JS Bank : Transmission of Quarterly Report for the Period Ended March 31, 2022.

1

Company Information

Board of Directors

Auditors

Mr. Adil Matcheswala

Mr. Hassan Afzal

Mr. Sadiq Ali

Ms. Nargis Ghaloo

Mr. Mumtaz Ali Shah

Mr. Shahnawaz Haider Nawabi

Mr. Usman Yousaf Mobin

Mr. Basir Shamsie

Audit Committee Ms. Nargis Ghaloo

Mr. Shahnawaz Haider Nawabi

Mr. Lt. Gen. (R) Mr. Sadiq Ali

Chief Financial Officer Mr. Hasan Shahid

Chairman

Non-Executive Director

Independent Director

Independent Director

Independent Director

Independent Director

Independent Director

President & CEOChairperson

KPMG Taseer Hadi & Co.

Chartered Accountants

Sheikh Sultan Trust Building No. 2

Beaumont Road

Karachi.

Legal Advisors

Bawaney & Partners

Haidermota & Co.

Liaquat Merchant Associates

Member

Share Registrar

Member

CDC Share Registrar Services Limited

CDC House, 99 - B, Block 'B',

S.M.C.H.S., Main Shahra-e-Faisal,

Karachi.

Company Secretary Mr. Ashraf Shahzad

Registered office

JS Bank Limited

Shaheen Commercial Complex

Dr. Ziauddin Ahmed Road

P.O. Box 4847 Karachi-74200, Pakistan

UAN: +92 21 111 JS Bank (572-265)

+92 21 111-654-321

www.jsbl.com

*All appointments on the Board and Board Committees are subject to SBP's FPT clearance.

Directors' Report

We are pleased to present the unaudited financial statements of JS Bank Limited ("JSBL") for the quarter ended March 31, 2022.

Economy review

During 3QFY22 FBR collection continued to improve, taking 9MFY22 collection to PKR 4,382 billion, marking a growth of 29% YoY and surpassing the target by PKR 247 billion. As a result, 1HFY22 fiscal deficit was recorded at 2.1% of GDP. Primary balance also reported a surplus of 0.1% of GDP.

With the uptick in economic activity during 3QFY22, average headline inflation increased to 12.6%YoY as compared to 11.0%YoY in the previous quarter. Although increase in headline inflation has mainly been on account of higher food prices, non-food-non-energy inflation is also witnessing gradual rise. SBP, however, kept the policy rate unchanged during 3QFY22.

At the same time, pressure at the external front rose as the country's import bill increased by 49% YoY during 8MFY22 to US$47.9 billion. Led by machinery imports, vaccine imports and higher commodity prices, mounting import bill overshadowed the 28% YoY growth in exports. During the same period, growth in remittances fell to single digit at 8% YoY. As a result, Current Account Deficit (CAD) accumulated to US$12.1 billion for the 8MFY22 period, as compared to a surplus of US$994 million during 8MFY21.

During 9MFY22, the country's foreign exchange reserves decreased by US$5.3 billion to US$18.56 billion as of 25 March 2022, where the decline was broadly witnessed by SBP foreign exchange reserves over higher CAD levels and scheduled debt repayments. The decline in forex reserves led to weak forex market sentiments, resulting in 16% depreciation in PKR against the US$ during the period.

Banking sector review

After increasing the Policy Rate to 9.75% as of CY21 end, the Monetary Policy Committee (MPC) kept the Policy Rate unchanged during 1QCY22. During the same period (2MCY22), the average weighted average banking spreads slightly increased by 7bps YoY, reaching 4.44%.

The banking sector deposits touched PKR 19,914 billion, expanding by 15% YoY as of February 2022. Relatively a higher portion of deposits continued to be parked in investments, which increased 25% YoY to PKR 14,541 billion and taking the IDR up to 73%. Advances, on the other hand, increased by 17% YoY to PKR 9,961 billion, with ADR slightly increasing to 50%. Moreover, Non-Performing Loans as at Dec.21 clocked in at PKR 860 billion, keeping the sector's Infection ratio close to 8%.

Performance overview

The highlights of the financial results of the Bank for the first quarter ended March 31, 2022 are presented below:

Bank continued to focus on its long term strategy of reducing large-ticket high-cost (public and private sector) deposits, which declined by roughly 11% on QoQ basis. On the other hand, non-remunerative deposits increased by 5% QoQ and their share in total deposit also improved to 28% in March 2022 from 26% in December 2021. Therefore, while the aggressive shedding of expensive deposits led to 2%QoQ reduction in overall deposits, Bank is expected to continue plugging the gap with non-remunerative and retail deposits. Furthermore, reduction in public sector deposits is also expected to benefit us once Treasury Single Account (TSA) is fully implemented. Bank's efforts to increase its customer base also resulted in approximately 11%

QoQ growth in number of depositors.

During the period under review, Gross advances were reported at PKR 253.81 billion while advances to deposits ratio stood at 56.3% with continued focus to increase small ticket lending.

Gross Investments increased by 30%, which mostly consist of short-term government securities.

In addition, the Bank remains satisfactorily capitalized with CAR at 13.61% at the close of the first quarter.

During the first quarter, Earnings witnessed a marginal uptick as the Bank reported a profit after tax of PKR 409.62 million as compared to a profit after tax of PKR 390.08 million in thecorresponding period last year. The Earnings Per Share (EPS) stands at PKR 0.32 (March 2021: PKR 0.30). On the revenue side, the Bank earned mark-up income of PKR 13,802.53 million compared to PKR 9,611.60 million in the corresponding period last year, an increase of 43.6%. Net interest income improved by 17.7% YoY on the back of increase in non-remunerative deposit mix and growth in mortgage financing and program lending. Non-markup income stood at PKR 1,209.52 million (up 12.1%) with major contributions from FX income and gain on sale of securities. Moreover, administrative expenses witnessed a growth of 13.1% as the we gear up customer onboarding on Zindigi and bring overall improvement in Bank's tech infrastructure.

Consolidated Financial Statements

On consolidated basis, JS Bank along with its subsidiaries JS Global Capital and JS Investments earned a profit before tax of PKR 889.8 million (profit after tax of PKR 617.6 million) for the first quarter period ended March 31, 2022, as compared to a profit before tax of PKR 850.2 million (profit after tax of PKR 527.6 million) in the corresponding period last year. The earnings per share stood at PKR 0.45 for the first quarter ended March 31, 2022.

Recognition

In 2022, the Bank has been recognized for its commitment to excellence on the national and international levels. The prestigious awards that we received during the first quarter of 2022 include:

• • The Global Diversity, Equity & Inclusion Benchmarks (GDEIB) Award 2021 for DEI Structure & implementation (Proactive), Work-life integration, flexibility & benefits (Progressive), and Community, government relations & philanthropy (Proactive)

• • USD Clearing Elite Quality Recognition Award for Outstanding Achievement by JP Morgan

Credit Ratings

The Pakistan Credit Rating Agency Limited (PACRA) has assigned to the Bank a long-term rating of "AA-" (Double A Minus) and a short-term rating of "A1+" (A One Plus) which is the highest possible rating for this category.

Acknowledgments

On behalf of JS Bank, we would like to express our gratitude to our customers and stakeholders for their patronage. We would also like to thank the Ministry of Finance, the State Bank of Pakistan, the Securities & Exchange Commission of Pakistan, and other regulatory authorities for their guidance and support to our Bank. Finally, we extend our appreciation to the management team and the staff for their persistent commitment to working together as a winning team.

For and on behalf of the Board,

Basir Shamsie President & CEOAdil Matcheswala Chairman

Karachi: April 27, 2022

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