March 09, 2015Company Update

Pakistan Research

Company Update HBL

Company Update HBL

Banks

HBL: The biggest privatization set to materialize in the biggest bank of Pakistan

HBL PAClosing Price: PKR201.8PKR200.3/Share

Key Data

12m Price Range (PKR)224.8 137.8155.0

Market Cap (PKR mn)296,069.5293,751.9

Outstanding Shares (mn)1,466.9

Avg. Daily Volume mn (6m)0.3229

1Yr Relative Performance

Source: Elixir Research

Ujala AdnanACUjala AdnanACuadnan@elixirsec.com(+92-21) 3569 4622

Habib Bank Limited (HBL) is the largest bank of Pakistan in terms of deposits with a market share of ~18.319% in countrys total deposits[footnoteRef:1] as of Dec-14 and is the first bank to have crossed PKR1.5tr deposit base[footnoteRef:2]. The Banks shares are listed on all three stock exchanges of Pakistan having a market capitalization of PKR297bnPKR294bn (USD2.9bn) as of Mar 05Mar09, 2015 closing price. HBL has been a substantial outperformer in growing its deposit base during CY11 and CY12 as deposits of the bank grew at a 5-year CAGR of 17% against 14% industry growth. The bank is now focusing on improvement in cost controls and development of non-fund based revenue streams. in our opinion as it recently launched its branchless banking facility HBL Express. The bank has the largest asset base within the banking sector amounting to over as of CY14 end, operates with the largest asset base of more than PKR1.8tr2, branch network of 1,596 branches, 1,589 ATM machines and more than 8mn customers. . HBL has presence in 25 countries and over 58 international branches. Apart from conventional banking operations, HBL also offers branchless banking facility to capture unbanked segments of the economy. The bank has an increased focus on growing its Islamic banking business. Islamic deposits have increased at a 3-year CAGR of 1.1x during CY12-CY14 which constitute 7% of HBL's total deposits.2 which reflects increased focus on growing Islamic deposits by the bank.Comment by Author: Please specify by reference to which measures (assets, deposits, etc.)Comment by Author: 18.3% HBL Consolidated Deposits/Industry Deposits (1,524,537/8,342,172) Comment by Author: The statement is our analysts opinionComment by Author: Source? Please confirm that this information is publicly availableComment by Author: Please state source [1: State Bank of Pakistan Economic Data ] [2: HBL Accounts]

SPO to lure investor interestin the pipeline: The Cabinet committee on Privatization recently approved transaction structure of HBL to be carried out as a base size of 250mn shares with an upsize option to subscribe for the remaining 359.3mn shares. GoP currently holds 609mn shares of HBL, of which 250mn would be offered as a base size to mobilize ~USD500mn. The remaining 359mn shares are expected to be offered under the green shoe option. HBLs weight in KSE-100 index is one of the lowest in top five banks at 1.6% which as per our calculation would likely increase by ~7pp to 8.6%, if fully offloaded by GoP. Given the market share of the bank in the industry, the current free float is very minute compared to peer banks free float, thus the planned increase free float of HBL would likely attract investor interest in our view. .Comment by Author: Please remove any detailed description of the offering that has not been previously made public and any suggestion that would include an implicit recommendation to invest (see paragraph 12 of the Research Guidelines)Largest branch network has helped sustain balance sheet growth: HBL has the largest branch network of 1,596 branches as of CY14. The bank has capitalized on its enormous branch network and managed to grow its balance sheet size substantially. Deposits of the bank grew at a 5-year CAGR of 17% during CY10-CY14 against 14% growth in sector deposits. Focus on CASA to help contain cost of funds: HBL in our view, compromised on its deposit mix while carrying out the aggressive deposit mobilization when CASA fell as low as 68% in CY12.inCY12. However, growth in current deposits in particular outpaced total deposit growth by almost 15pp growing by 30% during CY13 against 15% total deposit growth, and grew by another 23% during CY14 against 8.8% increase in total deposits. As a result of recent effort to improve the CASA mix, current accounts now constitute 34% as of Dec-14, against 26% in CY12.Steady growth in non-funded income via product diversification: HBL has also been focusing on enhancing its alternate delivery channels. The bank successfully launched its branchless banking operations under the name HBL Express during CY13 in order to reduce its reliance on volatile interest rates and having more sustainable revenue options. This helped the bank increase its fee and commission income by ~46% YoY during CY14. High yields locked in on PIBs: Banking sector of Pakistan underwent substantial change in the investment mix during CY14 when the banks shifted their investment mix from T-Bills to high yielding PIBs. HBL also increased its PIB portfolio by almost 1.9x YoY in CY14. The We believe that the impact of recent 150bps cut in discount rate would most likely be offset during short to medium term as HBL has already locked in higher yields on PIB portfolio..Bank profileComment by Author: Please refer to comments 2, 3 and 4 aboveHabib Bank Limited (HBL) is the largest bank of Pakistan in terms of deposits with a market share of ~18.319% in countrys total deposits1 as of Dec-14 and is the first bank to have crossed PKR1.5tr deposit base2.. The Banks shares are listed on all three stock exchanges of Pakistan having a market capitalization of PKR297bnPKR294bn (USD2.9bn) as of Mar 05Mar09, 2015 closing price. HBL has been a substantial outperformer in growing its deposit base during CY11 and CY12 as deposits of the bank grew at a 5-year CAGR of 17% against 14% industry growth[footnoteRef:3].. The bank is now focusing on improvement in cost controls and development of non-fund based revenue streams. in our opinion as it recently launched its branchless banking facility HBL Express. The bank has the largest asset base within the banking sector amounting to over PKR1.8tr[footnoteRef:4], branch network of 1,596 branches, 1,589 ATM machines and more than 8mn customers. The bank as of CY14 end, operates with the largest asset base of more than PKR1.8tr, branch network of 1,596 branches, 1,589 ATM machines and more than 8mn customers. HBL has presence in 25 countries and over 58 international branches. Apart from conventional banking operations, HBL also offers branchless banking facility to capture unbanked segments of the economy. The bank has an increased focus on growing its Islamic banking business having added almost 31 Islamic branches to its network during the last three years.As per HBL accounts, Islamic deposits have increased at a 3-year CAGR of 1.1x during CY12-CY14 which constitute 7% of HBL's total deposits. which reflects increased focus on growing Islamic deposits by the bank. Comment by Author: 18.3% HBL Consolidated Deposits/Industry Deposits (1,524,537/8,342,172) Comment by Author: Source? [3: State Bank of Pakistan Economic Data ] [4: HBL Accounts]

SPO to lure investor interestin the pipelineComment by Author: Please refer to comment 5 aboveThe Cabinet committee on Privatization recently approved transaction structure of HBL to be carried out as a base size of 250mn shares with an upsize option to subscribe for the remaining 359.3mn shares. GoP currently holds 609mn shares of HBL, of which 250mn would be offered as a base size to mobilize ~USD500mn. The remaining 359mn shares are expected to be offered under the green shoe option. HBLs weight in KSE-100 index is one of the lowest in top five banks at 1.656% which as per our calculation would likely increase by ~7pp to 8.6%, if fully offloaded by GoP. Given the market share of the bank in the industry, the current free float is very minute compared to peer banks free float, thus the planned increase free float of HBL would likely attract investor interest in our view.ScripSymbolFree Float (%)Index Weightage (%)

MCB Bank MCB40.07.34

United BankUBL40.04.55

National BankNBP23.71.91

Habib BankHBL7.510.0Comment by Author: Needs to be reviewed. Will be discussed with CGSH.1.65

Allied BankABL15.01.02

Total16.47

Source: Elixir ResearchKarachi Stock Exchange[footnoteRef:5] [5: Karachi Stock Exchange ]

Largest Largest branch network has helped sustain balance sheet growthHBL has the largest branch network of 1,596 branches as of Dec-14. The bank has capitalized on its enormous branch network and managed to grow its balance sheet size substantially. Deposits of the bank grew at a 5-year CAGR of 17% during CY10-CY14 against 14% growth in sector deposits. The deposits of the bank crossed PKR1tr mark in CY12 when it added ~34 branches to its network. HBL also has the highest number of deposits per employee of PKR108mn/employee in Top-5 banks which in our opinion points out the operational strength of its human resource while ranking lowest in cost to assets matrix at 2.3%. HBL also displayed a shift away from GoP deposits which comprised of 18.5% of the total deposits in CY12 and have reduced to 9.8% in CY14 diversifying HBLs deposits mix. After acquiring the credit card portfolio of CitiBank Pakistan in CY13, the bank also plans to acquire Pakistan operations of Barclays bank which would further augment its deposits and bring customer base of Barclays bank to HBL.Comment by Author: Authors opinions should be presented as suchComment by Author: The statement is our analysts opinion

Deposits growth trendSource: HBL AccountsDeposit growth trend comparison with other banksSource: HBL, NBP, UBL, ABL, MCB Accounts

Deposits growth trendSource: HBL AccountsDeposit growth trend comparison with other banksSource: HBL, NBP, UBL, ABL, MCB Accounts

HBLs deposits growth v M2 growth and Sector deposits growthSource: HBL Accounts, SBPDeposits per branch Top-5 Banks CY14Source: HBL Accounts,

Focus on improving CASA to help contain cost of fundsratioHBL in our view, compromised on its deposit mix while carrying out the aggressive deposit mobilization in the past when its CASA fell from 73% in CY10 to 68% in CY12 while composition of the fixed deposits increased by 5pp to 30% of the total deposits, savings deposits fell by 6pp to 42% and current deposits remained flat. However, growth in current deposits in particular outpaced total deposit growth by almost 15pp growing by 30% during CY13 against 15% total deposit growth, and grew by another 23% during CY14 against 8.8% increase in total deposits. As a result of recent effort to improve the CASA mix, current accounts now constitute 34% as of Dec-14, against 26% in CY12. ThisWe believe that recent shift in deposit mix points towards banks increased focus on improving efficiencies by way of minimizing cost.. Cost of funds also remained flat at around 4.3% during CY14[footnoteRef:6], despite having minimum rate on savings deposits in place. Comment by Author: The statement is our analysts opinion, as mentioned.Comment by Author: Source? Authors opinions should be presented as such.Comment by Author: Please confirm source [6: HBL Accounts ]

Substantial improvement in CASA during last two years Source: HBL AccountsHBLs deposit mixSource: HBL Accounts

Steady growth in non-funded income via product diversification

NFI Trend Source: HBL Accounts, Elixir ResearchNFI/Total RevenueSource: HBL Accounts, Elixir ResearchHBL has also been focusing on enhancing its alternate delivery channels. The bank successfully launched its branchless banking operations under the name HBL Express during CY13 in order to reduce its reliance on volatile interest rates and having more sustainable revenue options. This helped the bank increase its fee and commission income by ~46% YoY during CY14. HBL also acquired the credit card portfolio of CitiBank in CY13 making it the largest credit card vendor in the country. Other initiatives aimed at improving the fee and commission income include ATM partnerships with multiple business groups, alliance with NADRA electronic facilitations and issuance of UnionPay cards. The bank is also very actively carrying out cross-selling of its products which further supports non-funded income (NFI). HBL plans to launch a new state of art internet banking platform to include web portal access via smart application. The bank boasts the first mobile POS via a partnership with MasterCard and Monet. Comment by Author: Please state source and confirm that this information is publicly available

Source: HBL AccountsSource: HBL, NBP, UBL, ABL, MCB AccountsComment by Author: Problem with legends display at the bottom of this page

High yields locked in on PIBs Banking sector of Pakistan underwent substantial change in the investment mix during CY14 when the banks shifted their investment mix from T-bills to high yielding PIBs. HBL also increased its PIB portfolio by almost 1.9x in CY14. PIBs form almost 33% of the total investments of the bank as of Dec-14 against 15% in Dec-13. The impact of recent 150bps cut in discount rate would most likely be offset during short to medium term as HBL has already locked in higher yields on PIB portfolio. Yield on banks assets improved in CY14 by almost 50bps to 8.9% against CY13 interest yield of 8.4% after raising exposure to PIBs while net interest margins (NIM) clocked in at 4.5% in CY14 against 3.9% in CY13.

Shift in HBLs Investment MixSource: HBL AccountsPIBs/Total InvestmentsSource: HBL Accounts

Opex growth might slow down graduallyHBLs opex grew at a 5-year CAGR of 13% during CY10-CY14. We believe that cost to income ratio peaked out in CY13 at 50% due to 17% YoY growth in opex and weak core earnings. Cost to income ratio fell by 4pp during CY14 to 46% from 50% in CY13. HBLs CY13 cost to income ratio is slightly below our banking universe average of 50%. Banks 2014 Data2014DataCost to Income RatioDeposit per Branch (PKRMn)Opex perBranch (PKRMn)Opex per Mn Deposits

HBL46%955.2 26.7 27.9

NBP42%911.0 23.2 25.5

UBL47%691.2 23.2 33.5

ABL42%669.2 17.4 25.9

MCB38%563.3 17.7 31.5

Source: Elixir Research, Company HBL, NBP, UBL, ABL, MCB accounts

The bank is also making expenditure on improvement of its IT infrastructure in order to automate multiple performance objectives which would help the bank divert more resources to more profitable clientele.

Cost to income ratio (CY14) Peer Comparison Source: HBL, NBP, UBL, ABL, MCB AccountsOpex/Branch (CY14) Peer Comparison Source: HBL, NBP, UBL, ABL, MCB Accounts,

Asset quality has remained consistent HBLs has displayed relatively consistent trend in its asset quality in terms of NPL coverage ratio which clocked in at 83% in CY14. Infection ratio, on the other hand, has improved from 13% in Dec-13 to 12% in CY14 primarily as a result of NPL reversals which led to 0.4% drop in NPL stock during the year. Credit off-take grew at an average rate of 6% during CY10-CY14 resulting from cautious lending strategy and low credit demand. The bank has also increased its exposure to public sector entities (PSEs) during the past few years from 14.5% of total advances in CY08 to 19% in CY14.

Key Asset Quality Ratios Source: HBL Accounts, SBPNPL Coverage Ratio Dec-14 Peer BanksSource: HBL, NBP, UBL, ABL, MCB Accounts

Declining ADR over the yearsSource: HBL AccountsAdvances Break-up as of Dec-14Source: HBL Accounts

Adequate CAR increases lending capacity and growth optionsHBL has increased its credit off-take at an average rate of 6% during CY10-CY14. TheSlow credit off-take represents banks reluctance to lend in our view, which was also paralleled by low credit demand from private sector due to energy shortages and a weak macroeconomic situation. Therefore, HBLs ADR has been constantly declining over the last four years; from 62% in Dec-10 to 39% in Dec-14 against industry average of 53%. Asset quality has also improved with reversals resulting in decreased infection ratio as compared to previous years. WithWe believe that with a de-risked loan book and adequate CAR, HBL has a higher capacity to increase its credit off-take in falling interest rates in order to sustain its NIMs. On the other hand, HBL is also conducting due diligence of Barclays Bank (Pakistan operations) which would bring almost PKR38bn and PKR17bn in HBLs deposits and advances respectively. . Comment by Author: SourceComment by Author: The statement is our analysts opinion, as mentioned.Comment by Author: Please clarify that this is the authors opinionComment by Author: The statement is our analysts opinion, as mentioned.Comment by Author: We would suggest that this be deleted as per our comment above.

CAR ComparisonSource: HBL, NBP, UBL, ABL, MCB AccountsHBL advances growth v sector advancesSource: HBL Accounts, SBP

Management meeting takeaways Comment by Author: Please remove any information that is not publicly available and any suggestion that HBL management have authorised or verified the information contained in the report. Please redraft this section accordingly.HBL recently held a management meeting to give insight into their views on the bank & industry in general. Key points discussed were: The bank adopted a conservative approach w.r.t. investment in PIBs. Instead of being hog-wild, Asset Liability Management was the thrust behind investment in PIBs and thus the bank has a relatively lower exposure in PIBs as compared to its peers primarily. It was also revealed that duration of the PIB portfolio is around 4 years. HBL expects policy rate to further contract going forward amid easing inflation numbers. The bank also believes that the impact of DR cut will only be marginal. The bank also believes that market would not be very excited on issue of PKR1tr PIBs expected this year, as the banks remain well satiated. Also with limited incremental yield on longer tenure govt paper over the T-Bills, HBLs participation will also remain limited. Furthermore, in the view of the banks management resolution of Energy deficit remains key to economic improvement leading to growth in advances. The bank maintained proportion of savings deposits in its deposit mix eyeing more stability as savings deposits are less sensitive to interest rate volatility and earn a fixed spread of 300bps. Sharp rise in fee and commission income stemmed from growth in income from bancassurance and strong performance of HBLs Investment Banking section.

Financials

Income Statement

PKRmnCY10ACY11ACY12ACY13ACY14A

Net Interest Income46,99556,39857,76055,01669,087

Non- Interest Income13,47618,82515,95919,32323,512

Fee & commission5,4336,0866,7868,29212,119

Gain/loss on sale of investment1,3802,0211,3862,3012,102

FX Income3,1893,7562,5682,2992,847

Other Income2,7602,9203,0403,8872,865

Total Revenues60,47175,22473,72074,33992,599

Provisions & other charges7,5866,9256,7671,4001,493

Administrative expenses25,13229,93431,39136,80642,590

Profit Before Tax27,75438,36435,56136,13348,515

Taxation10,00611,98812,77013,10616,695

Profit after Tax17,74826,37622,79123,02731,820

Source: Company HBL Accounts, Elixir Research

Balance Sheet

PKRmnCY10ACY11ACY12ACY13ACY14A

Cash & Treasury Balances81,640103,400157,230135,477135,277

Balances with Other Banks37,41347,35047,98057,34267,691

Lending to FIs 30,33941,58124,82835,27134,314

Investments254,909418,604797,095826,062924,307

Advances459,750457,368499,818563,701595,295

Gross Loans502,445503,454545,788606,071661,476

Provisions(42,696)(46,086)(45,970)(66,721)(66,183)

NPLs53,60756,54956,23679,86779,527

Other Assets34,92044,80953,67066,60982,809

Operating Fixed Assets16,15519,16823,63225,70627,310

Deferred Tax Assets9,5737,2766,0565,103-

TOTAL ASSETS924,6991,139,5541,610,3091,715,2701,867,003

Bills Payable9,77513,89518,94319,42221,990

Borrowings from FIs40,46039,474196,581107,864103,411

Deposits747,375933,6321,214,9641,401,2301,524,538

Sub-Debt4,2825,0365,4412,633-

Other Liabilities26,55737,93141,34341,68744,393

TOTAL LIABILITIES828,4491,029,9671,477,2711,572,8361,696,901

Paid-up Capital10,01911,02112,12313,33514,669

Reserves/Profits76,82389,126106,903117,299132,597

Revaluation Surplus8,1968,20412,7859,91421,652

TOTAL EQUITY95,038108,351131,811140,548168,917

MINORITY INTEREST1,2121,2361,2271,8861,185

TOTAL SOURCES924,6991,139,5541,610,3091,715,2701,867,003

Source: Company HBL Accounts, Elixir Research

Financial Ratios

CY10ACY11ACY12ACY13ACY14A

EPS (PKR)11.517.915.515.921.6

DPS (PKR)4.95.87.58.011.8

BVPS (PKR)71.381.398.8105.4115.2

PER (x)17.811.413.212.89.4

Net Interest Margin (NIM)6%7%5%4%5%

Cost/Income Ratio (x)0.40.40.40.50.5

NPL Ratio11%11%10%13%12%

Net NPLs/Advances2%2%2%2%2%

NPL Coverage80%81%82%84%83%

Credit Cost2%1%1%0%0%

ADR62%49%41%38%39%

IDR34%45%66%59%61%

Deposit Growth9%25%30%15%9%

Loan Growth1%-1%9%13%6%

ROA2%3%2%1%2%

ROE19%26%19%17%21%

Source: Company HBL Accounts, Elixir Research

Chief Executive Officer

Junaid Iqbal(92-21) 3569 4617jiqbal@elixirsec.com

Pakistan Research TeamInstitutional EquitiesRetail Equities

Taha Khan Javed, CFA(92-21) 3569 4716tahajaved@elixirsec.com

Hassan Raza(92-21) 3569 4679hraza@elixirsec.com

Faisal BilwaniHead of Equities - FII(92-21) 3569 3919 fbilwani@elixirsec.com

M. Sibtain MustafaHead of Equities - LII(92-21) 3569 3911smustafa@elixirsec.com

Sikandar Rahim(92-21) 3569 3914srahim@elixirsec.com

Kamran Kaludi(92-21) 3569 3920kkaludi@elixirsec.com

Ujala Adnan(92-21) 35694622Uadnan@elixirsec.comJawwad Aboobakar(92-21) 3565 3182jawwad@elixirsec.comAdil Abid(92-21) 3569 4666aabid@elixirsec.com

Mubashir Anis Silat(92-21) 3569 4622manis@elixirsec.com

M. Zain-ul-Abedin(92-21) 35653180mzain@elixirsec.comKhurram Malik(92-21) 3569 4602kmalik@elixirsec.com

Syed Nasir Rizvi(92-21) 3569 4679snarizvi@elixirsec.comHNW & Family OfficesHarris Ahmed Batla(92-21) 3569 4706habatla@elixirsec.comIslamabad Office Asim Ghafoor Qureshi(92-51) 227 2341aghafoor@elixirsec.com

M. Ibad-ur-Rehman(92-21) 3569 4622irehman@elixirsec.comLahore OfficeTahir Maqbool(92-42) 3577 2643tmaqbool@elixirsec.comFaisalabad OfficeSyed Baqar Hassan(92-41) 254 1001-4sbhassan@elixirsec.com

Ali Raza(92-21) 3569 4622aliraza@elixirsec.com

Syed Tahseen(92-21) 3569 4622tjaved@elixirsec.com

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ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE LAWS OF ANY SUCH OTHER JURISDICTION.THIS DOCUMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES, AND NEITHER THIS DOCUMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER. THIS DOCUMENT HAS NOT BEEN PUBLISHED GENERALLY AND HAS ONLY BEEN MADE AVAILABLE TO INSTITUTIONAL INVESTORS. ANY DECISION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN ANY OFFERING MUST BE MADE SOLELY ON THE BASIS OF THE INFORMATION CONTAINED IN THE INTERNATIONAL OFFERING DOCUMENT (AND ANY SUPPLEMENTS THERETO) ISSUED IN CONNECTION WITH SUCH OFFERING.IN THE UNITED KINGDOM THIS DOCUMENT IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED AT QUALIFIED INVESTORS (AS DEFINED BELOW) WHO ARE (A) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") OR (B) HIGH NET WORTH ENTITIES FALLING WITHIN ARTICLE 49(2)(a) TO (d) OF THE ORDER, AND OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS.THIS DOCUMENT IS BEING DISTRIBUTED TO AND IS DIRECTED ONLY AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC, AS AMENDED BY DIRECTIVE 2010/73/EU TO THE EXTENT IMPLEMENTED BY THE RELEVANT MEMBER STATE) ("QUALIFIED INVESTORS"). ANY PERSON IN THE EEA WHO RECEIVES THIS DOCUMENT WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY SUCH RECIPIENT WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT HAS NOT RECEIVED THIS DOCUMENT ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS OR PERSONS IN THE UK AND OTHER MEMBER STATES (WHERE EQUIVALENT LEGISLATION EXISTS) FOR WHOM THE INVESTOR HAS AUTHORITY TO MAKE DECISIONS ON A WHOLLY DISCRETIONARY BASIS. HBL, THE JOINT GLOBAL COORDINATORS, THEIR AFFILIATES, OFFICERS, DIRECTORS, CONSULTANTS AND ADVISERS WILL RELY UPON THE TRUTH AND ACCURACY OF THE FOREGOING REPRESENTATIONS AND AGREEMENTS. ANY PERSON IN THE EEA WHO IS NOT A QUALIFIED INVESTOR SHOULD NOT ACT OR RELY ON THIS DOCUMENT OR ANY OF ITS CONTENTS.ELIXIR SECURITIES PAKISTAN (PRIVATE) LIMITED (ELIXIR) OR ONE OF ITS AFFILIATES IS OR MAY BE A MEMBER OF THE UNDERWRITING GROUP IN RESPECT OF A PROPOSED OFFERING OF SECURITIES BY HBL.THIS DOCUMENT HAS BEEN PRODUCED INDEPENDENTLY OF HABIB BANK LIMITED ("HBL") AND THE ISLAMIC REPUBLIC OF PAKISTAN (THE SELLING SHAREHOLDER), AND ANY OPINIONS AND EXPECTATIONS CONTAINED HEREIN ARE ENTIRELY THOSE OF ELIXIR AND ARE GIVEN AS PART OF ITS NORMAL RESEARCH ACTIVITY AND SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORISED OR APPROVED BY ANY OTHER PERSON. ELIXIR HAS NO AUTHORITY WHATSOEVER TO MAKE ANY REPRESENTATION OR WARRANTY ON BEHALF OF HBL, THE SELLING SHAREHOLDER, ANY OF THEIR ADVISERS, OR ANY OTHER PERSON IN CONNECTION THEREWITH. WHILE ALL REASONABLE CARE HAS BEEN TAKEN TO ENSURE THAT THE FACTS STATED HEREIN ARE ACCURATE AND THAT THE OPINIONS AND EXPECTATIONS CONTAINED HEREIN ARE FAIR AND REASONABLE, ELIXIR HAS NOT VERIFIED THE CONTENTS HEREOF AND ACCORDINGLY NONE OF ELIXIR, HBL, THE SELLING SHAREHOLDER, THE JOINT GLOBAL COORDINATORS NOR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS OR ADVISERS SHALL BE IN ANY WAY RESPONSIBLE FOR THE CONTENTS HEREOF AND NO RELIANCE SHOULD BE PLACED ON THE ACCURACY, FAIRNESS, OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS DOCUMENT. NO PERSON ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM THE USE OF THIS DOCUMENT OR OF ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION THEREWITH.ELIXIR (OR ITS OFFICERS, DIRECTORS OR EMPLOYEES) MAY, TO THE EXTENT PERMITTED BY LAW, HAVE A POSITION IN THE SHARES OF [(OR OPTIONS, WARRANTS OR RIGHTS WITH RESPECT TO, OR INTEREST IN THE SHARES)] HBL AND ELIXIR MAY MAKE A MARKET OR ACT AS A PRINCIPAL IN ANY TRANSACTIONS IN SUCH SECURITIES.

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Banks extend PKR138.45bn to exporters under modified EFS Comment by Author: What is this?

THIS DOCUMENT MAY NOT BE DISTRIBUTED, WHETHER DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, CANADA, THE PEOPLES REPUBLIC OF CHINA, JAPAN OR AUSTRALIA (OTHER THAN TO PERSONS IN AUSTRALIA TO WHOM AN OFFER OF SECURITIES MAY BE MADE WITHOUT A DISCLOSURE DOCUMENT IN ACCORDANCE WITH CHAPTER 6D OF THE CORPORATIONS ACT 2001).[LONDON 634084_1]2THIS DOCUMENT MAY NOT BE DISTRIBUTED, WHETHER DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, CANADA, THE PEOPLES REPUBLIC OF CHINA, JAPAN OR AUSTRALIA (OTHER THAN TO PERSONS IN AUSTRALIA TO WHOM AN OFFER OF SECURITIES MAY BE MADE WITHOUT A DISCLOSURE DOCUMENT IN ACCORDANCE WITH CHAPTER 6D OF THE CORPORATIONS ACT 2001).

[LONDON 634084_1]3THIS DOCUMENT MAY NOT BE DISTRIBUTED, WHETHER DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, CANADA, THE PEOPLES REPUBLIC OF CHINA, JAPAN OR AUSTRALIA (OTHER THAN TO PERSONS IN AUSTRALIA TO WHOM AN OFFER OF SECURITIES MAY BE MADE WITHOUT A DISCLOSURE DOCUMENT IN ACCORDANCE WITH CHAPTER 6D OF THE CORPORATIONS ACT 2001).

[LONDON 634084_1]