Askari Bank Limited has confirmed it will exercise its Call Option to redeem its Rated, Subordinated, and Unsecured Term Finance Certificates (TFCs) worth Rs. 6 billion. The bank shared the development with the Pakistan Stock Exchange (PSX), outlining the timeline and procedural details of the redemption.
The decision to call the debt instruments is in line with Clause 3.12 of the Trust Deed dated December 24, 2019, as well as Clause 27 of the Terms and Conditions incorporated in the agreement. By invoking this option, Askari Bank will repay the entire principal value of Rs. 6 billion along with the accrued profit, after applying deductions for Zakat and applicable taxes. The redemption will take place in full on September 17, 2025.
According to the bank’s announcement, the transfer books for the TFCs will remain closed from September 2, 2025, to September 16, 2025, both days inclusive. The eligibility for receiving redemption proceeds will be determined based on transfers recorded by the Registrar, CDC Share Registrar Services Limited in Lahore, by the close of business on September 1, 2025. Holders who are registered as of that date will qualify for the repayment.
The TFCs in question were issued as subordinated and unsecured instruments, meaning they formed part of the bank’s Tier II capital and carried higher risk compared to senior debt but offered enhanced returns to investors. By opting for early redemption, the bank may be seeking to optimize its capital structure, potentially replacing these liabilities with more cost-efficient funding or equity-based capital in line with its growth and regulatory strategies.
Market analysts often view such corporate actions as an indicator of financial stability, suggesting that the institution has sufficient liquidity and capital buffers to settle obligations ahead of their original maturity. For debt holders, the call provides an opportunity to reinvest the proceeds in other fixed-income or equity instruments, though in some cases it may also mean reinvesting at lower prevailing yields.
This move also reflects broader trends in Pakistan’s banking sector, where institutions are increasingly managing their balance sheets proactively to align with changing interest rate environments, Basel III capital requirements, and evolving market conditions. Early redemption of debt can help banks reduce funding costs, improve return on equity, and strengthen investor confidence.
The bank has not publicly detailed whether the redemption will be followed by the issuance of new debt instruments. However, given the regulatory and competitive landscape, market observers expect that any future funding actions by Askari Bank will be closely aligned with both strategic expansion plans and capital adequacy considerations.
Investors and analysts will be watching for further disclosures in the lead-up to the September 17 redemption date, as the move could provide insights into the bank’s future funding strategy and market positioning.