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Date PACRA Maintains Entity Ratings of Askari Limited 25-Jun-21 Entity

Analyst Rating Type Sehar Fatima Current Previous [email protected] (25-Jun-21) (26-Jun-20) +92-42-35869504 Action Maintain Maintain www.pacra.com Long Term AA+ AA+ Short Term A1+ A1+ Outlook Stable Stable Applicable Criteria Rating Watch --

Methodology | FI | Jun-20 The bank has a strong brand image, flanked by its affiliation with one of the strongest Methodology | Correlation conglomerate, Group. This represents strong ownership of the bank. This Between Long-Term And association has provided fruits in terms of market penetration, customer confidence, sustainable Short-Term Rating Scale | funding sources and avenues for generating mark-up and non mark-up based income stream. Jun-20 Askari Bank has shown stable growth rate over the years as evident by significant increase of 54% Criteria | Rating Modifier | in profit after tax in CY20. Volumetric increase in earning assets, led by investments provided Jun-20 support to profitability. CY20 proved to be a very prosperous year for the Bank in terms of both PBT and PAT. The net spread has increased on the back of lower cost of funds. The Bank increased its customer deposits by 16.2% to hold its market share intact at 4.7% (CY19: 4.7%). A noticeable rise is seen in both CA and SA, ultimately boosting CASA by a decent margin. In CY20, AKBL’s gross advances grew by 6.2% YoY and asset quality improved as infection ratio decreased to 6.7% (CY19: 7.1%). The Bank's CAR stood at 15.5% at end-Dec20 where Tier 1 capital enhanced to Related Research 12.3%. The Bank has issued tier II TFC of PKR 6bln which has enhanced its capital base, thereby boosting its lending capacity. COVID-19 is an ongoing challenge. While it has taken a toll on many Sector Study | Commercial businesses, its ramifications are still unfolding. The proactive measures taken by the regulators and Bank | Jun-20 other concerning bodies have mitigated the potential damages much anticipated from this pandemic. As a result, the banking industry remained protected and in fact posted record profits. Vigilance is required as the loan repayment cycle resumes amid variants of the pandemic continue to re-emerge. The ratings are dependent upon sustainability of the bank's relative positioning. Equity base of the Bank and CAR are satisfactory and may continually be enhanced. Meanwhile, holding the asset quality is a pre-requisite.

About the Entity Askari Bank Limited, incorporated in 1991, operates with a network of 537 branches as at end- Dec20. The share in total customer deposits stood at 4.7% at end-Dec20. Fauji Foundation (FF) is the key sponsor (~71.9% stake). The remaining shareholding is widely spread. Currently, overall control of the Bank vests in the eleven-member Board of Directors (BoD) including the President and CE. Five of the board members are Fauji Foundation nominees; four are independent members, while one represents NIT. Mr. Abid Sattar is the President & CE of Askari Bank Limited. He is a seasoned banker with rich industry experience spanning over three decades. His term will expire on Aug 08, 2021. The bank will disclose the detail of appointment of new or acting CEO in accordance with statutory requirement.

Disclaimer This press release is being transmitted for the sole purpose of dissemination through The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. print/electronic media. The press Our ratings reflect an independent, professional and impartial assessment of the risks associated with a release may be used in full or in particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit part without changing the ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA meaning or context thereof with opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the due credit to PACRA security's market price or suitability for a particular investor.

The Pakistan Credit Rating Agency Limited P R

Date PACRA Maintains Rating of Askari Bank Limited | Tier-II TFC 25-Jun-21 (TFC-VII) Analyst Timnat Thomas Debt Instrument [email protected] Rating Type Current Previous +92-42-35869504 (25-Jun-21) (26-Jun-20) www.pacra.com Action Maintain Initial Long Term AA AA Short Term -- Applicable Criteria Outlook Stable Stable Rating Watch -- Methodology | FI | Jun-20 Methodology | DI Basel III | Jun-20 The bank has a strong brand image, flanked by its affiliation with one of the strongest Criteria | Rating Modifier | conglomerate, Fauji Foundation Group. This represents strong ownership of the bank. This Jun-20 association has provided fruits in terms of market penetration, customer confidence, sustainable funding sources and avenues for generating mark-up and non-mark-up based income stream. Askari Bank has shown a stable growth rate over the years as evident by a significant increase of 54% in profit after tax in CY20. Volumetric increase in earning assets, led by investments provided support to profitability. CY20 proved to be a very prosperous year for the Bank in terms of both PBT and PAT. The net spread has increased on the back of lower cost of funds. The Bank increased Related Research its customer deposits by 16.2% to hold its market share intact at 4.7% (CY19: 4.7%). A noticeable rise is seen in both CA and SA, ultimately boosting CASA by a decent margin. In CY20, AKBL’s gross advances grew by 6.2% YoY and asset quality improved as the infection ratio decreased to Sector Study | 6.7% (CY19: 7.1%). The Bank's CAR stood at 15.5% at end-Dec20 were Tier 1 capital enhanced Microfinance | Sep-20 to 12.3%. The Bank has issued tier-II TFC of PKR 6bln which has enhanced its capital base, thereby boosting its lending capacity. COVID-19 is an ongoing challenge. While it has taken a toll on many businesses, its ramifications are still unfolding. The proactive measures are taken by the regulators and other concerning bodies have mitigated the potential damages much anticipated from this pandemic. As a result, the banking industry remained protected and in fact posted record profits. Vigilance is required as the loan repayment cycle remains amid variants of the pandemic continue to re-emerge. The ratings are dependent upon the sustainability of the bank's relative positioning. The equity base of the Bank and CAR are satisfactory and may continually be enhanced. Meanwhile, holding the asset quality is a prerequisite.

About the Entity Askari Bank Limited, incorporated in 1991, operates with a network of 537 branches as at end- Dec20. The banks share in total customer deposits stood at 4.7% at end-Dec20. Fauji Foundation (FF) is the key sponsor (~71.9% stake). The remaining shareholding is widely spread. Currently, overall control of the Bank vests in the eleven-member Board of Directors (BoD) including the President and CE. Five of the board members are Fauji Foundation nominees; four are independent members, while one represents NIT. Mr Abid Sattar is the President & CE of Askari Bank Limited. He is a seasoned banker with rich industry experience spanning over three decades. His term will expire on Aug 08, 2021. The bank will disclose the detail of the appointment of the new or acting CEO in accordance with the statutory requirement.

About the Instrument AKBL issued a Tier-2 TFC-VII in March 2020 amounting to PKR 6bln(inclusive of a greenshoe option of PKR2bln) to boost its CAR. The TFC-VII (Tier 2) instrument is rated, DSLR listed, unsecured and subordinated as to the payment of principal and profit to all other indebtedness of AKBL, including deposits. The profit rate is 3 Month KIBOR + 1.2%. The tenor of the instrument is 10 years and profit is being paid quarterly in arrears on the outstanding principal amount. The principal is to be paid in 4 equal quarterly instalments. The call option on the instrument may be exercised on or after the 20th coupon payment (5 years), subject to approval of the SBP. Disclaimer This press release is being transmitted for the sole purpose of dissemination through The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. print/electronic media. The press Our ratings reflect an independent, professional and impartial assessment of the risks associated with a release may be used in full or in particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit part without changing the ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA meaning or context thereof with opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the due credit to PACRA security's market price or suitability for a particular investor.

The Pakistan Credit Rating Agency Limited P R

Date PACRA Maintains Rating of Askari Bank Limited | TFC VI 25-Jun-21 (Additional Tier I) | July-18 Analyst Timnat Thomas Debt Instrument [email protected] Rating Type Current Previous +92-42-35869504 (25-Jun-21) (26-Jun-20) www.pacra.com Action Maintain Maintain Long Term AA- AA- Short Term -- Applicable Criteria Outlook Stable Stable Rating Watch -- Methodology | FI | Jun-20 Methodology | DI Basel III | Jun-20 The bank has a strong brand image, flanked by its affiliation with one of the strongest Criteria | Rating Modifier | conglomerate, Fauji Foundation Group. This represents strong ownership of the bank. This Jun-20 association has provided fruits in terms of market penetration, customer confidence, sustainable funding sources and avenues for generating mark-up and non-mark-up based income stream. Askari Bank has shown a stable growth rate over the years as evident by a significant increase of 54% in profit after tax in CY20. Volumetric increase in earning assets, led by investments provided support to profitability. CY20 proved to be a very prosperous year for the Bank in terms of both PBT and PAT. The net spread has increased on the back of lower cost of funds. The Bank increased Related Research its customer deposits by 16.2% to hold its market share intact at 4.7% (CY19: 4.7%). A noticeable rise is seen in both CA and SA, ultimately boosting CASA by a decent margin. In CY20, AKBL’s gross advances grew by 6.2% YoY and asset quality improved as the infection ratio decreased to Sector Study | Commercial 6.7% (CY19: 7.1%). The Bank's CAR stood at 15.5% at end-Dec20 were Tier 1 capital enhanced Bank | Jun-21 to 12.3%. The Bank has issued tier-II TFC of PKR 6bln which has enhanced its capital base, thereby boosting its lending capacity. COVID-19 is an ongoing challenge. While it has taken a toll on many businesses, its ramifications are still unfolding. The proactive measures are taken by the regulators and other concerning bodies have mitigated the potential damages much anticipated from this pandemic. As a result, the banking industry remained protected and in fact posted record profits. Vigilance is required as the loan repayment cycle remains amid variants of the pandemic continue to re-emerge. The ratings are dependent upon the sustainability of the bank's relative positioning. The equity base of the Bank and CAR are satisfactory and may continually be enhanced. Meanwhile, holding the asset quality is a prerequisite.

About the Entity Askari Bank Limited, incorporated in 1991, operates with a network of 537 branches as at end- Dec20. The banks share in total customer deposits stood at 4.7% at end-Dec20. Fauji Foundation (FF) is the key sponsor (~71.9% stake). The remaining shareholding is widely spread. Currently, overall control of the Bank vests in the eleven-member Board of Directors (BoD) including the President and CE. Five of the board members are Fauji Foundation nominees; four are independent members, while one represents NIT. Mr Abid Sattar is the President & CE of Askari Bank Limited. He is a seasoned banker with rich industry experience spanning over three decades. His term will expire on Aug 08, 2021. The bank will disclose the detail of the appointment of the new or acting CEO in accordance with the statutory requirement.

About the Instrument AKBL issued a TFC-VI (Additional Tier 1) in July 2018 amounting to PKR 6bln(inclusive of a greenshoe option of PKR 1.5bln) to boost its CAR. The TFC is an Over the Counter (OTC), listed, unsecured, subordinated, perpetual and non-cumulative instrument. It has a profit rate of 6 Month KIBOR + 1.5% and is being paid semi-annually in arrears on the outstanding principal amount. The instrument also carries a call option which may be exercised on or after Jun-23, subject to the approval of the SBP. Disclaimer This press release is being transmitted for the sole purpose of dissemination through The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. print/electronic media. The press Our ratings reflect an independent, professional and impartial assessment of the risks associated with a release may be used in full or in particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit part without changing the ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA meaning or context thereof with opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the due credit to PACRA security's market price or suitability for a particular investor.