Funds to be raised through Tier 2 capital instruments under Basel III framework to strengthen the bank’s capital base.
KARACHI: Bank Alfalah Limited has received final approval from the State Bank of Pakistan (SBP) for the issuance of Tier 2 capital through redeemable capital instruments worth Rs20 billion, the bank announced on Thursday.
In a notification submitted to the Pakistan Stock Exchange (PSX), Bank Alfalah stated that the approval has been granted under Section 66 of the Companies Act, 2017, and in accordance with the Basel III guidelines issued by the central bank.
The bank said the capital will be raised through the issuance of Term Finance Certificates (TFCs), which will be privately placed and may subsequently be listed in line with the Debt Securities Listing Regulations.
According to the disclosure, the aggregate size of the issuance will be Rs20 billion. The transaction remains subject to the execution of relevant transaction documents and fulfilment of all applicable regulatory and procedural requirements.
The issuance is aimed at strengthening the bank’s Tier 2 capital base and enhancing its overall capital adequacy position in compliance with Basel III regulatory standards.
Tier 2 capital instruments are commonly used by banks to support regulatory capital requirements and provide an additional cushion against potential financial stress while supporting future business growth.
The latest approval follows an earlier announcement made by Bank Alfalah on April 23, 2026, when the bank disclosed that it had received in-principle approval from the State Bank of Pakistan for the proposed capital raising exercise.
At that time, the bank informed investors that the proposed issuance of Term Finance Certificates would be for an aggregate amount of up to Rs20 billion and would be structured as redeemable capital under the applicable provisions of the Companies Act, 2017.
With the receipt of final regulatory approval, Bank Alfalah can now proceed with the issuance process, subject to completing the necessary documentation and meeting other regulatory conditions.
The move is expected to further strengthen the bank’s balance sheet and support its long-term growth strategy while maintaining compliance with evolving capital requirements set by the State Bank of Pakistan.
Banking sector analysts view Tier 2 capital issuances as an important tool for financial institutions seeking to enhance capital buffers, improve risk absorption capacity and support lending activities without diluting shareholder equity.
