ADVICE FOR INVESTORS INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS PROSPECTUS, ESPECIALLY THE RISK FACTORS GIVEN AT PARA 4.11 OF THIS PROSPECTUS BEFORE MAKING ANY INVESTMENT DECISION. SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS ARE PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015. SONERI BANK LIMITED PROSPECTUS THE ISSUE SIZE OF FULLY PAID UP, RATED, LISTED, PERPETUAL, UNSECURED, SUBORDINATED, NON-CUMULATIVE AND CONTINGENT CONVERTIBLE DEBT INSTRUMENTS IN THE NATURE OF TERM FINANCE CERTIFICATES (“TFCS”) IS PKR 4,000 MILLION, OUT OF WHICH TFCS OF PKR 3,600 MILLION (90% OF ISSUE SIZE) ARE ISSUED TO THE PRE-IPO INVESTORS AND PKR 400 MILLION (10% OF ISSUE SIZE) ARE BEING OFFERED TO THE GENERAL PUBLIC BY WAY OF INITIAL PUBLIC OFFER THROUGH THIS PROSPECTUS RATE OF RETURN: PERPETUAL INSTRUMENT @ 6 MONTH KIBOR* (ASK SIDE) PLUS 2.00% P.A INSTRUMENT RATING: A (SINGLE A) BY THE PAKISTAN CREDIT RATING COMPANY LIMITED LONG TERM ENTITY RATING: “AA-” (DOUBLE A MINUS) SHORT TERM ENTITY RATING: “A1+” (A ONE PLUS) BY THE PAKISTAN CREDIT RATING AGENCY LIMITED AS PER PSX’S LISTING OF COMPANIES AND SECURITIES REGULATIONS, THE DRAFT PROSPECTUS WAS PLACED ON PSX’S WEBSITE, FOR SEEKING PUBLIC COMMENTS, FOR SEVEN (7) WORKING DAYS STARTING FROM OCTOBER 18, 2018 TO OCTOBER 26, 2018. NO COMMENTS HAVE BEEN RECEIVED ON THE DRAFT PROSPECTUS. DATE OF PUBLIC SUBSCRIPTION: FROM DECEMBER 5, 2018 TO DECEMBER 6, 2018 (FROM: 9:00 AM TO 5:00 PM) (BOTH DAYS INCLUSIVE) CONSULTANT TO THE ISSUE BANKERS TO THE ISSUE (RETAIL PORTION) Allied Bank Limited Askari Bank Limited Bank Alfalah Limited** Bank Al Habib Limited Faysal Bank Limited Habib Metropolitan Bank Limited JS Bank Limited MCB Bank Limited Silk Bank Limited Soneri Bank Limited United Bank Limited** **In order to facilitate investors, United Bank Limited (“UBL”) and Bank Alfalah Limited (“BAFL”) are providing the facility of electronic submission of application (e‐IPO) to their account holders. UBL account holders can use UBL net banking to submit their application via link http://www.ubldirect.com/corporate/ebank and BAFL account holders can use BAFL net banking to submit their applications via link https://netbanking.bankalfalah.com.Further, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on December 6, 2018. The Central Depository Company of Pakistan (“CDC”) in collaboration with 1 Link (G) Limited (1 Link) has developed a Centralized e-IPO System (“CES”) through which applications for subscription of securities offered through IPOs can be made electronically. CES has been made available in this IPO which can be accessed through the web link www.cdceipo.com. Payment of subscription money can be made through 1Link’s member banks available for CES, list of which is available on above web link. For making application though CES, investors must be registered with CES. Registration with CES is one-time activity, free of cost, and a self-registration process by filling the CES registration form, which is available 24/7 all around the year. Investors who have valid Computerized National Identity Card (CNIC), bank account with any of the commercial bank, email address, mobile phone number and CDS Account (Investor Account or sub Account) may register themselves with CES. Investors who do not have CDS account may visit www.cdcpakistan.com for information and details. For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone Number: 0800 – 23275 (CDCPL) and e-mail: [email protected]. CES is connected to a number of banks through 1 Link for payment of the subscription money. For further details on CES, please refer para 2.10 of this Prospectus or contact Mr. Farooq Ahmed Butt at Phone 021-34326030 and email: [email protected]. Underwriters for Retail Portion of the Issue: For investor education, please visit www.jamapunji.com.pk, and read the IPO Investor Guide placed at web link https://www.secp.gov.pk/document/initial-public-offering-ipo-a-concise-guide-for- investors/?wpdmdl=29584 Jama Punji is an investor education initiative of the Securities & Exchange Commission of Pakistan. Prospectus and Subscription Forms can be downloaded from the following websites https://www.psx.com.pk, http://www.soneribank.com/ and https://www.nextcapital.com.pk For further queries you may contact: Saad Reaz Marium Ejaz Umer Habib Talha Azher P: 111 567 890 (Ext. 2265) P: 111 567 890 (Ext. 2188) P: +92 21 3516 9513 P: +92 21 3516 9516 E: [email protected] E: [email protected] E: [email protected] E:[email protected] DATE OF PUBLICATION OF THIS PROSPECTUS: NOVEMBER 28, 2018 *Average rate ‘Ask Side’ of the six-month Karachi Inter Bank offered Rate (“KIBOR”) as published on Reuters Page KIBR or as published by the Financial Markets Association of Pakistan in case Reuters page is unavailable on the Base Rate setting date. TFC PROSPECTUS | SONERI BANK LIMITED UNDERTAKING BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER DATE: OCTOBER 5, 2018 WE, MOHAMMAD AFTAB MANZOOR, THE PRESIDENT & CEO AND MIRZA ZAFAR BAIG, THE CHIEF FINANCIAL OFFICER OF SONERI BANK LIMITED HEREBY UNDERTAKE THAT: 1. THIS PROSPECTUS CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUER AND THE ISSUE, WHICH IS MATERIAL IN THE CONTEXT OF THE ISSUE AND NOTHING HAS BEEN CONCEALED IN THIS RESPECT; 2. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF; 3. THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD; 4. THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THIS PROSPECTUS AS A WHOLE OR ANY PART THEREOF MISLEADING; 5. ALL REQUIREMENTS OF THE SECURITIES ACT, 2015, THE DISCOLSURES IN PUBLIC OFFERING REGULATIONS, 2017 FOR PREPARATION OF PROSPECTUS, RELATING TO APPROVAL AND DISCLOSURES HAVE BEEN FULFILLED; AND 6. NO CHARGES, FEE, EXPENSES, PAYMENTS ETC. HAVE BEEN COMMITTED TO BE PAID TO ANY PERSON IN RELATION TO THIS PUBLIC OFFERING EXCEPT FOR THOSE AS DISCLOSED IN PART 03 OF THE PROSPECTUS. FOR AND BEHALF OF SONERI BANK LIMITED -sd- -sd- ___________________________ ___________________________ MOHAMMAD AFTAB MANZOOR MIRZA ZAFAR BAIG PRESIDENT & CEO CHIEF FINANCIAL OFFICER Page 2 of 119 TFC PROSPECTUS | SONERI BANK LIMITED GLOSSARY OF ABBREVIATIONS AND TECHNICAL TERMS Additional Tier 1 Capital means the additional Tier 1 capital as Additional Tier 1 Capital defined in the Basel III Circular ALCO Asset Liability Management Committee Consultant to the Issue Next Capital Limited SNBL or the Bank or the Issuer Soneri Bank Limited For first profit payment, the Base Rate will be set one working day before the Issue Date and for subsequent profit payments, it will be Base Rate Setting Date set on semiannual basis, one working day prior to the commencement of the next semiannual period. Instructions for Basel III Implementation in Pakistan issued by the Basel III Circular State Bank of Pakistan under BPRD circular # 06 dated August 15, 2013 (as may be amended, modified or replaced from time to time) Board / BOD Board of Directors of the Bank CAGR Compounded Annual Growth Rate Capital Adequacy Ratio; the amount of risk-based capital (Tier 1 and CAR Tier 2) as a percentage of risk-weighted assets CDC The Central Depository Company of Pakistan Limited CDS Central Depository System Credit Rating Agency The Pakistan Credit Rating Agency Limited (“PACRA”) Common Equity Tier 1 as defined in chapter 2, section 2.1.1 of the CET 1 Basel III Circular As described thereto in Paragraph A-5-2 of Annexure 5 of the Basel CET 1 Trigger Event III Circular. The Issuer shall immediately notify the SBP upon the occurrence of the CET 1 Trigger Event Conditions The terms and conditions governing and regulating the TFCs CY Calendar Year DFI Development Financial Institutions EPS Earnings per Share FY Financial Year GOP Government of Pakistan The Investment Agreement entered into between each pre-IPO Investment Agreement Investor and the Issuer, prior to the Issue Date The date of closing of the subscription list for the public offering of Issue Date the TFCs, being the last date for subscription of the TFCs by potential investors/general public KIBOR Karachi Inter-Bank Offer Rate (Ask Side) Mark-up will only be paid from the Issuer’s current year’s earning and if the Issuer is in compliance of regulatory Minimum Capital Lock-in-Clause Requirement and Capital Adequacy Ratio requirements set by SBP from time to time Lock-in-Event Inability of the Issuer to comply with the Lock-in clause Mandatory conversion of the TFCs into ordinary shares in Mandatory Conversion accordance with the Trust Deed and upon the occurrence of a Mandatory Conversion Event Page 3 of 119 TFC PROSPECTUS | SONERI BANK LIMITED Issuance of a written direction by the SBP to the Issuer to Mandatorily Convert the TFCs on account of: (i) a CET 1 Trigger Mandatory Conversion Event Event; (ii) the PONV Trigger Event; (iii) Lock-In Event or (iv) inability to exercise the non-cumulative feature Mandatory write-off (in whole or in part) of the Outstanding Face Mandatory Write-off Value of the TFCs in accordance with the Trust Deed and upon the occurrence of a Mandatory Write Off Event Mandatory Write-off Event will occur upon issuance of a written directive of the SBP requiring the Mandatory Write-Off of the TFCs on account of: (i) a PONV Trigger Event; (ii) a CET 1 Trigger Event; (iii) Mandatory Write-off Event upon the Issuer being unable to Mandatorily Convert the TFCs into Ordinary Shares upon occurrence of a CET 1 Trigger Event; (iv) Lock- in Event; or (v) inability to exercise non-cumulative feature Market Maker Next Capital Limited MCR Minimum Capital Requirement as prescribed by applicable laws NBFC Non-Banking Financial Company NII Net Interest Income NPLs Non-Performing Loans PSX Pakistan Stock Exchange PKR or Rs.