779
Other Liabilities
Interest / mark-up payable 394 5,442 5,548 80,446 253 158 - 13,231
Dividend Payable 2,590,007 - - 2,232,892 1,146,264 39 - 2,201,513
Others - - - 82,252 - - - 70,267
Contingencies and Commitments

Other contingencies - - - - - - - -
For the period ended March 31, 2023 (Un-audited) For the period ended March 31, 2022 (Un-audited)
Income
Mark-up / return / interest earned 398 5,387 - 30,567 - 12,769 - 11,898
Fee and commission income - - 30,372 - - 26 21,438 -
Dividend income - - 66,000 - - - 30,000 -
Gain on sale of securities - 1 - - - - - -
Other income - 36 3,114 - - 9 19,358 -
Expenses
Mark-up / return / interest paid 1,030 5,333 96,081 436,425 318 6,152 95,051 178,122
Directors fee 40,977 - - - 50,500 - - -
Managerial remuneration 172,907 584,118 - - 187,264 786,318 - -
Software maintenance - - - 82,546 - - - 23,250
Communication cost - - - 42,566 - - - 8,511
Charge for defined benefit plan - - - 116,750 - - - 67,204
Contribution to defined contribution plan - - - 179,206 - - - 141,926
Others - - - 163 - - - 5,428
Other Information
Dividend paid 2,177 5,019 5,903 134,203 - - - -
Insurance premium paid - - 1,021,431 - - - 673,255 -
Insurance claims settled - - 163,751 - - - 165,368 -
* The definition of Key Management Personnel has been changed in light of the SBP Corporate Governance Regulatory Framework with effect from June 2022.
2023 2022
39 CAPITAL ADEQUACY, LEVERAGE RATIO & LIQUIDITY REQUIREMENTS ---------(Rupees in '000)---------
Minimum Capital Requirement (MCR):

Paid-up capital (net of losses) 15,771,651 17,771,651
Capital Adequacy Ratio (CAR):

Eligible Common Equity Tier 1 (CET 1) Capital 84,750,891 84,234,454
Eligible Additional Tier 1 (ADT 1) Capital 13,566,874 13,568,130
Total Eligible Tier 1 Capital 98,317,765 97,802,584
Eligible Tier 2 Capital 23,717,504 23,442,613
Total Eligible Capital (Tier 1 + Tier 2) 122,035,269 121,245,197
Risk Weighted Assets (RWAs):

Credit Risk 692,868,558 755,004,734
Market Risk 12,584,613 8,815,338
Operational Risk 121,895,800 121,895,800
Total 827,348,971 885,715,872

In line with Basel III Capital Adequacy guidelines, following capital requirements are applicable to the Holding Company:

For Capital adequacy calculation, Bank has adopted Standardized Approach for Credit & Market Risk related exposures and
Alternate Standardized Approach (ASA) for operational risk.
Leverage Ratio (LR):

Eligible Tier-1 Capital* 99,443,869 98,201,491
Total Exposures 2,751,156,764 2,710,331,582
Leverage Ratio 3.61% 3.62%
Liquidity Coverage Ratio (LCR):

Total High Quality Liquid Assets 865,173,042 688,048,074
Total Net Cash Outflow 397,163,006 371,947,384
Liquidity Coverage Ratio 218% 185%
Net Stable Funding Ratio (NSFR):

Total Available Stable Funding 1,335,677,593 1,275,978,211
Total Required Stable Funding 881,005,540 849,343,576
Net Stable Funding Ratio 152% 150%
*Eligible Tier -1 Capital measure for calculation of Leverage Ratio is based on three months average.

40 AFGHANISTAN OPERATIONS
Bank Alfalah maintains a two-branch presence in Afghanistan. The board and management of the Holding Company continue to closely monitor
the evolving situation in Afghanistan which has been hampered due to country's frozen reserves and uncertainty regarding international
recognition which prevent normal flows in and out of Afghanistan. The Holding Company has taken impairment against assets where there is an
indication that carrying amount may be higher than its recoverable amount. The Holding Company remains focused on maintaining its control
standards i.e. both onshore and through Head Office oversight.
41 DATE OF AUTHORISATION
These consolidated condensed interim financial statements were authorised for issue on April 27, 2023 by the Board of Directors of the Holding
Company.
42 GENERAL
42.1 Comparative information has been re-classified, re-arranged or additionally incorporated in these consolidated condensed interim financial
statements, wherever necessary to facilitate comparison.
42.2 The effect of reclassification, rearrangement, restatement in the comparative information presented in these unconsolidated financial statements
is as follows:
Description of item Nature (Rupees in '000) From To
Net interest On Interest Rate Swap Income 125,560 Mark-Up/Return/Interest Mark-Up/Return/Interest

Expensed - Borrowings Earned - Investments
84 BANK ALFALAH
The Way Forward
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Q U A R T E R LY R E P O R T - M A R C H 3 1 , 2 0 2 3

The Way Forward

Directors’ Review - English 6

Directors’ Review - Urdu 11

Unconsolidated Condensed Interim Financial Statements 12

Unconsolidated Condensed Interim Statement of Financial Position 13

Unconsolidated Condensed Interim Profit and Loss Account (Un-audited) 14

Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited) 15

Unconsolidated Condensed Interim Statement of Changes in Equity (Un-audited) 16

Unconsolidated Condensed Interim Cash Flow Statement (Un-audited) 17

Notes to and Forming Part of the Unconsolidated Condensed Interim Financial

Consolidated Condensed Interim Financial Statements 51

Consolidated Condensed Interim Statement of Financial Position 52

Consolidated Condensed Interim Profit and Loss Account (Un-audited) 53

Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited) 54

Consolidated Condensed Interim Statement of Changes in Equity (Un-audited) 55

Consolidated Condensed Interim Cash Flow Statement (Un-audited) 56

Notes to and Forming Part of the Consolidated Condensed Interim Financial

QUARTERLY REPORT - MARCH 31, 2023 01

Abdulla Nasser Hawaileel Al Mansoori

Abdulla Khalil Al Mutawa

Khalid Mana Saeed Al Otaiba

Dr. Gyorgy Tamas Ladics

Dr. Ayesha Khan

Atif Aslam Bajwa

Aasim Wajid Jawad

Faisal Farooq Khan Chief Internal Auditor

Khawaja Muhammad Ahmad

Muhammad Akram Sawleh

Pervez Shahbaz Khan

Saad ur Rahman Khan

QUARTERLY REPORT - MARCH 31, 2023 03

Khalid Qurashi Khalid Mana Saeed Al Otaiba

Abdulla Khalil Al Mutawa Abdulla Khalil Al Mutawa

Khalid Mana Saeed Al Otaiba Khalid Qurashi

Dr. Ayesha Khan Atif Aslam Bajwa

Mr. Tahir Khurshid Mr. Farhan Ali

Board Human Resources, Remuneration & Board Compensation Committee (BCC)

Dr. Ayesha Khan Dr. Ayesha Khan

Abdulla Khalil Al Mutawa Abdulla Khalil Al Mutawa

Khalid Mana Saeed Al Otaiba Khalid Mana Saeed Al Otaiba

Dr. Gyorgy Tamas Ladics Mr. Muhammad Akram Sawleh

Mr. Muhammad Akram Sawleh

Abdulla Khalil Al Mutawa Abdulla Khalil Al Mutawa

Khalid Mana Saeed Al Otaiba Khalid Mana Saeed Al Otaiba

Dr. Gyorgy Tamas Ladics Khalid Qurashi

Dr. Ayesha Khan Dr. Ayesha Khan

Khalid Qurashi Dr. Gyorgy Tamas Ladics

Atif Aslam Bajwa Atif Aslam Bajwa

Mr. Aasim Wajid Jawad Mr. Muhammad Akram Sawleh

Board Information Technology Board Real Estate Committee (BREC)

Dr. Gyorgy Tamas Ladics Mr. Abdulla Khalil Al Mutawa

Abdulla Khalil Al Mutawa Mr. Khalid Mana Saeed Al Otaiba

Khalid Mana Saeed Al Otaiba Mr. Atif Aslam Bajwa

Atif Aslam Bajwa Mr. Muhammad Akram Sawleh

Mr. Aasim Wajid Jawad

QUARTERLY REPORT - MARCH 31, 2023 05

Financial Position March 31, 2023 December 31, 2022

QUARTERLY REPORT - MARCH 31, 2023 07

‫‪� 31‬رچ‪ � � 2022،‬‬ ‫‪� 31‬رچ‪ � � 2023،‬‬ ‫�� ر�د� ‬