STATEMENT ON RISK MANAGEMENT FRAMEWORK

Risk Management is underpinned by the key principle that Risk Management contributes to
the creation of sustainable value. The consistent and systematic application of Risk
Management is central to maximizing shareholders value, effectively leveraging the benefit
of opportunities, managing uncertainties and minimizing the impact of adverse events.
Soneri Bank is committed to establishing a sound system of risk oversight and management
and internal control to identify, assess, monitor and manage material risks related to the
conduct of Soneri Bank's activities under the supervision of Board Risk Management
Committee/Board of Directors. Our aim is to
Continuously improve the management of risk,

Better understand the reward-to-risk balance,

Reduce the risks to acceptable levels, and;

Make decisions based on a comprehensive view of the reward-to-risk balance.

Your Bank has been doing this by:

Implementing a comprehensive and systematic risk assessment and reporting process

across the Bank,

Integrating the outputs of risk specialist functions to provide a holistic view of the

risks associated with our business activities, and;

Embedding risk management into the business, with an awareness instilled in all

employees

RISK MANAGEMENT FRAME WORK

The Board of Directors at MCB Bank Limited, actively drive the risk management
framework that provides an active approach in dealing with factors that influence the
financial standing of the Bank. With the valuable guidance of BOD, the Bank has always
sought to generate recurrent earnings and create meaningful returns for its shareholder. An
Effective Risk Management Framework and Risk Governance Structure remains a
cornerstone towards ensuring realization of the vision of the Bank. Collectively, the strength
of the risk profile of the Bank comprises of:

Robust Risk Governance Structure

Strong Capital and Liquidity Position
Good Quality of credit Portfolio

RISK MANAGEMENT FRAMEWORK

The Bank has taken numerous strategic steps to further strengthen the overall risk
management framework, the salient features of which are summarized below:

In order to achieve earnings targets with a high degree of reliability, to control the
increasing trend of NPLs and avoid further losses, the focus is being placed on a
strong credit process. Credit risk policies are continuously being revised to establish

robust credit control environment in the bank.

In order to cope with data limitation and to start building reliable data for future
requirements of PD, the existing risk rating models are redesigned in such a way so as

to capture all information required for PD modeling and advanced approaches.

In addition the above, the bank has also revised the basic credit memorandum formats
for its corporate and ME to improve the credit risk assessment process and capture

key data at the transaction level.

The bank has also revised its operational risk policy in light of revised guidelines by

State bank of Pakistan.

SBP has given FWBL a special relaxation to meet the MCR, wherein the Bank is
required to maintain a paid-up capital (net of losses) of Rs. 3 Billion, instead of Rs.
10 Billion applicable to other banks.