Notes to and forming part of the Unconsolidated Financial Statements

For the year ended December 31, 2018

2018 2017
Foreign Foreign Net foreign Foreign Foreign
Off-balance Off-balance sheet Net foreign
Currency Currency currency Currency Currency
sheet items items currency exposure
Assets Liabilities exposure Assets Liabilities
--------------------------------------------------------------------------------------------- (Rupees in '000) ---------------------------------------------------------------------------------------------

Pakistan Rupee 1,528,881,285 1,332,249,233 (45,447,911) 151,184,141 1,663,524,378 1,474,785,303 (30,679,274) 158,059,801
US Dollar 188,482,131 105,377,856 (83,674,639) (570,364) 213,845,211 114,777,825 (98,381,371) 686,015
Pound Sterling 908,675 25,083,810 24,503,084 327,949 1,705,174 19,910,188 18,563,742 358,728
Japanese Yen 26,277 8,804 (12,606) 4,867 1,196,948 1,182,636 (11,770) 2,542
Euro 1,172,096 7,178,589 6,049,138 42,645 2,767,898 9,587,369 6,959,689 140,218
UAE Dirham 128,464,510 211,071,317 80,270,598 (2,336,209) 102,898,239 193,641,497 89,151,353 (1,591,905)
Bahraini Dinar 13,581,751 25,327,298 12,252,900 507,353 13,708,941 22,243,314 9,037,609 503,236
Qatari Riyal 24,428,228 28,332,023 4,809,866 906,071 26,105,618 29,677,810 4,230,555 658,363
Other Currencies 3,654,193 3,700,268 1,249,570 1,203,495 7,181,527 7,820,945 1,129,467 490,049
1,889,599,146 1,738,329,198 - 151,269,948 2,032,933,934 1,873,626,887 - 159,307,047

2018 2017
Banking Trading Banking Trading
book book book book
--------------------------------- (Rupees in '000) ---------------------------------
Impact of 1% change in foreign exchange rates on
- Profit and loss account
+1% change - - - -
-1% change - - - -
- Other comprehensive income
+1% change (15,664) - (7,572) -
-1% change 15,664 - 7,572 -

47.2.3 Equity Position Risk

Equity position risk is the risk that the fair value of a financial instrument will fluctuate due to changes in the prices of
individual stocks or the levels of equity indices. The Bank’s equity book comprises of held for trading (HFT) and available
for sale (AFS) portfolios. The objective of the HFT portfolio is to make short-term capital gains, whilst the AFS portfolio is
maintained with a medium term view of earning both capital gains and dividend income. Product program manuals have
been developed to provide guidelines on the objectives and policies, risks and mitigants, limits and controls for the equity
portfolios of the Bank.

2018 2017
Banking Trading Banking Trading
book book book book
--------------------------------- (Rupees in '000) ---------------------------------
Impact of 5% change in equity prices on,
Other comprehensive income
+5% change 860,010 - 938,862 -
-5% change (860,010) - (938,862) -

47.2.4 Yield / Interest Rate Risk in the Banking Book (IRRBB) - Basel II Specific

Interest rate risk is the risk that fair value of a financial instrument will fluctuate as a result of changes in interest rates,
including changes in the shape of yield curves. Interest rate risk is inherent in many of the Bank's businesses and arises
from mismatches between the contractual maturities or the re-pricing of on and off-balance sheet assets and liabilities. The
interest rate sensitivity profile is prepared on a quarterly basis based on the re-pricing or contractual maturities of assets
and liabilities.
Interest rate risk is monitored and managed by performing periodic gap analysis, sensitivity analysis and stress testing and
taking appropriate actions where required.
2018 2017
Banking Trading Banking Trading
book book book book
--------------------------------- (Rupees in '000) ---------------------------------
Impact of 1% change in interest rates on
- Profit and loss account
+1% change - 3,724,417 - 2,783,786
-1% change - (3,724,417) - (2,783,786)
- Other comprehensive income
+1% change 498,049 - - -
-1% change (498,049) - - -

Annual Report 2018 137