Evolving landscape and strategic adaptation

In the post-COVID-19 era, the banking industry has experienced significant transformation, driven by the acceleration of digital adoption, evolving customer expectations and heightened sustainability considerations. The Bank has navigated these changes by proactively enhancing its
digital services, fostering a customer-centric culture and embedding sustainability into its core strategy.

Our continued investment in digital innovation, coupled with a strong commitment to customer experience, has not only transformed our service delivery but also enabled us to support stakeholders in embracing digital platforms and environmentally-conscious practices. In tandem, we have remained vigilant of global and local economic trends, ensuring financial stability through robust liquidity and capital buffers, proactive risk management and sound governance practices.

Our approach to materiality

The principle of materiality forms the foundation of our Integrated Report, incorporating an analysis of the external environment through a double materiality perspective. This approach encompasses two dimensions: Impact materiality, which considers the outward effects of the Bank’s operations on the society, the environment, and the economy, and Financial materiality, which examines the inward impacts of external environmental and social changes on the Bank’s capacity to create, protect, and sustain value for stakeholders over the short, medium, and long term.

Identifying these material matters is a collaborative effort that involves inputs from various business/service units and active engagement with stakeholders, ensuring that the Bank remains aligned with the expectations of its key stakeholder groups. This assessment is not limited to Bank’s own operations but includes upstream and downstream value chain. Once identified, these material matters (impacts, risks and opportunities) are prioritised based on their relevance and potential impact on earnings sustainability, strategic goals and long-term value creation. The identified material topics are reviewed and validated annually during the strategic planning process. By aligning these insights with our strategic planning, we ensure our approach remains robust, forward-looking and responsive to evolving stakeholder expectations.

Integrating material matters into strategy and governance

To ensure effective management of material matters, we integrate the material matters into our strategic planning and performance management processes. Accountability for managing material topics is assigned to the heads of relevant divisions, with resources allocated based on their significance in achieving the Bank’s strategic objectives. These material topics are then embedded into the Key Performance Indicators (KPIs) of Key Management Personnel (KMP) to drive alignment with corporate goals.

The Bank has developed a comprehensive set of policies that promote ethical, transparent and sustainable business practices, ensuring that all staff members adhere to the highest standards of conduct. These policies are reviewed periodically by the Board of Directors to ensure they remain relevant and are monitored by the Integrated Risk Management Department (IRMD), which reports to the BIRMC.

In addition, the Bank has established grievance handling mechanisms, ensuring that stakeholder concerns are addressed promptly. Social and environmental screening is conducted for lending activities and business partnerships to ensure responsible engagement. Periodic internal and external audits further enhance the integrity of our approach by ensuring adherence to established policies and procedures. Findings from these audits are reported to the Board of Directors and relevant Management Committees for review and corrective action, if any.

This rigorous governance framework ensures that the Bank’s material matters are effectively managed, contributing to its overall resilience and sustainability. Additionally, sustainability-related risks and opportunities, identified based on financial materiality as defined by SLFRS S1 and S2, are detailed on pages 276 to 278 of this Report.

Materiality determination process

Since conducting our initial materiality assessment, we have continuously refreshed our analysis each year, incorporating insights from annual strategic planning exercises, stakeholder feedback and globally recognised frameworks such as the GRI Standards and SLFRS S1 and S2. This year, we enhanced the clarity and structure of our material matters by grouping related issues into six broader Thematic Material Matters and 28 value/risk drivers under them.

Transforming risks into opportunities

Each identified risk driver, when effectively managed, presents an opportunity of a value driver for the Bank to create, preserve or sustain value and in certain instances, to prevent value erosion. This approach reflects our strategic view that robust risk management is not merely about mitigating potential threats but about unlocking

Each identified risk driver, when effectively managed, presents an opportunity of a value driver for the Bank to create, preserve or sustain value and in certain instances, to prevent value erosion. This approach reflects our strategic view that robust risk management is not merely about mitigating potential threats but about unlocking opportunities for innovation, operational efficiency and long-term value creation. By embedding a proactive risk management framework into our business model, we are able to anticipate potential disruptions, respond effectively and leverage emerging opportunities. For example, managing credit risk through stringent underwriting standards and predictive analytics not only protects profitability but also fosters customer confidence and trust. Similarly, addressing cybersecurity and data privacy through advanced technological measures and training enhances regulatory compliance and builds a competitive edge. Likewise, focusing on sustainability and ESG risks, such as climate change, opens avenues for green financing and reinforces our commitment to responsible banking. This integrated approach ensures that both risks and opportunities are woven into our strategy, enabling us to deliver sustained value to stakeholders across short, medium and long-term horizons.

Ongoing commitment

We remain committed to regularly reviewing and refining our material matters to ensure alignment with evolving stakeholder expectations and global best practices. Looking ahead, a formal materiality assessment and stakeholder analysis will be undertaken in 2025 as part of our preparation for adopting SLFRS S1 and S2, which would further enhance the depth and accuracy of our reporting.

Following our commitment to integrating risk management and value creation, the Table 06 on pages 68 to 71 presents a structured analysis of the Bank’s 28 identified material matters. This tabulation serves as a comprehensive framework linking key risk and value drivers to strategic actions and broader sustainability goals. It highlights how each material matter influences the Bank’s strategy, the capitals it impacts, and the corresponding sustainability pillars under our Sustainability Framework. It also outlines proactive management measures, opportunities for innovation, and alignment with the SDGs and the GRI indicators.

Material matters – Holistic view Table – 06

Value/Risk Driver	Risks	Opportunities	Impact on Strategy	Relevant Capital(s)		Bank’s Sustainability Framework pillar	Management Measures	Relevant SDG(s)	GRI Disclosure
Thematic material matter 1: Risk, Compliance, and Governance
1.1 Credit risk and asset quality	Deterioration in asset quality undermines profitability, stifles growth and erodes stakeholder confidence	Well-managed asset quality enhances profitability, enables growth and elevates stakeholder confidence	Allocation of resources for technological innovations (predictive analytics, use case development) and training & development.				Rigorous underwriting standards, predictive analytics, credit scoring models, early warning systems, post-disbursement monitoring.		GRI 201: Economic performance
1.2 Cybersecurity and data privacy	Data breaches damage reputation and cause financial losses.	Strong cybersecurity boosts customer trust and regulatory compliance.	Investment in IT infrastructure and cybersecurity systems.				Robust cybersecurity policies, IT audits, penetration testing, real-time monitoring, cybersecurity awareness training.		GRI 418: Customer Privacy
1.3 Regulatory compliance and ethical conduct	Non-compliance results in regulatory penalties and reputational damage.	Compliance ensures operational stability and trust from stakeholders.	Strengthening internal controls and ethical practices.				AML, KYC, and CDD compliance, regular compliance audits, policy updates, ethics training.		GRI 2-27: Compliance with laws and regulations
1.4 Risk management framework	Insufficient risk management increases vulnerability to market shocks.	Effective risk management enhances resilience and stakeholder confidence.	Integration of risk management into strategic planning.				Enterprise risk management, stress testing, dedicated risk committees, integration of risk appetite into decision-making.		GRI 201: Economic performance
1.5 Fraud prevention	Fraud incidents lead to financial losses and regulatory scrutiny.	Proactive prevention protects assets and reputation.	Enhancing fraud detection mechanisms and response capabilities.				Advanced fraud detection systems, AI-based monitoring, collaboration with regulators, continuous improvement of controls.		GRI 205: Anti-corruption
1.6 Corporate governance	Weak governance erodes stakeholder confidence and attracts scrutiny.	Strong governance fosters long-term sustainability and investor trust.	Continuous improvement of governance practices.				Board oversight, diversity, independence, regular Board evaluations, ESG-linked executive incentives.		GRI 2-9 Governance Structure and composition GRI 2-17 Collective knowledge of the highest governance body GRI 2-18 Evaluation of the performance of the highest governance body
1.7 Reputation management	Negative perception affects brand value and customer loyalty.	Positive reputation strengthens competitive positioning.	Strategic communication and stakeholder engagement.				Crisis communication planning, media monitoring, thought leadership initiatives, stakeholder trust-building, ethical leadership.		GRI 2-23 Policy Commitments GRI 2-25 Processes to remediate negative impacts
Thematic material matter 2: Financial performance and economic contribution
2.1 Financial performance and capital adequacy	Poor financial performance hampers growth and weakens stakeholder confidence.	Strong performance enhances investor trust and capital inflows, creating leeway for growth.	Focus on liquidity management, cost efficiency and capital optimisation.				Liquidity management, profitability metrics, operational efficiency, cost-optimisation initiatives, capital planning through ICAAP.		GRI 201: Economic performance
2.2 Asset and liability management	Asset-liability mismatches impact liquidity and profitability.	Effective management ensures financial stability and profitability.	Enhancing balance sheet structure and liquidity buffers				Dynamic balance sheet management, liquidity stress testing, diversified funding sources, contingency funding plans, active monitoring of mismatches.		GRI 201: Economic performance
2.3 Economic impact and contribution	Limited contribution may reduce stakeholder goodwill and partnerships.	Significant contribution enhances goodwill and partnerships.	Supporting local economic development initiatives.				Support for SMEs and start-ups, public-private partnerships, regional economic development, job creation, responsible lending, fiscal responsibility.		GRI 201: Economic performance GRI 203: Indirect economic impacts
2.4 Strategic partnerships	Failure to leverage partnerships limits innovation and growth.	Successful partnerships improve customer value and operational efficiency.	Pursuing collaborative opportunities with fintechs and tech firms.				Collaborations with fintechs, tech partnerships, regular partnership outcome evaluations, co-creation of products and services.		GRI 2-6: Activities, value chain and other business relationships
Thematic material matter 3: Customer centricity and experience
3.1 Customer satisfaction and service quality	Poor service quality leads to customer attrition and loss of revenue.	High satisfaction enhances loyalty and lifetime value of customers.	Continuous service improvement and customer feedback integration.				SLA monitoring, NPS tracking, feedback mechanisms, dedicated CRM teams, AI-driven customer support, complaint resolution mechanisms.		GRI 2-29 Approach to stakeholder engagement
3.2 Customer experience	Inconsistent experience reduces customer trust and engagement.	Seamless experience strengthens brand loyalty.	Enhancing omnichannel service delivery.				Simplified processes, personalisation, omnichannel access, data-driven personalisation.		GRI 2-29 Approach to stakeholder engagement
3.3 Product diversification	Limited product offerings reduce market competitiveness.	Diverse offerings improve customer reach and market share.	Expanding product portfolio and cross-selling strategies.				Expanding product portfolio, continuous market research, co-branded financial products, financial inclusion products, digital solutions.		GRI 2-29 Approach to stakeholder engagement
3.4 Social media influence	Negative social media exposure damages brand reputation.	Active presence enhances customer engagement and competitive advantage.	Leveraging social media for proactive engagement and insights.				Proactive issue resolution via social media, engaging content creation, targeted campaigns, social media as a service and engagement channel.		GRI 2-25 Processes to remediate negative impacts
Thematic material matter 4: Innovation and digital transformation
4.1 Digital transformation	Slow digital adoption hampers competitiveness and growth.	Accelerated adoption drives innovation and customer satisfaction.	Implementing a forward-looking digital roadmap.				Digital roadmap, fintech adoption, change management, digital-first culture, mobile and online banking enhancements.		GRI 2-6: Activities, value chain and other business relationships
4.2 Technological infrastructure	Outdated infrastructure limits scalability and operational efficiency.	Advanced infrastructure enhances agility and service delivery.	Investing in scalable and resilient IT systems.				IT resilience, cloud computing, AI integration, blockchain, scalable infrastructure, disaster recovery.		GRI 2-6: Activities, value chain and other business relationships
4.3 Competitive advantage through technology	Failure to innovate reduces market competitiveness.	Innovation strengthens market leadership and differentiation.	Continuous investment in emerging technologies.				R&D for financial technologies, predictive analytics, customer-centric innovation, leveraging digital tools, fostering a culture of innovation.		GRI 2-6: Activities, value chain and other business relationships
4.4 Sustainable finance products	Limited green financing reduces alignment with ESG goals.	Sustainable finance enhances market positioning and ESG credentials.	Expanding ESG-aligned product offerings.				Green finance solutions, sustainability bonds, partnerships for green programs, ESG-aligned financial products.		GRI 2-6: Activities, value chain and other business relationships
Thematic material matter 5: ESG and sustainability
5.1 Climate change and environmental impact	Failure to address climate risks undermines stakeholder trust.	Proactive environmental action strengthens brand value.	Aligning operations with environmental goals.				Green finance, carbon reduction targets, eco-friendly branches, paperless banking, renewable energy adoption.		GRI 305: Emissions
5.2 Social responsibility and community engagement	Weak social responsibility reduces stakeholder engagement	Strong engagement builds community goodwill.	Integrating community programs into business strategy.				Responsible lending, community development partnerships, promoting financial literacy, charitable contributions.		GRI 203: Indirect economic impacts
5.3 Alignment with SDGs	Misalignment with global goals impacts reputation and stakeholder trust.	Alignment enhances credibility and opens new partnership opportunities.	Embedding ESG criteria in operations and lending.				ESG integration in operations, SDG-linked targets, stakeholder engagement, impact measurement, periodic progress reporting.		GRI 203: Indirect economic impacts
5.4 Supply chain sustainability	Non-compliance by vendors can damage reputation and operations.	Sustainable procurement enhances trust and operational resilience.	Strengthening vendor risk management and procurement policies.				Responsible and sustainable procurement, vendor risk assessments, local sourcing initiatives.		GRI 2-6: Activities, value chain and other business relationships
Thematic material matter 6: People and community
6.1 Employee development and retention	High attrition rates reduce productivity and increase costs.	Talent development enhances employee engagement and innovation.	Investing in training and career development programs.				Talent management, leadership training, mentorship programs, competitive benefits, diversity and inclusion initiatives.		GRI 404: Training and education GRI 405: Diversity and equal opportunity
6.2 Health and safety	Poor health and safety standards reduce employee morale and performance.	Strong standards enhance employee well-being and productivity.	Promoting health and safety as a core value.				Workplace safety initiatives, mental health support, employee assistance programs, regular safety drills.		GRI 403: Occupational health and safety
6.3 Work-life balance	Poor work-life balance leads to burnout and reduced productivity.	Balanced work-life improves morale and retention.	Encouraging flexible work arrangements.				Flexible work arrangements, remote work options, wellness programs, recreational facilities.		GRI 403: Occupational health and safety
6.4 Financial inclusion	Exclusion of underserved communities limits market potential.	Inclusion drives market expansion and social impact.	Expanding financial inclusion initiatives.				Microfinance products, rural outreach programmes, services for underserved communities, financial literacy initiatives.		GRI 203: Indirect economic impacts
6.5 Community engagement	Limited community involvement affects social license to operate.	Active engagement builds goodwill and strengthens relationships.	Strengthening CSR initiatives.				CSR initiatives, volunteer programmes, investments in education, healthcare and livelihoods, periodic community impact assessments.		GRI 203: Indirect economic impacts