Allied Bank Limited

INTRODUCTION:
Allied Bank Limited is Pakistan's fifth largest commercial bank and is an Ibrahim Group subsidiary. With
its registered office in Lahore, Allied Bank is one of the country's largest banks with over 1350 branches
and ATMs. It was the first Muslim bank with the name of Australasia Bank founded in Pakistan prior to
independence (1942). In 1974, Australasia Bank Limited called it Allied Bank of Pakistan, and Sarhad
Bank Ltd, Lahore Commercial Bank Ltd and Pak Bank Ltd were also merged into it.

HISTORY:
ABL is the first Muslim bank to be set up on land that later became Pakistan. It was founded on
December 3, 1942, by the Kashmiri silk merchant Khawaja Bashir Baksh as Australasia Bank in Lahore
with a capital of 0.12 million.The history of the bank is broken into several stages. The bank has
progressed in all aspects of its operations over the 25 years of Unified Pakistan. The 1970s were a hard
decade for all of Pakistan's banks. East Pakistan was split in 1971 and Australasia Bank lost its fifty
branches and also a lot of money. Nonetheless, growth has been stable.

All of the banks, including Australasia Bank, were nationalized in 1974. The small banks of the
provinces were consolidated into Australasia Bank. The new company was rebranded as Allied Bank of
Pakistan Limited on 1 July 1974. Then, as a public sector financial institution, it began its activities.

DETAILS:
Website https://www.abl.com

Industries Banking

Company size 10,001+ employees

Headquarters Lahore, Punjab

Type Public Company

Founded 1940

ROLE IN ISLAMIC BANKING:

A Sharia compliant investment mode with a range of tenors and delivery options for profit/loss is the
Allied Islamic Investment Credential. In September 2018, via its 117 dedicated Islamic banking branches
network in 53 major cities of Pakistan, ABL launched its Shariah-compliant Aitbaar Islamic Banking
operation.
Vision
Becoming a competitive and profitable bank offering integrated strategies to be the customer's first
option bank

Mission
 Providing our clients with value-added services
 Providing creative high tech technologies to satisfy the needs of customers
 Generating sustainable value for all stakeholders through development, productivity and
diversity
 To have a challenging working atmosphere and to honor loyal team members based on their
expertise and success.
 To play a constructive role in making a commitment to society.

Financial Review
The new age of implementing confinement steps by "SMART" lockdowns and mandating social
distancing activities has increased the pace of providing digital banking services to address the
increasing needs of retail banking customers and at the same time using information technologies to
communicate with different stakeholders, including regulators, in the midst of the new COVID-19
epidemic. The digital evolution further stresses the importance of reviewing and modifying current
operating frameworks in order to instill organizational efficiencies in order to ensure the long-term
survival of financial institutions worldwide.

AlliedBank Restricted interest income fell less than 1 percent toPKR86.63 for the nine months ended
30 September 2020. Net interest income rose 22 percent to PKR35.41B after the loan loss clause.
ToPKR12.63B, net profits rose 31 percent. Net interest income after loan loss payment shows an 18
percent rise in the trading and distribution segment to PKR41.75B, and a 63 percent increase in the
Islamic banking segment to PKR1.42B
ISLAMIC INVESTMENT
1. Investment certificates will be issued for a period of 1 month, 3 months, 6 months, 1 year, 2
years, 3 years, 4 years and 5 years on the basis of the Mudaraba mode through Allied Islamic
Savings / Current account. The deposit would be approved at the discretion of the Bank from
time to time for varying periods.
2. Profits or damages may be shared on the basis of annual, quarterly, half-yearly or maturity, or
can be decided/declared at the Bank's discretion from time to time.
3. Certificate of investment will be given in the multiple of minimum Rupees 25,000.
 4. The Bank will use all such deposits as may be considered necessary by the Bank in Shariah
compliant financing/investment modes.
5. The following options will be available from time to time at the maturity of the certificate or as
authorised by the Bank.
 Roll-over and benefit with Principal
 Benefit Encashment and Principal Roll-over (in linked current / saving account)
 Principal and Benefit Encashment (in connected current / saving account) at maturity
6. The weight applicable to such a certificate (TDR) in the case of early/premature encashment
shall be that of the certificate (TDR) of the closest completed tenor. For example, the weighting
applied to a one-year certificate (TDR) is allocated to a five-year certificate encashed after one
year (TDR).
 For incomplete years (i.e. 1, 2, 3, 4), prices would be chosen for the following completed years.
 The last declared rate for the daily saving accounts will be chosen for the duration exceeding the
years completed.
 The last declared rate for the daily saving accounts will be chosen for the TDR with a maturity of
less than a year.
 For any form of investment permit, no early payments or termination fees will be charged.

ISLAMIC BRANCHES:
Allied banks make it convenient for our clients to pause and keep their accounts with our Islamic
branches.

 One hundred and seventeen (117) branches in all cities of Pakistan.

ACHIEVEMENTS AGAINST OUR STRATEGIC OBJECTIVES:

 Improving the brand reputation and maximizing the equity of shareholders through sustainable
results, thus maximizing return against the potential for reasonable risk.
 Continuous re-engineering of strategies, processes, SOPs, SLAs and TATs by efficient control of
critical capital to ensure organizational efficiencies.
 Increasing the financial inclusion of the unbanked community through creative and diversified
innovations, creating faith in convenient distribution networks and product designs for
consumers.
  Instilling a code of integrity and transparency among human resources and being the Top
Professionals' Employer of Choice.

Digital Banking:

There is a steady transition in the banking sector, where digital revolution, Fintechs' consistent creativity
and dynamic offerings continually challenge the traditional banking sector to concentrate on rising
customer engagement by embracing the newest technology and quality excellence on both
conventional and e-banking fronts. DBG has introduced the Open Banking Application Program Interface
(API) platform to allow its innovation ecosystem in the evolving digital financial environment and to
provide high-end cashless solutions, and has partnered with the following FinTechs:

 "EasyTickets" on the myABL Digital Banking network to provide online cashless booking of
movie, bus and event tickets.
 Golootlo" through myABL Digital Banking App and UPI-PayPak CoBadged Debit Cards to offer
discounts on a wide range of products and services at 12,500+ merchants nationwide."
 1LINK" to provide bill payment aggregation services to conveniently pay bills through the
channels of 1LINK member banks."

Information Technology:
Technological developments are consistently revolutionizing the banking world. In the conventional
brick and mortar banking mode, machine learning, artificial intelligence, big data and robotics are
transforming. Your Bank has made tremendous strides in meeting its diversified customer base's
banking needs through state-of-the-art technical technology in response to rapidly changing trends. The
Bank is converging to maintain seamless 24/7 customer support, leveraging new technology and
growing its digital presence so that both digital and networked banking are provided to customers.
In addition, ITG has taken proactive steps to measure network performance, resulting in astonishing
ATM uptime and associated network services of over 97 percent.

 Optimizing Field Power and Workload Control

 ATM Cash Condition visibility in real time
 Improved standard of service Turn Around Time

Banking Services:
The Banking Services Group plays a key role in market development by delivering reliable and
productive assistance, supplemented by reinforcing of the control climate. It seeks to ensure that
banking services are provided with the utmost customer loyalty, which in turn synergizes the growth of
the New To Bank (NTB) relationship with the strengthening of the current customer base.

The technical support extended throughout the year culminated in the

opening and revival of nearly 1 million accounts in 2019. In comparison,
during the year, a healthy proportion of the overall unclaimed deposits is
re-activated and maintained. Automation and digitization remained the
primary goal of the Company throughout the year. Initiatives including
the use of Asaan Account Biometric Authentication Opening, Biometric
Locker Process Verification, Implementation Universal Banker's theory
(Onewindow operation).

Special Assets Management

Fragile economic conditions, sluggish market operation coupled with monetary initiatives, introduced by
the SBP to fight inflationary pressure, culminated in impaired repayment capacities of undertakings and
bonds, degrading the infection ratio of the sector in turn. Across the banking industry, the maintenance
of remedial assets has become increasingly critical for maintaining the viability of the bank. Via its
committed remedial unit, The Bank's Special Asset Management Department maintained its multi-
pronged turnaround plan against non-performing loans during the year, along with its contribution to
the overall bottom-line.

PROFIT AND LOSS ACCOUNT:

Six Years HORIZONTAL & VERTICAL Performance Highlights
VALUE CREATION FOR SHAREHOLDERS:
We show our dedication to providing long-term value for our shareholders by our financial success. The
bank has improved its break-up value per share over the last six years at a CAGR of 6 percent, which also
represents a 22 percent improvement in value formation (market value less break-up value) for our
shareholders in 2019. Increasing "Total assets to shareholder's funds" along with ROA have led to the
achievement of higher ROE from the respective industry average ratio.
SHARIAH BOARD:

Terms of Reference:
The key role of the Shariah Board is to supervise and advise the Bank's management on all shariah-
related issues, to improve shariah-related issues, A systematic system for Shariah implementation which
is responsible for all decisions relating to Shariah. The Shariah Board approves all practices, processes,
services and associated arrangements and contracts related to Islamic banking in compliance with
Shariah laws and standards. It is the duty of the Shariah Board to study the Internal Shariah Audit
Review Study, the External Shariah Audit, the SBP Shariah Investigation and Shariah Enforcement
Reviews and recommend necessary corrective steps.

The recruitment and growth of team members is also the responsibility of the Shariah Council. Shariah
Board meetings are held at-least regularly it also meets with Board of Directors at-least on quarterly
basis

Process of appointment and nomination:

The Board of Directors of the Bank shall, on the advice of the Human Resources and Remuneration
Committee, approve the selection of members of the Shariah Board. The appointment shall be subject
to prior authorisation by SBP and in compliance with the Fit and Proper Standards (FAPC) and SBP
Legislation.
PROFILE OF SHARIAH ADVISORS:
1. Mufti Muhammad Iftikhar Baig (Chairman Shariah Board)
He has been representing Allied Bank Limited since February 18, 2013 and since August 17, 2018,
as Chairman of the Shariah Commission. He is a trained Mufti of Jamia Darul-Uloom Karachi, one of the
country's most prestigious and influential religious institutions.

2. Mufti Mahmood Ahmad (Member Shariah Board)

He has served as a member of the bank's Shariah Board since August 17, 2015. He graduated as a
Shariah scholar from Wifaqu-ul-Almadaris Alarabiah of Shahadatul-Almiah (Masters in Arabic and Islamic
Studies).

3. Mufti Tayyab Amin (Resident Shariah Board Member)

Since September 3, 2018, he has served as the Bank's Resident Shariah Board Member (RSBM).
He received his Al-Aalamiyyah (a degree recognised by HEC Pakistan as a Masters in Arabic & Islamiyyat)
and a specialty in Islamic Jurisprudence from Jamia Darul-Uloom, Karachi, one of the country's most
esteemed and prestigious religious institutions.

REPORT OF SHARIAH BOARD:

For the year ended December 31, 2020
The Board of Directors and Executive Management are entirely responsible for ensuring that ABL-
activities IBG's are carried out at all times in accordance with the rules of Shariah. From the viewpoint of
Shariah, as defined under the Shariah Governance System of the State Bank of Pakistan, the scope of
this report is to cover ABL-affairs. IBG's The Shariah Board is pleased to present a report on the overall
ABL-IBG Shariah compliance climate.

Review and Development:

One more good year has been achieved by ABL-IBG. After completing a branch network of 117
dedicated Islamic branches and 10 Islamic Banking windows, further expansion in outreach has been
made by addition of 50 Windows at selected traditional branches during 2019. Similarly, substantial
growth has been reported in properties, deposits, liabilities, trade and other business avenues.

Recommendations:
Some areas which require continuous attention are as follows:

 The Bank's expanded emphasis on the consciousness of clients about Islamic banking is well
acknowledged. It is proposed that such courses for Ulama/Shariah scholars should also be
continued in the future.
 The policy of the bank to select new staff members for Islamic banking branches with an
inclination/commitment to Islamic banking ideology should be continued.
 The Bank is aggressively promoting training of its human capital by training sessions/seminars
on various aspects of Islamic Banking & Finance. However, continuous emphasis should be
sustained through Islamic Banking refresher, credential and Shariah documentation courses to
increase the level of knowledge.

Credit and debit cards:

It wasn't all that rare a decade ago to be out at a grocery store for dinner or at the cash counter, and
instantly remember you don't have enough cash to pay the bill. We can simply take out a debit or credit
card and electronically pay the bill there and there. It is hard now to remember a time when the
alternative of card-based payment was not present.

For a checking account, debit cards are distributed such that the money expended or withdrawn is
immediately removed from the account. It is a convenient alternative to cash, especially when it is
directly used on their POS (Point of Sale) machines for shopping at merchant locations.

You can charge more than you have on your credit card or leverage the credit balance, you can
reschedule your payments according to your preference and generally get better incentives and better
insurance cover. When paying the money back later, credit cards encourage spending.

Savings and terms deposite:

Never can savings stuffed into a mattress rise. Yet money saved in a Bank Account or in a fixed period,
by collecting interest, works for you and is also much better. The more your account is saved, the better
you can make out of it. Save plans give you the right to gain profits and the ability to borrow funds if you
need to pay for a financial disaster or needs.

Term Deposit Mechanics

Term deposits are investing opportunities provided by banks where for a certain 'term' or amount of
time you deposit your savings-on which it will receive a certain percentage as a return. Let's presume
you want to put your deposit at Allied Bank for a period of 1 year. After the maturity date, your deposit
will be kept secure.