Pakistan Banking IndustryPakistan Banking IndustryKey Trends

Jun-14

Banks 38

Banking Industry | Profile at end Dec-13

Branches10,726(YoY: 6%)

Banks 38Commercial 22 Commercial with Islamic Branches (14)

Foreign Banks (as branches) 7ATMs7,684(YoY: 23%)( ) o e g s ( ) 7

Islamic 5Specialized 4

( )

Assets10.5 trn

(YoY: 6%)

Deposits8.3 trn(YoY: 14%)

Advances4.5 trn(YoY: 6%)

Private Credit3.3trn

Equity939 bln

Borrower

[Includes TFCs](YoY: 6%)

[Direct Credit: 2.7trn]

(YoY:6%)

Government Deposits :732bln [10% of Industry]

Advances : 407bln [10% of Industry]

Deposit Accounts

37mln

BorrowerAccounts3.3mln

[CY12: 3.7mln] Advances : 407bln [10% of Industry][CY12: 34mln]

[ ]

* Amounts in PKR

Players | How old are they?2014 2014

Since Age (yrs)Oldies > 45Years Habib Bank Ltd. 1941 73 Allied Bank Ltd. 1942 72MCB Bank Ltd 1947 67

2014Since Age (yrs)

Teens <18 years Bank Alfalah Ltd. 1997 17

2014

MCB Bank Ltd. 1947 67 National Bank of Pakistan 1949 65 United Bank Ltd. 1959 55

Young >20 yearsFi W B k L d 1989 25

Meezan Bank Ltd. 2002 12 NIB Bank Ltd. 2003 11 SAMBA Bank Ltd. 2003 11 Summit Bank Ltd 2005 9

First Women Bank Ltd. 1989 25 The Bank of Punjab 1989 25 Askari Bank Ltd. 1991 23 Bank AL Habib Ltd. 1991 23S d d Ch d B k (P ki ) 1991 23

BankIslami Pakistan Ltd. 2006 8 Burj Bank Ltd. 2006 8 Dubai Islamic Bank Pakistan Ltd. 2006 8JS Bank Ltd. 2006 8 Standard Chartered Bank (Pakistan)

Ltd. 1991 23

The Bank of Khyber 1991 23 Habib Metropolitan Bank Ltd. 1992 22 Soneri Bank Ltd. 1992 22

JS Bank Ltd. 2006 8 AlBaraka Bank (Pakistan) Ltd.. 2007 7 Sindh Bank Ltd. 2010 4

Faysal Bank Ltd. 1994 20 KASB Bank Ltd. 1994 20 Silk Bank Ltd 1994 20

Average Life of industry players 25

* Excludes specialized banks and foreign bank branches

* Source: Banks' www and/or Annual reports

Indutsry | CEOs | New Appointments

Current President / CEO Appointment year Previous President holding Office

1 1 Faysal Bank Ltd. Nauman Ansari 2014 Naved Abid Khan2 2 First Women Bank Ltd. Tahira Raza 2014 Charmaine Hidayatullah (A) / Shafqat Sultana 3 3 National Bank of Pakistan Syed Ahmed Iqbal Ashraf 2014 Asif Brohi 4 4 Standard Chartered Bank (Pakistan) Ltd. Najam Siddiqui (A) 2014 Ibrahim Elgibali / Mohsin Nathani5 5 The Bank of Khyber Imran Samad (A) 2014 Bilal Mustafa6 6 U it d B k Ltd W j h t H i 2014 Atif B kh i

y

6 6 United Bank Ltd. Wajahat Husain 2014 Atif Bokhari

7 1 Allied Bank Ltd. Tariq Mehmood 2013 Khalid Sherwani8 2 Askari Bank Ltd. Syed Majeedullah Husaini 2013 Muhammad Rafiquddin Mehkari9 3 JS Bank Ltd. Khalid Imran 2013 Kalim-ur-Rahman

10 4 KASB Bank Ltd. Bilal Mustafa 2013 Syed Majeedullah Husaini (A)11 5 SAMBA Bank Ltd Shahid Sattar 2013 Tawfiq Husain11 5 SAMBA Bank Ltd. Shahid Sattar 2013 Tawfiq Husain

12 1 Habib Bank Ltd. Nauman Dar 2012 Zakir Mahmood13 2 MCB Bank Ltd. Imran Maqbool 2012 Atif Aslam Bajwa

14 1 AlBaraka Bank (Pakistan) Ltd.. Shafqaat Ahmed 2011 Syed Tariq Husain15 2 Bank Alfalah Ltd. Atif Aslam Bajwa 2011 Sirajuddin Aziz16 3 Burj Bank Ltd. Ahmed Khizer Khan 2011 Nikolaus Schwarz17 4 Habib Metropolitan Bank Ltd. Sirajuddin Aziz 2011 Anjum Iqbal18 5 NIB Bank Ltd. Badar Kazmi 2011 Khawaja Iqbal Hassan19 6 Soneri Bank Ltd. Mohammad Aftab Manzoor 2011 Atif Aslam Bajwa / Safar Ali Lakhani

20 1 Dubai Islamic Bank Pakistan Ltd. Junaid Ahmed 2010 Muhammad Mannan21 2 Sindh Bank Ltd. Mohammad Bilal Sheikh 2010 -

22 1 Summit Bank Ltd Husain Lawai 2009 Kamal Uddin Khan

23 1 Silk Bank Ltd Azmat Tarin 2008 Shaukat Tarin 24 2 The Bank of Punjab Naeemuddin Khan 2008 Hamesh Khan

25 1 B kI l i P ki t Ltd25 1 BankIslami Pakistan Ltd. Hasan A Bilgrami 2006 -26 2 Meezan Bank Ltd. Irfan Siddiqui 2002 -

27 1 Bank AL Habib Ltd. Abbas Dawood Habib 1994 Rashid Dawood Habib

New % of Additions in Branch Network

Bank Branch NetworkCY12 New

additions CY13 overall network

Large (System share > 5%)Habib Bank 1,496 50 1,546 13.6%National Bank of Pakistan. 1,317 25 1,342 11.8%United Bank Ltd. 1,277 5 1,282 11.3%MCB Bank Ltd. 1,202 15 1,217 10.7%

BAFL and ABL lead with100+ and 75 additionalbranches respectively

Allied Bank Ltd. 873 75 948 8.3%Bank Al Falah Ltd. 471 103 574 5.1%Bank Al Habib Ltd. 392 27 419 3.7%[Large Banks: Assets System Share: [64%] 7,028 300 7,328 64.5%

Medium (System share between 2% to 5%)

Standard Chartered Bank (Pakistan) Ltd 130 (14) 116 1.0%Askari Bank Ltd. 261 20 281 2.5%Faysal Bank Ltd. 265 4 269 2.4%The Bank of Punjab. 306 28 334 2.9%Habib Metropolitan Bank Ltd. 183 31 214 1.9%Medium Banks: Assets System Share: [17%] 1,145 69 1,214 10.7%Small (System share <2%)NIB Bank Ltd. 179 - 179 1.6% Barring JSBL and BoK theSoneri Bank Ltd. 233 6 239 2.1%Summit Bank Ltd 186 1 187 1.6%JS Bank Ltd. 185 26 211 1.9%The Bank of Khyber. 77 23 100 0.9%Silkbank Ltd. 85 3 88 0.8%KASB Bank Ltd. 105 (3) 102 0.9%First Women Bank Ltd. 41 - 41 0.4%

network of small bankslargely remains stagnated.

Samba Bank Ltd. 28 - 28 0.2%Sindh Bank Limited 160 50 210 1.8%Small Banks: Assets System Share: [5%] 1,279 106 1,385 12.2%Islamic BanksMeezan Bank Ltd 310 41 351 3.1%Dubai Islamic Bank Pakistan Ltd 75 50 125 1.1%Bank Islami Pakistan Ltd 141 59 200 1.8%

Islamic Banks remainbullish in terms of branchexpansion : 19% duringCY13

Al Baraka Bank (Pakistan) Ltd 94 16 110 1.0%Burj Bank Ltd 75 - 75 0.7%Islamic Banks: Assets System Share: [6%] 695 166 861 7.6%

Industry Total* 10,712 651 11,363 Growth: 5.5%

*Includes Foreign Bank branches and specialized Banks

CY13

280

0 50 100 150 200 250 300

MCB B k

Share Price of Banks | 6th May 201410

280

180

171

125

MCB Bank

Habib Bank Limited

United Bank Limited

Allied Bank Limited

58 42

40

31

NBP

Bank Alhabib

Meezan Bank

Habib Metro Bank

27

24

19

16

Bank ALFalah

Standard Chartered

Askari Bank Limited

Faysal Bank 16

14

11

10

9

Faysal Bank

Soneri Bank

Bank Islami Pakistan

Bank of Punjab

Bank of Khyber9 8

6

4

Bank of Khyber

Samba Bank

JS Bank

Summit Bank43

3

2

Silk

NIB Bank

KASB Bank2

25.6

(10) (5) - 5 10 15 20 25 30

Samba Bank

Price to Earning Multiple| Banks

9xs(Based on CY13 earnings)

20.3

19.6

18.0

14.5

NIB Bank

Silk

Bank Islami Pakistan

MCB Bank 14.5

13.0

11.8

11.3

Soneri Bank

JS Bank

Allied Bank Limited KSE : P/E 11.0

10.7

10.0

10.0

Habib Bank Limited

Standard Chartered

Faysal Bank

NBP

9xs

9.9

8.9

8.9

8 2

United Bank Limited

Bank Alhabib

Meezan Bank

Bank ALFalah8.2

8.2

8.2

6.1

Bank ALFalah

Bank of Khyber

Habib Metro Bank

Bank of Punjab

5.8

(3.7)

(6.1)

Askari Bank Limited

Summit Bank

KASB Bank

100%

-40% -20% 0% 20% 40% 60% 80% 100% 120%

Standard Chartered

One Year Stock Returns | Banks | CY13

49.4%

61%

58%

58%

54%

Bank ALFalah

United Bank Limited

Samba Bank

S i B k 54%

41%

34%

33%

Soneri Bank

Habib Bank Limited

MCB Bank

Habib Metro Bank One year KSE100 Return 49 4%

31%

31%

22%

18%

Meezan Bank

Bank Alhabib

Allied Bank Limited

NBP

: 49.4%

18%

7%

5%

3%

NBP

Faysal Bank

Bank of Khyber

Bank of Punjab

-8%

-11%

-19%

21%

Silk

NIB Bank

Askari Bank Limited

KASB Bank-21%

-23%

-25%

-28%

KASB Bank

JS Bank

Bank Islami Pakistan

Summit Bank

95%

-20% 0% 20% 40% 60% 80% 100%

Summit Bank

Year till date Stock Returns | Banks vs KSE-100 | Jan-14 till May14

12.3%

75%

47%

39%

39%

Samba Bank

Bank Islami Pakistan

Allied Bank Limited

F l B k 39%

36%

32%

29%

Faysal Bank

Askari Bank Limited

Soneri Bank

United Bank Limited

KSE100 Return : 12.3%

28%

23%

23%

14%

JS Bank

Silk

Habib Metro Bank

B k f Kh b 14%

10%

8%

4%

Bank of Khyber

HBL

NIB

KASB Bank

2%

2%

-1%

2%

Bank Alhabib

Meezan Bank

NBP

MCB Bank-2%

-2%

-5%

-8%

MCB Bank

Bank ALFalah

Standard Chartered

Bank of Punjab

60%30,000

Industry penetration as % GDP

20,091

22,909

25,402 50%25,000

13,200 14,867

18,285

30%

40%

15,000

20,000

KR

in b

ln

8,216 9,240 10,638

10%

20%

5 000

10,000

PK

0%

10%

-

5,000

2006 2007 2008 2009 2010 2011 2012 2013 1Q14

GDP | FY Assets Deposits%GDP Advances%GDP Deposits Advances

2006 2007 2008 2009 2010 2011 2012 2013 1Q14G | | bl 8 216 9 240 10 638 13 200 14 86 18 28 20 091 22 909 2 402GDP | FY | bln 8,216 9,240 10,638 13,200 14,867 18,285 20,091 22,909 25,402

Deposits%GDP 40% 42% 40% 36% 37% 34% 36% 36% 36%Advances%GDP 31% 31% 32% 27% 25% 21% 21% 20% 20%

53%

60%Growth Trends

42%40%

50%

22%24%

19%

31%30%

12%9% 9%

13% 14%

9%6%

15% 15%17%

19%

11%

17%

8% 7% 6%

14%

8%10%

20%

1%

6%2%

-2% -3%

0%

nt

es

its ts nt

es

its

its ts nt

es

its ts nt

es

its ts nt

es

its ts nt

es

its ts nt

es

its

-15%-20%

-10%

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Dep

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Ass

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CY08 CY09 CY10 CY11 CY12 CY13 1QCY14

PKR in bln CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13Total Assets 4,353 5,172 5,628 6,516 7,117 8,171 9,761 10,537 Investments (net) 833 1,276 1,087 1,737 2,157 3,055 4,009 4,305 Deposits 3,255 3,854 4,218 4,786 5,451 6,244 7,301 8,318 p , , , , , , , ,Equity 402 544 563 660 695 784 882 939 Gross Advances 2,604 2,906 3,532 3,686 3,914 3,941 4,375 4,632

Growth % CY06 CY07 CY08 CY09 CY10 CY11 CY12 Dec-13Total Assets 19% 19% 9% 16% 9% 15% 19% 8%Investments (Net) 4% 53% -15% 60% 24% 42% 31% 7%Deposits 15% 18% 9% 13% 14% 15% 17% 14%Gross Advances 20% 12% 22% 4% 6% 1% 11% 6%

PKR in bln Mar-13 Jun-13 Sep-13 Dec-13Total Assets 9,735 10,090 9,759 10,537 Investments (net) 4 160 4 253 4 029 4 305

Mar-1410,752 4 662Investments (net) 4,160 4,253 4,029 4,305

Deposits 7,236 7,756 7,698 8,318 Equity 864 901 903 939 Gross Advances 4,344 4,343 4,352 4,632

QoQ Growth% Mar-13 Jun-13 Sep-13 Dec-13

4,662 8,151

956 4,483

Mar-14Q Q pTotal Assets -0.3% 3.7% -3.3% 8.0%Investments (Net) 3.8% 2.2% -5.3% 6.9%Deposits -0.9% 7.2% -0.7% 8.1%Gross Advances -0.7% 0.0% 0.2% 6.4%

2Q and 4Q : are seen ashappening quarters for banking

industry

2.0%8.3%

-2.0%-3.2%

Incremental Growth | Funding & DeploymentCY12 CY13 1QCY14

QoQ

YOY Growth in Total Assets 19% 8% 2%Incremental Growth

PKR in bln

ASSETS 1,554 776 215 I 954 296 356Investments 954 296 356 Advances 440 306 (23) Cash and Placements 110 133 (106) Others 49 41 (12)

LIABILITIES & EQUITY 1,554 776 215 Depsoits 1,063 1,017 (167) Borrowing from FIs 355 (312) 282 Sub odinated debt (3) (15) 2 Others 41 29 80 Equity 98 57 18

1 Habib bank 1,610,474 16.6% 1,715,271 16.3% 2 National Bank 1,309,528 13.5% 1,364,341 12.9%

3 U it d B k 896 535 9 2% 1 009 761 9 6%

Large Banks (System Share: Total Assets >5% of Total banking Insudtry)

Dec-12 Dec-13Total Assets (PKR in mln)

Large 1 Habib bank 1,610,474 16.6% 1,715,271 6.5% 2 National Bank 1,309,528 13.5% 1,364,341 4.2% 3 United Bank 896,535 9.2% 1,009,761 12.6%

4 MCB 767 075 7 9% 815 508 6 3%

Total Assets (PKR in mln) | Growth compared to preceeding Year endDec-12 Dec-13

3 United Bank 896,535 9.2% 1,009,761 9.6% 4 MCB 767,075 7.9% 815,508 7.7% 5 Allied 633,706 6.5% 734,196 7.0% 6 Bank AlFalah 536,568 5.5% 610,614 5.8% 7 Bak Alhabib 453,106 4.7% 460,727 4.4%

6,206,991 63.9% 6,710,419 63.7%

Medium Banks (System Share: Total Assets >2% and <5% of Total

4 MCB 767,075 7.9% 815,508 6.3% 5 Allied 633,706 6.5% 734,196 15.9% 6 Bank AlFalah 536,568 5.5% 610,614 13.8% 7 Bak Alhabib 453,106 4.7% 460,727 1.7%

6,206,991 63.9% 6,710,419 8.1%

Total Assets (PKR in mln) | Growth compared to preceeding Year end

1 Standard Chartered 388,872 4.0% 399,438 3.8% 2 Askari 353,025 3.6% 394,827 3.7% 3 Faysal 313,123 3.2% 355,280 3.4% 4 The Bank of Punjab 332,111 3.4% 352,698 3.3%

5 Habib Metro 304 416 3 1% 311 454 3 0%

( ybanking Insudtry)

Total Assets (PKR in mln)Dec-12 Dec-13

Medium 1 Standard Chartered 388,872 4.0% 399,438 2.7% 2 Askari 353,025 3.6% 394,827 11.8% 3 Faysal 313,123 3.2% 355,280 13.5% 4 The Bank of Punjab 332,111 3.4% 352,698 6.2% 5 Habib Metro 304,416 3.1% 311,454 2.3%

1,691,548 17.4% 1,813,698 7.2%

Dec-12 Dec-13

5 Habib Metro 304,416 3.1% 311,454 3.0% 1,691,548 17.4% 1,813,698 17.2%

1 NIB 190 609 2 0% 176 825 1 7%

Small Banks (System Share: Total Assets <2% of Total banking Insudtry)

Total Assets (PKR in mln)Dec-12 Dec-13

1,691,548 17.4% 1,813,698 7.2%

Small 1 NIB 190,609 2.0% 176,825 -7.2% 2 Soneri 158,629 1.6% 169,234 6.7% 3 Summit 134,289 1.4% 125,500 -6.5%

Total Assets (PKR in mln)Dec-12 Dec-13

1 NIB 190,609 2.0% 176,825 1.7% 2 Soneri 158,629 1.6% 169,234 1.6% 3 Summit 134,289 1.4% 125,500 1.2% 4 JS 112,770 1.2% 116,823 1.1% 5 The Bank of Khyber 82,178 0.8% 108,170 1.0% 6 Silk 89,080 0.9% 91,800 0.9% 7 Sindh 92,291 1.0% 75,032 0.7% 8 KASB 88,313 0.9% 68,906 0.7%

9 SAMBA 34 854 0 4% 40 002 0 4%

4 JS 112,770 1.2% 116,823 3.6% 5 The Bank of Khyber 82,178 0.8% 108,170 31.6% 6 Silk 89,080 0.9% 91,800 3.1% 7 Sindh 92,291 1.0% 75,032 -18.7% 8 KASB 88,313 0.9% 68,906 -22.0% 9 SAMBA 34,854 0.4% 40,002 14.8% 10 First Women 22,506 0.2% 20,761 -7.8% 9 SAMBA 34,854 0.4% 40,002 0.4%

10 First Women 22,506 0.2% 20,761 0.2% 521,992 5.4% 521,495 4.9%

Dec-12 Dec-13

Islamic Banks Total Assets (PKR in mln)

521,992 5.4% 521,495 -0.1%

1 M 247 437 2 5% 329 725 33 3%

Dec-12 Dec-13

Islamic Banks Total Assets (PKR in mln)

1 Meezan 247,437 2.5% 329,725 3.1% 2 AlBaraka 73,867 0.8% 87,759 0.8% 3 BankIslami 74,249 0.8% 86,856 0.8% 4 Dubai Islamic 63,510 0.7% 80,257 0.8% 5 Burj 47,185 0.5% 53,389 0.5%

506,247 5.2% 637,985 6.1%

Industry Size (Total 9,711,154 10,536,989

1 Meezan 247,437 2.5% 329,725 33.3% 2 AlBaraka 73,867 0.8% 87,759 18.8% 3 BankIslami 74,249 0.8% 86,856 17.0% 4 Dubai Islamic 63,510 0.7% 80,257 26.4% 5 Burj 47,185 0.5% 53,389 13.1%

506,247 5.2% 637,985 26.0%

Banks Ratings (As of 07-May-14)LT Rating

1 Habib Bank Ltd. 16.3% AAA

Large Banks (sorted in terms of System Share)Dec-13

2 National Bank of Pakistan 12.9% AAA 3 United Bank Ltd. 9.6% AA+ 4 MCB Bank Ltd. 7.7% AAA 5 Allied Bank Ltd. 7.0% AA+ 6 Bank Alfalah Ltd. 5.8% AA 7 Bank AL Habib Ltd. 4.4% AA+

63.7%

LT Rating 1 Standard Chartered Bank (Pakistan) Ltd. 3.8% AAA 2 Askari Bank Ltd. 3.7% AA- 3 Faysal Bank Ltd. 3.4% AA 4 The Bank of Punjab 3.3% AA-

Dec-13Medium Banks (sorted in terms of System Share)

j 5 Habib Metropolitan Bank Ltd. 3.0% AA+

17.2%

LT Rating 1 NIB Bank Ltd. 1.7% AA-

2 S i B k Ltd 1 6% AA

Dec-13Small Banks (sorted in terms of System Share)

2 Soneri Bank Ltd. 1.6% AA- 3 Summit Bank Ltd 1.2% A- [RW] 4 JS Bank Ltd. 1.1% A+ 5 The Bank of Khyber 1.0% A 6 Silk Bank Ltd 0.9% A- 7 Sindh Bank Ltd. 0.7% AA- 8 KASB Bank Ltd. 0.7% BBB

9 SAMBA Bank Ltd 0 4% AA 9 SAMBA Bank Ltd. 0.4% AA- 10 First Women Bank Ltd. 0.2% A-

4.9%

LT Rating

1 M B k Ltd 3 1% AA

Islamic Banks (sorted in terms of System Share)Dec-13

1 Meezan Bank Ltd. 3.1% AA 2 AlBaraka Bank (Pakistan) Ltd.. 0.8% A 3 BankIslami Pakistan Ltd. 0.8% A 4 Dubai Islamic Bank Pakistan Ltd. 0.8% A 5 Burj Bank Ltd. 0.5% A

6.1%* All Ratings carry Stable outlook except Summit which is under RW Developing

Industry ADR and IDR Advances and Investments to Deposits Ratio | Industry Trend

72%

81%

8,000

9,000

Advances and Investments to Deposits Ratio | Industry Trend

54%

63%

6,000

7,000

27%

36%

45%

3 000

4,000

5,000

PKR

in b

ln

9%

18%

27%

1,000

2,000

3,000

CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 1QCY14Deposits 3,255 3,854 4,218 4,786 5,451 6,244 7,301 8,318 8,151 Advances (net) 2,428 2,688 3,173 3,240 3,358 3,349 3,760 4,047 4,014

0%-

Investments (net) 833 1,276 1,087 1,737 2,157 3,055 4,009 4,305 4,662 Investments % Deposits 26% 33% 26% 36% 40% 49% 55% 52% 57%Advances % Deposits 75% 70% 75% 68% 62% 54% 52% 49% 49%

90%

100%

Industry | Advances Composition

60%

70%

80%

90%

30%

40%

50%

Dec-10 Dec-11 Dec-12 Dec-13 Mar-140%

10%

20%

Others (incl. Staff Loans) 4% 4% 5% 5% 5%Agriculture Sector 5% 5% 5% 5% 5%SMEs Sector 9% 8% 7% 6% 6%Consumer sector 7% 6% 6% 6% 6%Commodity financing 12% 12% 12% 11% 10%Commodity financing 12% 12% 12% 11% 10%Corporate Sector 63% 65% 66% 67% 68%

Industry after having a bad experience in SMEs (Infection ratio as high as 43% in Sep-12) is focusing on corporate segment

G Ad

Sector wise Advances Composition

% of Total PKR in mln % of Total PKR in mln % of Total PKR in mln

Others 1,780,573 1,917,127 1,783,342 Textile 17 1% 767 054 17 3% 778 868 16 7% 699 342

CY13

Gross Advances

CY12Sectors

1QCY14

Textile 17.1% 767,054 17.3% 778,868 16.7% 699,342 Production/Transmission of Energy 12.4% 554,432 10.9% 493,122 11.7% 492,814 Individuals 9.0% 401,785 8.5% 383,162 7.9% 333,309 Agribusiness 7.5% 335,485 7.6% 340,342 8.4% 354,343 Chemical & Pharmaceuticals 3.6% 159,245 3.3% 150,256 3.6% 150,101 , , ,Financial 2.3% 105,125 2.7% 121,013 1.9% 81,725 Sugar 3.9% 175,431 2.7% 120,274 2.5% 105,558 Automobile/Transportation 1.4% 62,062 1.3% 60,794 1.3% 56,329 Electronics 1.5% 67,461 1.3% 58,877 1.4% 57,003 Cement 1.1% 48,803 1.2% 54,679 1.4% 58,351 Shoes & Leather garments 0.6% 25,008 0.6% 26,628 0.6% 23,742 Insurance 0.0% 225 0.0% 354 0.0% 340 Total 4,482,690 4,505,495 4,196,299

Commentary: Textile remained the largest credit exposure of the industry. Whilethere was an increase in %share of textile sector, absolute exposure increased by closeto PKR 80bln. Personal loans, lending to Financial sector and sugar businessi d d i CY13increased during CY13.

Sectors Absolute Growth Infection Ratio

Sector wise Advances Composition and Asset Quality

CY13 CY12 CY13 CY12Others 133,784 122,885 10.7% 11.5%Textile 79,526 42,256 26.2% 29.6%Individuals 49,853 (7,188) 12.3% 16.2%

PKR in mln PKR in mln

Individuals 49,853 (7,188) 12.3% 16.2%Financial 39,288 2,602 6.8% 10.5%Sugar 14,717 (22,768) 5.2% 10.3%Automobile/Transportation 4,465 19,048 17.2% 19.8%Shoes & Leather garments 2,886 (168) 11.3% 12.8%Electronics 1 874 21 536 41 3% 41 9%Electronics 1,874 21,536 41.3% 41.9%Production/Transmission of Energy 308 3,202 3.0% 3.7%Chemical & Pharmaceuticals 155 11,193 8.9% 9.9%Insurance 13 (3,344) 0.2% 13.0%Cement (3,673) (2,873) 25.3% 29.3%A ib i (14 001) 263 769 10 2% 9 1%Agribusiness (14,001) 263,769 10.2% 9.1%Total 309,196 450,150 13.0% 14.5%

Commentary: During CY13 the industry saw a significant improvement inasset quality of Textile, Individuals, financial, sugar, and auto sector (Inpercentage terms)

21%700

Industry | Credit Risk | Asset Quality

15%

18%

500

600

9%

12%

300

400

KR

in b

ln

6%200

PK

CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 1QCY14NPLs 177 218 359 446 556 592 615 585 602

0%

3%

-

100

NPLs 177 218 359 446 556 592 615 585 602 Provision 138 188 250 312 371 410 439 459 468 Infection ratio % 7% 8% 10% 13% 15% 16% 14% 13% 13%

Commentary: We should be happy to see industry infection ratio dropping for recent three yearsCommentary: We should be happy to see industry infection ratio dropping for recent three years. However, in terms of absolute money we can see CY13 as the first year where absolute NPLs have decreased.

Weighted average Lending & Deposit Rates | Oustanding Advences & Deposits | Spreads

11.3

12.5

14.013.4 13.6

12.8

11.311 2 12

13

14

12

13

14

p | p

10.5

11.3 11.2

9

10

11

12

9

10

11

12

6.55.9 6.0

5 8

7.4 7.3 7.3 7.5 7.5 7.67.0

6.2 6.06

7

8

6

7

8

%%

3.14.0

5.25.8

5.1 5.1

3

4

5

3

4

5

0

1

2

0

1

2

CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 1QCY14

Yield Cost of Funds Spread

Weighted average Lending & Deposit Rates |Fresh Disbursements & Deposits | Spreads

12.7

14.2

13.514.1

12.4 13

14

15

13

14

15

p | p

10.5 10.610.3

10.7

10

11

12

13

10

11

12

13

4.9 5 4

7.3 7.77.2 7.4

6.76.5 6 3

6.76

7

8

9

6

7

8

9

%%

5.4 5.7 6.05.5

5.2 5.4

6.5 6.35.7

4.6 4.8

3

4

5

6

3

4

5

6

0

1

2

0

1

2

CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 1QCY14

Yield Cost of Funds Spread

PKR bln31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 YoY Growth

Investment Portfolio | GoP Securities

PIBs 1,119 1,322 1,302 1,380 2,365 111%GoP Ijara Sukuk 459 459 459 370 323 -30%Market T-Bills 3,144 3,151 2,940 3,181 2,759 -12%Total 4,722 4,932 4,701 4,931 5,447 15%

Banking Industry Investment in GoP SecuritiesPIBs 615 728 682 744 1,522 147%GoP Ijara Sukuk 415 413 413 335 289 -30%jMarket T-Bills 2,676 2,682 2,458 2,736 2,304 -14%Total 3,705 3,822 3,552 3,815 4,115

Banking Industry holdings % in GoP SecuritiesBanking Industry holdings % in GoP SecuritiesPIBs 55% 55% 52% 54% 64%GoP Ijara Sukuk 90% 90% 90% 91% 90%Market T-Bills 85% 85% 84% 86% 84%Total 78% 77% 76% 77% 76%Total 78% 77% 76% 77% 76%

Structure of Interest Rates

12.0

12.5

12.0

12.5

Structure of Interest Rates

11.0

11.5

11.0

11.5

10.0

10.5

10.0

10.5 %%

8.5

9.0

9.5

8.5

9.0

9.5

8.58.5 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

Discount Rate 6M T-bills Cutoff Yield 3Yrs PIBsDiscount Rate 6M T bills Cutoff Yield 3Yrs PIBs

Industry Profitability Trend

120

140 y y

100

60

80

PK

R i

n b

ln

40

-

20

CY07 CY08 CY09 CY10 CY11 CY12 1QCY13 2QCY13 3QCY13 4QCY13 Dec 13 1QCY14CY07 CY08 CY09 CY10 CY11 CY12 1QCY13 2QCY13 3QCY13 4QCY13 Dec-13 1QCY14

Profit After Tax (ytd)

CET 1 Tier I Tier II CAR 2013 CAR 2012 1 Habib bank 12.9% 12.9% 2.5% 15.4% 15.3% 2 National Bank 10.6% 10.6% 4.7% 15.2% 15.5%

3 United Bank 10 0% 10 0% 3 3% 13 3% 15 0%

Large BanksCapital Adequacy at end Dec-13

3 United Bank 10.0% 10.0% 3.3% 13.3% 15.0% 4 MCB 20.9% 20.9% 1.4% 22.3% 22.2% 5 Allied 15.5% 15.5% 2.4% 17.9% 16.2% 6 Bank AlFalah 8.4% 8.4% 3.6% 12.1% 12.6% 7 Bak Alhabib 10.8% 10.8% 3.6% 14.4% 15.9%

Medium Banks (System Share: Total Assets >2% and <5% of Total banking )

CET 1 Tier I Tier II Total CAR 2012 1 Standard Chartered 15.1% 15.1% 2.0% 17.0% 14.3% 2 Askari 8.2% 8.2% 2.2% 10.4% 11.8% 3 Faysal 9.9% 9.9% 1.4% 11.3% 10.7% 4 The Bank of Punjab 8.7% 8.7% 0.3% 9.0% 7.7%

5 H bib M t 15 6% 15 6% 0 6% 16 1% 16 7%

I dt )Capital Adequacy at end Dec-13

5 Habib Metro 15.6% 15.6% 0.6% 16.1% 16.7%

CET 1 Tier I Tier II Total CAR 2012 1 NIB 11.1% 11.1% 0.0% 11.1% 13.0%

2 S i 10 5% 10 5% 0 4% 11 0% 12 4%

Small Banks (System Share: Total Assets <2% of Total banking Insudtry)Capital Adequacy at end Dec-13

2 Soneri 10.5% 10.5% 0.4% 11.0% 12.4% 3 Summit 0.6% 2.7% 1.7% 4.4% 4.6% 4 JS 18.8% 18.8% 0.2% 19.0% 24.3% 5 The Bank of Khyber 23.4% 23.4% 0.6% 24.0% 25.0% 6 Silk 3.5% 4.5% 2.4% 6.9% 5.7% 7 Sindh 24.0% 24.0% 0.0% 24.0% 38.5% 8 KASB -2.3% -2.6% -0.6% 9 SAMBA 42.4% 42.4% 0.0% 42.4% 43.8% 10 First Women 20.0% 20.0% 0.0% 20.1% 24.7%

CET 1 Tier I Tier II Total CAR 2012Capital Adequacy at end Dec-13

Islamic Banks

CET 1 Tier I Tier II Total CAR 2012

1 Meezan 11.4% 11.4% 1.1% 12.5% 14.1% 2 AlBaraka 9.6% 9.6% 2.4% 12.0% 11.2% 3 BankIslami 14.3% 14.3% 1.4% 15.7% 15.5% 4 Dubai Islamic 14.4% 14.4% 0.2% 14.6% 19.1% 5 Burj 20.5% 20.5% 0.3% 20.8% 22.6%

Glossary & Data References

Data References:

1. Financial Soundness Indicators and Quarterly1. Financial Soundness Indicators and Quarterly Compendium of the Banking System :

[Mar-14, Dec-13 M 13]13, Mar-13]

2. National Data Summary Page, SBP :

Glossary:

ADR Advances to Deposits RatioIDR Investments to Deposits RatioCAR Capital Adequacy RatioCAR Capital Adequacy RatioCET I Common Equity Tier I

Samiya Mukhtarsamiya@pacra.comContact number: +92 42 3586 9504

DISCLAIMERDISCLAIMERPACRA has used due care in preparation of this document. Our information has been obtained from sourceswe consider to be reliable but its accuracy or completeness is not guaranteed. The information in thisdocument may be copied or otherwise reproduced, in whole or in part, provided the source is dulyacknowledged. The presentation should not be relied upon as professional advice.