QNB ALAHLI S.A.

E
)Egyptian Joint Stock Company(

Separate Financial Statements

Together With Auditors’ Report
For The Year Ended December 31, 2023

KPMG Hazem Hassan BDO Khaled & Co.

Public Accountants & Consultants Public Accountants & Advisers
QNB ALAHLI S.A.E
Separate Statement of Financial Position
As of 31 December 2023
(All amounts are shown in Egyptian Pounds)

Note December 31, 2023 December 31, 2022

Assets:
Cash and due from Central Bank of Egypt (CBE) (16) 61,558,547,091 42,595,999,375
Due from banks (17) 42,610,823,880 30,225,100,450
Treasury bills (18) 152,105,446,740 67,814,297,699
Loans and credit facilities to banks (19) 884,737,336 -
Loans and credit facilities to customers (20) 252,467,782,728 216,590,580,220
Financial derivatives (21) - 23,578,000
Financial Investments:
- Fair value through other comprehensive income (22) 16,292,961,610 15,780,960,730
- Amortized cost (22) 80,536,769,618 91,191,494,225
- Fair value through profit or loss (22) 101,198,551 73,975,416
Investments in subsidiaries (23) 540,261,839 540,261,839
Intangible assets (24) 477,474,366 341,252,070
Other assets (25) 9,998,521,260 8,814,525,367
Deferred tax assets (32) 313,607,221 21,930,119
Property and equipment (26) 2,642,483,903 2,778,176,053
Total assets 620,530,616,143 476,792,131,563

Liabilities and equity:

Liabilities:
Due to banks (27) 5,088,111,931 3,521,728,022
Customer deposits (28) 530,118,813,705 407,066,800,830
Financial derivatives (21) 6,264,722 22,954,635
Other loans (29) 3,995,190,883 3,459,330,313
Other liabilities (30) 9,244,749,175 5,694,921,568
Other provisions (31) 1,299,276,603 970,787,533
Current income tax payable 5,480,510,017 2,909,208,842
Defined benefits obligation (33) 595,997,416 565,184,100
Total liabilities 555,828,914,452 424,210,915,843

Equity:
Issued and paid-up capital (34) 10,774,114,830 10,774,114,830
Reserves (35) 31,615,807,892 27,085,452,327
Profit for the year and retained earnings (35) 22,311,778,969 14,721,648,563
Total equity 64,701,701,691 52,581,215,720
Total liabilities and equity 620,530,616,143 476,792,131,563

Mohamed Bedeir Ali Rashid Al-Mohannadi

Chief Executive Officer Chairman of the Board of Directors

The accompanying notes from (1) to (39) are an integral part of these Separate Financial Statements.
(Auditors' report attached).

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QNB ALAHLI S.A.E
Separate Income Statement
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

From January 01, 2023 From January 01, 2022

Note
To December 31, 2023 To December 31, 2022

Interest on loans and similar income (6) 76,742,486,077 43,621,211,566

Cost of deposits and similar expense (6) )46,360,249,587( )24,043,433,819(

Net interest income 30,382,236,490 19,577,777,747

Fee and commission income (7) 5,607,640,142 3,894,409,592

Fee and commission expense (7) )1,593,464,239( )1,388,926,176(

Net interest, fee and commission income 34,396,412,393 22,083,261,163

Dividend income (8) 335,092,482 256,533,743

Net trading income (9) 597,437,852 435,795,998

Gain on financial investments (22) 86,459,835 68,498,714

Impairment credit losses (12) )5,582,564,383( )3,666,759,458(

Administrative expenses (10) )5,852,634,087( )5,013,256,485(

Other operating revenues (expenses) (11) 326,188,914 972,986,728

Profit before income tax 24,306,393,006 15,137,060,403

Income tax expense (13) )8,536,708,869( )5,012,896,281(

Net profit for the year 15,769,684,137 10,124,164,122

Earnings per share (14) 6.57 4.20

Mohamed Bedeir Ali Rashid Al-Mohannadi

Chief Executive Officer Chairman of the Board of Directors

The accompanying notes from (1) to (39) are an integral part of these Separate Financial Statements.

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QNB ALAHLI S.A.E
Separate Statement of Comprehensive Income
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

From January 01, 2023 From January 01, 2022

To December 31, 2023 To December 31, 2022

Net profit for the year 15,769,684,137 10,124,164,122

Other comprehensive income items that will not be reclassified to the Profit or Loss:

Net change in fair value of investments in equity instruments measured at fair value
332,776,563 662,719,522
through other comprehensive income

Tax impact related to other comprehensive income that will not be reclassified to the profit
)73,275,835( )139,138,550(
or loss

Amount transferred to retained earning, net of tax )19,961,016( -

Other comprehensive income items that is or may be reclassified to the profit or loss:

Net change in fair value of debt instruments measured at fair value through other
)1,396,049,269( )710,984,776(
comprehensive income

Tax impact related to other comprehensive income that will be reclassified to the profit or
274,772,291 44,660,988
loss

Expected credit loss for fair value of debt instruments measured at fair value through other
375,571 228,872
comprehensive income

Total other comprehensive income items for the year, net of tax (881,361,695) )142,513,944(

Total comprehensive income for the year, net of tax 14,888,322,442 9,981,650,178

The accompanying notes from (1) to (39) are an integral part of these Separate Financial Statements.

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QNB ALAHLI S.A.E
Separate Statement of changes in Equity
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

Issued and Paid Legal Fair Value General Banking General Risk Retained Net Profit for the
General Reserve Special Reserve Capital Reserve Total
Up Capital Reserve Reserve Risk Reserve Reserve Earnings Year

December 31, 2022

Balance at 1 January 2022 10,774,114,830 2,418,770,935 19,533,050,946 12,856,666 29,147,135 379,822,282 153,028,333 21,453,923 4,429,291,439 7,300,178,377 45,051,714,866

Transfer to reserves and retained earnings - 371,945,658 4,446,125,174 - 13,124,486 - - - 16,833,735 (4,848,029,053) -

Dividend distributions for year 2021 - - - - - - - - - (2,452,149,324) )2,452,149,324 (

Net change in other comprehensive income - - - - - (142,513,944) - - - - )142,513,944 (

Net profit for the year - - - - - - - - - 10,124,164,122 10,124,164,122

Transfer from general banking risk reserve - - - - - - (151,359,267) - 151,359,267 - -

Balance at 31 December 2022 10,774,114,830 2,790,716,593 23,979,176,120 12,856,666 42,271,621 237,308,338 1,669,066 21,453,923 4,597,484,441 10,124,164,122 52,581,215,720

December 31, 2023

Balance at 1 January 2023 10,774,114,830 2,790,716,593 23,979,176,120 12,856,666 42,271,621 237,308,338 1,669,066 21,453,923 4,597,484,441 10,124,164,122 52,581,215,720

Transfer to reserves and retained earnings - 506,169,256 4,905,392,798 - 779,000 - - - 1,924,025,581 )7,336,366,635( -

Dividend distributions for year 2022 - - - - - - - - - )2,787,797,487( )2,787,797,487 (

Net change in other comprehensive income - - - - - )861,400,679( - - - - )861,400,679 (

Reclassification of the net change in fair value of equity

- - - - - )19,961,016( - - 19,961,016 - -
instruments upon derecognition

Net profit for the year - - - - - - - - - 15,769,684,137 15,769,684,137

Transfer from general banking risk reserve - - - - - - )623,794( - 623,794 - -

Balance at 31 December 2023 10,774,114,830 3,296,885,849 28,884,568,918 12,856,666 43,050,621 )644,053,357 ( 1,045,272 21,453,923 6,542,094,832 15,769,684,137 64,701,701,691

The accompanying notes from (1) to (39) are an integral part of these Separate Financial Statements.

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 QNB ALAHLI S.A.E
Separate Statement of Cash Flows
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

Note December 31, 2023 December 31, 2022

Cash flows from operating activities
Profit before tax 24,306,393,006 15,137,060,403

Adjusted by:
Property and Equipment depreciation and Intangible assets amortization (10) 471,049,492 436,131,358
Impairment credit losses (12) 5,582,564,383 3,666,759,458
Loans written off during the year (4,619,748,983) (1,009,401,277)
Recovery from loans previously written off 74,208,693 43,892,980
Net formed / (reversed) other provisions 189,033,211 437,571,236
Utilized provisions other than loans provision (1,260,578) (11,672,128)
Translation differences of other provisions in foreign currencies 140,716,437 37,219,404
Translation differences of other Financial assets provisions in foreign currencies other
12,402,515 10,130,925
than loans provision
Translation differences resulting from monetary foreign currency investments (1,099,855,905) (1,424,836,551)
Amortization of premium / discount for bonds (1,548,118,287) (1,690,921,461)
(Gain) on sale of Property and Equipment (9,666,000) (779,000)
Dividend income (8) (335,092,482) (256,533,743)
Gain on financial investments (22) (86,459,835) (68,498,714)
Operating profits before changes in assets and liabilities resulting from operating
23,076,165,667 15,306,122,890
activities
Net decrease / increase in assets and liabilities
Due from banks (18,323,666,885) )15,747,054,457(
Treasury bills (93,442,398,899) )20,275,324,969(
Loans and credit facilities to Banks (886,408,881) -
Loans and credit facilities to customers (36,815,189,774) )44,632,745,294(
Financial derivatives 6,888,087 )11,764,615(
Financial investement recognized at fair value through profit or loss (27,223,135) 18,574,216
Other assets (1,186,839,907) )1,354,459,611(
Due to banks 1,566,383,909 63,040,275
Customer deposits 123,052,012,875 110,826,929,647
Other liabilities 3,447,080,163 1,415,745,605
Defined benefits obligation 30,813,316 21,647,968
Income tax paid (6,055,588,340) )3,905,439,541(
Net cash flows used in / resulting from operating activities (1) )5,557,971,804 ( 41,725,272,114
Cash flows from investing activities
Acquisition of Property and Equipment and Intangible assets )471,596,452( )512,399,020(
Proceeds from sale of Property and Equipment 9,682,814 1,031,109
Proceeds from financial investments other than held for trading investments 45,163,034,003 19,429,281,321
Acquisition of financial investments other than held for trading investments )32,121,274,058( )32,847,575,674(
Dividends received 334,092,481 41,812,093
Net cash flows resulting from / used in investing activities (2) 12,913,938,788 )13,887,850,171 (
Cash flows from financing activities
Other loans 535,860,570 1,022,584,451
Dividends paid )2,685,050,043( )2,379,275,593(
Net cash flows used in financing activities (3) )2,149,189,473 ( )1,356,691,142 (
Net increase in cash and cash equivalents during the year (1+2+3)
5,206,777,511 26,480,730,801

Cash and cash equivalents at the beginning of the year 43,839,393,544 17,358,662,743
Cash and cash equivalents at the end of the year (36) 49,046,171,055 43,839,393,544
Cash and cash equivalents at end of the year are represented in :
Cash and due from Central Bank of Egypt (16) 61,558,547,091 42,595,999,375
Due from banks (17) 42,660,349,493 30,239,210,244
Treasury bills 153,436,872,353 67,847,716,023
Balances with Central Bank of Egypt (mandatory reserve) )55,539,436,865( )37,215,769,980(
Treasury bills with maturity more than 3 months )153,070,161,017( )59,627,762,118(
Cash and cash equivalents at end of the year 49,046,171,055 43,839,393,544

The accompanying notes from (1) to (39) are an integral part of these Separate Financial Statements .

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QNB ALAHLI S.A.E
Statement of Profit Distribution Proposal
For the Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

December 31, 2023 December 31, 2022

Net year's profits ( from income statement ) 15,769,684,137 10,124,164,122

Deduct/Add :

Profits of sale fixed assets transferred to capital reserve )9,666,000( )779,000(

Change in General Banking Risk Reserve 623,794 151,359,267

Item transferred to retrained earrings 19,961,016 -

Distributable year's net profits 15,780,602,947 10,274,744,389

Add :

Beginning balance of retained earnings 6,521,510,022 4,446,125,174

Total 22,302,112,969 14,720,869,563

To be distributed as follows:

Statutory reserve 788,000,907 506,169,256

General reserve 8,257,672,449 4,905,392,798

Shareholders' Dividends 3,232,234,449 1,616,117,225

Employees' profit share 1,595,306,685 1,057,772,118

Remuneration for board members 13,420,000 11,160,700

Banking System Support and Development Fund* 157,806,029 102,747,444

Retained earnings carried forward 8,257,672,450 6,521,510,022

Total 22,302,112,969 14,720,869,563

* According to Article 178 of the Central Bank and Banking System's Law No. 194 for year 2020, to deduct an amount not exceeding 1%
of the distributable year's net profits for the benefit of the Support and Development the Banking System Fund.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

1. Background:

QNB ALAHLI "S.A.E" ("The Bank") was incorporated as an investment and commercial bank on April 13, 1978, in accordance with the provisions of the
Investment Law no 43 of 1974 and its executive regulations and the amendments thereon. The Bank provides all banking services related to its activity,
through its Head Office located in 5 Champlion Street - Downtown - Cairo and its 234 branches served by 7,209 staff at the date of the financial
statements. The Bank is listed on the Egyptian Stock Exchange (EGX).

These Financial statements were approved by the Board of Directors on January 11, 2024.

2. Summary of significant accounting policies:-

2.1 Basis of preparation of the separate financial statements

These separate financial statements have been prepared in accordance with the instructions of the Central Bank of Egypt (CBE) rules approved by its
Board of Directors on December 16, 2008; and as per IFRS 9 "Financial Instruments" in accordance with the instructions of the Central Bank of Egypt
(CBE) dated February 26, 2019.

The separate and consolidated financial statements of the Bank and its subsidiaries have been prepared in accordance with the instructions of the
Central Bank of Egypt (CBE) rules, the affiliated companies are entirely included in the consolidated financial statements and these companies are the
companies that the Bank - directly or indirectly has more than half of the voting rights or has the ability to control the financial and operating policies,
regardless of the type of activity, the Bank’s consolidated financial statements can be obtained from the Bank's management. The Bank accounts for
investments in subsidiaries and associate companies in the separate financial statements at cost minus impairment loss.

The separate financial statements of the Bank should be read with its consolidated financial statements, for the Year ended on December 31, 2023 to get
complete information on the Bank’s financial position, income statements, cash flows and change in shareholders equity.

2.2 Accounting for Investments in subsidiaries and associates

Investments in subsidiaries and associates are presented in the attached separate financial statements using the cost method which represents the
bank’s direct share ownership and not according to the business results and the net assets of the investees. And the consolidated financial statements
provide a wider understanding for the consolidated financial position, business results and the consolidated cash flows for the bank and its subsidiaries
)The Group(, including the bank’s share in the net assets of its associate companies.

2.2.1 Investments in subsidiaries

Subsidiaries are entities (including Special Purposes Entities / SPEs) which the bank exercises direct or indirect control over its financial and operating
policies in order to get benefits from its activities and usually have an ownership share of more than half of its voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered in assessing whether the bank has the control over its investees.

2.2.2 Investments in associates

Associates are entities over which the bank exercises significant influence directly or indirectly, but without exercising control or joint control, where
the bank holds 20% to 50% of voting rights in the associate.

The purchase method is used to account for the bank's purchases of subsidiaries and associates when they are initially recognized; the acquisition date
is the date on which the acquirer obtains control or significant influence of acquiree “subsidiary or associate”. According to the purchase method, the
investments in subsidiaries and associates are initially recognized at cost (which may be incorporated goodwill). The acquisition cost represents the
fair value of the consideration given in addition to the other acquisition related costs.
In business combination achieved in stages, and business combination achieved through more than one transaction, is then dealing with every
transaction of such transactions that separately on the basis of the acquisition consideration and fair value information at the date of each transition
until the date where the control is achieved.

The investments in subsidiaries and associates are subsequently accounted for using the cost method on the separate financial statements. According
to the cost method; investments are recognized at acquisition cost less any impairment losses in value, if any. Dividends are recognized as revenue in
the separate income statement when they are declared and the bank's right to collect them has been established.

2.3 Segment reporting

An operating segment is a group of assets and operations providing products or services whose risks and benefits are different from those associated
with products or services provided by other operating segments. A geographical segment provides products or services within a specific economic
environment characterized by risks and benefits different from those related to other geographical segments operating in a different economic
environment.
The Bank is divided into two main business lines, which are corporate banking and retail banking. In addition, a corporate center acts as a central
funding department for the bank’s core businesses. The dealing room, proprietary activity and other non-core businesses are reported under the
corporate banking business line.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

For the purpose of preparation of segment reporting by geographical region, segment profit or loss and assets and liabilities are presented based on the
location of the branches. Given that the bank does not have any entity abroad, and unless otherwise stated in a specific disclosure, all equity and debt
instruments of the bank issued by foreign institutions and credit facilities granted to foreign counterparties are reported based on the location of the
domestic branch where such assets are recorded.

2.4 Foreign currency translation

2.4.1 Functional and presentation currency

The separate financial statements of the bank are presented in the Egyptian pound which is the bank’s functional and presentation currency.

2.4.2 Transactions and balances in foreign currencies

The Bank maintains its accounting records in Egyptian pounds. Transactions in foreign currencies during the period are translated into the Egyptian
pounds using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-
translated at end of reporting Year at the exchange rates then prevailing. Foreign exchange gains and losses resulting from settlement and translation of
such transactions and balances are recognized in the income statement and reported under the following line items:

- Net trading income from held for trading assets and liabilities;
- Other operating revenues (expenses) from the remaining assets and liabilities;
- Investments in equity instrument recognized at fair value through other comprehensive income in equity.

Changes in the fair value of investments in debt instruments; which represent monetary financial instruments, denominated in foreign currencies and
classified as FVTOCI assets are analyzed into differences resulting from changes in the amortized cost of the instrument, differences resulting from
changes in the applicable exchange rates and differences resulting from changes in the fair value of the instrument. Differences resulting from changes
in the amortized cost are recognized and reported in the income statement in "Interest on loans and similar income" whereas differences resulting from
changes in foreign exchange rates are recognized and reported in "Other operating revenues (expenses)". The remaining differences resulting from
changes in fair value are recognized in equity and accumulated in the "Fair value reserve" in Other Comprehensive Income.

Valuation differences arising on the measurement of non-monetary items at fair value include gains or losses resulting from changes in foreign currency
exchange rates used to translate those items. Total fair value changes arising on the measurement of equity instruments classified as at fair value
through the profit or loss are recognized in the income statement, whereas total fair value changes arising on the measurement of equity instruments
classified as FVTOCI are recognized directly in equity in the "Fair value revaluation reserve" in Other comprehensive income.

2.5 Financial assets

Financial assets classified as amortized cost, fair value through other comprehensive income (FVTOCI) and fair value through profit or loss (FVTPL).
The classification depends on the buisness model of the financial assets that are managed with its contractual cash flow and is determined by
management at the time of initial recognition.

2.5.2.1 Financial assets classified as amortized cost

The financial asset is retained in the business model of financial assets held to collect contractual cash flow. The objective from this business model is to
collect contractual cash flow which represented in principal and interest. The sale is an exceptional event for the purpose of this model and under the
terms of the standard represented in following:

- Significant deterioration for the issuer of financial instrument;

- Lowest sales in terms of rotation and value;
- A clear and reliable documentation process for the justification of each sale and its conformity with the requirements of the standard.

2.5.2.2 Financial assets classified as fair value through other comprehensive income
The financial asset is retained in the business model of financial assets held to collect contractual cash flows and sales. Held to collect contractual cash
flows and sales are integrated to achieve the objective of the model. Sales are high in terms of turnover and value as compared to the business model
retained for the collection of contractual cash flows.

2.5.2.2 Financial assets classified as fair value through profit or loss

The financial asset is held in other business models including trading, management of financial assets at fair value, maximization of cash flows through
sale.
The objective of the business model is not to retain the financial asset for the collection of contractual or retained cash flows for the collection of
contractual cash flows and sales. Collecting contractual cash flows is an incidental event for the objective of the model.

The characteristics of the business model are as follows:

- Structuring a set of activities designed to extract specific outputs;
- Represents a complete framework for a specific activity (inputs - activities - outputs);
- One business model can include sub-business models.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

2.6 Offsetting of financial assets and financial liabilities

Financial assets and liabilities are offset when the bank has a legally enforceable right to offset the recognized amounts and it intends to settle these
amounts on a net basis, or realize the asset and settle the liability simultaneously.

2.7 Financial derivatives and hedge accounting

Derivatives are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value.
Fair values are determined based on quoted market prices in active markets, including recent market transactions, or valuation techniques, including
discounted cash flow models and options pricing models, as appropriate. All derivatives are recognized as assets when their fair value is positive and as
liabilities when their fair value is negative.

Embedded derivatives, such as the conversion option in a convertible bond, are treated as separate derivatives if they meet the definition of a financial
instruments, and when their economic characteristics and risks are not closely related to those of the host contract, provided that the host contract is
not classified as at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in the
income statement "Net trading income" ;unless the bank chooses to designate the hybrid contract as a whole as at fair value through profit or loss.

The timing of recognition in profit or loss, of any gains or losses arising from changes in the fair value of derivatives, depends on whether the derivative
is designated as a hedging instrument, and the nature of the item being hedged. The parent bank designates certain derivatives as:

- Hedging instruments of the risks associated with fair value changes of recognized assets or liabilities or firm commitments (fair value hedge);
-
Hedging of risks relating to future cash flows attributable to a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).

Hedge accounting is used for derivatives designated in a hedging relationship when the following criteria are met. At the inception of the hedging
relationship, the bank documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and
its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the bank documents
whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

2.7.1 Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized immediately in the profit or loss, together
with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The effective portion of changes in the fair
value of the interest rate swaps and the changes in the fair value of the hedged item attributable to the hedged risk are recognized in profit or loss.
Additionally, interest differential on interest rate swaps is recognized in profit or loss as part of "Net interest income" line item in the income statement.
Any ineffectiveness is recognized in profit or loss in "Net trading income".

When the hedging instrument no longer qualifies for hedge accounting, the adjustment to the carrying amount of a hedged item, measured at amortized
cost, arising from the hedged risk is amortized to profit or loss from that date to maturity of the asset using the effective interest method. Adjustment to
the carrying amount of a hedged equity instrument that has been deferred in equity remains in equity until the asset is derecognized.

2.7.2 Cash flow hedge

The effective portion of changes in the fair value of derivatives designated and effective for cash flow hedge is recognized in equity while changes in fair
value relating to the ineffective portion is recognized immediately in the income statement in "Net trading income".

Amounts accumulated in equity are transferred to income statement in the relevant periods when the hedged item affects the income statement. The
effective portion of changes in fair value of interest rate swaps and options are reported in "Net trading income".

When a hedging item expires, or is sold or if hedging instrument no longer qualifies for hedge accounting requirements, gains or losses that have been
previously accumulated in equity remain in equity and are only recognized in profit or loss when the forecast transaction ultimately occurs. If the
forecast transaction is no longer expected to occur, any related cumulative gain or loss on the hedging instrument that has been recognized in equity
shall be reclassified immediately to profit or loss.

2.7.3 Derivatives that do not qualify for hedge accounting

Where a derivative instrument does not qualify for hedge accounting, changes in fair value of that derivative and related interest are recognized
immediately in the income statement in "Net trading income" line item. However, gains or losses arising from changes in fair value of derivatives that
are managed in conjunction with financial assets or financial liabilities, designated upon initial recognition at fair value through profit or loss, are
included in "Net income from financial instruments designated upon initial recognition as at fair value through profit or loss".

2.8 Interest income and expense

- Interest income and expense on all interest-bearing financial instruments are recognized in "Interest income" and "Interest expense" line items in the
income statement using the effective interest rate method.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

- The effective interest rate is a method of calculating the amortized cost of a debt instrument whether a financial asset or a financial liability and of
allocating its interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments or receipts through the expected life of the financial debt instrument or, when appropriate, a shorter period to the net carrying amount of
the financial asset or financial liability on initial recognition. When calculating the effective interest rate, the bank estimates the future cash flows,
considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The
calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction
costs and all other premiums or discounts.

Interest income on loans is recognized on an accrual basis except for the interest income on non-performing loans, which ceases to be recognized as
revenue when the recovery of interest or principle is in doubt.

- Interest income on non-performing or impaired (Stage 3) loans and receivables ceases to be recognized in profit or loss and is rather recorded off-balance
sheet in statistical records. Interest income on these loans is recognized as revenue on a cash basis as follows:
1- For retail loans, personal loans, small and medium business loans, real estate loans for personal housing and small loans for businesses, when interest
income is collected and after recovery of all arrears.

2- For corporate loans, interest income is recognized on a cash-basis after the bank collects 25% of the rescheduled installments and provided these
installments continue to be paid for at least one year.

If a loan continues to be performing thereafter, interest accrued on the principal then outstanding starts to be recognized as revenues. Interest that is
marginalized prior to the date when the loan becomes performing is not recognized in the profit or loss except when the total balance of loan, prior to
that date, is paid in full.

2.9 Fees and commission income

Fees charged for servicing a loan or facility that is measured at amortized cost, are recognized as revenue as the service is provided. Fees and
commissions on non-performing or impaired loans or receivables cease to be recognized as income and are rather recorded off balance sheet. These are
recognized as revenue - on a cash basis - only when interest income on those loans is recognized in profit or loss, at which time, fees and commissions
that are an integral part of the effective interest rate of a financial asset are treated as an adjustment to the effective interest rate of that financial asset.

Commitment fees received by the bank to originate a loan are deferred if it is probable that the bank will enter into a specific lending arrangement and
are regarded as a compensation for an ongoing involvement with the acquisition of the financial instrument and recognized as an adjustment to the
effective interest rate. If the commitment expires without the bank making the loan, the fees are recognized as revenue on expiry.

Loan syndication fees received by the bank are recognized as revenue when the syndication has been completed, only if the bank arranges the loan and
retains no part of the loan package for itself (or retains a part at the same effective interest rate for comparable risk as other participants).

Fees and commissions that are earned on negotiating or participating in the negotiation of a transaction in favor of another entity, such as
arrangements for the allotment of shares or another financial instrument or acquisition or sale of an enterprise on behalf of a client, are recognized as
revenue when the transaction has been completed. Administrative consultations and other service fees are usually recognized as revenue on a straight-
line basis over the period in which the service is rendered. Fees from financial planning management and custodian services provided to clients over
long periods are usually recognized as revenue on a straight-line basis over the period in which these services are rendered.

2.10 Dividends income

Dividend income on investments in equity instruments and similar assets is recognized in the income statement when the bank’s right to receive
payment is established.

2.11 Purchase and resale agreements and sale and repurchase agreements (repos and reverse repos)

Financial instruments sold under repurchase agreements are not derecognized from the statement of financial position and cash receipts are shown in
liability side in the statement of financial position.

2.12 Impairment of financial assets

The Bank reviews all its financial assets except for financial assets that are measured at fair value through profit or loss to assess the extent of
impairment as described below.
Financial assets are classified at three stages at each reporting date:
- Stage 1 : Financial assets that have not experienced a significant increase in credit risk since the date of initial recognition, and the expected credit loss
is calculated for 12 months.
- Stage 2 : Financial assets that have experienced a significant increase in credit risk since the initial recognition or the date on which the investments are
made, and the expected credit loss is calculated over the life of the asset.
- Stage 3 :Impairment of financial assets whose expected credit loss is to be recognized over the life of the asset on the basis of the difference between the
carrying amount of the instrument and the present value of expected future cash flows.
Credit losses and impairment losses on the value of financial instruments are measured as follows:

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

• The low risk financial instrument is classified at initial recognition in the first stage and credit risk is monitored continuously by the Bank's credit risk
management.
• If it is determined that there has been a significant increase in credit risk since the initial recognition, the financial instrument is transferred to the
second stage where it is not yet considered impaired at this stage.
• If there are indicators of impairment of the financial instrument, it is transferred to the third stage.
• The financial assets created or acquired by the Bank and include a high credit risk ratio for the Bank's low risk financial assets are recognized on the
initial recognition of the second stage directly and therefore the expected credit losses are measured on the basis of expected credit losses over the life of
the asset.

2.12.2.1 Significant increase in credit risk

The Bank considers that the financial instrument has experienced a significant increase in the credit risk when one or more of the following quantitative
and qualitative criteria, as well as the factors relating to default, have been met.
2.12.2.2 Quantitative factors
When the probability of default over the remaining life of the instrument is increased from the date of the financial position compared to the probability
of default over the remaining life expected at initial recognition in accordance with the Bank's acceptable risk structure.

2.12.2.3 Qualitative factors

Retail loans,micro and small businesses
If the borrower encounters one or more of the following events:
• The borrower submits a request to convert short-term to long-term payments due to negative effects on the borrower's cash flows.
• Extension of the deadline for repayment at the borrower's request.
• Frequent Past dues over the previous 12 months.
• Future adverse economic changes affecting the borrower's future cash flows.
Corporate loans and medium businesses
If the borrower has a follow-up list and / or financial instrument faced one or more of the following events:
• A significant increase in the rate of return on the financial asset as a result of increased credit risk.
• Significant negative changes in the activity and physical or economic conditions in which the borrower operates.
• Scheduling request as a result of difficulties facing the borrower.
• Significant negative changes in actual or expected operating results or cash flows.
• Future economic changes affecting the borrower's future cash flows.
• Early indicators of cash flow / liquidity problems such as delays in servicing creditors / business loans.
• Cancellation of a direct facility by the bank due to the high credit risk of the borrower.
Nonpayments
The loans and facilities of institutions, medium, small, micro and retail banking are included in stage two if the period of non-payment is more than 60
days and less than 90 days,(180 days for SME's according to CBE Circular dated 14 December 2021 regarding the temporary amendments of SME's NPL
treatment in IFRS9 regulation) . Note that this period (60 days) will be reduced by (10) days per year to become (30) days during (3) years from the date
of application (Year 2019).
Transfer between the three stages:
Transfer from second stage to first stage:
The financial asset shall not be transferred from the second stage to the first stage unless all the quantitative and qualitative elements of the first stage
are met and the full arrears of the financial asset and the proceeds are paid.
Transfer from third stage to second stage:
The financial asset shall not be transferred from the third stage to the second stage until all the following conditions have been met:

• Completion of all quantitative and qualitative elements of the second stage.

• Repayment of 25% of the balance of the outstanding financial assets, including accrued segregated / statistical interest.
• Regularity of payment for at least 12 months.
2.13 Intangible assets
2.13.1 Goodwill
Goodwill, arising from the acquisition or legal merger of subsidiaries, represents the difference between the cost of the combination and the acquirer’s

interest in the fair value of the identifiable assets, liabilities and qualifying contingent liabilities of the acquiree at the acquisition date. Goodwill is

annually tested for impairment and is written-down to profit or loss at an annual amortization of 20% or impairment loss, whichever is higher.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)
2.13.2 Software (computer programs)

Expenditure on upgrade and maintenance of computer programs is recognized as an expense in the income statement in the period in which it is
incurred. Expenditures directly incurred in connection with specific software are recognized as intangible assets if they are controlled by the bank and
when it is probable that they will generate future economic benefits within more than one year that exceed its cost. Direct costs include the cost of the
staff involved in upgrading the software in addition to a reasonable portion of relative overheads.
Upgrade costs are recognized and added to the original cost of the software when it is likely that such costs will increase the efficiency or enhance the
performance of the computers software beyond its original specification.

Cost of computer software recognized as an asset shall be amortized over the period of expected benefits from three to five years except for the core IT
system which is amortized over ten years.

2.14 Property and Equipment

The Bank’s property and equipment include lands and buildings of the bank which basically comprise the head office premises and branch buildings. All
property and equipment are carried at historical cost net of accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the construction or acquisition of the items. Subsequent costs are included in the assets
carrying amount or recognized separately, as appropriate, only when it is probable that future economic benefits associated with the item will flow to
the bank and the cost of the item can be measured reliably. Repairs and maintenance expenses are recognized in profit or loss within "other operating
costs" line item during the financial year in which they are incurred.
The Bank considers the residual value of its property and equipment as insignificant and immaterial in relation to the depreciable amount; therefore, the
depreciable amount of the bank’s property and equipment is determined without any deduction for residual values. Depreciation is charged so as to write
off the cost of assets, other than land which is not depreciated, over their estimated useful lives, using the straight-line method based on the following
annual rates:

Buildings 50 years
Decoration & installations 10 years
Lifts 15 years
Electricity & Air conditioning 10 years
Fixtures Generators 30 years
Telephone network & CCTV 10 years
Firefighting system & Plumbing system 10 years
Other installations 10 years
The shortest of 10
Leasehold improvements years or contract
period

Depreciation periods for property and equipment, other than buildings, depend on their useful lives which are usually estimated as specified below:

Furniture 10 years
Armored vaults 20-30 years
IT equipment 5 years
Electric appliances 5 years
Vehicles 5 years

The bank reviews the carrying amounts of its depreciable property and equipment whenever changes in circumstances or events indicate that the
carrying amounts of those assets may not be recovered. Where the carrying amount of an asset exceeds its recoverable amount, the carrying amount is
reduced to its recoverable amount.
The recoverable amount of an asset is the higher of the asset’s net realizable value or value in use. Gains or losses on disposals are determined by
comparing proceeds with relevant carrying amount. These are included in the profit or loss in other operating income (expenses) in the income
statement.

2.15 Impairment of non-financial assets

Non-financial assets that do not have definite useful lives, except for goodwill, are not amortized. These are annually tested for impairment. Depreciable
property and equipment are tested for impairment whenever changes in circumstances or events indicate that the carrying amounts of those assets may
not be recovered. Impairment loss is recognized and the carrying amount of an asset is reduced to the extent that such carrying amount exceeds the
asset's recoverable amount.

The recoverable amount of an asset is the higher of the asset’s net realizable value or value in use. For the purpose of estimating the impairment loss,
where it is not possible to estimate the recoverable amount of an individual asset, the bank estimates the recoverable amount of the cash-generating
unit to which the asset belongs is estimated.

At the end of each year, the bank reviews non-financial assets for which an impairment loss is recognized to assess whether or not all or part of such
impairment losses should be reversed through profit or loss.

2.16 Leasing

All lease contracts to which the bank is a party are treated as operating or finance leases as follows:
2.16.1 As a lessee
Lease payments made under operating leases, net of any discounts received from the lessor, are recognized as an expense in the profit or loss on a
straight-line basis over the lease term.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

2.16.2 As a lessor

Assets leased out under operating lease contracts are reported as part of the property and equipment in the statement of financial position and are
depreciated over the expected useful lives of the assets, on the same basis as other property assets. Lease rental income is recognized in profit or loss, net
of any discounts granted to the lessee, using the straight line method over the contract term.

2.17 Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise balances due within three months from date of placement or
acquisition. They include cash and balances placed with the Central Bank of Egypt (other than those required under the mandatory reserve), current
accounts with banks and treasury bills, certificates of deposits and other governmental notes.

2.18 Other provisions

Provisions for obligations, other than those for credit risk or employee benefits, due within more than 12 months from the date of separate financial
statements are recognized based on the present value of the best estimate of the consideration required to settle the present obligation at the reporting
date. An appropriate pretax discount rate that reflects the time value of money is used to calculate the present value of such provisions.

For obligations due within less than twelve months from the date of separate financial statements, provisions are calculated based on undiscounted
expected cash outflows unless the time value of money is material, in which case provisions are measured at present value.

When a provision is wholly or partially no longer required, it is reversed through the profit or loss under "Other Operating Income (Expenses)" line item.

2.19 Financial guarantees

A financial guarantee contract is a contract issued by the bank as security for loans or overdrafts due from its clients to other entities that requires the
bank to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the original or modified terms of a debt instrument. Financial guarantees are generally issued by the bank to beneficiary banks, corporations and
other entities on behalf of the bank’s clients.

When a financial guarantee is recognized initially, it is measured at its fair value plus, transaction costs that is directly attributable to the issue of such
financial guarantee.

After initial recognition, a financial guarantee contract issued by the bank is measured at the higher of:

(I) The amount initially recognized less, when appropriate, cumulative amortization of security fees recognized as income in profit or loss using
the straight-line method over the term of the guarantee; and

(II) The best estimate for the payments required to settle any financial obligation resulting from the financial guarantee at the reporting date.

Such estimates are made based on experience in similar transactions and historical losses as supported by management judgment.

Any increase in the obligations resulting from the financial guarantee, shall be recognized within other operating income (expenses) in the income
statement.

2.20 Employee benefits

Post-employment benefits (defined benefit plans) and defined contribution plans:

The Bank is liable for all obligations arising from its plans for employee benefits which comply, in all material respects, with the principles set out below.
Starting 1 January 2009, the bank has fully complied with the policy referred to below, and recognized any adjustments, resulting from the first full
implementation of amendments to the CBE rules, directly on retained earnings.

The Bank provides several post-employment benefits to its employees, such as the medical care scheme which qualifies as a defined-benefit plan. A
defined benefit plan commits the bank, either formally or constructively, to pay a certain amount or level of future benefits and therefore bears the
medium- or long-term risk.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

The Bank recognizes the defined benefit obligation as a liability in the statement of financial position under "obligations for post-retirement schemes" to
cover the total value of such obligations. This is assessed regularly by independent actuary using the projected unit credit method. This valuation
technique incorporates assumptions about demographics variables, staff turnover, salary growth rate and discount and inflation rates.

When these plans are financed from external funds classified as plan assets, the fair value of these funds is subtracted from the defined benefit
obligation. Differences arising from changes in the actuarial assumptions and estimates are recognized in the income statement as actuarial gains or
losses to the extent of the higher of the following two amounts as of the end of the previous financial period:
• 10% of the present value of the defined benefit obligation (before deducting plan assets); and
• 10% of the fair value of the plan assets.

Actuarial gains and losses that exceed the 10 percent criteria above are amortized to profit or loss over the expected average remaining working lives of
the participating employees.

Past service cost is recognized immediately to the extent that the benefits have already vested, and otherwise is amortized on a straight-line basis over
the average period until the benefits become vested. Annual cost of employee benefits plans is reported as part of general and administrative expenses
(employee costs).

Defined contribution plans are pension schemes whereby the bank pays defined contributions to an independent entity. The Bank shall not be under
legal or constructive obligation to pay more contributions if this entity doesn’t maintain adequate assets to pay-off the employees’ benefits in return for
their service in the current and previous periods.

According to the defined contribution plans, the bank pays contributions to private sector pension scheme under mandatory or voluntary contractual
arrangement. The Bank shall be under no additional obligation other than the contribution payments. Contributions to defined contribution retirement
benefit plans are recognized as employee benefits cost when employees have rendered service entitling them to the contributions. Prepaid contributions
shall be recognized as assets to the extent that these contribution payments will reduce future payments or result in cash refunds.

2.21 Income taxes

Income tax expense on the years’s profit or loss represents the sum of the tax currently payable and deferred tax and is recognized in the income
statement, except when they relate to items that are recognized directly in equity, in which case the tax is also recognized in equity.

The Bank’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting Year, in
addition to income tax differences related to prior years.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the separate financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered. However, when it is expected that the tax benefit will increase,
the carrying amount of deferred tax assets shall increase to the extent of previous reduction.

2.22 Borrowings

Loans obtained by the bank are initially recognized at fair value net of transaction costs incurred in connection with obtaining the loan. Borrowings are
subsequently measured at amortized cost, with the difference between net proceeds and the value to be paid over the borrowing period, recognized in
profit or loss using the effective interest rate method.
2.23 Capital
2.23.1 Capital issuance cost

Issued and paid up-capital (i.e. Bank's own equity instruments) is initially measured at the cash proceeds received, less transaction costs directly
attributable to the issuance of new shares, issuance of shares to effect business combination, or issue of share options. Transaction costs, net of tax
benefits, are reported as a deduction from equity.

2.23.2 Dividends

Dividends on equity instruments issued by the bank are recognized when the general assembly of the bank’s shareholders approves them. Dividends
include the employees’ profit share and the board of directors’ remuneration as prescribed by the bank's articles of incorporation and the corporate law.

2.24 Fiduciary activities

The Bank carries out fiduciary activities that result in ownerships or management of assets on behalf of individuals, trusts, and retirement benefit plans
and other institutions. These assets and income arising thereon are not recognized in the bank’s separate financial statements, as they are not assets or
income of the bank.
2.25 Comparative figures

Comparative figures are reclassified, where necessary, to conform to changes in the current Year's financial statements presentation.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

3. Management of financial risks

The Bank as a result of conducting its activities is exposed to various financial risks. Since financial activities are based on the concept of accepting risks
and analyzing and managing individual risks or group of risks altogether, the bank aims at achieving a well-balanced risks and relevant rewards, as
appropriate and to reduce the probable adverse effects on the bank’s financial performance. The most important types of risks are credit risk, market
risk, liquidity risk and other operating risks. The market risk comprises foreign currency risk, interest rate risk and other pricing risks.

For example, the bank has laid down to determine and analyze the risks, set limits to the risks and control them through reliable methods and
up–to–date systems. The Bank regularly reviews the risk management policies and systems and amendments thereto, so that they reflect the changes in
markets, products and services and the best up-to–date applications.

Risks are managed in accordance with pre-approved policies by the board of directors. The risk management department identifies, evaluates and covers
financial risks, in close collaboration with the bank’s various operating units. The board of directors provides written rules which cover certain risk
areas, such as credit risk, foreign exchange risk, interest rate risk and the use of derivative and non-derivative financial instruments. Moreover, the risk
department is responsible for the periodic review of risk management and the control environment independently.

Risk management strategy

The Bank operates in business lines, which generate a range of risks whose frequency, severity and volatility can be of different and significant
magnitudes. A greater ability to calibrate its risk appetite and risk parameters, the development of risk management core competencies, as well as the
implementation of a high-performance and efficient risk management structure are therefore critical undertakings for bank.

Thus, the primary objectives of the bank’s risk management framework are:

- To contribute to the development of the Bank in various business lines to reach an ideal level of general risk.
- To guarantee the bank’s sustainability as a going concern, through the implementation of a high-quality risk management infrastructure.
In defining the bank’s overall risk appetite, the bank management takes various considerations and variables into account, including:
• The relative balance between risk and reward of the bank’s various activities.
• Earnings sensitivity to business, credit and economic cycles.
• The aim of achieving a well-balanced portfolio of earnings streams.
Risk management governance and risk principles

Bank's risk management governance is based on:

i) Strong managerial involvement, throughout the entire organization, starting from the Board of Directors down to operational field management teams.

ii) A tight framework of internal procedures and guidelines;

iii) Continuous supervision by business lines and support functions as well as by an independent body to monitor risks and to enforce rules and procedures.

Within the board, the Risk and Audit Committees are more specifically responsible for examining the consistency of the internal framework for
monitoring risks and compliance.
Risk categories
The following are part of the risks associated with Bank’s Banking activities:

a- Credit risk:
(Including country risk): represents risk of losses arising from the inability of the Bank’s customers, sovereign issuers or other counterparties
to meet their financial commitments.

Credit risk also includes the replacement risk linked to market transactions. In addition, credit risk may be further increased by a
concentration risk, which arises either from large individual exposures or from groups of counterparties with a high default probability.

b- Market risk:
Represents risk of loss resulting from changes in market prices and interest rates.
c- Operational risk:
(Including legal, compliance, accounting, environmental, reputational risks, etc.): represents risk of loss or fraud or of producing inaccurate
financial and accounting data due to inadequacies or failures in procedures and internal systems, human error or external events. Additionally,
operational risks may also take the form of compliance risk, which is the risk of the bank incurring either legal, administrative or disciplinary
sanctions or financial losses due to failure to comply with relevant rules and regulations.
d- Structural interest and exchange rate risk:
Represents risk of loss or of residual depreciation in the bank’s balance sheet and off-balance sheet assets arising from changes in interest or
exchange rates. Structural interest and exchange rate risk arises from banking commercial activities and on Corporate Center transactions
(operations on equities, investments and bond issues).

e- Liquidity risk:
Represents the risk that bank might not be able to meet its obligations as they become due.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

The Bank dedicates significant resources to constantly adapting its risk management to its activities and ensures that its risk management framework
operates in full compliance with the following fundamental principles of:

- Full independence of risk assessment departments from the operating divisions; and
- Consistent approach to risk assessment and monitoring applied throughout the bank.

The Risk Division is independent from the bank’s operating entities and reports directly to general management. Its role is to contribute to the
development and profitability of the bank by ensuring that the risk management framework in place is both robust and effective. It employs various
teams specializing in the operational management of credit and market risk.

More specifically, the Risk Division:

- Defines and approves the methods used to analyze, assess, approve and monitor credit risks, country risks, market risks and operational risks; conducts
a critical review of commercial strategies in high risk areas and continually seeks to improve such risk forecasting and management;

- Contributes to independent assessment by analyzing transactions implying a credit risk and by providing guidance on transactions proposed by sales
managers;

- Identifying a frame for all Bank’s operational risks.

The Assets and Liabilities Unit under the Finance Division, for its part, is entrusted with assessing and managing other major types of risks, namely
liquidity and structural risks (resulting from interest rate, exchange rate and liquidity) as well as the bank’s long term financing, management of capital
requirements and equity structure.

The Internal Legal Counsel deals with compliance and legal risks.

Responsibility for devising the relevant risk management structure and defining risk management operating principles lies mainly with both the Risk
Division and, in particular fields, the assets and liabilities management under Finance Division.

The Bank’s Risk Committee is in charge of reviewing all the bank’s key risk management issues and meets at least on quarterly basis. Risk Committee’s
monthly meetings involve members of the Executive Committee, the heads of the business lines and the Risk Division managers and are used to review
all the core strategic issues: risk-taking policies, assessment methods, material and human resources, analysis of credit portfolios and of the cost of risk,
market and credit concentration limits (by product, country, sector, region, etc.).
On the other hand, the Assets and Liabilities management committee (ALCO) is competent for matters relating to funding and liquidity policy making
and planning.

All new products and activities or products under development must be submitted to the New Product Committee.

This New Product Committee aims at ensuring that, prior to the launch of a new activity or product, all associated risks are fully understood, measured,
approved and subject to adequate procedures and controls, using the available information and processing systems.

Operational risks, permanent control and audit (periodic) control process are supervised by the Audit and Accounts Committee that meets on a quarterly
basis.

Finally, the Bank’s risk management principles, procedures and infrastructures and their implementation are monitored by the Internal Audit team and
the External Auditors.

(A) CREDIT RISKS

The Bank is exposed to the credit risk which is the risk resulting from failure of the client to meet its contractual obligations towards the bank. The credit
risk is considered to be the most significant risk for the bank, therefore requiring careful management. The credit risk manifests itself in the lending
activities and debt instruments in bank’s assets as well as off balance sheet financial instruments, such as letters of credit and letters of guarantee.

(A/1) Credit risk management: organization and structure

Maintaining comprehensive and efficient management and monitoring of credit risk – which constitutes the bank’s primary source of risk – is vital to
preserving bank financial strength and profitability. As a result, the bank implements a tight credit risk control framework, whose cornerstone is the
Credit Risk Policy and Authorities defined jointly by the Risk Division and the Business Lines, and is subject to periodic review and approval by the
Board of Directors.
Within the Risk Division, persons are responsible for:
- Setting credit limits by customer, customer group or transaction type;
- Approving credit score or internal customer rating criteria;
- Monitoring and surveillance of large exposures and various credit portfolios; and
- Reviewing specific and general provisioning policies.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

In addition, comprehensive portfolio analysis is performed in order to provide guidance to the General Management on the bank’s overall credit risk
exposure as well as reporting to Risk Committee.

The Risk Division also helps define criteria for measuring risk and defining appropriate provisioning practices.

Risk approval

Embedded in bank’s credit policy is the concept that approval of any credit risk undertaking must be based on sound knowledge of the client and a
thorough understanding of the client’s business, the purpose, nature and structure of the transaction and the sources of repayment, while bearing in
mind the bank’s risk strategy and risk appetite.

The risk approval process is based on four core principles:

- All transactions involving replacement risk must be pre-authorized, replacement risk is bearing a loss when a bank is forced to replace a contract in case
of breaching the original party's contract (debtor risk, non-settlement or non-delivery risk and issuer risk).

- Staff assessing credit risk is fully independent from the decision-making process.

- Subject to relevant credit delegations, responsibility for analyzing and approving risk lies with the most appropriate business line or credit risk unit,
which reviews all authorization requests relating to a specific client or client group, to ensure a consistent approach to risk management.

- All credit decisions systematically include internal obligor risk ratings, as proposed by business lines and vetted by the Risk Division and approved by
concerned Credit Committee.

Risk management and audit

Changes in the quality of outstanding commitments are reviewed on a periodic basis and at least once a quarter, as part of the “sensitive names” and
provisioning procedures. This review is based on analyses performed by the business divisions and the risk function. Furthermore, the Internal Audit
also carries out file reviews or risk audits in the bank’s branch groups and reports its findings to the General Management.

Replacement risk

Replacement risk provides the measurement of the replacement cost of a transaction in the event of default by the original counterparty and the
necessity to close the ensuing position with counterparty; hence, the replacement cost is the result of the market price between the date on which the
original transaction is entered into and the default date. Transactions giving rise to replacement risk include interest rate swaps and forward FX deals.

Replacement risk management

The Bank places great emphasis on carefully monitoring its replacement risk exposure in order to minimize its losses in case of default of its
counterparties and counterparty limits are, therefore, assigned to all trading counterparties, irrespective of their status (bank, other financial
institution, corporate and public institutions).

(A/2) Risk measurement and internal ratings

Bank rating system is based on three key pillars:

- The internal ratings models used to measure and quantify counterparty risk.
- A set of procedures defining guidelines for devising and using ratings (scope, frequency of rating revision, procedure for approving ratings, etc.).
- Reliance on human judgment to improve modeling results to include elements outside the scope of rating model.

Credit risk rating is supported by a set of procedures ensuring reliable, consistent and timely default and loss data detection.

Rating models are reviewed and developed when necessary. The Bank regularly evaluates performance of credit rating models and their capacity to
predict default cases.

The calculations used to measure and monitor replacement risk include:

- Current Average Risk (CAR) is a calculation of the Average risk of all the future scenarios, excluding the negative scenarios, i.e., when the replacement
makes a gain.
- Credit value at risk (VAR) is a calculation of the largest loss that would be incurred in 99% of cases.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

Following are some risk mitigations methods:

Collaterals

The Bank designs several policies and controls for credit risk mitigation such as collaterals for funds provided. The Bank lays down guidelines for
specific categories of the accepted collaterals.

The main types of collaterals for Loans and credit facilities to customers are:

• Real estate mortgage;

• Pledge on business assets like machinery and merchandise;
• Pledge in financial instruments like debt instruments and equity.

The long term financing and lending for companies are often collaterized while credit facilities for persons are not collaterized. The Bank attempts to
mitigate the credit risk through additional collaterals from the concerned parties immediately on arising of impairment indicators for any of the loans or
facilities.

Collaterals taken to secure assets other than Loans and credit facilities are identified according to the nature of the instrument.

Debit instruments and treasury bills are often not collaterized.

Derivatives

The Bank exercise prudential strict control procedures on net open positions of derivatives. i.e. the difference between sale and purchase agreements at
the level of value and duration. The amount exposed to credit risk at any time is determined at fair value of the instrument that may achieve benefit to
the bank. i.e. any assets with high positive fair value which represents insignificant part of contractual imputed value used to reflect the volume of
existing instruments. This credit risk is managed as part of overall lending limit granted to the customer together with the potential risk as a result of
market changes.

The Bank doesn’t obtain collaterals for credit risk related to such instruments except for the amounts requested by the bank as marginal deposits from
other parties.

- 21 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(A/3) Provisioning policy (Measurement of expected credit losses)

The Bank's policies require the identification of three stages of classifying financial assets measured at amortized cost, loan commitments and financial
guarantees as well as debt instruments at fair value through other comprehensive income in accordance with changes in credit quality since initial
recognition and thereafter measuring the impairment losses (expected credit losses) as follows:

The un-impaired financial asset is classified at initial recognition in the first stage and credit risk is monitored continuously by the Bank's credit risk
management.

In the case of a significant increase in credit risk since the initial recognition, the financial asset is transferred to the second stage and the financial
asset is not considered at this stage (the expected credit loss over the life of the asset without impairment).

In case of indications of impairment of the financial asset, it is transferred to the third stage. The Bank relies on the following indicators to determine
whether there is objective evidence of impairment:

- A significant increase in the rate of return on the financial asset as a result of increased credit risk.
- Significant negative changes in the activity and financial or economic conditions in which the borrower operates.
- Scheduling request as a result of difficulties facing the borrower.
- Significant negative changes in actual or expected operating results or cash flows.
- Future economic changes affecting the borrower's future cash flows.
- Early indicators of cash flow / liquidity problems such as delays in servicing creditors / business loans.
- Cancellation of a direct facility by the bank due to the high credit risk of the borrower.

The following table illustrates the proportional distribution of loans and credit facilities reported in the financial position for each of the four internal
ratings of the Bank and their relevant impairment losses:

December 31, 2023 December 31, 2022

Allowance for impairment Allowance for impairment

Loans and credit facilities Loans and credit facilities
loss loss
1- Good debts 86.20% 11.60% 86.51% 8.43%
2- Normal watch-list 6.99% 22.49% 5.72% 10.01%
3- Special watch-list 1.38% 5.22% 2.85% 19.71%
4- Non performing loan 5.43% 60.69% 4.92% 61.85%
100% 100% 100% 100%

(A/4) General Model for Measurements of Banking Risks:

In addition to the four categories of the bank's internal credit ratings indicated above, management classifies Loans and credit facilities based on more
detailed subgroups in accordance with the CBE requirements.

Assets exposed to credit risk in these categories are classified according to detailed rules and terms depending heavily on information relevant to the
customer, his activity, financial position and his repayment track record.

The Bank calculates the allowances required for impairment of assets exposed to credit risk, including commitments relating to credit on the basis of
rates determined by CBE. In case, the allowance required for impairment losses as per CBE credit worthiness rules exceeds the provisions as required by
the expected credit loss, that excess shall be debited from distributable net profits and carried to the general banking risk reserve in the equity section.
Such reserve is always adjusted, on a regular basis, by any increase or decrease so that the reserve shall always be equivalent to the amount of increase
between the two provisions. Such reserve is not available for distribution; note (35) shows the movement (if any) on the general banking risk reserve
during the financial period.

Below is a statement of credit rating for corporations as per the Bank's internal ratings compared with those of CBE's; it also includes the percentages of
provisions required for impairment of assets exposed to credit risk.

Required Provision
CBE rating Description Internal Rating Internal Description
According to ORR %
1 Low risk 0% 1 Good debts
2 Moderate risks 1% 1 Good debts
3 Satisfactory risks 1% 1 Good debts
4 Appropriate risks 2% 1 Good debts
5 Acceptable risks 2% 1 Good debts
6 Marginally acceptable risks 3% 2 Normal watch-list
7 Watch-list 5% 3 Special watch-list
8 Substandard debts 20% 4 Non-performing loans
9 Doubtful debts 50% 4 Non-performing loans
10 Bad debts 100% 4 Non-performing loans

- 22 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(A/5) Maximum limit for credit risk before collaterals

Financial position items exposed to credit risks December 31, 2023 December 31, 2022
Treasury bills 152,105,446,740 67,814,297,699
Loans and credit facilities to banks 884,737,336 -

Loans and credit facilities to customers

Retail loans
- Overdrafts 4,859,175,860 4,067,094,495
- Credit cards 1,894,866,993 1,581,196,876
- Personal loans 40,077,773,714 33,727,404,139
- Real estate loans 5,855,296,397 4,633,413,392

Corporate loans
- Overdrafts 105,978,617,046 87,964,889,193
- Direct loans 69,385,570,831 59,888,990,906
- Syndicated Loans and facilities 21,703,784,911 22,210,229,914
- Other loans 2,887,279,702 2,692,284,579
Segregated interest , unearned discount & deferred income )174,582,726( )174,923,274(
Financial derivatives - 23,578,000
Financial investments
- Debt instrument 95,200,815,468 105,636,715,758
Other Financial assets 7,305,530,717 6,328,690,914
Total 507,964,312,989 396,393,862,591

The following table provides information on the quality of financial assets during the Year:
December 31, 2023
Stage 1 Stage 2 Stage 3
Due from banks Total
12-Months Life time Life time
Credit rating
Good debts 17,047,358,363 2,145,449,746 - 19,192,808,109
Normal watch-list 11,344,464,186 4,031,688,423 - 15,376,152,609
Special watch-list - 8,091,388,775 - 8,091,388,775
Non performing loan - - - -
28,391,822,549 14,268,526,944 - 42,660,349,493
Allowance for impairment losses )49,525,613( - - )49,525,613(
Carrying amount 28,342,296,936 14,268,526,944 - 42,610,823,880

December 31, 2022

Stage 1 Stage 2 Stage 3
Due from banks Total
12-Months Life time Life time
Credit rating
Good debts 2,429,847,029 525,857,613 - 2,955,704,642
Normal watch-list 14,689,805,344 12,593,700,258 - 27,283,505,602
Special watch-list - - - -
Non performing loan - - - -
17,119,652,373 13,119,557,871 - 30,239,210,244
Allowance for impairment losses )14,109,794( - - )14,109,794(
Carrying amount 17,105,542,579 13,119,557,871 - 30,225,100,450

December 31, 2023

Stage 1 Stage 2 Stage 3
Treasury bills Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list 152,211,434,928 - - 152,211,434,928
Special watch-list - - - -
Non performing loan - - - -
152,211,434,928 - - 152,211,434,928
Allowance for impairment losses )105,988,188( - - )105,988,188(
Carrying amount 152,105,446,740 - - 152,105,446,740

- 23 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2022

Stage 1 Stage 2 Stage 3
Treasury bills Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list 67,847,716,023 - - 67,847,716,023
Special watch-list - - - -
Non performing loan - - - -
67,847,716,023 - - 67,847,716,023
Allowance for impairment losses )33,418,324( - - )33,418,324(
Carrying amount 67,814,297,699 - - 67,814,297,699

December 31, 2023

Stage 1 Stage 2 Stage 3
Loans and credit facilities to Banks Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list - 856,058,261 - 856,058,261
Special watch-list - 30,349,887 - 30,349,887
Non performing loan - - - -
- 886,408,148 - 886,408,148
Allowance for impairment losses - )1,670,812( - )1,670,812(
Carrying amount - 884,737,336 - 884,737,336

December 31, 2022

Stage 1 Stage 2 Stage 3
Loans and credit facilities to Banks Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list - - - -
Special watch-list - - - -
Non performing loan - - - -
- - - -
Allowance for impairment losses - - - -
Carrying amount - - - -

December 31, 2023

Stage 1 Stage 2 Stage 3
Retail loans Total
12-Months Life time Life time
Credit rating
Good debts 49,658,531,618 - - 49,658,531,618
Normal watch-list 1,482,408,419 - - 1,482,408,419
Special watch-list - 1,809,162,645 - 1,809,162,645
Non performing loan - - 1,009,880,460 1,009,880,460
51,140,940,037 1,809,162,645 1,009,880,460 53,959,983,142
Allowance for impairment losses )245,166,104( )143,779,975( )883,924,099( )1,272,870,178(
Carrying amount 50,895,773,933 1,665,382,670 125,956,361 52,687,112,964

December 31, 2022

Stage 1 Stage 2 Stage 3
Retail loans Total
12-Months Life time Life time
Credit rating
Good debts 41,827,699,110 - - 41,827,699,110
Normal watch-list 1,779,523,255 - - 1,779,523,255
Special watch-list - 695,145,315 - 695,145,315
Non performing loan - - 924,627,665 924,627,665
43,607,222,365 695,145,315 924,627,665 45,226,995,345
Allowance for impairment losses )291,012,829( )81,531,385( )845,342,229( )1,217,886,443(
Carrying amount 43,316,209,536 613,613,930 79,285,436 44,009,108,902

- 24 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2023

Stage 1 Stage 2 Stage 3
Corporate loans Total
12-Months Life time Life time
Credit rating
Good debts 178,156,629,737 3,675,574,820 - 181,832,204,557
Normal watch-list 28,267,715 17,272,626,060 - 17,300,893,775
Special watch-list - 1,898,918,796 - 1,898,918,796
Non performing loan - - 13,584,814,288 13,584,814,288
178,184,897,452 22,847,119,676 13,584,814,288 214,616,831,416
Allowance for impairment losses )1,387,991,908( )4,487,617,751( )8,785,969,267( )14,661,578,926(
Carrying amount 176,796,905,544 18,359,501,925 4,798,845,021 199,955,252,490

December 31, 2022

Stage 1 Stage 2 Stage 3
Corporate loans Total
12-Months Life time Life time
Credit rating
Good debts 147,083,343,632 10,724,134,623 - 157,807,478,255
Normal watch-list 39,756,632 11,373,030,262 - 11,412,786,894
Special watch-list - 5,885,319,247 - 5,885,319,247
Non performing loan - - 10,435,407,052 10,435,407,052
147,123,100,264 27,982,484,132 10,435,407,052 185,540,991,448
Allowance for impairment losses )802,778,336( )4,166,720,386( )7,815,098,134( )12,784,596,856(
Carrying amount 146,320,321,928 23,815,763,746 2,620,308,918 172,756,394,592

December 31, 2023

Debt instruments at fair value through other Stage 1 Stage 2 Stage 3
Total
comprehensive income 12-Months Life time Life time
Credit rating
Good debts 7,622,400,264 - - 7,622,400,264
Normal watch-list 7,041,645,586 - - 7,041,645,586
Special watch-list - - - -
Non performing loan - - - -
14,664,045,850 - - 14,664,045,850
Allowance for impairment losses )710,128( - - )710,128(
Carrying amount - fair value 14,664,045,850 - - 14,664,045,850

December 31, 2022

Debt instruments at fair value through other Stage 1 Stage 2 Stage 3
Total
comprehensive income 12-Months Life time Life time
Credit rating
Good debts 4,147,015,624 - - 4,147,015,624
Normal watch-list 10,298,205,909 - - 10,298,205,909
Special watch-list - - - -
Non performing loan - - - -
14,445,221,533 - - 14,445,221,533
Allowance for impairment losses )334,557( - - )334,557(
Carrying amount - fair value 14,445,221,533 - - 14,445,221,533

December 31, 2023

Debt instruments at amortized cost Stage 1 Stage 2 Stage 3
Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list 80,536,769,618 - - 80,536,769,618
Special watch-list - - - -
Non performing loan - - - -
80,536,769,618 - - 80,536,769,618
Allowance for impairment losses - - - -
Carrying amount 80,536,769,618 - - 80,536,769,618

- 25 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2022

Debt instruments at amortized cost Stage 1 Stage 2 Stage 3
Total
12-Months Life time Life time
Credit rating
Good debts - - - -
Normal watch-list 91,193,931,697 - - 91,193,931,697
Special watch-list - - - -
Non performing loan - - - -
91,193,931,697 - - 91,193,931,697
Allowance for impairment losses )2,437,472( - - )2,437,472(
Carrying amount 91,191,494,225 - - 91,191,494,225

The following table shows changes in impairment credit losses between the beginning and ending of the year as a result of these factors:
December 31, 2023
Stage 1 Stage 2 Stage 3
Due from banks Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 14,109,794 - - 14,109,794
New financial assets purchased or issued 46,019,860 - - 46,019,860
Financial assets have been matured or derecognised )14,109,794( - - )14,109,794(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 3,505,753 - - 3,505,753
Balance at the end of the year 49,525,613 - - 49,525,613

December 31, 2022

Stage 1 Stage 2 Stage 3
Due from banks Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 3,246,515 1,913,366 - 5,159,881
New financial assets purchased or issued 11,514,495 - - 11,514,495
Financial assets have been matured or derecognised )3,246,515( )1,913,366( - )5,159,881(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 2,595,299 - - 2,595,299
Balance at the end of the year 14,109,794 - - 14,109,794
December 31, 2023
Stage 1 Stage 2 Stage 3
Treasury bills Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 33,418,324 - - 33,418,324
New financial assets purchased or issued 97,697,744 - - 97,697,744
Financial assets have been matured or derecognised )33,418,324( - - )33,418,324(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 8,290,444 - - 8,290,444
Balance at the end of the year 105,988,188 - - 105,988,188

- 26 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2022

Stage 1 Stage 2 Stage 3
Treasury bills Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 11,532,464 - - 11,532,464
New financial assets purchased or issued 26,544,294 - - 26,544,294
Financial assets have been matured or derecognised )11,532,464( - - )11,532,464(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 6,874,030 - - 6,874,030
Balance at the end of the year 33,418,324 - - 33,418,324

December 31, 2023

Stage 1 Stage 2 Stage 3
Loans and credit facilities to Banks Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 - - - -
New financial assets purchased or issued - 1,671,545 - 1,671,545
Financial assets have been matured or derecognised - - - -
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences - )733( - )733(
Balance at the end of the year - 1,670,812 - 1,670,812

December 31, 2022

Stage 1 Stage 2 Stage 3
Loans and credit facilities to Banks Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 - - - -
New financial assets purchased or issued - - - -
Financial assets have been matured or derecognised - - - -
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences - - - -
Balance at the end of the year - - - -

December 31, 2023

Stage 1 Stage 2 Stage 3
Retail loans Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 291,012,829 81,531,385 845,342,229 1,217,886,443
Net impairment loss recognized during the year )45,846,725( 46,755,371 231,460,839 232,369,485
Loans written-off during the year - - )192,884,225( )192,884,225(
Collections of loans previously written-off - 15,493,219 - 15,493,219
Foreign exchange translation differences - - 5,256 5,256
Balance at the end of the year 245,166,104 143,779,975 883,924,099 1,272,870,178
December 31, 2022
Stage 1 Stage 2 Stage 3
Retail loans Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 177,646,277 95,458,695 594,044,091 867,149,063
Net impairment loss recognized during the year 113,366,552 )26,246,307( 288,511,793 375,632,038
Loans written-off during the year - - )37,221,369( )37,221,369(
Collections of loans previously written-off - 12,318,997 - 12,318,997
Foreign exchange translation differences - - 7,714 7,714
Balance at the end of the year 291,012,829 81,531,385 845,342,229 1,217,886,443

- 27 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2023

Stage 1 Stage 2 Stage 3
Corporate loans Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 802,778,336 4,166,720,386 7,815,098,134 12,784,596,856
New financial assets purchased or issued 430,997,812 741,235,787 - 1,172,233,599
Financial assets have been matured or derecognised )305,744,235( )1,555,814,710( )231,852,284( )2,093,411,229(
Transfer to stage 1 119,775,858 )119,552,769( )223,089( -
Transfer to stage 2 )17,448,519( 17,448,519 - -
Transfer to stage 3 )1,908,505( )1,911,814,459( 1,913,722,964 -
Changes in the probability of failure and loss in the event
264,477,956 2,604,277,032 3,303,580,713 6,172,335,701
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - )7,011,166( )4,419,853,592( )4,426,864,758(
Collections of loans previously written-off - 58,715,474 - 58,715,474
Foreign exchange translation differences 95,063,205 493,413,657 405,496,421 993,973,283
Balance at the end of the year 1,387,991,908 4,487,617,751 8,785,969,267 14,661,578,926

December 31, 2022

Stage 1 Stage 2 Stage 3
Corporate loans Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 886,925,221 3,683,232,793 4,574,017,535 9,144,175,549
New financial assets purchased or issued 328,870,886 481,467,025 - 810,337,911
Financial assets have been matured or derecognised )252,915,780( )944,216,369( )115,081,502( )1,312,213,651(
Transfer to stage 1 19,088,318 )19,088,318( - -
Transfer to stage 2 )90,142,582( 90,142,582 - -
Transfer to stage 3 )7,420,763( )1,178,281,275( 1,185,702,038 -
Changes in the probability of failure and loss in the event
)218,246,498( 1,454,704,324 2,538,005,908 3,774,463,734
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - )169,436( )972,010,472( )972,179,908(
Collections of loans previously written-off - 31,573,983 - 31,573,983
Foreign exchange translation differences 136,619,534 567,355,077 604,464,627 1,308,439,238
Balance at the end of the year 802,778,336 4,166,720,386 7,815,098,134 12,784,596,856

December 31, 2023

Debt instruments at fair value through other Stage 1 Stage 2 Stage 3
Total
comprehensive income 12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 334,557 - - 334,557
New financial assets purchased or issued 225,104 - - 225,104
Financial assets have been matured or derecognised )12,956( - - )12,956(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
163,423 - - 163,423
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences - - - -
Balance at the end of the year 710,128 - - 710,128

December 31, 2022

Debt instruments at fair value through other Stage 1 Stage 2 Stage 3
Total
comprehensive income 12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 105,685 - - 105,685
New financial assets purchased or issued 136,826 - - 136,826
Financial assets have been matured or derecognised )994( - - )994(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
93,040 - - 93,040
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences - - - -
Balance at the end of the year 334,557 - - 334,557

- 28 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

December 31, 2023

Stage 1 Stage 2 Stage 3
Debt instruments at amortized cost Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2023 2,437,472 - - 2,437,472
New financial assets purchased or issued - - - -
Financial assets have been matured or derecognised )3,043,790( - - )3,043,790(
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
- - - -
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 606,318 - - 606,318
Balance at the end of the year - - - -
December 31, 2022
Stage 1 Stage 2 Stage 3
Debt instruments at amortized cost Total
12-Months Life time Life time
Allowance for impairment losses at January 01, 2022 5,457,439 - - 5,457,439
New financial assets purchased or issued - - - -
Financial assets have been matured or derecognised - - - -
Transfer to stage 1 - - - -
Transfer to stage 2 - - - -
Transfer to stage 3 - - - -
Changes in the probability of failure and loss in the event
)3,681,563( - - )3,681,563(
of failure and the balance exposed to failure
Changes on model assumptions and methodology - - - -
Loans written-off during the year - - - -
Foreign exchange translation differences 661,596 - - 661,596
Balance at the end of the year 2,437,472 - - 2,437,472

Off balance sheet items exposed to credit risks December 31, 2023 December 31, 2022
Financial guarantees 255,000 255,000
L/Cs 4,356,626,045 3,206,343,484
Accepted papers 1,370,130,079 1,878,129,718
L/Gs 65,307,349,039 49,406,278,293
Total 71,034,360,163 54,491,006,495

Commitments for credit facilities have a carrying amount of EGP 30,758,471,259 at the end of current reporting year against EGP 24,355,577,867 in
the prior year.

The preceding table shows the maximum limit exposure to risks at the end of December 2023 and December, 2022 without taking into consideration
collaterals held by the bank, if any. For financial position items, amounts stated depend on the net carrying amount shown in the financial position.

The preceding table related to financial position items exposed to credit risks shows that 50% of the maximum limit exposed to credit risk at the end
of current reporting year is attributable to loans and credit facilities to customers and Banks against 55% at the end of the prior year, investments in
debt instruments constitute 19% against 27% at the end of the prior year and treasury bills constitute 30% against 17% at the end of the prior year.
The management is confident of its ability to maintain control on an ongoing basis and maintain the minimum credit risk resulting from loan
portfolio, facilities, and debt instruments based on the following facts:
- 93% of the loans and credit facilities portfolio at the end of the current reporting year comprises loans and credit facilities classified at the top 2
categories of the internal rating against 92% at the end of the prior year.
- 93% of the loan and credit facilities portfolio at the end of the current reporting year does not have arrears or indicators of impairment against 94% at
the end of the prior year.
-
Loans and credit facilities that are individually assessed for impairment (Stage 3) at the end of the current reporting year have a carrying amount of
EGP 14,594,694,748 . Impairment on these loans and credit facilities represents 66% of their carrying amount. Loans and credit facilities, that are
individually assessed for impairment at the end of the prior year had a carrying amount of EGP 11,360,034,717 and their impairment represents 76%
of such carrying amount.

- The Bank applied more prudential selection process on granting loans and credit facilities during the current reporting year ended December 31, 2023.

- 97% of investments in debt instruments and treasury bills at the end of the current reporting year comprise local sovereign debt instruments against
98% at the end of the prior year.

- 29 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(A/6) Loans and credit facilities

Balances of loans and credit facilities in terms of credit risk rating are analyzed below:

December 31, 2023 December 31, 2022

Loans and credit Loans and credit Loans and credit Loans and credit
facilities to facilities to banks facilities to facilities to banks
customers customers
Neither have arrears nor impaired 250,455,473,311 886,408,148 216,562,122,259 -
Have arrears but not impaired 3,526,646,499 - 2,845,829,817 -
Impaired 14,594,694,748 - 11,360,034,717 -
Total 268,576,814,558 886,408,148 230,767,986,793 -
Less: Allowance for impairment losses )15,934,449,104( )1,670,812( )14,002,483,299( -
Less: Segregated interest )205,723( - )205,721( -
Less: Unearned discount & deferred income )174,377,003( - )174,717,553( -
Net 252,467,782,728 884,737,336 216,590,580,220 -

Total credit allowance for loans and credit facilities to customers at the end of the current reporting year amounted to EGP 15,934,449,104 (EGP 14,002,483,299 at the end
of the prior year) of which EGP 9,669,893,366 represent impairment in stage three (EGP 8,660,440,363 at the end of the prior year) and EGP 6,264,555,738 represent
impairment for stage one and stage two in the credit portfolio (EGP 5,342,042,936 at the end of the prior year).

Note (20-A) includes additional information on the allowance for impairment losses for Loans and credit facilities to customers during the current reporting year.

During the current accounting year, the loans and credit facilities to customers portfolio increase by 16% due to the increase on lending activity.

Loans and credit facilities which do not have arrears and are not subject to impairment

The credit quality of Loans and credit facilities that not subject to impairment is assessed by reference to the bank’s internal rating.

Loans and credit facilities to customers

December 31, 2023
Retail

Rating Overdrafts Credit cards Personal loans Real estate loans Total

Good debts 4,859,425,996 1,753,128,662 37,359,507,787 5,686,469,173 49,658,531,618

Normal watch-list 33,957 - - - 33,957
Special watch-list 29,359 - - - 29,359
Total 4,859,489,312 1,753,128,662 37,359,507,787 5,686,469,173 49,658,594,934

Corporate
Syndicated Loans
Overdrafts Direct loans Other loans Total
and facilities
Good debts 96,964,204,859 62,427,451,670 19,485,185,230 2,879,140,451 181,755,982,210
Normal watch-list 10,591,807,260 3,859,721,738 2,754,783,730 - 17,206,312,728
Special watch-list 578,968,504 1,255,614,935 - - 1,834,583,439
Total 108,134,980,623 67,542,788,343 22,239,968,960 2,879,140,451 200,796,878,377

Guaranteed loans are not considered subject to impairment for the non-performing category after taking into consideration the collectability of the guarantees.

December 31, 2022

Retail

Rating Overdrafts Credit cards Personal loans Real estate loans Total
Good debts 4,064,999,319 1,432,259,251 31,805,333,451 4,525,107,089 41,827,699,110
Normal watch-list 978,961 - - - 978,961
Special watch-list 1,498,279 - - - 1,498,279
Total 4,067,476,559 1,432,259,251 31,805,333,451 4,525,107,089 41,830,176,350

Corporate

Syndicated Loans
Overdrafts Direct loans Other loans Total
and facilities

Good debts 83,154,163,236 50,550,551,781 21,342,819,392 2,662,304,876 157,709,839,285

Normal watch-list 4,714,642,763 5,471,746,222 1,068,595,185 7,600,000 11,262,584,170
Special watch-list 1,695,340,772 4,001,200,228 2,281,425 60,700,029 5,759,522,454
Total 89,564,146,771 60,023,498,231 22,413,696,002 2,730,604,905 174,731,945,909

Guaranteed loans are not considered subject to impairment for the non-performing category after taking into consideration the collectability of the guarantees.

- 30 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

Loans and credit facilities which have arrears but are not subject to impairment

These are loans and credit facilities with past-due installments but are not subject to impairment, unless information has otherwise indicated. Loans and
credit facilities to customers which have arrears but are not subject to impairment are analyzed below:

December 31, 2023

Retail

Overdrafts Credit cards Personal loans Real estate loans Total

Up to 30 days - 101,942,766 1,282,585,399 97,846,297 1,482,374,462

More than 30 – 60 days - 116,481,067 1,403,535,791 117,244,836 1,637,261,694
More than 60 – 90 days - 7,651,178 159,001,962 5,218,452 171,871,592
Total - 226,075,011 2,845,123,152 220,309,585 3,291,507,748

Corporate
Syndicated
Overdrafts Direct loans Loans and Other loans Total
facilities
Up to 30 days 653,773 48,298,011 - - 48,951,784
More than 30 – 60 days 243,038 29,751,710 - - 29,994,748
More than 60 – 90 days - 57,601,004 - - 57,601,004
More than 90 days - 98,591,215 - - 98,591,215
Total 896,811 234,241,940 - - 235,138,751

December 31, 2022

Retail

Overdrafts Credit cards Personal loans Real estate loans Total

Up to 30 days - 149,746,063 1,504,310,222 124,488,009 1,778,544,294

More than 30 – 60 days - 27,650,962 440,765,671 28,142,684 496,559,317
More than 60 – 90 days - 9,904,927 178,360,691 8,822,101 197,087,719
Total - 187,301,952 2,123,436,584 161,452,794 2,472,191,330

Corporate
Syndicated
Overdrafts Direct loans Loans and Other loans Total
facilities
Up to 30 days - 51,349,625 - - 51,349,625
More than 30 – 60 days - 69,246,667 - - 69,246,667
More than 60 – 90 days - 96,289,630 - - 96,289,630
More than 90 days 783,521 155,969,044 - - 156,752,565
Total 783,521 372,854,966 - - 373,638,487

Past due loans and credit facilities are those amounts, or any part thereof, which have fallen due but for which no payment has been received in accordance
with the contractual terms. These include arrears for periods more than one day.

Amounts shown in the note represent the whole balance of the loan or facility and not only the past due amounts. These do not include the remaining loans
and credit facilities of the same customer so long default has not fully or partially occurred on those loans.

On initial recognition of loans and credit facilities, the fair value of collaterals, if any, is assessed based on valuation methods used for similar assets but are
not recognized in the financial statements since these do not represent assets of the bank at that date. In subsequent periods, the fair value is updated to
reflect the market price or prices for similar assets.

-31
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

Loans and credit facilities which are individually impaired

Loans and credit facilities to customers

At the end of the current reporting year the carrying amount of loans and credit facilities, that are assessed to be individually impaired (Stage 3) excluding any cash flows
expected to arise from the associated guarantees, amounted to EGP 14,594,694,748 against EGP 11,360,034,717 at the end of the prior year.

The following table provides a breakdown of the balance of such loans and credit facilities which are individually impaired including the fair value of the collaterals shall
prevail when calculating the provisions.
December 31, 2023
Retail
Overdrafts Credit cards Personal loans Real estate loans Total
Loans which are individually impaired 59,858,741 37,692,884 848,670,128 63,658,707 1,009,880,460
Fair value of collaterals - - 1,081,980 - 1,081,980

Corporate
Syndicated Loans and
Overdrafts Direct loans Other loans Total
facilities
Loans which are individually impaired 2,674,450,290 10,846,103,882 2,660,087 61,600,029 13,584,814,288
Fair value of collaterals 234,336,583 338,848,222 - - 573,184,805

December 31, 2022

Retail

Overdrafts Credit cards Personal loans Real estate loans Total

Loans which are individually impaired 64,311,931 27,358,661 748,034,408 84,922,665 924,627,665
Fair value of collaterals - 20,000 144,199 - 164,199

Corporate
Syndicated Loans and
Overdrafts Direct loans Other loans Total
facilities
Loans which are individually impaired 965,730,380 9,469,676,672 - - 10,435,407,052
Fair value of collaterals 20,958,919 144,573,134 - - 165,532,053
Restructured Loans and credit facilities:

The Bank applies different types of restructuring policies to its loans and credit facilities, which include extending payment terms, executing forced management
programmes and applying prepayment and extension provisions to the loan. The applied restructuring policies depend on factors or criteria that indicate, in management
judgment that the counterparty’s continuous payment of the loan is unlikely to occur in the absence of such restructuring policies that are subject to ongoing review. Within
the bank renegotiated outstanding loans relate to long-term loans made to any type of clientele (retail and corporate loans clients).

Total renegotiated loans amounted to EGP 2,791,009,153 at the end of the current reporting year against EGP 1,663,199,766 at the end of the prior year. These balances do
not include any amounts whose commercial terms were renegotiated to preserve the quality of the bank’s relationship with its clients, including those terms pertaining to
loans interest rates and/or loans repayment periods .

The Bank practice calls for most clients whose loans have been renegotiated to be maintained in the “non-performing” category, as long as the bank remains uncertain of
their ability to meet their future commitments in accordance with the definition of default under Basel II.

Loans and credit facilities to customers

Corporate loans December 31, 2023 December 31, 2022
Overdrafts 31,232,271 24,874,678
Direct loans 2,759,776,882 1,638,325,088
Total 2,791,009,153 1,663,199,766

(A/7) Debt instruments, treasury bills, and other governmental notes

The following table shows a breakdown of debt instruments, treasury bills, and other governmental notes (excluding allowances for impairment) as per last rating:
Rating December 31, 2023 December 31, 2022
Egyptian Treasury Bills B- 152,211,434,928 67,847,716,023
Fair value through other comprehensive
income
Other debt instruments Unrated 2,507,159,381 1,121,285,192
Egyptian debt instruments B- 7,041,645,586 10,298,205,909
US Treasury Bonds AA+ 5,115,240,883 3,025,730,432
Amortized cost
Egyptian Treasury Bonds B- 80,536,769,618 91,193,931,697
Total 247,412,250,396 173,486,869,253

(A/8) Acquisition of collaterals

The Bank acquire foreclosed asset as acquisition of guarantees as following:

Asset type
December 31, 2023 December 31, 2022
Building 18,480,000 115,000,000

Assets acquired are classified under the other Assets item in the financial position. These assets are sold or used for the purposes of the Bank whenever practicable.

- 32 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

(A/9) Concentration of risks of financial assets exposed to credit risks

(Geographical segments)

The following table provides a breakdown of the gross amount of the most significant credit risk limits to which the bank is exposed at the end of the current reporting year (excluding allowances for impairment).
The gross amount of all financial assets including loans and credit facilities is segmented into the geographical regions of the bank’s clients except for investments in foreign treasury bonds which are reported in
the “other countries” category.

Arab Republic of Egypt

Other
Red Sea & Upper Total
Great Cairo Alex Delta Total countries
Egypt
Treasury bills 152,211,434,928 - - - 152,211,434,928 - 152,211,434,928
Loans and credit facilities
37,602,767 - 848,805,381 - 886,408,148 - 886,408,148
to banks

Loans and credit

facilities to customers
Retail loans

Overdrafts 3,001,690,929 1,330,031,135 425,131,080 162,494,909 4,919,348,053 - 4,919,348,053

Credit cards 1,499,948,781 235,400,156 204,120,697 77,426,923 2,016,896,557 - 2,016,896,557

Personal loans 29,927,250,092 3,875,129,033 5,638,987,144 1,611,934,798 41,053,301,067 - 41,053,301,067

Real estate loans 4,603,900,867 259,933,666 452,382,729 654,220,203 5,970,437,465 - 5,970,437,465

Corporate loans

Overdrafts 85,279,535,805 14,081,528,832 7,691,300,816 3,757,962,271 110,810,327,724 - 110,810,327,724

Direct loans 54,841,838,104 11,273,459,075 9,164,658,721 3,343,178,265 78,623,134,165 - 78,623,134,165

Syndicated loans and
20,576,002,045 310,675,354 1,257,342,586 98,609,062 22,242,629,047 - 22,242,629,047
facilities
Other loans 2,746,809,417 79,185,174 84,745,889 30,000,000 2,940,740,480 - 2,940,740,480

Financial investments

Debt instruments 90,085,574,585 - - - 90,085,574,585 5,115,240,883 95,200,815,468

Other financial assets 6,859,176,254 185,462,074 157,336,145 43,491,838 7,245,466,311 66,252,009 7,311,718,320
Total at the end of the
451,670,764,574 31,630,804,499 25,924,811,188 9,779,318,269 519,005,698,530 5,181,492,892 524,187,191,422
current year
Total at the end of the
347,879,827,871 27,845,449,979 22,652,678,935 9,180,203,053 407,558,159,838 3,051,308,710 410,609,468,548
comparative year

(Business segments)

The following table provides a breakdown of the gross amount of the most significant credit risk limits to which the bank is exposed at the end of the current reporting year (excluding allowances for impairment).
The gross amount of all financial assets is segmented into business sectors in which the bank’s clients operate.

Agricultural Trading Service Governmental Foreign Other

Industrial entities Individuals Total
entities entities entities sector Governments activities
Treasury bills - - - - 152,211,434,928 - - - 152,211,434,928

Loans and credit facilities

- - - - - - 886,408,148 - 886,408,148
to banks

Loans and credit

facilities to customers

Retail loans

Overdrafts - - - - - - - 4,919,348,053 4,919,348,053

Credit cards - - - - - - - 2,016,896,557 2,016,896,557

Personal loans - - - - - - - 41,053,301,067 41,053,301,067

Real estate loans - - - - - - - 5,970,437,465 5,970,437,465

Corporate loans

Overdrafts 2,065,672,355 47,426,913,106 17,769,761,200 43,547,981,063 - - - - 110,810,327,724

Direct loans 1,254,014,126 54,674,370,939 10,877,039,127 11,817,709,973 - - - - 78,623,134,165

Syndicated loans and
129,286,319 18,561,249,364 509,281,428 3,042,811,936 - - - - 22,242,629,047
facilities
Other loans - 1,162,712,607 332,904,845 1,048,548,275 - - 396,574,753 - 2,940,740,480
Financial investments
Debt instruments - - - 2,507,159,381 87,578,415,204 5,115,240,883 - - 95,200,815,468

Other financial assets 25,001,134 883,094,607 213,761,645 521,665,284 5,210,795,076 66,252,009 - 391,148,565 7,311,718,320
Total at the end of
3,473,973,934 122,708,340,623 29,702,748,245 62,485,875,912 245,000,645,208 5,181,492,892 1,282,982,901 54,351,131,707 524,187,191,422
current year
Total at the end of the
3,086,492,450 95,551,288,783 30,109,330,203 59,388,915,540 173,578,304,120 3,069,887,739 205,219,101 45,620,030,612 410,609,468,548
comparative year

- 33 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(B) Market Risk

Market risk is the risk of losses resulting from unfavorable changes in market parameters. It contains all trading book transactions as well as some
banking book portfolios valued using the mark-to-market approach. The bank's policy on market risk transactions is “Prudent” in that:

- Products subject to “market risk” which are offered by the Bank to its customers are restricted to cash and simple financial derivatives such as interest
rate swaps and foreign exchange swap and forward contracts.

- The only trading activity conducted by the Bank is over-night foreign exchange position, within a prudent limit that cannot be exceeded.

- Open positions must be centrally managed and matched.

The front-office managers assume primary responsibility in terms of risk exposure; however, management lies with an independent structure being the
Market Risk Controller (MRC), within Risk Division. The main function of MRC is the ongoing analysis, independently from the trading rooms, of the
positions and risks linked to the market activities of the bank and the comparison of these positions to the allowed limits. The MRC carries out the
following functions:

- Daily and periodic analysis and reporting (independently from the front office) of the exposures, stress tests and risks incurred by the bank’s market
activities and comparison of said exposure and risks with the pre-set limits.

- Definition of the risk-measurement methods and control procedures, approval of the valuation methods used to calculate and monitor risks, including
those made on a gross or nominal basis.

- Management of the approval process for limits.

- Reviewing new products or services from market risk aspect under New Product Committee to ensure that market risks are properly identified and
controlled.
At the proposal of this MRC and Head of Risk Division, the board sets the levels of authorized risk by type of market activity and makes the main
decisions concerning bank’s market risk management.

(B/1) Methods of Measuring Market Risk and Defining Exposure Limits

As a part of managing market risk, the Bank has several hedging strategies and enters into interest rate swaps to balance the risks inherent in debt
instruments and fixed rate long term loans, if the fair value option is applied. The Bank uses a lot of methods to control market risk such as stress testing
"ST".

Stress testing gives indicator of the loss volume expected that may arise from sharp adverse circumstances. Stress testing is designed to match business
using standard analysis for specific scenarios. The Bank sets a maximum limit of expected losses of 10% from authorized limit according to internal bank
rules.

(B/2) Stress test for foreign exchange risk

The following table provides FX position (whether short or long) for all balance sheet items and off balance sheet items.

Currency Short/Long FX positions FX short positions FX long positions Expected loss at 10%

USD 120,830,215 - 120,830,215 12,083,022

EUR 102,769 - 102,769 10,277
GBP 149,820 - 149,820 14,982
JPY 48,484 - 48,484 4,848
CHF 226,274 - 226,274 22,627
DKK )132,518( )132,518( - )13,252(
NOK 73,251 - 73,251 7,325
SEK 114,693 - 114,693 11,469
CAD 52,671 - 52,671 5,267
AUD 127,521 - 127,521 12,752
AED 653,889 - 653,889 65,389
BHD 2,623 - 2,623 262
KWD 284,474 - 284,474 28,447
OMR 4,897 - 4,897 490
QAR 215,338 - 215,338 21,534
SAR 763,344 - 763,344 76,334
CNY 32,433 - 32,433 3,243
EGP )123,550,178( )123,550,178( - -
Maximum expected loss at December 31, 2023 12,355,016
Maximum expected loss at December 31, 2022 )10,193,413(

- 34 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(B/3) Foreign exchange rate volatility risk (concentration of FX risk on financial instruments)
The Bank is exposed to foreign exchange rate volatility risk in terms of the financial position and cash flows. The board of directors set limits for foreign exchange risk
at the total value of positions at the end of the day and during the day when timely control is exercised. The following table summarizes the bank’s exposure to the risks
of fluctuations in foreign exchange rates at the end of the current reporting year. This table includes the carrying amounts of the financial instruments in terms of their
relevant currencies and in EGP equivalent.
Other
EGP USD EUR GBP Total
currencies
Financial assets

Cash and due from Central Bank of Egypt (CBE) 60,211,928,308 940,125,619 321,090,180 57,754,511 27,648,473 61,558,547,091

Due from banks 774,252,656 31,253,874,867 9,348,004,472 813,932,028 420,759,857 42,610,823,880

Treasury bills 140,066,594,146 12,038,852,594 - - - 152,105,446,740
Loans and credit facilities to Banks - 877,485,845 - - 7,251,491 884,737,336
Loans and credit facilities to customers 186,884,907,909 61,669,173,290 3,759,850,780 32,987,338 120,863,411 252,467,782,728
Financial investments

Fair value through other comprehensive income 10,089,925,206 6,200,847,935 2,188,469 - - 16,292,961,610

Amortized cost 80,536,769,618 - - - - 80,536,769,618

Fair value through profit or loss 101,198,551 - - - - 101,198,551
Other financial assets 6,969,572,507 318,226,289 16,790,062 873,258 68,601 7,305,530,717
Total financial assets 485,635,148,901 113,298,586,439 13,447,923,963 905,547,135 576,591,833 613,863,798,271

Financial liabilities
Due to banks 4,465,496,992 515,123,281 61,761,615 45,730,043 - 5,088,111,931
Customer deposits 415,600,617,091 99,992,719,460 13,243,212,721 855,725,780 426,538,653 530,118,813,705
Financial derivatives 3,923,014 2,341,708 - - - 6,264,722
Other loans 115,013,233 3,880,177,650 - - - 3,995,190,883
Other financial liabilities 2,229,033,946 392,542,042 13,031,066 2,521,206 323,289 2,637,451,549
Total financial liabilities 422,414,084,276 104,782,904,141 13,318,005,402 903,977,029 426,861,942 541,845,832,790

Net financial position 63,221,064,625 8,515,682,298 129,918,561 1,570,106 149,729,891 72,017,965,481

At the end of the comparative year

Total financial assets 383,835,944,248 77,176,206,464 8,544,106,399 637,491,372 430,928,546 470,624,677,029
Total financial liabilities 335,133,550,535 70,826,083,628 8,477,826,150 633,416,463 451,106,143 415,521,982,919
Net financial position 48,702,393,713 6,350,122,836 66,280,249 4,074,909 )20,177,597 ( 55,102,694,110

(B/4) Structural Interest Rate Risk

- Structural interest rate risk is linked to commercial activities and corporate center transactions. Structural interest rate risk arises from residual gaps (surplus or deficit)
of the bank’s fixed-rate positions. The general principle is to reduce structural interest rate risk to the maximum extent.

- Whenever possible, commercial operations are hedged against interest rate, either through micro-hedging (individual hedging of each commercial transaction) or
macro-hedging techniques (hedging of portfolios of similar commercial transactions within the treasury department).

- Consequently, structural interest rate risk only results from the residual positions remaining after hedging. The absence of interest rate derivative market in Egyptian
Pound makes it difficult to hedge positions in this currency.

Organization of the management of Structural Interest Rate risks

- Identification and measurement of the risk is carried out by the Assets & Liabilities Management Unit (ALMU) which comes under the authority of the Bank's finance
department.
- Risk assessment, limits and corrective actions are decided by the Assets & Liabilities Management Committee (ALCO) headed by the Chief Executive Officer with the
participation of the Managing Directors, the Chief Financial Officer and the Commercial Divisions Heads, the Branch Network Head, the General Secretary and the Head
of the Dealing Room.
- Execution of the necessary actions decided by the ALCO for the rectification of the gaps is carried out by the dealing room through the financial market. Progress is
reported and notified to the ALMU/ALCO.
Assets & Liabilities Management Committee (ALCO) duties
- Decide on the limits for the sensitivity.
- Review, validate and approve any assumptions used for the identification and measurements of the respective risks.
- Review interest rate Gap and sensitivity position reported through ALMU.
- Assess, amend and approve recommendations for bringing the Gap (if any) within the previously approved limits.

Assets & Liabilities Management Unit (ALMU) duties

- Document and maintain the respective risks management policy as approved by the ALCO.
- Construct and continuously elaborate on the models used for the identification and measurement of the respective risks.
- Report to ALCO on the respective exposures and the evolution of such exposures over time.
- Provide recommendations for bringing the gaps within limits.
- Follow up and notify ALCO of the progress made in the implementation of the ALCO decisions.

- 35 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

Dealing Room duties

Provide frequent updates on markets movements.

Execute and Report progress of ALCO approved recommendations.
Co-ordinate with ALMU on the spontaneous hedging of special transactions according to ALCO approved policy and recommendations.

Bank's Objective of Interest Rate Risk Management

The Bank's aim is to reduce exposure to structural interest rate risk as much as possible.
Any residual interest rate risk exposure must comply with the sensitivity limits approved by the ALCO. Sensitivity is defined as the variation in the net present value of
future residual fixed-rate positions for a 1% parallel increase in the yield curve. Adherence to applicable limits is closely monitored.

Measurement and monitoring of structural interest rate risks

In order to quantify the Bank's exposure to structural interest rate risks, all fixed rate assets and liabilities on future maturities are analyzed to identify any gaps.

On a quarterly basis, assets and liabilities are analyzed independently, without any prior matching. Maturities on outstanding positions are determined on the basis of the
contractual terms of the transactions and models of historic client behavior (e.g. saving accounts) as well as conventional assumptions for some balance sheet items (e.g.
equity).

Once the gaps have been identified for each major currency, the sensitivity is calculated as the variation of the net present value of the fixed rate position of an
instantaneous parallel shift of the 1% in the yield curve of each major currency. The cumulative sensitivity for all currencies as well as for any single currency should not
exceed the above mentioned limit.

The following table summarizes the extent to which the bank is exposed to the risks of fluctuations in the interest rate including the carrying amount of the financial
instruments distributed on the basis of the rate prevailing in re-pricing dates or maturity dates, whichever is earlier.

More than one More than 3

More than one
At the end of the year Up to one month month up to 3 months up to More than 5 years Interest free Total
year up to 5 years
months one year
Financial assets
Cash and due from Central
- - - - - 61,558,547,091 61,558,547,091
Bank of Egypt (CBE)
Due from banks 29,232,524,036 11,281,696,629 - - - 2,096,603,215 42,610,823,880
Treasury bills 29,447,034,209 39,153,867,264 83,504,545,267 - - - 152,105,446,740
Loans and credit facilities to
7,251,491 877,485,845 - - - - 884,737,336
Banks
Loans and credit facilities to
199,374,219,308 10,020,637,752 10,589,786,642 24,869,692,563 7,613,446,463 - 252,467,782,728
customers
Financial investments
Fair value through other
264,284,324 662,875,056 3,902,247,138 9,834,639,333 - 1,628,915,759 16,292,961,610
comprehensive income
Amortized cost 3,363,378,177 5,036,615,744 18,202,595,746 50,455,642,637 3,478,537,314 - 80,536,769,618
Fair value through profit or
- - - - - 101,198,551 101,198,551
loss
Other financial assets - - - - - 7,305,530,717 7,305,530,717
Total financial assets 261,688,691,545 67,033,178,290 116,199,174,793 85,159,974,533 11,091,983,777 72,690,795,333 613,863,798,271
IRS (notional amount) 656,478,377 173,773,686 - - - - 830,252,063

Financial liabilities
Due to banks 4,510,391,561 - - - - 577,720,370 5,088,111,931
Customer deposits 276,629,454,649 68,780,613,817 54,787,563,283 71,383,107,857 202,309,367 58,335,764,732 530,118,813,705
Financial derivatives - - - - - 6,264,722 6,264,722
Other loans 3,880,919,480 - 83,117,792 31,153,611 - - 3,995,190,883
Other financial liabilities - - - - - 2,637,451,549 2,637,451,549

Total financial liabilities 285,020,765,690 68,780,613,817 54,870,681,075 71,414,261,468 202,309,367 61,557,201,373 541,845,832,790
IRS (notional amount) 830,252,063 - - - - - 830,252,063

Re-pricing gap )23,505,847,831( )1,573,661,841 ( 61,328,493,718 13,745,713,065 10,889,674,410 11,133,593,960 72,017,965,481

At the end of the comparative year

Total financial assets 206,894,762,689 40,207,985,358 79,397,642,484 78,951,826,350 13,727,533,368 51,444,926,780 470,624,677,029
IRS (notional amount) 643,328,409 262,898,623 262,898,623 664,978,870 - - 1,834,104,525
Total financial liabilities 195,751,293,149 36,012,940,088 62,320,057,695 68,413,645,468 259,081,025 52,764,965,494 415,521,982,919
IRS (notional amount) 1,834,104,525 - - - - - 1,834,104,525
Re-pricing gap 9,952,693,424 4,457,943,893 17,340,483,412 11,203,159,752 13,468,452,343 )1,320,038,714( 55,102,694,110

- 36 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

(C) Liquidity Risk

Liquidity risk is defined as the risk of not being able to meet cash flow or collateral requirements when they fall due and at a reasonable price.
The bank manages this exposure through modeling of its cash flow under several scenarios.

Organization of Liquidity Risk Management

Identification and measurement of the risk is carried out by the Assets & Liabilities Management Unit (ALMU) which comes under the authority of the bank's Finance
Department.
Risk assessment and corrective actions are decided by the Assets & Liabilities Management Committee (ALCO) headed by the Chief Executive Officer with the
participation of the Managing Directors, the Chief Financial Officer and the Commercial Divisions Heads, the Branch Network Head, the General Secretary and the Head
of the Dealing Room.
Execution of the necessary actions decided by the ALCO for the rectification of the gaps is carried out by the dealing room and/or the business lines. Progress is reported
and notified to the ALMU/ALCO.

Assets & Liabilities Management Committee (ALCO) duties

- Review, validate and approve any assumptions and scenarios used for the identification and measurements of the respective risks.
- Review the structured liquidity Gap reported by ALMU.
- Assess, amend and approve recommendations for funding strategy and/or the portfolio composition for the remedy of the gaps.

Assets & Liabilities Management Unit (ALMU) duties

- Document and maintain the respective risks' management policy as approved by the ALCO.
- Construct and continuously elaborate on the models used for the identification and measurement of the respective risks.
- Report to ALCO on the respective exposures and the evolution of such exposures over time.
- Follow up and notify ALCO of the progress made in the implementation of the ALCO decisions.
- Co-ordinate with the various business lines for funding needs and report potential impact on the liquidity gap.
- Test and advice on the potential impact of any new product offering on the structured liquidity positions.

Dealing Room duties

- Is responsible for managing short term liquidity.
- Provide frequent updates on markets' status and alerting signals of liquidity stretches.
- Execute and Report progress of ALCO approved recommendations.
- Communicate their funding needs to ALMU for the construction of the liquidity gap.

Bank's Objective of Liquidity Risk Management

The bank's objective is to finance its activities at the best possible rates under normal conditions and to ensure it can meet its obligations in the event of a crisis.
To this end, the main principles of the bank's liquidity management are as follows:
- Management of the short-term liquidity in accordance with the regulatory framework.
- Diversification of funding sources.
- Maintenance of a portfolio of liquid assets.

Measurement and monitoring of structural liquidity risks

The bank's liquidity management framework comprises the following processes:
- Regular assessment of the bank structural liquidity profile and its development over time.
- Monitoring of the diversification of funding sources.
- Assessment of the bank's funding needs on the basis of the budget forecasts in order to plan appropriate funding solutions.
Liquidity gaps are constructed by listing the respective on and off-balance sheet-items according to the currency of denomination and residual maturity. Maturities on
outstanding assets and liabilities are determined on the basis of the contractual terms of transactions, models of historic client behavior patterns (e.g. savings accounts)
as well as conventional assumptions relating to certain balance sheet items (e.g. equity).

Liquidity Risk
Liquidity risk represents difficulty encountering the bank in meeting its financial commitments upon maturity and refurbishing amounts withdrawn. This may results in
failure in fulfilling obligations related to depositors and meeting lending commitments.

December 31, 2023

More than one month More than 3 months More than one year up
Contractual maturities Up to one month More than 5 years Total
up to 3 months up to one year to 5 years
Financial liabilities
Due to banks 5,150,788,704 - - - - 5,150,788,704
Customer deposits 337,722,832,542 72,769,903,585 66,474,084,010 85,715,057,205 259,289,488 562,941,166,830
Other loans 3,898,046,942 30,198,642 194,642,600 116,731,166 - 4,239,619,350
Total financial liabilities 346,771,668,188 72,800,102,227 66,668,726,610 85,831,788,371 259,289,488 572,331,574,884

• All balances shown in the table above represent the undiscounted cash flows; therefore, it is not possible to match these figures with the corresponding items in the
statement of financial position.
• The spot foreign exchange rate and interest rate prevailing at that date are used in the above table.

December 31, 2022

More than one month More than 3 months More than one year up
Contractual maturities Up to one month More than 5 years Total
up to 3 months up to one year to 5 years
Financial liabilities
Due to banks 3,544,530,140 - - - - 3,544,530,140
Customer deposits 241,125,399,363 38,817,590,097 70,658,781,007 78,311,369,381 351,020,157 429,264,160,005
Other loans 450,068,301 26,326,734 559,970,380 2,704,540,387 - 3,740,905,802
Total financial liabilities 245,119,997,804 38,843,916,831 71,218,751,387 81,015,909,768 351,020,157 436,549,595,947
• All balances shown in the table above represent the undiscounted cash flows; therefore, it is not possible to match these figures with the corresponding items in the
statement of financial position.
• The spot foreign exchange rate and interest rate prevailing at that date are used in the above table.

Assets available to meet all liabilities and cover loan commitments include cash, balances with Central Banks, due from banks, treasury bills, other governmental notes
and Loans and credit facilities to banks and clients. Maturity term of percentage of loans to clients that are maturing within a year is extended in the normal course of
the bank’s business. Moreover, some debt instruments, treasury bills and other governmental notes are pledged to cover liabilities. The Bank has the ability to meet
unexpected net cash flows through selling securities, and finding other financing sources.

- 37 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

Cash flow derivatives

Derivatives settled on a gross-basis

The Bank is a party to derivative contracts that are settled on a gross-basis, in particular foreign exchange derivatives. The following table shows
derivative financial liabilities that shall be settled in gross distributed over the remaining periods of contractual maturities at the balance sheet date. The
amounts shown in the table represent the undiscounted cash flows.
December 31, 2023

More than one More than 3 More than one

Maturities for statement of financial Up to one
month up to 3 months up to year up to 5 More than 5 years Total
position items month
months one year years
Held for trading derivatives
Foreign exchange derivatives
Cash outflows 642,556,029 351,704,971 83,333,353 - - 1,077,594,353
Cash inflows 643,923,874 353,220,424 83,443,851 - - 1,080,588,149
December 31, 2022

More than one More than 3 More than one

Maturities for statement of financial Up to one
month up to 3 months up to year up to 5 More than 5 years Total
position items month
months one year years
Held for trading derivatives
Foreign exchange derivatives
Cash outflows 617,477,974 679,562,313 59,258,771 - - 1,356,299,058
Cash inflows 626,080,991 688,501,648 59,337,734 - - 1,373,920,373

Cash flow for Off-balance sheet items

December 31, 2023

More than one

Less than one More than 5
Maturities for off-balance sheet items year and less Total
year years
than 5 years
Financial guarantees 255,000 - - 255,000
Operating lease commitments 145,830,597 360,617,435 108,548,902 614,996,934
Capital commitments resulting from acquisition of property
1,121,252,067 - - 1,121,252,067
and equipment
Total 1,267,337,664 360,617,435 108,548,902 1,736,504,001

More than one

Less than one More than 5
year and less Total
year years
than 5 years
Commitments for credit facilities 27,442,713,794 3,063,129,759 252,627,706 30,758,471,259

December 31, 2022

More than one

Less than one More than 5
Maturities for off-balance sheet items year and less Total
year years
than 5 years

Financial guarantees 255,000 - - 255,000

Operating lease commitments 153,387,944 350,799,600 128,175,885 632,363,429
Capital commitments resulting from acquisition of property
1,002,721,195 - - 1,002,721,195
and equipment
Total 1,156,364,139 350,799,600 128,175,885 1,635,339,624

More than one

Less than one More than 5
year and less Total
year years
than 5 years
Commitments for credit facilities 21,804,382,319 2,551,195,548 - 24,355,577,867

- 38 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(D) Fair value of financial assets and liabilities and sources of fair value
(D/1) Financial instruments measured at fair value

Financial assets classified as trading financial assets at fair value with changes in fair value are measured in the statement of income under 'Net trading
income'.

Debt instruments classified as financial assets at fair value through other comprehensive income are measured at fair value with changes in fair value
recognized in the other comprehensive income statement under "fair value reserve".

For investments in equity instruments, equity securities listed on the stock exchange are measured at fair value in accordance with quoted market prices
on the date of the separate financial statements.

For non-listed shares, except for strategic investments, they are evaluated in one of the accepted techniques: discounted cash flow method multiples of
value "and the inclusion of the valuation differences in other comprehensive income within the" fair value reserve "; for strategic investments, the cost or
nominal value is the fair value of those investments.

The table below shows the financial assets and liabilities at fair value in the separate financial statements within the fair value hierarchy, based on the
levels of inputs that are essential for measuring the fair value as a whole:

Level 1:

The first level inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Bank can access on the measurement date.

Level 2:
The inputs of the second level are all inputs other than quoted prices within the first level and these inputs are observable for the asset or liability, directly
or indirectly.

Level 3:
The third level inputs are the unobservable inputs of the asset or liability.

December 31, 2023

Financial Assets Level 1 Level 2 Level 3 Total
US Treasury Bonds 5,115,240,883 - - 5,115,240,883
Other debt instruments - 2,507,159,381 - 2,507,159,381
Egyptian debt instruments 7,041,645,586 - - 7,041,645,586
Funds at fair value through other comprehensive income 75,625,755 - - 75,625,755
Funds at fair value through profit or loss 101,198,551 - - 101,198,551
Equity Instruments 174,854,480 - 1,378,435,525 1,553,290,005
Financial derivatives - - - -

December 31, 2022

Financial Assets Level 1 Level 2 Level 3 Total
US Treasury Bonds 3,025,730,432 - - 3,025,730,432
Other debt instruments - 1,121,285,192 - 1,121,285,192
Egyptian debt instruments 10,298,205,909 - - 10,298,205,909
Funds at fair value through other comprehensive income 55,682,165 - - 55,682,165
Funds at fair value through profit or loss 73,975,416 - - 73,975,416
Equity Instruments 187,691,889 - 1,092,365,143 1,280,057,032
Financial derivatives - 23,578,000 - 23,578,000

- 39 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(D/2) Financial instruments not measured at fair value

The following table summarizes the carrying amount and fair value of financial assets and liabilities that are not stated in the statement of financial
position at fair value:
Carrying amount Fair value
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Financial assets

Due from banks 42,610,823,880 30,225,100,450 42,610,823,880 30,225,100,450

Loans and credit facilities to Banks 884,737,336 - 877,070,284 -

Loans and credit facilities to customers 252,467,782,728 216,590,580,220 248,540,416,840 214,371,283,108

Financial investments at amortized Cost

Debt instruments 80,536,769,618 91,191,494,225 72,798,254,598 87,201,002,754
Financial liabilities:

Due to banks 5,088,111,931 3,521,728,022 5,088,111,931 3,521,728,022

Customer deposits 530,118,813,705 407,066,800,830 515,905,252,890 393,274,460,425

Other loans 3,995,190,883 3,459,330,313 3,995,190,883 3,459,330,313

Due from banks:

The carrying amount of variable interest rate of placements and deposits for one day represents reasonable estimate for its fair value. Fair value expected
for due to banks with free interest rate is the current value. Fair value expected for deposits bearing fixed interest rate is the current value for those
deposits as it is maturity is less than one year.
Loans and credit facilities to customers:
Loans and credit facilities are stated at the statement of financial position net of allowance for impairment losses.
Debt instruments at amortized cost:
The fair value of debt instruments is determined at the cost charged on the "Egyptian Treasury Bonds" according to Reuters announced at the end of the
financial year.
Customer deposits and due to other banks:
The estimated fair value for deposits of indefinite maturity, including free-interest rate deposits, represents the amount paid on demand.

(E) Capital management

For capital management purposes, the Bank’s capital includes total equity as reported in the statement of financial position plus some other elements that
are managed as capital. The bank manages its capital to ensure that the following objectives are achieved:

- Compliance with the legally imposed capital requirements in Egypt.

- Protecting the Bank’s ability to continue as a going concern and enabling it to generate yield for shareholders and other parties dealing with the Bank.

- Maintaining a strong capital base to enhance growth of the Bank’s operations.

- Capital adequacy and uses are reviewed by the bank’s management in accordance with the requirements of the regulatory authority represented by the
Central Bank of Egypt (CBE). Data is submitted and filed with the CBE on a quarterly basis. The CBE requires the Bank to comply with the following:

- Maintaining EGP 5 Billion as a minimum requirement for the issued and paid-up capital. The Bank's paid-up capital amounted to EGP 10,774,114,830 at the
end of the current year.

- Maintaining a minimum level of capital adequacy ratio of 10%, calculated as the ratio between total value of the capital elements, and the risk-weighted
average of the bank’s assets and contingent liabilities. Minimum level of capital adequacy ratio reached 12.50 % during current year, The Bank's capital
adequacy ratio reached 25.09% at the end of the current year (December 31, 2022: 21.79%) according to Basel II.

- 40 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

The numerator in the capital adequacy ratio according to Basel II comprise the following 2 tiers:

- Tier 1: basic capital which comprises paid-up capital (net of treasury stock), plus: retained earnings and reserves resulting from profit appropriations (other than general reserve for banking risks &
special reserve), less: any goodwill previously recognized and any carried forward losses, plus: the carrying amount of other comprehensve income.
- The interim net profit was incorporated in Tier 1 capital in accordance with the decision of Central Bank of Egypt Board of Directors held on 15 February 2017.
- Tier 2: subordinated capital which comprises with equivalent amount of the loans provision for debt instrument / Loans and credit facilities at stage 1 which does not exceed 1.25% from the total
risk-weighted average of assets and contingent liabilities, plus: the carrying amount of subordinated loans/deposits maturing over more than 5 years (provided that such carrying amount shall be
reduced by 20 % of its value in each of the last five years of their maturity), in addition to 45% from increase in fair value above the carrying amount of investments in subsidiaries and associates
and 45% from special reserve.

In calculating the numerator of the capital adequacy ratio, total value of Tier 2 should not exceed total value of Tier 1. Also, total value of subordinated loans (deposits) should not exceed 50 % of
Tier 1.

Assets are risk weighted at a range of 0 to 200%. Risk classification of these assets is based on the type of the debtor as to reflect the associated credit risk and after consideration of cash collaterals.
The same treatment is applied for the off-balance sheet items which shall be adjusted to reflect the contingent nature of and potential loss on these amounts.

Capital adequacy Standard had been prepared based on Basel II requirements, and Central Bank of Egypt Board of Directors had approved in its meeting held on December 18, 2012, which had been
issued on December 24, 2012 and in accordance with the instructions of the Central Bank of Egypt for the capital adequacy ratio (Basel II) issued during May 2019, And CBE instructions issued in
January 2021 regarding the adoption of Standardized Approach for mearuting operational risk starting from year 2022 to replace Basic Indicator Approach.
The tables below summarizes the compositions of Tier 1, Tier 2 and the capital adequacy ratio based on Basel II:
December 31, 2022
According to Basel II December 31, 2023
Restated**
Tier 1 capital
Share capital 10,774,114,830 10,774,114,830
General reserve 28,884,568,918 28,884,568,918
Legal reserve 3,296,885,849 3,296,885,849
Other reserves 43,050,621 43,050,621
Retained earnings 7,252,028,739 7,232,067,723
Net profit for the year 15,957,689,129 -
General risk reserve 21,453,923 21,453,923
Other comprehensive income )644,763,485( 236,973,781
Total deductions from capital invested )1,098,486,030( )815,687,591(
Total tier 1 capital 64,486,542,494 49,673,428,054
Tier 2 capital
45% from special reserve 16,761,150 16,761,150
Impairment provision for loans, debt instruments and contingent liabilities in stage one* 2,368,758,685 1,469,988,017
Total tier 2 capital 2,385,519,835 1,486,749,167
Total capital 66,872,062,329 51,160,177,221
Risk weighted assets and contingent liabilities:
Credit Risk 252,691,828,214 220,821,796,364
Market Risk 2,070,856 527,418
Operational Risk 13,850,135,473 13,931,603,333
Total risk weighted assets and contingent liabilities 266,544,034,543 234,753,927,115
Capital adequacy ratio for Tier 1 24.19% 21.16%
Capital adequacy ratio 25.09% 21.79%

* Provided it does not exceed 1.25% from total value of risk weighted assets and contingent liabilities.
** After 2022 profit distribution.
- Based on Consolidated financial statement after the disposal of insurance activity.

Leverage financial ratio

Central Bank of Egypt Board of Directors had approved in its meeting held on July 7, 2015 on special supervisory instructions related to leverage ratio which maintaining a minimum level of leverage
ratio of 3% to be reported in quarterly basis to be obligatory ratio started from year 2018.
This ratio will be included in Basel requirement Tier1 in order to maintain Egyptian Banking system strong and safe, as long to keep up with best international regulatory treatments.
Leverage financial ratio reflect relationship between Tier 1 for capital that is used in capital adequacy ratio (after exclusions) and other assets (on balance sheet and off-balance sheet) that are not
risk weighted assets.
Ratio Elements
I- The numerator elements
The numerator consists of Tier 1 for capital that is used in capital adequacy ratio (after exclusions) in accordance with the requirements of the regulatory authority represented by the Central Bank
of Egypt (CBE).

II- The denominator elements

The denominator consists of all bank assets (on balance sheet and off-balance sheet) according to financial statements called "Bank exposures" which include total the following:
1- On balance sheet exposure items after deducting some of Tier I Exclusions for capital base.
2- Derivatives contracts exposures.
3- Financing Financial papers operations exposures.
4- Off-balance sheet items (weighted by credit conversion factor).

December 31, 2022

December 31, 2023
The tables below summarizes the leverage financial ratio: Restated*
Tier 1 capital after exclusions 64,486,542,494 49,673,428,054
Total on-balance sheet exposures, derivatives contracts and financial papers operations. 622,305,349,796 478,146,793,491
Total exposures off-balance sheet 39,518,803,764 31,222,435,285
Total exposures on-balance sheet and off-balance sheet 661,824,153,560 509,369,228,776
Leverage financial ratio 9.74% 9.75%
* After 2022 profit distribution.
- Based on Consolidated financial statements after the disposal of insurance activity.

- 41 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

4- Significant accounting estimates and assumptions :

In the application of the bank's accounting policies, which are described in note 3, management is required to make judgments, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which
the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and
future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting Period that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial Period.

a. Impairment of Loans and credit facilities (Expected Credit Loss)

The Bank reviews its Loans and credit facilities portfolio, at least, on a quarterly basis. Management uses its discretionary judgment in determining
whether it is necessary to recognize impairment loss in the income statement. This requires it to identify any reliable evidence indicating measurable
decline in the expected future cash flows from loan portfolio before identifying any decline for each individual loan.

This evidence includes data indicating negative change in the ability of a portfolio of borrowers to repay the bank, or local and economic circumstances
related to default. On scheduling future cash flows, the management use estimates based on previous experience related to impairment of assets having
similar credit risks. Such experience refers to impairment similar to that of the portfolio in question. The methods and assumptions used in estimating
both the amount and timing of the future cash flows are reviewed on a regular basis to minimize any discrepancy between the estimated loss and actual
loss based on management given experience.

b. Fair value of derivatives

Fair value of derivative financial instruments not quoted in an active market is determined using valuation techniques. When these techniques (such as
the pricing models) are used to determine fair value, periodic tests and review are performed on them using competent independent personnel other than
those responsible for the preparation of such techniques. All such models have been approved and tested prior to use to ensure that their results reflect
reliable data and prices that can be compared to the market. These models use market observable data only to the extent it is practical to obtain such
data, however, some areas such as credit risk related to the bank and counterparties, volatility and correlations requires management judgement.
Changes in assumptions about these factors can affect the fair value of the financial instrument's disclosure.

C. Debt instrument at amortized cost:

Non-derivative financial assets with fixed or determinable payments and maturity dates are classified as debt instruments at amortized cost "within the
business model of financial assets held to collect contractual cash flows".

If classification of investments as amortized cost – other than stakes required to be retained by the Bank in accordance with the provisions of the law –
were suspended by the bank, the carrying amount of the outstanding amortized cost investements at the end of the current reporting year would have
decreased by EGP 7,738,515,020 to reach the fair value with a corresponding decrease in the fair value through other comprehensive income.

- 42 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

5-Segmentation analysis
(5/A) Segmental analysis by activity
Segment activity includes operational processes, assets used in offering banking services, management of surrounding risks and related yield. Such activity may be
different from other activities. Segmentation analysis of operations according to banking activities includes:

Corporate:
This includes current account activities, deposits, overdrafts, loans, credit facilities, and financial derivatives to large, medium, and small entities.
Individual :
This includes current account activities, deposits, savings, credit cards, personal loans, and real estate loans.
Other businesses:
They include other Banking activities such as fund management.
Inter-segment activities are affected within the bank’s normal course of business. Assets and liabilities of each segment include operating assets and liabilities as
shown in the bank's balance sheet.
At the end of the current year
Income and expenses according to segmental activities
Corporate Investments Individual Other businesses Total
(December 31, 2023)
Net interest income 9,999,859,018 5,928,141,998 8,255,587,394 6,198,648,080 30,382,236,490
Net fee and commission income 2,397,448,247 )698,343( 1,389,591,267 227,834,732 4,014,175,903
Dividend income - 335,092,482 - - 335,092,482
Net trading income 646,552,710 - 57,436,034 )106,550,892( 597,437,852
Gain on financial investments - 86,459,835 - - 86,459,835
Impairment credit losses )5,251,158,071( )61,611,201( )232,369,485( )37,425,626( )5,582,564,383(
Administrative expenses )2,426,701,404( )5,720,204( )3,407,363,876( )12,848,603( )5,852,634,087(
Other operating revenues (expenses) )453,865,371( 3,546,625 )573,020,806( 1,349,528,466 326,188,914
Profit before income tax 4,912,135,129 6,285,211,192 5,489,860,528 7,619,186,157 24,306,393,006
Income tax expense )1,725,203,222( )2,207,444,688( )1,928,107,599( )2,675,953,360( )8,536,708,869(
Net profit for the current year 3,186,931,907 4,077,766,504 3,561,752,929 4,943,232,797 15,769,684,137

Assets and liabilities according to segmental activities

Corporate Investments Individual Other businesses Total
(December 31, 2023)
Segment activity assets 199,818,182,995 249,576,638,358 52,649,599,733 99,034,998,081 601,079,419,167
Unclassified assets - - - - 19,451,196,976
Total assets 199,818,182,995 249,576,638,358 52,649,599,733 99,034,998,081 620,530,616,143
Segment activity liabilities 356,737,883,377 - 173,378,111,265 9,092,386,599 539,208,381,241
Unclassified liabilities - - - - 16,620,533,211
Total liabilities 356,737,883,377 - 173,378,111,265 9,092,386,599 555,828,914,452

At the end of the comparative year

Income and expenses according to segmental activities
Corporate Investments Individual Other businesses Total
(December 31, 2022)
Net interest income 6,114,363,317 4,006,334,844 5,833,482,662 3,623,596,924 19,577,777,747
Net fee and commission income 1,463,429,742 147,440 915,130,203 126,776,031 2,505,483,416
Dividend income - 256,533,743 - - 256,533,743
Net trading income 701,549,581 - 26,817,145 )292,570,728( 435,795,998
Gain on financial investments - 68,498,714 - - 68,498,714
Impairment credit losses )3,272,587,994( )11,559,139( )375,632,038( )6,980,287( )3,666,759,458(
Administrative expenses )1,994,637,384( )4,794,520( )2,957,528,843( )56,295,738( )5,013,256,485(
Other operating revenues (expenses) )615,576,531( )32,480,035( )355,960,037( 1,977,003,331 972,986,728
Profit before income tax 2,396,540,731 4,282,681,047 3,086,309,092 5,371,529,533 15,137,060,403
Income tax expense )793,655,426( )1,418,283,030( )1,022,084,008( )1,778,873,817( )5,012,896,281(
Net profit for the comparative year 1,602,885,305 2,864,398,017 2,064,225,084 3,592,655,716 10,124,164,122

At the end of the comparative year

Assets and liabilities according to segmental activities
Corporate Investments Individual Other businesses Total
(December 31, 2022)
Segment activity assets 172,665,154,881 175,400,989,909 43,967,582,368 67,422,291,401 459,456,018,559
Unclassified assets - - - - 17,336,113,004
Total assets 172,665,154,881 175,400,989,909 43,967,582,368 67,422,291,401 476,792,131,563
Segment activity liabilities 262,386,649,381 - 144,680,151,449 7,004,012,970 414,070,813,800
Unclassified liabilities - - - - 10,140,102,043
Total liabilities 262,386,649,381 - 144,680,151,449 7,004,012,970 424,210,915,843

- 43 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

(5/B) Segmental analysis by geographic area

At the end of the current year

Income and expenses according to

geographical segments Great Cairo Alex Delta Red Sea / Upper Egypt Head office Total
(December 31, 2023)

Net interest income 15,058,891,883 2,464,964,067 2,048,119,288 888,624,750 9,921,636,502 30,382,236,490

Net fee and commission income 1,942,553,367 383,478,178 368,062,315 123,755,711 1,196,326,332 4,014,175,903

Dividend income - - - - 335,092,482 335,092,482

Net trading income 584,108,598 85,154,809 61,054,763 18,854,764 )151,735,082( 597,437,852

Gain on financial investments - - - - 86,459,835 86,459,835

Impairment credit losses )4,051,120,227( )427,322,708( )646,073,112( )362,678,183( )95,370,153( )5,582,564,383(

Administrative expenses )4,008,989,318( )754,329,190( )671,880,541( )336,798,220( )80,636,818( )5,852,634,087(
Other operating revenues
)665,557,022( )151,576,068( )125,663,018( )71,142,778( 1,340,127,800 326,188,914
(expenses)
Profit before income tax 8,859,887,281 1,600,369,088 1,033,619,695 260,616,044 12,551,900,898 24,306,393,006
Income tax expense )3,111,703,095( )562,069,616( )363,020,149( )91,531,610( )4,408,384,399( )8,536,708,869(
Net profit for the
5,748,184,186 1,038,299,472 670,599,546 169,084,434 8,143,516,499 15,769,684,137
current year

Assets and liabilities according to

geographical segments Great Cairo Alex Delta Red Sea/ Upper Egypt Head office Total
(December 31, 2023)

Assets of geographical segments 194,951,738,171 30,905,568,014 24,162,400,428 9,234,128,261 360,485,699,682 619,739,534,556

Unclassified assets - - - - - 791,081,587

Total assets 194,951,738,171 30,905,568,014 24,162,400,428 9,234,128,261 360,485,699,682 620,530,616,143

Liabilities of geographical segments 429,310,967,578 57,867,319,686 35,594,800,763 14,164,807,696 11,515,234,693 548,453,130,416

Unclassified liabilities - - - - - 7,375,784,036

Total liabilities 429,310,967,578 57,867,319,686 35,594,800,763 14,164,807,696 11,515,234,693 555,828,914,452

At the end of the comparative year

Income and expenses according to

geographical segments Great Cairo Alex Delta Red Sea/ Upper Egypt Head office Total
(December 31, 2022)

Net interest income 9,683,083,146 1,634,369,627 1,520,425,878 618,570,936 6,121,328,160 19,577,777,747

Net fee and commission income 1,304,049,163 228,723,729 217,833,209 74,855,807 680,021,508 2,505,483,416
Dividend income - - - - 256,533,743 256,533,743
Net trading income 547,914,406 52,226,827 38,573,995 14,887,018 )217,806,248( 435,795,998
Gain on financial investments - - - - 68,498,714 68,498,714
Impairment credit losses )2,114,002,340( )293,489,832( )970,089,839( )277,458,321( )11,719,126( )3,666,759,458(
Administrative expenses )3,424,609,795( )640,789,213( )585,899,176( )292,295,501( )69,662,800( )5,013,256,485(
Other operating revenues
)358,484,032( )69,318,662( )64,291,772( )30,194,092( 1,495,275,286 972,986,728
(expenses)

Profit before income tax 5,637,950,548 911,722,476 156,552,295 108,365,847 8,322,469,237 15,137,060,403

Income tax expense )1,867,103,691( )301,932,481( )51,844,968( )35,887,202( )2,756,127,939( )5,012,896,281(

Net profit for the comparative
3,770,846,857 609,789,995 104,707,327 72,478,645 5,566,341,298 10,124,164,122
year

At the end of the comparative year

Assets and liabilities according to

geographical segments Great Cairo Alex Delta Red Sea/ Upper Egypt Head office Total
(December 31, 2022)

Assets of geographical segments 165,834,647,275 27,072,830,512 20,294,699,756 8,661,508,072 254,565,263,759 476,428,949,374

Unclassified assets - - - - - 363,182,189

Total assets 165,834,647,275 27,072,830,512 20,294,699,756 8,661,508,072 254,565,263,759 476,792,131,563

Liabilities of geographical segments 329,869,240,602 44,836,823,838 27,386,502,048 9,050,024,095 8,623,144,785 419,765,735,368

Unclassified liabilities - - - - - 4,445,180,475

Total liabilities 329,869,240,602 44,836,823,838 27,386,502,048 9,050,024,095 8,623,144,785 424,210,915,843
Geographical segmental analysis is based on the locations of branches through which the bank provides its services.

- 44 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

6- Net interest income December 31, 2023 December 31, 2022

Interest from loans and similar income:
Loans and credit facilities:
- Customers and banks 37,911,646,206 22,488,372,704
Total 37,911,646,206 22,488,372,704
Treasury bills and bonds 34,462,483,349 19,525,683,197
Other debt instruments 223,434,456 66,109,706
Deposits and current accounts 4,174,488,453 1,527,859,154
Net interest differential on hedging instruments (IRS contracts) )29,566,387( 13,186,805
Total 76,742,486,077 43,621,211,566
Cost of deposits and similar expense :
Deposits and current accounts:
- Banks )547,653,577( )295,541,229(
- Customers )45,571,520,779( )23,632,390,561(
Total )46,119,174,356( )23,927,931,790(
Repo arrangements )12,921,870( )22,758,316(
Other loans )228,153,361( )92,743,713(
Total )46,360,249,587( )24,043,433,819(

Net 30,382,236,490 19,577,777,747

7- Net fee and commission income: December 31, 2023 December 31, 2022
Fee and commission income:
Credit fees and commission 3,130,705,657 2,173,235,823
Custody fees 38,642,464 28,057,351
Investment commission 26,645,773 27,482,889
Other fees 2,411,646,248 1,665,633,529
Total 5,607,640,142 3,894,409,592
Fee and commission expense:
Brokerage fees )6,606,669( )5,070,686(
Other fees )1,586,857,570( )1,383,855,490(
Total )1,593,464,239( )1,388,926,176(

Net 4,014,175,903 2,505,483,416

8- Dividend income December 31, 2023 December 31, 2022

subsidiaries 249 957 500 199,966,000
Equity instruments at fair value through other comprehensive income 85,134,982 56,567,743
Total 335,092,482 256,533,743

9- Net trading income: December 31, 2023 December 31, 2022

Forex operations:
Foreign exchange trading gains ( loss ) 626,246,799 361,387,164
Changes in fair value of currency forward contracts )27,484,114( 82,238,407
Changes in fair value of currency swap contracts )16,899( )10,976,892(
Changes in fair value IRS contracts )1,307,934( 3,147,319
Total 597,437,852 435,795,998

10- Administrative expenses December 31, 2023 December 31, 2022

Staff cost:
Salaries and wages 2,413,957,717 1,951,246,156
Social insurance 144,123,690 121,172,165
Pension cost:
Defined contribution scheme 102,135,363 96,596,971
Other retirement benefits (Defined benefit scheme ) 80,101,574 58,393,290
2,740,318,344 2,227,408,582
Depreciation and amortization 471,049,492 436,131,358
Other administrative expenses 2,641,266,251 2,349,716,545
Total 5,852,634,087 5,013,256,485

11- Other operating revenues (expenses) December 31, 2023 December 31, 2022

Foreign exchange differences from translation of foreign currency monetary assets and liabilities
other than held for trading items and those classified as at fair value through profit or loss at initial 1,255,189,789 1,842,586,499
recognition
Gain on sale of property and equipment 9,666,000 779,000
Software cost )672,856,011( )374,827,451(
Operating lease rental expense )201,082,018( )160,890,433(
Gain on sale of foreclosed assets reverted to the bank in settlement of debts 28,579,205 272,334
Other provisions (net of reversed amounts) )189,033,211( )437,571,236(
Other income (expense) 95,725,160 102,638,015
Total 326,188,914 972,986,728

12- Impairment credit losses December 31, 2023 December 31, 2022
Loans and credit facilities to customers )5,483,527,556( )3,648,220,032(
Loans and credit facilities to Banks )1,671,545( -
Due from banks )31,910,066( )6,354,614(
Treasury bills )64,279,420( )15,011,830(
Debt instruments at fair value through other comprehensive income )375,571( )228,872(
Debt instruments at amortized cost 3,043,790 3,681,563
Other assets )3,844,015( )625,673(
Total )5,582,564,383( )3,666,759,458(

- 45 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

13- Income tax expense December 31, 2023 December 31, 2022
Current tax )8,621,094,382( )5,111,767,622(
Deferred tax 84,385,513 98,871,341
Total )8,536,708,869( )5,012,896,281(

Additional data on deferred tax is disclosed in note 31. Income tax expense is different from the tax that would have arisen had the statutory tax rate
been applied on pre-tax accounting profit as shown below:

Profit before tax 24,306,393,006 15,137,060,403

Income tax calculated at 22.5 % tax rate 5,468,938,426 3,405,838,591
Tax impact for:
Non-taxable income )204,642,367( )75,823,020(
Non-deductible expenses for tax purposes 2,961,419,163 1,416,572,511
Prior-years’ tax settlements )18,643,179( )2,324,946(
Recognize of deferred tax assets )15,603,075( )14,420,770(
Provision and segregated interest 397,103,752 346,474,037
Tax deductible (10% on dividend income) 32,521,662 35,451,219
Effective income tax expense 8,621,094,382 5,111,767,622

Tax Position
A) QNB ALAHLI Position:
A-1) Corporate Tax
The Bank's accounts were tax-inspected and settled with respect to Tax since the beginning of activity till the end of December 31, 2010.
Years 2011 and 2012 transferred to court.
Years 2013 till 2020 have been inspected, and the due tax was paid.
Years 2021, the period for the examination was requested, and the documents were submitted to the Egyptian Tax Authority during the legal dates.
Year 2022 the Bank submitted its tax return in the due date and books have not been inspected yet.
A-2) Salaries Taxes
The Bank’s books have been inspected, and the due tax was paid until year 2020.
Year 2021 and 2022 the Bank submitted its tax return in the due date and books have not been inspected yet.
A-3) Stamp duties
The Bank’s books have been inspected, for all branches until July 31, 2006 and all tax was paid.
Years August 01 ,2006 till December 31, 2021 have been inspected, and the due tax was paid.
Year 2022 the Bank paid the taxes on the due date and books have not been inspected yet.

(B) EX-MIBank Position:

B-1) Corporate tax
The Bank's accounts were tax- inspected and settled since the beginning of activity till November 30,2006.

B-2) Salaries taxes

The Bank’s books have been inspected, and the due tax was paid till November 30, 2006.

B-3) Stamp duties

The Bank’s books have been inspected for all branches until July 31, 2006 and all due tax was paid.
Period from August 01, 2006 till November 30, 2006 have been inspected, and the due tax was paid.

14- Earnings Per Share December 31, 2023 December 31, 2022
Net Profit for the year 15,769,684,137 10,124,164,122
Remuneration for the Board Members )from the year’s net profit(* )13,420,000( )11,160,700(
Staff profit share )from the year’s net profit(* )1,595,306,685( )1,057,772,118(
Profit available to shareholders 14,160,957,452 9,055,231,304
Weighted average number of the shares outstanding during the year 2,154,822,966 2,154,822,966
Earning Per Share 6.57 4.20
* Based on Profits distribution proposal. The actual amounts will be subject to the ordinary AGM approval .

- 46 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

15- Classification and measurement of financial assets and financial liabilities

The following table shows the gross financial assets and financial liabilities (excluding allowances for impairment) according to the business model classification:

Debt instruments Equity instruments

at fair value at fair value Financial instruments
Total Carrying
December 31, 2023 Amortized cost through other through other at fair value through
amount
comprehensive comprehensive profit or loss
income income

Cash and due from Central Bank of Egypt (CBE) 61,558,547,091 - - - 61,558,547,091
Due from banks 42,660,349,493 - - - 42,660,349,493
Treasury bills 12,144,840,783 140,066,594,145 - - 152,211,434,928
Loans and credit facilities to Banks 886,408,148 - - - 886,408,148
Loans and credit facilities to customers 268,576,814,558 - - - 268,576,814,558
Financial derivatives - - - - -
Fair value through other comprehensive income - 14,664,045,850 1,628,915,760 - 16,292,961,610
Amortized cost 80,536,769,618 - - - 80,536,769,618
Fair value through profit or loss - - - 101,198,551 101,198,551
Other financial assets 7,311,718,320 - - - 7,311,718,320
Total financial assets 473,675,448,011 154,730,639,995 1,628,915,760 101,198,551 630,136,202,317
Due to banks 5,088,111,931 - - - 5,088,111,931
Customer deposits 530,118,813,705 - - - 530,118,813,705
Financial derivatives - - - 6,264,722 6,264,722
Other loans 3,995,190,883 - - - 3,995,190,883
Other financial liabilities 2,637,451,549 - - - 2,637,451,549
Total financial liabilities 541,839,568,068 - - 6,264,722 541,845,832,790

Debt instruments Equity instruments

at fair value at fair value Financial instruments
Total Carrying
December 31, 2022 Amortized cost through other through other at fair value through
amount
comprehensive comprehensive profit or loss
income income
Cash and due from Central Bank of Egypt (CBE) 42,595,999,375 - - - 42,595,999,375
Due from banks 30,239,210,244 - - - 30,239,210,244
Treasury bills 67,847,716,023 - - - 67,847,716,023
Loans and credit facilities to customers 230,767,986,793 - - - 230,767,986,793
Financial derivatives - - - 23,578,000 23,578,000
Fair value through other comprehensive income - 14,445,221,533 1,335,739,197 - 15,780,960,730
Amortized cost 91,193,931,697 - - - 91,193,931,697
Fair value through profit or loss - - - 73,975,416 73,975,416
Other financial assets 6,331,034,502 - - - 6,331,034,502
Total financial assets 468,975,878,634 14,445,221,533 1,335,739,197 97,553,416 484,854,392,780
Due to banks 3,521,728,022 - - - 3,521,728,022
Customer deposits 407,066,800,830 - - - 407,066,800,830
Financial derivatives - - - 22,954,635 22,954,635
Other loans 3,459,330,313 - - - 3,459,330,313
Other financial liabilities 1,451,169,119 - - - 1,451,169,119
Total financial liabilities 415,499,028,284 - - 22,954,635 415,521,982,919

- 47 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

16- Cash and due from Central Bank of Egypt (CBE) December 31, 2023 December 31, 2022
Cash 6,019,110,226 5,380,229,395
Balances with CBE (mandatory reserve) 55,539,436,865 37,215,769,980
Total 61,558,547,091 42,595,999,375
Interest free balances 61,558,547,091 42,595,999,375
Total 61,558,547,091 42,595,999,375

17- Due from Banks December 31, 2023 December 31, 2022
Current accounts 3,755,945,439 1,642,610,333
Deposits 38,904,404,054 28,596,599,911
42,660,349,493 30,239,210,244
Less : Allowance for impairment losses )49,525,613( )14,109,794(
Total 42,610,823,880 30,225,100,450

Balances at CBE other than those under the mandatory reserve 11,344,464,186 14,689,805,344
Local banks 13,917,033,336 12,742,160,658
Foreign Banks 17,398,851,971 2,807,244,242
Less : Allowance for impairment losses )49,525,613( )14,109,794(
Total 42,610,823,880 30,225,100,450

Interest free balances 2,096,603,215 1,086,943,877

Balances at floating interest rates 1,659,342,224 555,666,456
Balances at fixed interest rates 38,904,404,054 28,596,599,911
Less : Allowance for impairment losses )49,525,613( )14,109,794(
Total 42,610,823,880 30,225,100,450

Current balances 42,610,823,880 30,225,100,450

Total 42,610,823,880 30,225,100,450

18- Treasury bills December 31, 2023 December 31, 2022

91 days maturity 375,875,000 8,386,025,000
182 days maturity 44,945,900,000 26,167,450,000
More than 182 days maturity 120,868,832,420 37,654,991,980
Less : Unearned interest )12,753,735,067( )4,360,750,957(
153,436,872,353 67,847,716,023
Less : Allowance for impairment losses )105,988,188( )33,418,324(
Fair Value Reserve )1,225,437,425( -
Total 152,105,446,740 67,814,297,699
Treasury bills classified as amortized cost 12,038,852,595 67,814,297,699
Treasury bills classified as FVOCI 140,066,594,145 -
Total 152,105,446,740 67,814,297,699

19- Loans and credit facilities to Banks December 31, 2023 December 31, 2022

Other loans 886,408,148 -

Less : Allowance for impairment losses )1,670,812( -

Total 884,737,336 -

20- Loans and credit facilities to December 31, 2023 December 31, 2022
customers
Allowance for Allowance for
Total Net Total Net
impairment losses impairment losses
Individuals
Overdrafts 4,919,348,053 )60,172,193( 4,859,175,860 4,131,788,490 )64,693,995( 4,067,094,495
Credit cards 2,016,896,557 )122,029,564( 1,894,866,993 1,646,919,864 )65,722,988( 1,581,196,876
Personal loans 41,053,301,067 )975,527,353( 40,077,773,714 34,676,804,443 )949,400,304( 33,727,404,139
Real estate loans 5,970,437,465 )115,141,068( 5,855,296,397 4,771,482,548 )138,069,156( 4,633,413,392
Total (1) 53,959,983,142 )1,272,870,178 ( 52,687,112,964 45,226,995,345 )1,217,886,443( 44,009,108,902
Corporate including small loans
for businesses
Overdrafts 110,810,327,724 )4,831,710,678( 105,978,617,046 90,530,660,672 )2,565,771,479( 87,964,889,193
Direct loans 78,623,134,165 )9,237,563,334( 69,385,570,831 69,866,029,869 )9,977,038,963( 59,888,990,906
Syndicated loans and facilities 22,242,629,047 )538,844,136( 21,703,784,911 22,413,696,002 )203,466,088( 22,210,229,914
Other loans 2,940,740,480 )53,460,778( 2,887,279,702 2,730,604,905 )38,320,326( 2,692,284,579
Total (2) 214,616,831,416 )14,661,578,926 ( 199,955,252,490 185,540,991,448 )12,784,596,856( 172,756,394,592
Total loans and credit facilities
268,576,814,558 )15,934,449,104 ( 252,642,365,454 230,767,986,793 )14,002,483,299( 216,765,503,494
to customers (1+2)

Less: Segregated interest )205,723( )205,721(

Less: Unearned discount and
)174,377,003( )174,717,553(
deferred income
Net Loans and credit facilities
to customers distributed as 252,467,782,728 216,590,580,220
follows:

Current balances 187,238,751,778 155,971,868,986

Non-current balances 65,229,030,950 60,618,711,234
Net Loans and credit facilities
252,467,782,728 216,590,580,220
to customers

- 48 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

20-A Allowance for impairment losses

December 31, 2023
Individuals Overdrafts Credit cards Personal loans Real estate loans Total
Balance at beginning of the year 64,693,995 65,722,988 949,400,304 138,069,156 1,217,886,443
Net impairment loss recognized during the year 43,963,696 89,856,570 107,717,578 )9,168,359( 232,369,485
Loans written-off during the year )48,485,498( )33,549,994( )97,089,004( )13,759,729( )192,884,225(
Collection of loans previously written-off - - 15,493,219 - 15,493,219
Foreign exchange translation differences - - 5,256 - 5,256
Balance at end of the year 60,172,193 122,029,564 975,527,353 115,141,068 1,272,870,178

Syndicated loans
Corporate Overdrafts Direct loans Other loans Total
and facilities

Balance at beginning of the year 2,565,771,479 9,977,038,963 203,466,088 38,320,326 12,784,596,856

Net impairment loss recognized during the period year 2,066,456,311 2,852,981,603 319,559,023 12,161,134 5,251,158,071
Loans written-off during the year - )4,426,864,758( - - )4,426,864,758(
Collection of loans previously written-off - 58,715,474 - - 58,715,474
Foreign exchange translation differences 199,482,888 775,692,052 15,819,025 2,979,318 993,973,283
Balance at end of the year 4,831,710,678 9,237,563,334 538,844,136 53,460,778 14,661,578,926

Total 15,934,449,104

December 31, 2022

Individuals Overdrafts Credit cards Personal loans Real estate loans Total

Balance at beginning of comparitive year 8,216,968 57,304,948 701,338,722 100,288,425 867,149,063

Net impairment loss recognized during the year 61,064,296 15,390,995 261,366,749 37,809,998 375,632,038
Loans written-off during the year )4,587,269( )6,972,955( )25,631,878( )29,267( )37,221,369(
Collection of loans previously written-off - - 12,318,997 - 12,318,997
Foreign exchange translation differences - - 7,714 - 7,714
Balance at end of the year 64,693,995 65,722,988 949,400,304 138,069,156 1,217,886,443

Corporate Syndicated loans

Overdrafts Direct loans and facilities Other loans Total
Balance at beginning of comparitive year 1,785,635,795 7,230,060,793 114,836,031 13,642,930 9,144,175,549
Net impairment loss recognized during the year 524,629,225 2,653,035,359 72,198,180 22,725,230 3,272,587,994
Loans written-off during the year - )972,179,908( - - )972,179,908(
Collection of loans previously written-off - 31,573,983 - - 31,573,983
Foreign exchange translation differences 255,506,459 1,034,548,736 16,431,877 1,952,166 1,308,439,238
Balance at end of the year 2,565,771,479 9,977,038,963 203,466,088 38,320,326 12,784,596,856
Total 14,002,483,299

21- Financial Derivatives

December 31, 2023
(A) Held for trading Notional amount Assets Liabilities
- Forward foreign exchange contracts 926,169,965 - 3,906,114
- Swap foreign exchange contracts 151,424,388 - 16,899
Total 1,077,594,353 - 3,923,013
(B) Fair value hedge
- Interest rate swap contracts 830,252,063 - 2,341,709
Total 830,252,063 - 2,341,709

Total 1,907,846,416 - 6,264,722

December 31, 2022

(A) Held for trading Notional amount Assets Liabilities
- Forward foreign exchange contracts 1,356,299,058 23,578,000 -
- Swap foreign exchange contracts - - -
Total 1,356,299,058 23,578,000 -
(B) Fair value hedge
- Interest rate swap contracts 1,834,104,525 - 22,954,635
Total 1,834,104,525 - 22,954,635

Total 3,190,403,583 23,578,000 22,954,635

Forward exchange contracts represent commitments to purchase local and foreign currencies including the unexecuted part of regular-way transactions. Interest rate swap
contracts represent commitments to swap fixed interest rate with variable interest rate where the physical exchange of funds is not required except in foreign exchange swaps. The
Bank’s credit risk represents the cost of potential replacement of the swaps in case other parties fail to meet their obligations. This risk is controlled on an ongoing basis in terms of
fair value and percentage of contracted amounts. To control the outstanding credit risk, the Bank assesses counterparties to the contract in the same manner used in lending
activities.
- Fair value hedge
The Bank uses interest rate swap contracts to mitigate part of the risk of potential increase in fair value of its fixed rate customer deposits in foreign currencies to the extent caused
by declining market interest rates.
Net fair value of hedging instruments (Interest rate swap) liability amounted to EGP 2,341,709 as of December 31, 2023 (Liability EGP 22,954,635 in the prior year). Gain resulting
from hedging instruments amounted to EGP 20,612,927 (Loss of EGP 59,496,900 in the prior year) and Loss arose from the hedged items reached EGP 21,920,861 (Gain of EGP
62,644,219 in the prior year).

- 49 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

22- Financial investments

Fair value through other comprehensive income (FVTOCI) December 31, 2023 December 31, 2022

)A( Debt instruments at fair value:

Listed Instruments in Egyptian Stock Exchange Market 9,548,804,967 11,419,491,101
Listed instruments in foreign stock exchange market 5,115,240,883 3,025,730,432
Total debt instruments measured at fair value through
14,664,045,850 14,445,221,533
other comprehensive income

)B( Equity instruments at fair value:

Listed instruments in Egyptian stock exchange market 174,854,480 187,691,889
Unlisted instruments in stock exchange market 1,378,435,525 1,092,365,143
Total equity instruments measured at fair value through
1,553,290,005 1,280,057,032
other comprehensive income
)C( Money market funds and balanced funds:
Unlisted instruments in stock exchange market 75,625,755 55,682,165

Total financial investments measured at Fair value through

16,292,961,610 15,780,960,730
other comprehensive income (1)

Amortized cost

)A( Debt Instruments:

Listed instruments in stock exchange market 80,536,769,618 89,999,239,328
Unlisted instruments in stock exchange market - 1,194,692,369
Less : Allowance for impairment losses - )2,437,472(
Total Debt instruments measured at amortized cost (2) 80,536,769,618 91,191,494,225

Fair value through profit or loss (FVTPL)

)A( Mutual funds:

Unlisted instruments in stock exchange market * 101,198,551 73,975,416
Total equity instruments measured at fair value through
101,198,551 73,975,416
profit or loss (3)

Total Financial investments (1+2+3( 96,930,929,779 107,046,430,371

Current balances 29,208,492,988 40,865,056,180

Non-current balances 67,722,436,791 66,181,374,191
Total financial investment 96,930,929,779 107,046,430,371

Fixed interest debt instruments 92,693,656,087 104,515,430,566

Variable interest debt instruments 2,507,159,381 1,121,285,192
Total debt instruments 95,200,815,468 105,636,715,758
The following table analyzes the movements on financial investments during the year:
Fair value through other
Amortized cost
comprehensive income
Balance at the beginning of the current year 15,780,960,730 91,191,494,225
Additions 7,080,305,224 25,040,968,834
Amortization of premium / discount )15,725,290( 1,563,843,577
Disposals (sale/redemption) )7,508,426,070( )37,542,391,950(
Translation differences resulting from monetary foreign currency denominated assets 819,438,445 280,417,460
Changes in fair value reserve 162,164,719 -
Transferred to Retained Earnings )25,756,148( -
Change in Allowance for impairment during the year - 2,437,472
Balance at the end of the current year 16,292,961,610 80,536,769,618

The following table analyzes the movements on financial investments during the comparative year :
Fair value through other
Amortized cost
comprehensive income
Balance at the beginning of the comparative year 15,123,771,188 75,291,377,974
Additions 11,004,688,640 21,842,887,034
Amortization of premium / discount )76,120,758( 1,767,042,219
Disposals (sale/redemption) )11,218,254,607( )8,142,528,000(
Translation differences resulting from monetary foreign currency denominated assets 995,141,521 429,695,030
Changes in fair value reserve )48,265,254( -
Change in Allowance for impairment during the year - 3,019,968
Balance at the end of the comparative year 15,780,960,730 91,191,494,225

Gain on financial investments December 31, 2023 December 31, 2022

Gain on financial investments at fair value through profit or loss 11,297,196 7,275,311
Gain on selling financial investments at fair value through other comprehensive income 75,162,639 61,223,403
Total 86,459,835 68,498,714

* The Bank’s equity instruments classified in the fair value through other comprehensive income category represent Bank subscribed stake at 5% from the total certificates’ number of
its QNB ALAHLI First Fund with cumulative daily return (THEMAR Money Market Fund) upon its initial offering, in addition to the Bank subscribed stake at 20% from the total
certificates’ number of its QNB ALAHLI Second Fund with yearly / cumulative return (Tawazon Balanced Fund), in addition to the 20% from the total certificates’ number of its
QNB ALAHLI Third Fund with yearly / cumulative return (Tadawol Equity Fund) upon its initial offering. All stakes required to be retained by the Bank until maturity of the funds
in accordance with the provisions of the law, had a nominal value of EGP 5 million each.

- 50 -
 QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

23- Investments in subsidiaries

The following table summarizes the Bank’s holdings in its subsidiaries:

Country of Investee’s liabilities Investee’s The Bank's

December 31, 2023 Investee’s assets Investee’s revenues Carrying amount
residence (excluding equity) profit (loss) stake
QNB ALAHLI leasing company
Egypt 4,405,493,376 3,645,715,984 792,863,307 170,131,408 144,915,453 99.98%
(Subsidiary)
QNBALAHLI Life Insurance company
Egypt 7,814,733,678 6,735,940,311 696,645,288 520,796,782 69,179,676 99.98%
)Subsidiary(
QNB ALAHLI Asset Management Egypt
Egypt 16,936,309 348,588 1,739,438 1,472,081 1,176,710 97.48%
(Subsidiary)
QNB ALAHLI Factoring Company
Egypt 876,865,335 536,775,227 247,765,535 6,232,763 324,990,000 99.997%
(Subsidiary)
Total 13,114,028,698 10,918,780,110 1,739,013,568 698,633,034 540,261,839

Country of Investee’s liabilities Investee’s The Bank's

December 31, 2022 Investee’s assets Investee’s revenues Carrying amount
residence (excluding equity) profit (loss) stake

QNB ALAHLI leasing company

Egypt 4,048,827,022 3,445,293,646 486,914,406 136,623,930 144,915,453 99.98%
(Subsidiary)
QNBALAHLI Life Insurance company
Egypt 6,646,182,677 5,813,240,207 399,790,243 276,288,649 69,179,676 99.98%
)Subsidiary(
QNB ALAHLI Asset Management Egypt
Egypt 15,386,966 271,327 1,356,408 960,751 1,176,710 97.48%
(Subsidiary)
QNB ALAHLI Factoring Company
Egypt 1,132,552,363 798,259,780 171,889,253 3,452,404 324,990,000 99.997%
(Subsidiary)
Total 11,842,949,028 10,057,064,960 1,059,950,310 417,325,734 540,261,839

24- Intangible assets December 31, 2023 December 31, 2022

Software
Net book value at the beginning of the year 341,252,070 275,574,773
Additions 244,924,839 152,706,976
Amortization )108,702,543( )87,029,679(
Net book value at the end of the year 477,474,366 341,252,070

25- Other assets December 31, 2023 December 31, 2022

Accrued revenues 7,311,718,320 6,331,034,502
Pre-paid expenses 275,711,607 206,282,390
Advance payments for acquisition of property and equipment 1,076,138,114 1,066,233,152
Foreclosed assets reverted to the bank in settlement of debts 19,525,277 115,536,072
Deposits held with others and custody 21,413,298 21,037,130
Advance payments to tax authority 10,679,330 14,491,072
Others 1,289,522,917 1,062,254,637
10,004,708,863 8,816,868,955
Less : Expected credit loss (ECL) )6,187,603( )2,343,588(
Total 9,998,521,260 8,814,525,367

Lands and Renovations of leased Machinery &

26- Property and Equipment Others Total
buildings assets equipment
January 1, 2022
Cost 2,929,518,028 329,616,275 1,418,642,850 292,664,495 4,970,441,648
Accumulated depreciation )975,256,143( )169,790,794( )890,808,924( )166,747,990( )2,202,603,851 (
Net book value 1,954,261,885 159,825,481 527,833,926 125,916,505 2,767,837,797

December 31, 2022

Net book value at the beginning of the year 1,954,261,885 159,825,481 527,833,926 125,916,505 2,767,837,797
Additions 173,622,316 33,332,400 142,769,181 9,968,147 359,692,044
Disposals from property and equipment )1,575,596( - )26,577,700( )6,103,502( )34,256,798 (
Disposals from accumulated depreciation 1,373,362 - 26,527,825 6,103,502 34,004,689
Depreciation for the year )129,105,103( )23,648,547( )169,821,433( )26,526,596( )349,101,679 (
Net book value 1,998,576,864 169,509,334 500,731,799 109,358,056 2,778,176,053

January 1, 2023
Cost 3,101,564,748 362,948,675 1,534,834,331 296,529,140 5,295,876,894
Accumulated depreciation )1,102,987,884( )193,439,341( )1,034,102,532( )187,171,084( )2,517,700,841 (
Net book value 1,998,576,864 169,509,334 500,731,799 109,358,056 2,778,176,053

December 31, 2023

Net book value at the beginning of the year 1,998,576,864 169,509,334 500,731,799 109,358,056 2,778,176,053
Additions 43,907,434 41,146,157 117,343,867 24,274,155 226,671,613
Disposals from property and equipment )1,696( )1,671,745( )27,699( )5,579,153( )7,280,293 (
Disposals from accumulated depreciation 1,696 1,671,745 10,885 5,579,153 7,263,479
Depreciation for the year )131,558,073( )25,941,224( )178,235,674( )26,611,978( )362,346,949 (
Net book value 1,910,926,225 184,714,267 439,823,178 107,020,233 2,642,483,903

Balances at December 31, 2023

Cost 3,145,470,486 402,423,087 1,652,150,499 315,224,142 5,515,268,214
Accumulated depreciation )1,234,544,261( )217,708,820( )1,212,327,321( )208,203,909( )2,872,784,311 (
Net book value 1,910,926,225 184,714,267 439,823,178 107,020,233 2,642,483,903

- 51 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

27- Due to banks December 31, 2023 December 31, 2022

Current accounts 637,668,765 373,766,225
Deposits 3,928,770,066 2,340,731,540
Repos transactions 521,673,100 807,230,257
Total 5,088,111,931 3,521,728,022

Central banks 521,673,100 807,230,257

Local banks 908 908
Foreign banks 4,566,437,923 2,714,496,857
Total 5,088,111,931 3,521,728,022

Non-interest bearing balances 577,720,370 319,016,137

Variable interest rate balances 59,948,395 54,750,088
Fixed interest rate balances 4,450,443,166 3,147,961,797
Total 5,088,111,931 3,521,728,022

Current balances 5,088,111,931 3,521,728,022

Total 5,088,111,931 3,521,728,022

28- Customer deposits December 31, 2023 December 31, 2022

Demand deposits 157,349,998,365 124,192,519,726
Time deposits and call accounts 235,002,478,471 160,626,747,989
Term saving certificates 98,574,549,873 84,911,180,783
Saving deposits 30,603,731,183 30,340,189,452
Other deposits* 8,588,055,813 6,996,162,880
Total 530,118,813,705 407,066,800,830

Corporate deposits 356,740,702,440 262,386,649,381

Retail deposits 173,378,111,265 144,680,151,449
Total 530,118,813,705 407,066,800,830

Non-interest bearing balances 58,335,764,732 50,971,825,603

Variable interest rate balances 139,655,045,516 111,896,612,604
Fixed interest rate balances 332,128,003,457 244,198,362,623
Total 530,118,813,705 407,066,800,830
Current balances 458,195,256,486 337,710,153,778
Non-current balances 71,923,557,219 69,356,647,052
Total 530,118,813,705 407,066,800,830

* Other deposits include deposits covering irrevocable letters of credit in the total of EGP 1,243,440,368 as of December 31, 2023 (December 31, 2022
EGP 1,313,923,906 ). The fair value of these deposits approximates its carrying amount.

29- Other loans December 31, 2023 December 31, 2022

National Bank of Egypt (Epap & Eco) 32,639,187 3,820,977
Commercial International Bank 68,365,000 -
European Bank for Reconstruction and Development 3,854,142,629 3,391,330,269
The Micro, Small and Medium Enterprises Development Agency 40,044,067 64,179,067
Total 3,995,190,883 3,459,330,313
Current balances 1,615,939,362 889,721,381
Non-current balances 2,379,251,521 2,569,608,932
Total 3,995,190,883 3,459,330,313

30- Other liabilities December 31, 2023 December 31, 2022

Accrued interest 2,637,451,549 1,451,169,119
Unearned revenues 178,058,901 136,292,043
Accrued expenses 1,975,474,232 1,308,512,143
Sundry credit balances 4,453,764,493 2,798,948,263
Total 9,244,749,175 5,694,921,568

- 52 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

31- Other provisions December 31, 2023

Foreign currencies
Balance at Formed
Description Released during the translation Balance at the end of
the beginning during the Used during the year
year differences the year
of the year year
+ (-)
Provision for tax claims 37,391,004 - - - )912,126( 36,478,878
Provision for legal claims 8,843,548 26,655,581 - 158,829 )348,452( 35,309,506
Provision for contingent
875,390,079 161,809,303 - 128,548,822 - 1,165,748,204
liabilities
Provision for fidelity 49,162,902 - - 12,008,876 - 61,171,778
Provision for operational
- 568,327 - )90( - 568,237
risk
Total 970,787,533 189,033,211 - 140,716,437 )1,260,578( 1,299,276,603

December 31, 2022

Foreign currencies
Balance at Formed
Description Released during the translation Balance at the end of
the beginning during the Used during the year
year differences the year
of the year year
+ (-)
Provision for tax claims 38,880,823 - - - )1,489,819( 37,391,004
Provision for legal claims 18,768,411 - )5,407,970( 230,924 )4,747,817( 8,843,548
Provision for contingent
413,479,382 442,549,179 - 19,361,518 - 875,390,079
liabilities
Provision for fidelity 36,125,405 845,027 - 17,626,962 )5,434,492( 49,162,902
Provision for operational
415,000 - )415,000( - - -
risk
Total 507,669,021 443,394,206 )5,822,970( 37,219,404 )11,672,128( 970,787,533

32- Deferred income tax

Deferred tax has been calculated on all temporary tax differences using the balance sheet method and using the expected tax rate on a time that the Bank
will recognize a benefit from assets / incurred liabilities at a tax rate of 22.5% for the current financial Year. The Bank does not offset deferred tax assets and
deferred tax liabilities unless the bank has a legally enforceable right to set off current tax assets against current tax liabilities; and if the deferred tax assets
and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

Deferred tax assets and liabilities

Below are the balances and movements of deferred tax assets and liabilities:

Deferred tax assets Deferred tax liabilities

Tax impact on temporary differences arising from: December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Property and equipment - - )159,982,611( )142,933,586(
Provisions (other than the provision for loan impairment) 432,326,712 334,672,215 - -
Differences in fair value of financial investments at fair
29,543,805 - - )177,747,784(
value through other comprehensive income
Others 11,719,315 7,939,274 - -

Deferred tax assets (liabilities) 473,589,832 342,611,489 )159,982,611( )320,681,370(

Net balance of DTA (DTL) 313,607,221 21,930,119

Movement of deferred tax assets and liabilities:

Deferred tax assets Deferred tax liabilities
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Beginning balance 342,611,489 229,573,853 )320,681,370( )212,037,513(
DT recognized / utilized during the year 130,978,343 113,037,636 160,698,759 )108,643,857(
Closing balance 473,589,832 342,611,489 )159,982,611( )320,681,370(

Balances of deferred tax assets (liabilities) recognized directly in equity

December 31, 2023 December 31, 2022
Differences in fair value of financial investments at fair
29,543,805 )177,747,784(
value through other comprehensive income

- 53 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

33- Defined benefits obligation

December 31, 2023 December 31, 2022

Amounts recognized in the statement of financial position:

Liability for post-retirement medical benefits 595,997,416 565,184,100

Amounts recognized in the income statement:

Post-retirement medical benefits 80,101,574 58,393,290

Post-retirement medical benefits obligation constitutes of:

Balances shown in the statement of financial position are represented as follows:
Present value of unfunded liabilities 503,299,378 499,198,065
Unrecognized actuarial gain 92,698,038 65,986,035
595,997,416 565,184,100

Liability movements during the year are represented as follows:

Balance at the beginning of the financial year 565,184,100 543,536,132
Current service cost 5,120,749 4,472,992
Interest cost 78,082,532 52,430,234
Actuarial gain/losses )3,101,707( 1,490,064
Benefits paid )49,288,258( )36,745,322(
595,997,416 565,184,100

Amounts recognized in the income statement are shown below:

Current service cost 5,120,749 4,472,992
Interest cost 78,082,532 52,430,234
Actuarial gain/losses recognized during the year )3,101,707( 1,490,064
80,101,574 58,393,290

The main actuarial assumptions used by the Bank are outlined below: December 31, 2023 December 31, 2022
Discount rate (two plans):
A- QNB ALAHLI current employees plan 21.50% 17.00%
B-Ex-MIBank retirees plan 21.50% 17.00%
QNB ALAHLI -long term increase in the cost of medical care (on top of inflation) 15.00% 11.00%
Ex-MIBank - long term increase in the cost of medical care (on top of inflation) 15.00% 11.00%

Sensitivities to +1% in discount rate (duration of the plan): Service cost DBO
Post-retirement medical benefits 3.82% 6.10%

34- Issued and paid-up capital

(A) Authorized Capital

- The authorized capital amounts to EGP 15 billion.

(B) Issued and Paid up Capital

- The issued and paid up capital amounted to EGP 9,794,649,850 on December 31, 2018 representing 979,464,985 shares with a nominal value of EGP
10 each, of which 854,141,985 shares were paid in Egyptian pound and 125,323,000 shares were paid in foreign currency according to the exchange
rates prevailing on the payment date.

- The Extraordinary General Assembly held on February 28, 2019 decided to increase the capital from EGP 9,794,649,850 to EGP 10,774,114,830,an
increase of EGP 979,464,980 by transferring from the general reserve, and decided to split the face value of each share of the Bank's capital from EGP
10 to be EGP 5 .

- The issued and paid up capital amounted to EGP 10,774,114,830 on December 31, 2023 representing 2,154,822,966 shares with a nominal value of
EGP 5 each, of which 1,904,176,966 shares were paid in Egyptian pound and 250,646,000 shares were paid in foreign currency according to the
exchange rates prevailing on the payment date.

- 54 -
QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023
(All amounts are shown in Egyptian Pounds)

35- Reserves and retained earnings

(1) Reserves December 31, 2023 December 31, 2022

General reserve (a) 28,884,568,918 23,979,176,120
General banking risk reserve (b) 1,045,272 1,669,066
Legal reserve ( c) 3,296,885,849 2,790,716,593
Fair value reserve (d) )644,053,357( 237,308,338
Special reserve (e) 12,856,666 12,856,666
Capital reserve 43,050,621 42,271,621
General risk reserve 21,453,923 21,453,923
Total reserves at the end of the year 31,615,807,892 27,085,452,327

Reserve movements are as follows:

(a) General reserve December 31, 2023 December 31, 2022

Balance at the beginning of the financial year 23,979,176,120 19,533,050,946
Transferred from retained earnings 4,905,392,798 4,446,125,174
Balance at the end of the year 28,884,568,918 23,979,176,120

(b) General banking risk reserve

Balance at the beginning of the year 1,669,066 153,028,333
Transferred to retained earnings )623,794( )151,359,267(
Balance at the end of the year 1,045,272 1,669,066
General bank risk reserve represent the difference between the allowance required for impairment losses as per CBE credit worthiness rules and the allowance as
required by the expected credit loss which recognized in financial statements .
In accordance with the instructions of the Central Bank of Egypt, the general banking risk reserve is supported annually by 10% of the value of the assets owned by
the Bank in return for debt if these assets are not disposed of within the period specified in the law.

(c) Legal reserve December 31, 2023 December 31, 2022

Balance at the beginning of the year 2,790,716,593 2,418,770,935
Transferred from the net profit of the prior year 506,169,256 371,945,658
Balance at the end of the year 3,296,885,849 2,790,716,593

According to the provisions of local laws, 5% of net profit of the year shall be transferred to a non-distributable statutory reserve until it reaches 100% of the bank’s
capital.

( d ) Fair value reserve December 31, 2023 December 31, 2022

Balance at the beginning of the year 237,308,338 379,822,282
Net change in fair value (Notes 18 and 22 ) )1,063,272,706( )48,265,254(
Impairment losses on debt instruments at fair value through other comprehensive income 375,571 228,872
Transferred to retained earnings )25,756,149( -
Deferred tax recognized during the year (Note 32) 207,291,589 )94,477,562(
Balance at the end of the year )644,053,357 ( 237,308,338

( e ) Special reserve

The application of the CBE new basis rules of preparation and presentation of financial statements as well as the modified principles of recognition and measurement
requires to restate the comparative figures of the first financial year that have been impacted by this change, including comparative figures in the balance sheet and
the income statements for the previous year as the impact of adjustment is positive, such impact was carried directly to retained earnings then transferred to the
special reserve in equity and shall not be used except by approval from CBE. The following is a breakdown of the items that generated the special reserve amount:

December 31, 2023 December 31, 2022

Amortized cost method using EIR for held to maturity investments 253,607 253,607
Amortized cost method using EIR for Available-for-sale investments 393,930 393,930
Deferred tax (Tax impact on adjustment) )4,249,739( )4,249,739(
Available-for-sale investments (Equity instruments) 16,458,868 16,458,868
Total 12,856,666 12,856,666

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(2) Profit for the year and retained earnings

December 31, 2023 December 31, 2022
Movements on retained earnings:
Balance at the beginning of the year 14,721,648,563 11,729,469,816
Net profit for the year 15,769,684,137 10,124,164,122
Previous year’s profit distribution )1,616,117,225( )1,616,117,225(
Employees’ profit share )1,057,772,118( )747,158,368(
Board of directors’ remuneration )11,160,700( )16,000,000(
Banking System Support and Development Fund )102,747,444( )72,873,731(
Transferred to capital reserve )779,000( )13,124,486(
Transferred to general reserve )4,905,392,798( )4,446,125,174(
Transferred to legal reserve )506,169,256( )371,945,658(
Transferred from fair value reserve, net of tax 19,961,016 -
Transferred from general banking risk reserve 623,794 151,359,267
Balance at the end of the year 22,311,778,969 14,721,648,563

36- Cash and cash equivalents

For the purpose of presenting the cash flow statement, cash and cash equivalents include the following balances maturing within less than 3 months
from placement or acquisition date.
December 31, 2023 December 31, 2022
Cash and balances with central banks 6,019,110,226 5,380,229,395
Due from banks in less than 3 months 42,660,349,493 30,239,210,244
Treasury bills and other governmental notes (91 days) 366,711,336 8,219,953,905
Total 49,046,171,055 43,839,393,544

37- Contingent liabilities and other commitments

(a) Legal claims (litigation)

Several lawsuits were brought against the Bank and are still outstanding as of December 31, 2023. No provision has been formed since it is not
probable that the Bank will incur losses in regard of these lawsuits.

(b) Capital commitments:

The Bank is a party to contracts for capital commitments amounting to EGP 1,121,252,067 as of December 31, 2023 (EGP 1,002,721,195 on December
31, 2022). These represent commitments by the Bank for the purchases of buildings and equipment. Management is sufficiently confident that net
profit shall be realized and finance shall be made available to cover these commitments.

(c) Commitments for guarantees

The bank’s commitments for loans, guarantees and facilities are set out below:
December 31, 2023 December 31, 2022
Financial guarantees 255,000 255,000
Accepted papers 1,370,130,079 1,878,129,718
L/Gs 65,307,349,039 49,406,278,293
Import L/Cs 3,510,920,407 3,106,055,000
Export L/Cs 845,705,638 100,288,484
Total 71,034,360,163 54,491,006,495

(d) Commitments for credit facilities December 31, 2023 December 31, 2022
Commitments for credit facilities 30,758,471,259 24,355,577,867

(e) Commitments under operating lease contracts

Total minimum rental payments for the irrevocable operating lease contracts are as follows :
December 31, 2023 December 31, 2022
Not more than one year 145,830,597 153,387,944
More than one year and less than 5 years 360,617,435 350,799,600
More than 5 years 108,548,902 128,175,885
Total 614,996,934 632,363,429

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

38- Related-party transactions

Qatar National Bank (Q.P.S.C.) is the ultimate parent and controlling party as at the end of the reporting year which owns 94.97% of the bank’s
ordinary shares whereas the remaining 5.03% are held by other shareholders.
A number of transactions have been conducted during the reporting Year with related parties within the bank’s normal course of business. These
include loans, deposits, and foreign currency transactions.

Related party transactions with the parent company other than the payment of dividends on ordinary shares:

QNB Group December 31, 2023 December 31, 2022

Due from banks 1,820,941,837 36,447,035
Due to banks 4,184,019,659 2,605,843,696
Export LC - 843,750
LGs for banks 15,871,167,405 7,917,607,811
Foreign exchange derivative 151,424,388 -
Interest rate swap 830,252,063 1,834,104,525
Administrative expenses 204,386,585 231,256,711
(A) Loans and credit facilities to related parties
Directors and other key management personnel
Subsidiaries
(and close family members)

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Outstanding loans at the beginning of the
111 111 4,028,199,751 3,275,523,072
financial year
Loans issued during the financial year - - 1,566,030,977 2,187,816,365

Loans repayment during the financial year - - )1,579,010,510( )1,435,139,686(

Loans outstanding at the end of the

111 111 4,015,220,218 4,028,199,751
financial year
Interest income on loans - - 649,510,726 386,820,903

Loans and credit facilities to related parties can be analyzed below

Directors and other key management personnel

Subsidiaries
(and close family members)

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Overdrafts 111 111 872 -
Revolving term loan - - 3,960,003,392 3,917,365,760
Visa card - - 866 -
Direct loans - - 55,215,088 110,833,991
Total 111 111 4,015,220,218 4,028,199,751

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

(B) Deposits from related parties

Directors and other key management personnel

Subsidiaries
(and close family members)

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Deposits outstanding at the beginning of
11,768,595 85,022,402 824,364,339 747,909,065
the financial year
Changes in board members - )76,411,375( - -
Deposits placed during the year 9,079,677 9,159,086 526,837,798 161,380,972
Deposits repaid during the year )1,456,936( )6,001,518( )792,143,003( )84,925,698(
Deposits outstanding at the end of the
19,391,336 11,768,595 559,059,134 824,364,339
financial year
Interest expense on deposits 987,043 451,886 26,555,435 27,456,905

Deposits from related parties can be analyzed below

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Demand Deposits 5,474,343 1,202,901 541,307,417 31,592,358
Saving account 336,569 666,247 - -
Certificates of deposits 13,447,775 8,688,756 12,171,881 375,926,476
Time Deposits 132,649 1,210,691 5,579,836 416,845,505
Total 19,391,336 11,768,595 559,059,134 824,364,339

(C) Other transactions with related parties

Directors and other key management personal

Subsidiaries
(and close family members)

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Fee and commission income 78,661 - 16,484,614 17,478,482
Guarantees issued by the bank - - 110,701,204 24,792,802

The above guarantees comprise:

LGs - - 3 3
LCs - - 110,701,201 24,792,799
Total - - 110,701,204 24,792,802

The pricing for related parties’ transactions are the same for other parties.

In accordance with the instructions of the Central Bank of Egypt (CBE) rules in 23 August 2011. The monthly average of net salaries and benefits for
top 20 employees with the largest salaries and benefits reached ( EGP 9,859,486) during the current year.

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QNB ALAHLI S.A.E
Notes to the Separate Financial Statements
For The Year Ended 31 December 2023 (All amounts are shown in Egyptian Pounds)

39- Money Market and balanced Funds

A- QNB ALAHLI First Fund with cumulative daily return (THEMAR Money Market Fund)

The Bank has set up an investment fund under the name of "THEMAR" with daily accumulated interest as one of the banking activities authorized in
accordance with the provisions of the Capital Market Law 95 of 1992.

THEMAR initial offering was for one million certificates at nominal value of EGP 100 million, of which 50,000 certificates worth of EGP 5 million were
subscribed by the bank at that time. EFG HERMES is managing this fund.

Total number of the outstanding certificates at December 31, 2023 reached 11,350,053 at a total value of EGP 6,489,279,302 The Bank currently holds
227,001 certificates worth of EGP 129,785,551 of which EGP 28,587,000 classified as fair value through other comprehensive income that represent
5% from the total number of certificates that were initially issued, whereas the remaining value of EGP 101,198,551 which represents 2% of the
increase in fund’s net asset value since initial subscription are classified as fair value through profit or loss.

According to the management agreement and the fund’s prospectus, the Bank shall receive fees and commissions for supervising the fund and other
administrative services. Total commissions for the current year amounting to EGP 26,077,078 have been reported in the “fees and commission
income” line item in the income statement.

B- QNB ALAHLI Second Fund with periodly / cumulative return (Tawazon Balanced Fund)

The Bank has set up an investment fund under the name of Tawazon Fund with periodic income as one of the banking activities authorized in
accordance with the provisions of the Capital Market Law 95 of 1992.

Tawazon initial offering was for two hundred and fifty thousand certificates amounting to EGP 25 million, of which 50,000 certificates worth of EGP 5
million were subscribed by the bank at that time. Beltone Asset Management is managing this fund.

Total number of the outstanding certificates at December 31, 2023 reached 97,043 at a total value of EGP 36,842,918 The Bank currently holds 50,000
certificates worth of EGP 18,982,780 that are classified as fair value through other comprehensve income and represent 20% of the total number of
certificates that were initially issued.

According to the management agreement and the fund’s prospectus, the Bank shall receive fees and commissions for supervising the fund and other
administrative services. Total commissions for the current year amounting to EGP 180,239 have been reported in the “fees and commission income”
line item in the income statement.

C- QNB ALAHLI Third Fund with periodly / cumulative return (Tadawol Equity Fund)

The Bank has set up an investment fund under the name of Tadawol Fund with periodic accumulated income as one of the banking activities
authorized in accordance with the provisions of the Capital Market Law 95 of 1992.

Tadawol certificates were offered in a public offering amounting to EGP 25 million distributed over two hundred and fifty thousand certificates with a
nominal value of EGP 100 each, subscriptions have only covered a number of one hundred and twenty five thousand certificates amounting to EGP
12.5 million, of which 50,000 certificates worth of EGP 5 million were subscribed at by the bank at that time. HC Fund Manager Asset Management is
managing this fund.

Total number of the outstanding certificates at December 31, 2023 reached 129,042 at a total value of EGP 72,407,983 The Bank currently holds
50,000 certificates worth of EGP 28,055,975 that are classified as fair value through other comprehensive income and represent 40% from the total
number of certificates that were initially issued.

According to the management agreement and the fund’s prospectus, the Bank shall receive fees and commissions for supervising the fund and other
administrative services. Total commissions for the current year amounting to EGP 388,456 have been reported in the “fees and commission income”
line item in the income statement.

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