# EDGAR Filing Document

**Accession Number:** 0000311669
**File Stem:** 0001140361-25-037544
**Filing Date:** 2025-10
**Character Count:** 355113
**Document Hash:** 43d03b79f7e0ea65bf82168379d1d92d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001140361-25-037544.hdr.sgml**: 20251008

**ACCESSION NUMBER**: 0001140361-25-037544

**CONFORMED SUBMISSION TYPE**: QRTLYRPT

**PUBLIC DOCUMENT COUNT**: 5

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251008

**DATE AS OF CHANGE**: 20251007

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ASIAN DEVELOPMENT BANK
- **CENTRAL INDEX KEY:** 0000311669
- **STANDARD INDUSTRIAL CLASSIFICATION:** FOREIGN GOVERNMENTS [8888]
- **ORGANIZATION NAME:** International Corp Fin
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** QRTLYRPT
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 083-00002
- **FILM NUMBER:** 251381165

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** P O BOX 789
- **CITY:** 1099 METRO MANILA PHILIPPINES
- **PROVINCE COUNTRY:** R6
- **BUSINESS PHONE:** 63 2 86324444

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** NO. 6 ADB AVENUE
- **STREET 2:** MANDALUYONG CITY 1550
- **CITY:** METRO MANILA
- **PROVINCE COUNTRY:** R6

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ADB
- **DATE OF NAME CHANGE:** 20000101

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![](image01.jpg)

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#### <br> INTERNAL

August 2025

## Management's Discussion and Analysis

## and Condensed Quarterly Financial Statements:

## 30 June 2025
(Unaudited)

Distribution of this document is limited until it has been approved by the Board of Directors. Following such approval, this document will be reclassified as *public* and disclosed in accordance with ADB's Access to Information Policy.

![](image02.jpg)

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#### CONTENTS

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **Page** |
| **[MANAGEMENT'S DISCUSSION AND ANALYSIS](#MANAGEMENTSDISCUSSIONANDA)** | **[MANAGEMENT'S DISCUSSION AND ANALYSIS](#MANAGEMENTSDISCUSSIONANDA)** | **[MANAGEMENT'S DISCUSSION AND ANALYSIS](#MANAGEMENTSDISCUSSIONANDA)** |  |
| **[Executive Summary](#EXECUTIVESUMMARY)** | **[Executive Summary](#EXECUTIVESUMMARY)** | **[Executive Summary](#EXECUTIVESUMMARY)** |  |
| [I.](#I.OVERVIEW) | **[Overview](#I.OVERVIEW)** | **[Overview](#I.OVERVIEW)** | **1** |
| [II.](#II.ORDINARYCAPITALRESOURC) | **[Ordinary Capital Resources](#II.ORDINARYCAPITALRESOURC)** | **[Ordinary Capital Resources](#II.ORDINARYCAPITALRESOURC)** | **2** |
|  | [A.](#BasisofFinancialReporting) | [Basis of Financial Reporting](#BasisofFinancialReporting) | 2 |
|  | [B.](#OverallFinancialResults) | [Overall Financial Results](#OverallFinancialResults) | 4 |
|  | [C.](#EquityandHeadrooms) | [Equity and Headrooms](#EquityandHeadrooms) | 15 |
|  | [D.](#CapitalAdequacy) | [Capital Adequacy](#CapitalAdequacy) | 16 |
| [III.](#III.SPECIALFUNDS) | **[Special Funds](#III.SPECIALFUNDS)** | **[Special Funds](#III.SPECIALFUNDS)** | **17** |
|  | [A.](#AsianDevelopmentFund) | [Asian Development Fund](#AsianDevelopmentFund) | 17 |
|  | [B.](#TechnicalAssistanceSpecia) | [Technical Assistance Special Fund](#TechnicalAssistanceSpecia) | 18 |
|  | [C.](#JapanSpecialFund) | [Japan Special Fund](#JapanSpecialFund) | 19 |
|  | [D.](#AsianDevelopmentBankInsti) | [Asian Development Bank Institute](#AsianDevelopmentBankInsti) | 19 |
|  | [E.](#RegionalCooperationandInt) | [Regional Cooperation and Integration Fund](#RegionalCooperationandInt) | 20 |
|  | [F.](#ClimateChangeFund) | [Climate Change Fund](#ClimateChangeFund) | 20 |
|  | [G.](#AsiaPacificDisasterRespon) | [Asia Pacific Disaster Response Fund](#AsiaPacificDisasterRespon) | 20 |
|  | [H.](#FinancialSectorDevelopmen) | [Financial Sector Development Partnership Special Fund](#FinancialSectorDevelopmen) | 21 |
| **[Appendix: Ordinary Capital Resources Condensed Management](#Appendix)** | **[Appendix: Ordinary Capital Resources Condensed Management](#Appendix)** | **[Appendix: Ordinary Capital Resources Condensed Management](#Appendix)** | **22** |
|  |  | **[Reporting Balance Sheets](#Appendix)** |  |

---

---

| | | |
|:---|:---|:---|
| **[FINANCIAL STATEMENTS](#FinancialStatements)** | **[FINANCIAL STATEMENTS](#FinancialStatements)** |  |
| [I. Ordinary Capital Resources (OCR)](#OCR-1) | [I. Ordinary Capital Resources (OCR)](#OCR-1) |  |
| [OCR-1](#OCR-1) | [Condensed Balance Sheet](#OCR-1) | 24 |
| [OCR-2](#OCR-2) | [Condensed Statement of Income and Expenses](#OCR-2) | 26 |
| [OCR-3](#OCR-3) | [Condensed Statement of Comprehensive Income](#OCR-3) | 27 |
| [OCR-4](#OCR-4) | [Condensed Statement of Changes in Equity](#OCR-4) | 27 |
| [OCR-5](#OCR-5) | [Condensed Statement of Cash Flows](#OCR-5) | 28 |
| [OCR-6](#OCR-6) | [Notes to Condensed Financial Statements](#OCR-6) | 29 |
| [II. Asian Development Fund (ADF)](#ADF-1) | [II. Asian Development Fund (ADF)](#ADF-1) | [II. Asian Development Fund (ADF)](#ADF-1) |
| [ADF-1](#ADF-1) | [Condensed Balance Sheet](#ADF-1) | 60 |
| [ADF-2](#ADF-2) | [Condensed Statement of Income and Expenses](#ADF-2) | 61 |
| [ADF-3](#ADF-3) | [Condensed Statement of Comprehensive Loss](#ADF-3) | 62 |
| [ADF-4](#ADF-4) | [Condensed Statement of Changes in Fund Balances](#ADF-4) | 62 |
| [ADF-5](#ADF-5) | [Condensed Statement of Cash Flows](#ADF-5) | 63 |
| [ADF-6](#ADF-6) | [Notes to Condensed Financial Statements](#ADF-6) | 64 |

---

------

---

| | | |
|:---|:---|:---|
| [III. Technical Assistance Special Fund (TASF)](#TASF-1) | [III. Technical Assistance Special Fund (TASF)](#TASF-1) | [III. Technical Assistance Special Fund (TASF)](#TASF-1) |
|  [TASF-1](#TASF-1) | [Condensed Statement of Financial Position](#TASF-1) | 70 |
|  [TASF-2](#TASF-2) | [Condensed Statement of Activities and Changes in Net Assets](#TASF-2) | 71 |
|  [TASF-3](#TASF-3) | [Condensed Statement of Cash Flows](#TASF-3) | 72 |
|  [TASF-4](#TASF-4) | [Notes to Condensed Financial Statements](#TASF-4) | 73 |
| [IV. Japan Special Fund (JSF)](#JSF-1) | [IV. Japan Special Fund (JSF)](#JSF-1) | [IV. Japan Special Fund (JSF)](#JSF-1) |
|  [JSF-1](#JSF-1) | [Condensed Statement of Financial Position](#JSF-1) | 78 |
|  [JSF-2](#JSF-2) | [Condensed Statement of Activities and Changes in Net Assets](#JSF-2) | 79 |
|  [JSF-3](#JSF-3) | [Condensed Statement of Cash Flows](#JSF-3) | 80 |
|  [JSF-4](#JSF-4) | [Notes to Condensed Financial Statements](#JSF-4) | 81 |
| [V. Asian Development Bank Institute (ADBI)](#ADBI-1) | [V. Asian Development Bank Institute (ADBI)](#ADBI-1) | [V. Asian Development Bank Institute (ADBI)](#ADBI-1) |
|  [ADBI-1](#ADBI-1) | [Condensed Statement of Financial Position](#ADBI-1) | 85 |
|  [ADBI-2](#ADBI-2) | [Condensed Statement of Activities and Changes in Net Assets](#ADBI-2) | 86 |
|  [ADBI-3](#ADBI-3) | [Condensed Statement of Cash Flows](#ADBI-3) | 87 |
|  [ADBI-4](#ADBI-4) | [Notes to Condensed Financial Statements](#ADBI-4) | 88 |
| [VI. Regional Cooperation and Integration Fund (RCIF)](#RCIF-1) | [VI. Regional Cooperation and Integration Fund (RCIF)](#RCIF-1) | [VI. Regional Cooperation and Integration Fund (RCIF)](#RCIF-1) |
|  [RCIF-1](#RCIF-1) | [Condensed Statement of Financial Position](#RCIF-1) | 93 |
|  [RCIF-2](#RCIF-2) | [Condensed Statement of Activities and Changes in Net Assets](#RCIF-2) | 94 |
|  [RCIF-3](#RCIF-3) | [Condensed Statement of Cash Flows](#RCIF-3) | 95 |
|  [RCIF-4](#RCIF-4) | [Notes to Condensed Financial Statements](#RCIF-4) | 96 |
| [VII. Climate Change Fund (CCF)](#CCF-1) | [VII. Climate Change Fund (CCF)](#CCF-1) | [VII. Climate Change Fund (CCF)](#CCF-1) |
|  [CCF-1](#CCF-1) | [Condensed Statement of Financial Position](#CCF-1) | 100 |
|  [CCF-2](#CCF-2) | [Condensed Statement of Activities and Changes in Net Assets](#CCF-2) | 101 |
|  [CCF-3](#CCF-3) | [Condensed Statement of Cash Flows](#CCF-3) | 102 |
|  [CCF-4](#CCF-4) | [Notes to Condensed Financial Statements](#CCF-4) | 103 |
| [VIII. Asia Pacific Disaster Response Fund (APDRF)](#APDRF-1) | [VIII. Asia Pacific Disaster Response Fund (APDRF)](#APDRF-1) | [VIII. Asia Pacific Disaster Response Fund (APDRF)](#APDRF-1) |
|  [APDRF-1](#APDRF-1) | [Condensed Statement of Financial Position](#APDRF-1) | 107 |
|  [APDRF-2](#APDRF-2) | [Condensed Statement of Activities and Changes in Net Assets](#APDRF-2) | 108 |
|  [APDRF-3](#APDRF-3) | [Condensed Statement of Cash Flows](#APDRF-3) | 109 |
|  [APDRF-4](#APDRF-4) | [Notes to Condensed Financial Statements](#APDRF-4) | 110 |
| [IX. Financial Sector Development Partnership Special Fund (FSDPSF)](#FSDPSF-1) | [IX. Financial Sector Development Partnership Special Fund (FSDPSF)](#FSDPSF-1) | [IX. Financial Sector Development Partnership Special Fund (FSDPSF)](#FSDPSF-1) |
|  [FSDPSF-1](#FSDPSF-1) | [Condensed Statement of Financial Position](#FSDPSF-1) | 114 |
|  [FSDPSF-2](#FSDPSF-2) | [Condensed Statement of Activities and Changes in Net Assets](#FSDPSF-2) | 115 |
|  [FSDPSF-3](#FSDPSF-3) | [Condensed Statement of Cash Flows](#FSDPSF-3) | 116 |
|  [FSDPSF-4](#FSDPSF-4) | [Notes to Condensed Financial Statements](#FSDPSF-4) | 117 |

---

------

#### MANAGEMENT'S DISCUSSION AND ANALYSIS

#### <br>

#### EXECUTIVE SUMMARY
Under Strategy 2030, which sets the direction for the Asian Development Bank (ADB) to respond effectively to the changing needs of Asia and the Pacific, ADB continues to sustain its efforts to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. In its Strategy 2030 Midterm Review<sup>1</sup>, ADB approved an ambitious new road map to guide its evolution and scale up its support on key challenges facing Asia and the Pacific.

During the first six months of 2025, ADB delivered total commitments of $7.5 billion ($4.1 billion – 2024) and disbursements of $9.0 billion ($6.8 billion – 2024).<sup>2</sup>

***Financial Results:*** Ordinary capital resources (OCR) reported net income of $677 million ($1,264 million – 2024) and allocable net income of $645 million ($813 million – 2024) for the six months ended 30 June 2025. The net income decreased mainly due to the unrealized losses from fair value changes of financial instruments. The allocable net income (non-GAAP measure) decreased due to higher provision for credit losses and administrative expenses, partially offset by higher income from loans and equity-funded liquidity investments.

As of 30 June 2025, loans outstanding balance was $158.4 billion, a $4.5 billion increase from $153.9 billion at 31 December 2024. Liquidity investments after swaps increased by $11.4 billion to $61.1 billion as of 30 June 2025 from $49.7 billion at the end of 2024. Borrowings after swaps increased by $11.9 billion to $168.2 billion at 30 June 2025 from $156.3 billion at the end of 2024. For the six months ended 30 June 2025, ADB issued $27.6 billion bonds ($24.7 billion – 2024).

***Allocation of 2024 Net Income***<sup>3</sup>***:*** In May 2025, the Board of Governors approved the ADB's 2024 financial statements and the allocation of 2024 OCR net income during the ADB's 58th Annual Meeting. The 2024 allocable net income of $1,539 million was allocated as follows: OCR's ordinary reserve ($1,016 million), the Asian Development Fund ($394 million), and the Technical Assistance Special Fund ($130 million).

***ADF 14 Replenishment:*** The 13th replenishment of the Asian Development Fund (ADF 14) and the eighth regularized replenishment of the Technical Assistance Special Fund (TASF) became effective on 23 April 2025. As of 30 June 2025, ADB received instruments of contributions from 26 donors totaling $1,935 million, which represents 75.2% of the total ADF 14 and TASF 8 donor contribution commitment amounting to $2,574 million.<sup>4</sup>

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<sup>1</sup> ADB. 2024. *Strategy 2030 Midterm Review: An Evolution Approach for the Asian Development Bank*.

<sup>2</sup> The figures are for ordinary capital resources (OCR) and Special Funds. Special Funds include the Asian Development Fund (ADF), Technical Assistance Special Fund (TASF), Japan Special Fund (JSF), Regional Cooperation and Integration Fund (RCIF), Asia Pacific Disaster Response Fund (APDRF), Climate Change Fund (CCF) and Financial Sector Development Partnership Special Fund (FSDPSF).

<sup>3</sup> ADB. 2025. *Board of Governor's Resolution No. 434 – Allocation of Net Income.*

<sup>4</sup> US dollar equivalent based on the Board of Governor's Resolution No. 427 exchange rates.

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**I.** OVERVIEW

The Asian Development Bank (ADB), a multilateral development bank, was established in 1966 under the Agreement Establishing the Asian Development Bank (the Charter).<sup>1</sup> ADB is owned by 69 members, 50 of which are regional members providing 63.7% of its capital and 19 nonregional members providing 36.3% of its capital.<sup>2</sup> ADB provides various forms of financial assistance to its developing member countries (DMCs). The main instruments are loans, technical assistance (TA), grants, guarantees, and equity investments. These instruments are funded through ordinary capital resources (OCR), Special Funds, and trust funds. The Charter requires that funds from each resource be kept and used separately. Trust funds are generally funded by contributions and administered by ADB as the trustee.

ADB also offers debt management products such as interest rate swaps and cross currency swaps (including local currency swaps) to its sovereign and sovereign-guaranteed borrowers and entities fully guaranteed by members for their third-party liabilities. In addition, ADB provides policy dialogue and transaction advisory services to its DMCs and private sector clients to promote public–private partnerships in the region, and mobilizes financial resources through its cofinancing operations, which access official and other concessional, commercial, and export credit sources to maximize the development impact of its assistance. Cofinancing for ADB projects can be in the form of external loans, grants for TA and components of loans, equity investments, and credit enhancement products such as guarantees and syndications.

ADB continued to focus on implementing Strategy 2030, its long-term corporate strategy, to achieve a prosperous, inclusive, resilient, and sustainable Asia and the Pacific. During the first six months of 2025, ADB delivered total commitments of $7.5 billion ($4.1 billion – 2024) and disbursements of $9.0 billion ($6.8 billion – 2024).<sup>3</sup> In February 2025, ADB approved a plan to scale up its operations by 50% over the next decade, leveraging its existing capital base to enhance its development impact across Asia and the Pacific.<sup>4</sup> Under the Capital Utilization Plan, ADB will increase its annual financing commitments from $24 billion in 2024 to more than $36 billion by 2034.

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<sup>1</sup> ADB. 1966. *Agreement Establishing the Asian Development Bank.*

<sup>2</sup> Following the provisions of Board of Governor Resolution No. 431, one nonregional member became a regional member effective 30 April 2025.

<sup>3</sup> The figures are for ordinary capital resources (OCR) and Special Funds. Special Funds include the Asian Development Fund (ADF), Technical Assistance Special Fund (TASF), Japan Special Fund (JSF), Regional Cooperation and Integration Fund (RCIF), Asia Pacific Disaster Response Fund (APDRF), Climate Change Fund (CCF) and Financial Sector Development Partnership Special Fund (FSDPSF).

<sup>4</sup> ADB. 2025. *Capital Utilization Plan*. <u>https://www.adb.org/documents/capital-utilization-plan</u>

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2<br>

#### <br>
II. ORDINARY CAPITAL RESOURCES

OCR provides financial assistance to sovereign and nonsovereign borrowers in DMCs in the form of loans, equity investments, and other debt securities. In addition to direct lending, OCR also provides guarantees to assist DMC governments and nonsovereign borrowers in securing commercial funds for ADB-assisted projects and provides transaction advisory services to sovereign and nonsovereign clients.

Funding of OCR lending, investment and other ordinary operations comes from three distinct sources: borrowings from the capital markets and private placements; paid-in capital provided by shareholders; and accumulated retained income (reserves). To fund its OCR operations, ADB issues debt securities in the international and domestic capital markets. ADB's debt securities carry the highest possible investment ratings from three major international credit rating agencies. The funding strategy is aimed at ensuring availability of funds for operations at the most stable and lowest possible cost. Such strategy has enabled OCR to achieve cost-efficient funding levels for its borrowing members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Basis of Financial Reporting** 

ADB's basis of financial reporting are (i) statutory reporting, which is in accordance with accounting principles generally accepted in the United States (US GAAP) reporting requirements, and (ii) management reporting, which is used as the primary measure to make financial management decisions and to monitor key financial ratios. The key financial performance indicator under these two bases is net income for statutory reporting and allocable net income for management reporting.

**Statutory reporting.** ADB prepares OCR financial statements in accordance with US GAAP. ADB manages its balance sheet by selectively using derivatives to minimize interest rate and currency risks associated with its financial instruments. Derivatives are used to enhance asset and liability management of individual positions and overall portfolios. ADB has elected not to define any qualifying hedging relationships, not because economic hedges do not exist, but rather because the application of hedging criteria under the accounting standards does not make fully evident ADB's risk management strategies.

ADB reports all derivative instruments on the balance sheet at fair value and recognizes the changes in fair value for the year as part of net income. To apply a consistent accounting treatment between the borrowings and their related swaps, ADB elects to measure all borrowings that are swapped or are intended to be swapped in the future at fair value. All investments for liquidity purpose, other debt securities classified as available for sale, and equity investments (except for those accounted for under the equity method) are reported at fair value. ADB continues to report its loans, other debt securities classified as held-to-maturity, and the remaining borrowings at amortized cost.

**Management reporting (non-GAAP measure).** ADB also reports OCR financial results based on internal management reporting basis which is used as the primary measure to make financial management decisions and to monitor key financial ratios.

ADB reports allocable net income, which is defined as net income after appropriation of guarantee fees to special reserve and certain adjustments reported in the cumulative revaluation adjustments account.<sup>5</sup> The cumulative revaluation adjustments account sets aside the impact of unrealized gains or losses from fair value changes associated with certain financial instruments

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<sup>5</sup> ADB's Charter stipulates that the Board of Governors shall determine the allocation of net income annually.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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3<br>

and from translation adjustments of nonfunctional currencies, and unrealized gains or losses on equity method investments.

ADB intends to hold most borrowings and swaps until maturity or call, hence interim net unrealized gains and losses reported under the statutory reporting basis will generally converge with the net realized income and expenses that ADB recognizes over the life of these financial instruments.

For equity investments, ADB generally holds its investments until ADB's development role has been fulfilled. Any gains or losses from equity investments recorded at fair value are realized and are deemed available for allocation when ADB exits the investments. Therefore, the periodic net unrealized gains or losses are excluded from the allocable net income until the exit date.

The management reporting basis balance sheet reconciled from the statutory reporting basis balance sheet as of 30 June 2025 is provided in the Appendix. <br>

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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4<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Overall Financial Results** 

OCR reported net income of $677 million ($1,264 million – 2024) and allocable net income of $645 million ($813 million – 2024) for the six months ended 30 June 2025. Table 1 presents the overall financial results for the six months ended 30 June 2025 and 2024.

#### Table 1: Overall Financial Results for the Six Months Ended 30 June
($ million)

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| | | | |
|:---|:---|:---|:---|
| **Item** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2025** | &nbsp;&nbsp;&nbsp;&nbsp; **2024** | **Change** |
|  **Revenue from loans—operations**<sup>a</sup> | **3578** | **4092** | **(514)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Sovereign regular | 2997 | 3487 | (490) |
| &nbsp;&nbsp;&nbsp;&nbsp; Sovereign concessional | 358 | 359 | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp; Nonsovereign | 223 | 246 | (23) |
|  **Revenue from investments for liquidity purpose** | **1269** | **1350** | **(81)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest | 1270 | 1365 | (95) |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized losses on sale of investments | (1) | (15) | 14 |
|  **Revenue from equity investments—operations** | **61** | **51** | **10** |
| &nbsp;&nbsp;&nbsp;&nbsp; Net realized gains<sup>b</sup> | 0 | 7 | (7) |
| &nbsp;&nbsp;&nbsp;&nbsp; Dividends and others | 5 | 3 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gains on equity method investments<sup>c</sup> | 24 | 50 | (26) |
| &nbsp;&nbsp;&nbsp;&nbsp; Unrealized gains (losses) on equity method investments<sup>c</sup> | 32 | (9) | 41 |
|  **Revenue from guarantees—operations** | **14** | **13** | **1** |
|  **Revenue from other debt securities—operations** | **26** | **22** | **4** |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and others | 24 | 22 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Realized gains | 2 | – | 2 |
|  **Revenue from other sources** | **47** | **44** | **3** |
|  **Borrowings and related expenses** | **(3789)** | **(4449)** | **660** |
| (Provision) Release of provision for credit losses | **(110)** | **40** | **(150)** |
|  **Administrative expenses—OCR** | **(383)** | **(333)** | **(50)** |
|  **Other expenses** | **(22)** | **(13)** | **(9)** |
|  **Net unrealized (losses) gains** | **(14)** | **447** | **(461)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Fair value changes | (14) | 452 | (466) |
| &nbsp;&nbsp;&nbsp;&nbsp; Reclassification of unrealized gains on divested equity investments<sup>b</sup> | – | (3) | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp; Translation adjustments of nonfunctional currencies | 0 | (2) | 2 |
|  **Net income** | **677** | **1264** | **(587)** |
|  **Appropriation of guarantee fees to special reserve** | **(14)** | **(13)** | **(1)** |
|  **Net income after appropriation of guarantee fees to special reserve** | **663** | **1251** | **(588)** |
|  **Adjustments** | **(18)** | **(438)** | **420** |
| &nbsp;&nbsp;&nbsp;&nbsp; Net unrealized losses (gains) | 14 | (447) | 461 |
| &nbsp;&nbsp;&nbsp;&nbsp; Unrealized (gains) losses on equity method investments<sup>c</sup> | (32) | 9 | (41) |
|  **Allocable net income (non-GAAP measure)** | **645** | **813** | **(168)** |

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() = negative, – = nil, ADB = Asian Development Bank, OCR = ordinary capital resources. Note: 0 = amount less than $0.5 million.

<sup>a</sup> Includes interest revenue, commitment charges, amortization of front-end fees and loan origination cost and interest on asset swaps. Excludes funding costs.

<sup>b</sup> Sale of equity investments in 2024 resulted in reclassification of the unrealized gains up to 31 December 2023 of $3 million to realized gains. The net realized gains up to the date of sale in 2025 totaled $0.5 million ($7 million – 2024).

<sup>c</sup> Pertains to ADB's proportionate share of gains or losses from equity method investments.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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5<br>

**Net income.** Net income for the six months ended 30 June 2025 decreased to $677 million, from $1,264 million reported in 2024, mainly due to the unrealized losses from fair value changes of financial instruments.

**Allocable net income.**<sup>6</sup> OCR allocable net income for the six months ended 30 June 2025 decreased to $645 million, compared with $813 million in 2024, driven by higher provision for credit losses and administrative expenses, partially offset by higher income from loans and equity- funded liquidity investments.

The change in net income and allocable net income were driven by the following factors.

Revenue from loans decreased by $514 million compared to the same period in 2024 mainly because of the lower average interest rates (Figure 1) applied to regular OCR loans, partially offset by increase in average outstanding loans in 2025 (Figure 2),<br>

Revenue from investments for liquidity purpose decreased by $81 million compared to the same period in 2024 mainly because of the $95 million decrease in interest revenue driven by the lower short-term interest rates on debt-funded liquidity investments compared to the same period in 2024,<br>

Revenue from equity investments, excluding unrealized gains/losses on equity method investments, decreased by $31 million ($29 million – 2025; $60 million – 2024) mainly due to the lower realized gains on equity method investments,<br>

Borrowings and related expenses decreased by $660 million compared to the same period in 2024 mainly because of lower level of short-term interest rates (Figure 1) . Consistent with the market movements, average cost of borrowings under management reporting basis for the six months ended 30 June 2025 decreased to 4.6% from 5.6% of the same period in 2024,<br>

Provision for credit losses amounted to $110 million for the six months ended 30 June 2025. The provision in 2025 was mainly driven by the ongoing macroeconomic uncertainty and shifts in borrower risk characteristics,<br>

Administrative expenses of OCR increased by $50 million primarily because of higher salaries and benefits expenses, and<br>

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| | |
|:---|:---|
| ![](image00006.jpg) <br>| ![](image00005.jpg) |

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<sup>6</sup> Allocable net income is defined as net income after appropriation of guarantee fees to special reserve and certain adjustments set aside in the cumulative revaluation adjustments account.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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6<br>

$14 million net unrealized losses for the six months ended 30 June 2025 ($447 million net unrealized gains – 2024) was largely due to the fair value losses on borrowing and derivatives driven mainly by the movement of medium- and long-term interest rates (Table 2).<br>

#### Table 2: Details of Net Unrealized (Losses) Gains

#### for the Six Months Ended 30 June
($ million)

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| | | | |
|:---|:---|:---|:---|
| **Item** | &nbsp;&nbsp;&nbsp; **2025** | &nbsp;&nbsp; **2024** | **Change** |
|  Fair value changes from: | **(14)** | **452** | **(466)** |
| &nbsp;&nbsp;&nbsp; Borrowings and related derivatives | (19) | 378 | (397) |
| &nbsp;&nbsp;&nbsp; Loans related derivatives | 107 | (2) | 109 |
| &nbsp;&nbsp;&nbsp; Investments related derivatives | (109) | 65 | (174) |
| &nbsp;&nbsp;&nbsp; Equity investments | 7 | 11 | (4) |
|  Reclassification of unrealized gains on divested equity investment | <br> **–** | **(3)** | **3** |
|  Translation adjustments of nonfunctional currencies | **0** | **(2)** | **2** |
|  **Total** | **(14)** | **447** | **(461)** |
| () = negative, – = nil.<br> Note: 0 = amount less than $0.5 million. |  |  |  |

---

**Selected Financial Data.** Selected financial data are presented in Table 3. For the six months ended 30 June 2025, return on earning assets and return on equity, under both reporting bases, decreased because of lower net income and allocable net income compared to the same period in 2024. Return on loans, return on investments for liquidity purposes, and cost of borrowings, under both reporting bases, decreased because of lower levels of short-term interest rates in 2025 compared to the same period in 2024.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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7<br>

#### <br>

#### Table 3: Selected Financial Data
(%, unless otherwise stated)

---

| | | | |
|:---|:---|:---|:---|
| **Item** | **30 June 2025** | **30 June 2024** | **31 December 2024** |
|  **Operational Highlights ($ million)** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans, Guarantees, EI, and ODS Committed<sup>a</sup> | 7301 | 3982 | 22920 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans, EI, and ODS Disbursements | 8714 | 6567 | 17911 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans and ODS Principal Repayments and Prepayments | 6986 | 6048 | 12956 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans, EI, and ODS Outstanding | 160718 | 152038 | 156112 |
|  **Statutory Reporting Basis** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net Income ($ million) | 677 | 1264 | 1629 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Earning Assets<sup>b</sup> | 0.6 | 1.0 | 0.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Equity<sup>c</sup> | 2.3 | 3.7 | 2.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Loans<sup>d</sup> | 4.5 | 5.0 | 4.9 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Investments for Liquidity Purpose<sup>e</sup> | 4.1 | 5.0 | 4.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Borrowings<sup>f</sup> | 4.6 | 5.4 | 5.2 |
|  **Management Reporting Basis (non-GAAP measure)**<sup>g</sup> |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Allocable Net Income<sup>h</sup> ($ million) | 645 | 813 | 1539 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Earning Assets<sup>b</sup> | 0.6 | 0.8 | 0.7 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Equity<sup>c</sup> | 2.3 | 2.9 | 2.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Loans<sup>d</sup> | 4.5 | 5.3 | 5.2 |
| &nbsp;&nbsp;&nbsp;&nbsp; Return on Investments for Liquidity Purpose<sup>e</sup> | 4.3 | 4.9 | 4.8 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cost of Borrowings<sup>f</sup> | 4.6 | 5.6 | 5.5 |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital Utilization Ratio<sup>i</sup> | 73.0 | 71.6 | 71.5 |

---

EI = equity investments, ODS = other debt securities.

Note: All ratios are annualized and based on average monthly balances. Amounts and ratios are year-to-date figures except for outstanding balances and capital utilization ratio, which are as of period-end.

<sup>a</sup> Includes commitments under the private sector programs namely, the Trade and Supply Chain Finance and the Microfinance Program.

<sup>b</sup> Net income (for statutory reporting basis) or allocable net income (for management reporting basis) divided by average earning assets. Earning assets comprise investments for liquidity purpose, loans outstanding, equity investments, and other debt securities (all after swaps, if applicable).

<sup>c</sup> Net income (for statutory reporting basis) or allocable net income (for management reporting basis) divided by average equity balances.

<sup>d</sup> Interest revenue on loans, commitment fees, other revenue or expenses on loans and related swaps, and gains or losses on related swaps divided by average outstanding loans after swaps. For the six months ended 30 June 2025, under statutory basis reporting, the return on regular and concessional OCR loans was 5.1% and 2.6%, respectively, while under management basis reporting, the return on regular and concessional OCR loans was 5.1% and 2.1%, respectively.

<sup>e</sup> Interest revenue and gains or losses on investments and related swaps divided by average balances of investments after swaps.

<sup>f</sup> Financial expenses and gains or losses on borrowings and related swaps divided by average outstanding borrowings after swaps.

<sup>g</sup> Management reporting basis ratios exclude impact of unrealized gains or losses from fair value changes associated with certain financial instruments, unrealized gains or losses on equity method investments, and nonnegotiable and noninterest-bearing demand obligations on account of subscribed capital.

<sup>h</sup> Allocable net income is defined as net income after appropriation of guarantee fees to special reserve and certain adjustments set aside in the cumulative revaluation adjustments account.

<sup>i</sup> Capital utilization ratio is the ratio of the total economic capital used to usable equity.

**1.** **Loans**

**Loans**—**operations.** ADB's OCR lending falls into two categories: sovereign and nonsovereign. Sovereign loans consist of sovereign regular OCR loans and sovereign concessional OCR loans. Sovereign regular OCR loans are available to sovereign and sovereign-guaranteed borrowers in ADB DMCs that have attained higher economic development and sovereign concessional OCR loans are available for the poorest and most vulnerable members of ADB. ADB also provides lending without sovereign guarantee to privately-held or state-owned or subsovereign entities. In its nonsovereign operations, ADB provides financial assistance based on market-based terms and conditions. ADB, as needed, helps mobilize additional debt from diverse institutions, such as private and public financial institutions and development partners.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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8<br>

OCR offers lending products broadly in three modalities:

<br> - Project – Also known as investment lending, it finances expenditures incurred for discrete investment projects and focuses on project implementation. Disbursements in this modality are linked to expenditures for inputs. Nonsovereign loans fall under this modality.

Policy-based – This modality provides sovereign budget support for structural reforms and development expenditure programs in developing member countries. In certain circumstances, it may also be used to provide balance of payments or counter-cyclical fiscal support. It is linked to the implementation of policy reforms, disbursed quickly, and targeted to sector-wide and economy-wide impact.<br>

<br> - Results-based – It supports government-owned sector programs and disburses ADB funds based on the achievement of program results.

Table 4 shows OCR's loans outstanding by modality.

#### Table 4: OCR Loans Outstanding by Modality

#### as of 30 June 2025 and 31 December 2024
($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Sovereign** | **Sovereign** |  |  |
|  | **Regular** | **Concessional** | **NSO** | **Total** |
| **<u>30 June 2025</u>** |  |  |  |  |
| Project Loan | 73051 | 22245 | 6385 | 101681 |
| Policy-based Loan | 38837 | 11894 | – | 50731 |
| Results-based Loan | 6240 | 1119 | – | 7359 |
| Total Outstanding | 118129 | 35258 | 6385 | 159772 |
| Accounting adjustments<sup>a</sup> | (585) | (97) | (39) | (722) |
|  | 117543 | 35161 | 6346 | 159050 |
| Allowance for credit losses on loans | (98) | (177) | (373) | (648) |
| **Loans Outstanding** | **117445** | **34984** | **5973** | **158402** |
| **<u>31 December 2024</u>** |  |  |  |  |
| Project Loan | 72968 | 21441 | 5754 | 100163 |
| Policy-based Loan | 36537 | 11133 | – | 47670 |
| Results-based Loan | 5872 | 866 | – | 6738 |
| Total Outstanding | 115377 | 33439 | 5754 | 154570 |
| Accounting adjustments<sup>a</sup> | (25) | (107) | (34) | (166) |
|  | 115352 | 33332 | 5720 | 154404 |
| Allowance for credit losses on loans | (91) | (163) | (286) | (540) |
| **Loans Outstanding** | **115261** | **33169** | **5434** | **153864** |

---

() = negative, – = nil, NSO = nonsovereign operations, OCR = ordinary capital resources. Note: Numbers may not sum precisely because of rounding.

<sup>a</sup> Includes fair value adjustment on loans, unamortized loan origination cost, and unamortized front-end fee.

**Expected credit loss.** ADB measures expected credit losses for loans, guarantees, and held-to- maturity other debt securities. Credit losses are measured over the contractual term (lifetime) of the asset or commitment based on all available information: historical experience, current conditions, and macroeconomic forecasts. ADB is also exposed to credit risks on off-balance sheet exposures and records a liability for credit losses on undisbursed loan and held-to-maturity other debt securities commitments and guarantees.

As of 30 June 2025, total allowance for credit losses and liability for credit losses on off-balance sheet exposures increased to $788 million ($675 million – 31 December 2024), primarily attributed to the ongoing macroeconomic uncertainty and shifts in borrower risk characteristics. Allowance

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

------

9<br>

for credit losses and liability for credit losses on off-balance sheet exposures are summarized in Table 5.

**Table 5: Summary of Allowance for Credit Losses**

 **and Liability for Credit Losses on Off-Balance Sheet Exposures**

($ million)

---

| | | |
|:---|:---|:---|
|  **Item** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **30 June 2025** | &nbsp;&nbsp;&nbsp;&nbsp; **31 December 2024** |
|  **Allowance for credit losses on loans** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **648** | **540** |
| &nbsp;&nbsp;&nbsp; Sovereign regular OCR loans | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 98 | 91 |
| &nbsp;&nbsp;&nbsp; Sovereign concessional OCR loans<sup>a</sup> | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 177 | 163 |
| &nbsp;&nbsp;&nbsp; Nonsovereign loans | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 373 | 286 |
|  **Allowance for credit losses on other debt securities** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **30** | **14** |
|  **Liability for credit losses on off-balance sheet exposures** | **110** | **121** |
|  **Total<sup>b</sup>** | **788** | **675** |

---

OCR = ordinary capital resources.

<sup>a</sup> Include allowance for heavily indebted poor countries debt relief ($33 million – 30 June 2025, $33 million – 31 December 2024).

<sup>b</sup> Excludes Recovery Assets from risk transfer arrangements.

**Status of loans.** ADB places loans in non-accrual status when the principal, interest or other charges are overdue by more than 180 days or in case of loans that are not yet overdue by more than 180 days, when there is expectation that loan service payment will not be collected when they become due at the point when such information is known. Once a loan to a borrower is placed in non-accrual status, all other overdue loans to the same borrower will be placed in non- accrual status. On the date a borrower's loan is placed into non-accrual status, unpaid interest and other charges accrued are deducted from the revenue of the current period. As of 30 June 2025, there was one sovereign concessional loan borrower with 11 loans in non-accrual status with outstanding amount of $511 million (one sovereign concessional loan borrower with 11 loans with outstanding amount of $486 million – 31 December 2024) and there were seven nonsovereign borrowers in non-accrual status with outstanding amount of $92 million (seven nonsovereign borrowers with outstanding amount of $98 million – 31 December 2024).

**Summary of loan activities.** Table 6 shows the summary of loan commitments and Table 7 shows the disbursements and repayments for sovereign regular OCR, sovereign concessional OCR and nonsovereign loans. For the six months ended 30 June 2025, the total OCR loan commitments was $5,763 million ($2,713 million – 2024). The $3,050 million or 112.4% increase in loan commitments was mainly due to the increase in sovereign regular OCR loan commitments and sovereign concessional OCR policy-based loan commitments, partially offset by the decrease in sovereign concessional OCR project loan commitments and nonsovereign project loan commitments. The total loan disbursements during the six months ended 30 June 2025 increased to $8,617 million from $6,460 million during the same period in 2024 due to the higher sovereign and nonsovereign loan disbursements in 2025.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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10<br>

#### Table 6: OCR Loan Commitments

#### for the Six Months Ended 30 June

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2024** | **2024** |  |
|  | <br> **Number<sup>a</sup>** | **Amount**<br> ($ million)  | <br> **Number<sup>a</sup>** | **Amount**<br> **($ million)**  | **Change<br> ($ million)**<br>|
|  **Sovereign Regular** | **18** | **4702** | **10** | **1512** | **3190** |
| &nbsp;&nbsp;&nbsp; Project | 13 | 2855 | 8 | 1212 | 1643 |
| &nbsp;&nbsp;&nbsp; Policy-based | 4 | 1800 | 2 | 299 | 1501 |
| &nbsp;&nbsp;&nbsp; Results-based | 1 | 48 | – | – | 48 |
|  **Sovereign Concessional** | **4** | **875** | **11** | **779** | **96** |
| &nbsp;&nbsp;&nbsp; Project | 2 | 175 | 8 | 476 | (301) |
| &nbsp;&nbsp;&nbsp; Policy-based | 2 | 700 | 3 | 303 | 397 |
| &nbsp;&nbsp;&nbsp; Results-based | – | – | – | – | – |
|  **Nonsovereign—Project** | **7** | **186** | **10** | **422** | (236) |
|  **Total** | **29** | **5763** | **31** | **2713** | **3050** |

---

() = negative, – = nil, OCR = ordinary capital resources.

Note: Amounts are based on exchange rates at loan signing date. Numbers may not sum precisely because of rounding.

<sup>a</sup> Commitments for sovereign loans and nonsovereign project loans are counted based on the number of loans committed.

#### Table 7: OCR Loan Disbursements and Repayments

#### for the Six Months Ended 30 June
($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp; **2025** | &nbsp;&nbsp;&nbsp; **2025** | &nbsp;&nbsp;&nbsp; **2024** | &nbsp;&nbsp;&nbsp; **2024** |
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Disbursements** | &nbsp;&nbsp;&nbsp; **Repayments**<sup>a</sup> | **Disbursements** | &nbsp;&nbsp;&nbsp; **Repayments**<sup>a</sup> |
|  **Sovereign Regular** | **5397** | **5095** | **4598** | **4300** |
| &nbsp;&nbsp;&nbsp; Project | 1994 | 2602 | 2716 | 2124 |
| &nbsp;&nbsp;&nbsp; Policy-based | 3093 | 2362 | 1656 | 2079 |
| &nbsp;&nbsp;&nbsp; Results-based | 310 | 131 | 226 | 96 |
|  **Sovereign Concessional** | **1767** | **984** | **1385** | **988** |
| &nbsp;&nbsp;&nbsp; Project | 706 | 715 | 875 | 734 |
| &nbsp;&nbsp;&nbsp; Policy-based | 800 | 247 | 390 | 234 |
| &nbsp;&nbsp;&nbsp; Results-based | 261 | 22 | 120 | 19 |
|  **Nonsovereign**<sup>b</sup> | **1453** | **869** | **476** | **731** |
|  **Total** | **8617** | **6948** | **6460** | **6019** |

---

OCR = ordinary capital resources.

Note: Numbers may not sum precisely because of rounding.

<sup>a</sup> Includes prepayment of $208 million for three sovereign regular OCR loans and $16 million for 10 nonsovereign loans for the six months ended 30 June 2025 ($94 million for two sovereign regular OCR loans and $108 million for two nonsovereign loans – 2024). Amounts are based on the United States dollar equivalent as of receipt of payment.

<sup>b</sup> Includes loan disbursements and repayments under the private sector programs.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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11<br>

#### Table 8: OCR Loans Outstanding by Product

#### as of 30 June 2025 and 31 December 2024
($ million)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Sovereign** | **Sovereign** | **Sovereign** | **Sovereign** | | |
|  | **Regular**  | **Regular**  | **Concessional**  | **Concessional**  | **Nonsovereign**  | **Nonsovereign**  |
| **Product** | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| Flexible loan product<sup>a</sup> | 114675 | 114212 | n/a | n/a | 4564 | 4172 |
| Local currency loans | 3307 | 1013 | n/a | n/a | 1821 | 1582 |
| Concessional loans | n/a | n/a | 35258 | 33439 | n/a | n/a |
| Pool-based single currency loans<sup>b</sup> | 147 | 152 | n/a | n/a | n/a | n/a |
| Total Outstanding | 118129 | 115377 | 35258 | 33439 | 6385 | 5754 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounting adjustments<sup>c</sup> | (585) | (25) | (97) | (107) | (39) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp; Allowance for credit losses | (98) | (91) | (177) | (163) | (373) | (286<br><u>)</u> |
| **Loans Outstanding** | **117445** | **115261** | **34984** | **33169** | **5973** | **5434** |

---

() = negative, n/a = not applicable, OCR = ordinary capital resources, PSCL = Pool-based single currency loan

Note: Numbers may not sum precisely because of rounding.

<sup>a</sup> Includes fixed rate loans amounting to $5,994 million for sovereign regular OCR loans and $459 million for nonsovereign loans as of 30 June 2025 ($7,474 million for sovereign regular OCR loans and $500 million for nonsovereign loans – 31 December 2024).

<sup>b</sup> PSCLs are legacy loan products and are no longer offered.

<sup>c</sup> Includes fair value adjustment on loans, unamortized loan origination cost, and unamortized front-end fee.

**Sovereign regular OCR loans.** The Flexible Loan Product (FLP) is the primary loan product for sovereign regular OCR. The cost-base rate7 used for FLP loans are the Secured Overnight Financing Rate (SOFR) compounded in arrears for US dollar-denominated loans and the Tokyo Overnight Average Rate (TONA) for yen-denominated loans. FLP loans have a lending rate consisting of the cost-base rate, lending spread, rebates or surcharges, and maturity premiums, if applicable (Table 9). If the lending rate calculated for any 6-month interest period is negative, the interest rate floor of zero will apply.

The FLP is designed to meet demand by borrowers for loan products that suit project needs and effectively manage their external debt. ADB provides sovereign regular OCR borrowers of FLP loans with options to manage their interest rate and exchange rate risks, while providing low intermediation risk to ADB. Borrowers may request a conversion of all or any portion of the principal amount of the loan through: (i) conversions to any standard currency or changes to the loan currency of all or part of the disbursed or undisbursed loan amounts; (ii) conversions to any nonstandard currency in which ADB can effectively intermediate (other than for conversions to a local currency) or changes to the loan currency of all or a part of the disbursed or undisbursed loan amounts; (iii) an interest rate conversion from floating to fixed or vice-versa of all or part of the disbursed or undisbursed loan amounts at the time of disbursement; and (iv) an establishment of an interest rate cap or an interest rate collar on a floating rate. During the six months ended 30 June 2025, ADB executed 19 local currency and interest rate conversions totaling $1,863 million (nil – 2024). There were 18 loan conversions made effective totaling $2,347 million, comprising of 15 loan conversions executed in March 2025, and three loan conversions executed in October 2024.

Local currency loans (LCLs) are offered to sovereign borrowers in different local currencies which ADB can effectively intermediate. ADB responds to the evolving financial needs of borrowers to reduce their currency mismatch in DMCs.

LCLs may be made on a fixed or floating rate basis with an effective contractual spread. Floating rate LCLs typically reset every three or six months. The cost-base rate of an LCL is determined

------

<sup>7</sup> The Euro Interbank Offered Rate (EURIBOR) and New Zealand Dollar (NZD) bank bill rate will continue to be used for Euro and NZD loans, respectively.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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12<br>

by its financing mode. Table 9 shows the summary of charges on sovereign regular OCR FLP loans and LCLs as of 30 June 2025.

#### Table 9: Summary of Charges on Sovereign Regular OCR

#### Flexible Loan Product and Local Currency Loans as of 30 June 2025
(basis point)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Item** | **FLP** | **CSF** | **SPBL** | **LCL** |
| <br>A. Loan Term | For project and results-based,<br> flexible loan terms of up to 19<br> years of average loan maturity;<br> For policy-based, loan term of<br> 15 years including a grace<br> period of up to 3 years | Loan term of 7 years, including<br> a grace period of up to 3 years | Loan term of 5 to 8 years,<br> including a grace period of up<br> to 3 years | For project and results-based, flexible loan terms of up to 19 years of average loan maturity; For policy-based, loan term of 15 years including a grace period of up to 3 years |
| **B. Cost-Base Rate**<sup>a</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1. US dollar | 6-month SOFR compounded in arrears | 6-month SOFR compounded in arrears | 6-month SOFR compounded in arrears |  |
| &nbsp;&nbsp;&nbsp;&nbsp;2. Yen | 6-month TONA compounded in arrears | 6-month TONA compounded in arrears | 6-month TONA compounded in arrears |  |
| &nbsp;&nbsp;&nbsp;&nbsp;3. Euro | 6-month EURIBOR | 6-month EURIBOR | 6-month EURIBOR |  |
| &nbsp;&nbsp;&nbsp;&nbsp;4. New Zealand dollar | 6-month Bank Bill Rate | 6-month Bank Bill Rate | 6-month Bank Bill Rate |  |
| &nbsp;&nbsp;&nbsp;&nbsp;5. Yuan |  |  |  | 3-month SHIBOR |
| &nbsp;&nbsp;&nbsp;&nbsp;6. Tenge |  |  |  | ADB Funding Rate |
| **C. Lending Spread**<sup>b</sup> | 50 | 75 | 200 | 50 |
| **D. Maturity Premium**<sup>c</sup> **for loans** |  |  |  |  |
| **with average maturity of** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1. < 9 years | 0 | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;2. 9 years up to 13 years | 0–40 | 0–40 | 0–40 | 0–40 |
| &nbsp;&nbsp;&nbsp;&nbsp;3. >13 years up to 16 years | 0–50 | 0–50 | 0–50 | 0–50 |
| &nbsp;&nbsp;&nbsp;&nbsp;4. >16 years up to 19 years | 0–75 | 0–75 | 0–75 | 0–75 |
| **E. Surcharge or (Rebate)**<sup>d</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1. US dollar | 37 | 43 | 43 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;2. Yen | (24) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;3. Euro | 12 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;4. New Zealand dollar | 52 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;5. Yuan |  |  |  | (35) |
| **F. Commitment Charges**<sup>e</sup> | 15 | 15 | 75 | 15 |

---

() = negative, CSF = Countercyclical Support Facility, EURIBOR = Euro Interbank Offered rate, FLP = Flexible Loan Product, LCL = local currency loan, OCR = ordinary capital resources, SHIBOR = Shanghai Interbank Offered rate, SOFR = Secured Overnight Financing Rate, SPBL = special policy-based loan, TONA = Tokyo Overnight Average Rate, US = United States.

<sup>a</sup> The LCL cost-base rate depends on whether financing in a local currency is based on back-to-back funding or the pool-based approach. For back-to-back funding, the cost-base rate comprises ADB's cost of a funding transaction undertaken to finance a specific loan. For a pool-based funding approach, the cost-base rate is based on the local floating-rate benchmark.

<sup>b</sup> The current FLP and LCL effective contractual spread is 50 basis points for loans negotiated on or after 1 January 2014. The terms of emergency assistance loans are similar to FLP terms.

<sup>c</sup> For loans which formal negotiations were completed on or after 1 April 2012, a maturity premium is added to the contractual spread and applied for the entire life of the loan. A limit of 19 years applies to the average loan maturity of FLP loans and LCLs. For all loans to regular OCR-only borrowing countries, approved on or after 1 January 2021, a new pricing structure was implemented to adjust the pricing framework and introduce diversity in the current flat pricing structure for countries in different stages of development. The new maturity premium is applied for the life of a loan regardless of country group changes during the tenor of the loan.

<sup>d</sup> To maintain the principle of the cost pass-through pricing policy, ADB passes on its actual funding cost margin to its borrowers through a surcharge or rebate and these are incorporated into the interest rate for the succeeding interest period. Rebates or surcharges for all FLPs are determined in January and July every year on the basis of the average funding cost margin below or above the relevant benchmark for the preceding 6 months. The information presented is applicable for 1 January to 30 June 2025.

<sup>e</sup> The commitment charge is levied on undisbursed balances beginning 60 days after signing of the applicable loan agreement. For loans under contingent disaster financing, the borrower will pay, in lieu of commitment charges, a front-end fee of 25 or 10 basis points of the committed loan amount depending on the contingent disaster financing option.

**Sovereign concessional OCR loans.** ADB offers sovereign concessional OCR loans to eligible DMCs. Concessional loans represent the concessional financing to DMCs with (i) per capita gross national income below the International Development Association (IDA) operational cut-off; (ii) least developed countries with per capita gross national income above the IDA operational cut- off; and (iii) per capita gross national income above the IDA operational cut-off with limited or lack of creditworthiness.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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13<br>

#### Table 10: Sovereign Concessional OCR Loan Terms

#### as of 30 June 2025

---

| | | | | |
|:---|:---|:---|:---|:---|
|  <br> **Terms** | **Concessional**<br> **Assistance-Only**<br> **Countries**<sup>a</sup> | **OCR Blend**<br> **Countries**<sup>b,</sup> <sup>c</sup> | <br> **SIDS** | **Emergency** <br> **Assistance** |
| A. Maturity (years) | 24 – 32 | 25 | 40 | &nbsp;&nbsp;&nbsp; 40 |
| B. Grace period (years) | 8 | 5 | 10 | &nbsp;&nbsp;&nbsp; 10 |
| C. Interest rate during the grace period | 1.0% | 2.0% | 1.0% | &nbsp;&nbsp;&nbsp; 1.0% |
| D. Interest rate during the amortization period | 1.5% | 2.0% | 1.0% | &nbsp;&nbsp;&nbsp; 1.0% |
| E. Principal repayment |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;1. First 10 years after the grace period | Equal | Equal | 2.0%<sup>d</sup> | &nbsp;&nbsp;&nbsp; 2.0%<sup>d</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;2. Year thereafter | Equal | Equal | 4.0%<sup>d</sup> | &nbsp;&nbsp;&nbsp; 4.0%<sup>d</sup> |

---

OCR = ordinary capital resources, SIDS = small island developing states

<sup>a</sup> Countries that are eligible for sovereign concessional OCR loans and/or Asian Development Fund grants.

<sup>b</sup> Countries that are eligible for both sovereign regular and concessional OCR loans.

<sup>c</sup> Applicable for projects with loan negotiations completed on or after 1 January 2013.

<sup>d</sup> Principal repayment will be calculated based on the approved loan amount multiplied by the annual rate of 2.0% for the first 10 years after the grace period and 4.0% thereafter.

The borrowers of sovereign concessional OCR loans may choose a currency of liability in special drawing rights (SDR) or a currency that is available under ADB's FLP and in the SDR basket, subject to ADB's confirmation of the availability of such currency. As of 30 June 2025, over 97% (97% – 31 December 2024) of the sovereign concessional OCR loans were in SDR (52%) and US dollars (45%).

**Nonsovereign loans.** The FLP is the primary loan product for nonsovereign operations. Similar with the sovereign regular OCR loans, the cost-base rate used for FLP loans are SOFR compounded in arrears as primary option together with the optional Term SOFR for US dollar- denominated loans, and the TONA compounded in arrears is the cost-base rate for yen- denominated loans. As of 30 June 2025, all nonsovereign loans have successfully transitioned to the FLP, with the exception of a few loans where ADB applies its cost of funds until contract amendments are finalized.

ADB applies market-based pricing to determine the lending spread, front-end fees, and commitment charges, and other fees for each loan. The lending spread is intended to cover ADB's risk exposure to specific borrowers and projects and the front-end fee to cover the administrative costs incurred in loan origination. Front-end fees are typically 1% to 1.25% depending on the transaction. ADB applies a commitment fee (typically 0.50% to 1.0% per year) on the undisbursed loan balance.

LCLs are also offered to nonsovereign borrowers in different local currencies which ADB can effectively intermediate. ADB responds to the evolving financial needs of borrowers to reduce their currency mismatch in DMCs. LCLs are priced based on relevant local currency funding benchmarks or ADB's funding costs and a credit spread.

**2.** **Guarantees**

**Private Sector Programs.** ADB's private sector programs include the Trade and Supply Chain Finance (TSCFP) and Microfinance programs (MFP). The TSCFP has two main streams of activity: (i) it provides guarantees and loans through partner banks to close market gaps for trade finance, including among small and medium-sized businesses, to generate the trade-led growth and jobs that underpin development; and (ii) it delivers knowledge products, services, and

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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14<br>

solutions to make global trade and supply chains green, resilient, inclusive, transparent and socially responsible. The MFP provides risk participation on revolving basis for loans made by commercial financial institutions to microfinance institutions in ADB's DMCs. Table 11 shows the commitments under the private sector programs.

#### Table 11: OCR Commitments under Private Sector Programs

#### for the Six Months Ended 30 June
($ million)

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| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **2025** | &nbsp;&nbsp;&nbsp;&nbsp; **2024** | **Change** |
|  Short-term | 727 | 860 | (133) |
|  Long-term | 274 | 236 | 38 |
|  Total<sup>a</sup> | **1001** | **1096** | (95) |
| MFP = Microfinance Program, OCR = ordinary capital resources, TSCFP = Trade and Supply Chain Finance Program<br> Note: Short-term has maturity of less than 365 days. Long-term has maturity of 365 days or more. | MFP = Microfinance Program, OCR = ordinary capital resources, TSCFP = Trade and Supply Chain Finance Program<br> Note: Short-term has maturity of less than 365 days. Long-term has maturity of 365 days or more. | MFP = Microfinance Program, OCR = ordinary capital resources, TSCFP = Trade and Supply Chain Finance Program<br> Note: Short-term has maturity of less than 365 days. Long-term has maturity of 365 days or more. | MFP = Microfinance Program, OCR = ordinary capital resources, TSCFP = Trade and Supply Chain Finance Program<br> Note: Short-term has maturity of less than 365 days. Long-term has maturity of 365 days or more. |

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<sup>a</sup> Includes $745 million guarantees ($786 million – 2024) and $164 million loans ($143 million – 2024) under TSCFP, and $92 million ($167 million – 2024) guarantees under MFP.

**Policy-Based Guarantee.** ADB's policy-based guarantee (PBG) is anchored with policy conditions and provides guarantee over government borrowing from private financiers. The PBG helps the government access to commercial borrowing and improves the terms of such borrowing. In June 2025, ADB signed its first ever PBG amounting up to $500 million.

**Exposure Exchange Agreement.** The exposure exchange agreement (EEA) provides for the simultaneous exchange of credit risk coverage for potential non-accrual events on the exchanged sovereign exposures. In case of non-accrual events, the party providing protection would pay the other counterparty interest for any period the covered exposure is in nonaccrual, and principal when the covered exposure is fully or partially written-off. The EEA transaction is treated as an exchange of two separate financial guarantees (guarantee provided and guarantee received). As of 30 June 2025, ADB's total amount of guarantee provided and received under its EEA with peer multilateral development banks amounted to $6.0 billion ($6.0 billion – 31 December 2024).

**3.** **Investments for Liquidity Purpose**

The OCR liquidity investment portfolio after swaps including securities purchased under resale arrangements and securities transferred under repurchase agreements amounted to $61,069 million as of 30 June 2025 ($49,725 million – 31 December 2024). ADB's liquidity investment portfolio primarily consists of high-quality liquid fixed income investments. For the six months ended 30 June 2025, the overall rate of return under the management reporting basis decreased to 4.3% from 4.9% during the same period in 2024.

**4.** **Borrowings**

OCR borrowings after swaps as of 30 June 2025 amounted to $168,218 million ($156,348 million – 31 December 2024). The average cost of borrowings after swaps for the six months ended 30 June 2025 was 4.6% under the management reporting basis (5.6% – 2024). For the six months ended 30 June 2025, ADB issued $27,614 million bonds ($24,721 million – 2024) and $2,780 million in short-term funds under its Euro-Commercial Paper Programme ($4,073 million – 2024).

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Equity and Headrooms** 

As of 30 June 2025, ADB's total authorized capital of 10,639,233 shares valued at $146,117 million was fully subscribed, which consisted of $7,322 million paid-in and $138,795 million callable capital. The details of ADB's equity as of 30 June 2025 and 31 December 2024 are shown in Table 12.

#### Table 12: Details of Equity

#### as of 30 June 2025 and 31 December 2024
($ million, SDR million)

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| | | |
|:---|:---|:---|
|  | **30 June 2025** | **31 December 2024** |
| Authorized (SDR106,392) |  |  |
| Subscribed (SDR106,392) | $146117 | $138749 |
| Less: Callable capital subscribed | 138795 | 131796 |
| Paid-in capital subscribed | 7322 | 6953 |
| Less: Other adjustments<sup>a</sup> | 20 | 25 |
|  | 7302 | 6928 |
| Add: (1) ADF assets transfer<sup>b</sup> | 30748 | 30748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;(2) Other reserves<sup>c</sup> | 19536 | 18759 |
| Total Equity | $57586 | $56435 |

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ADF = Asian Development Fund, SDR = special drawing rights, OCR = ordinary capital resources.

<sup>a</sup> Comprises discount and nonnegotiable, noninterest-bearing demand obligations on account of subscribed capital. (See OCR-1 of the Financial Statements).

<sup>b</sup> The transfer of ADF assets to OCR on 1 January 2017 was treated as a contribution from ADF which was recognized as a one- time income.

<sup>c</sup> Includes ordinary reserve, special reserve, surplus, cumulative revaluation adjustments, net income after appropriation less net notional amounts required to maintain value of currency holdings, and accumulated other comprehensive income (loss). (See OCR-1 of the Financial Statements).

**Callable capital.** Callable capital can be called only if required to meet ADB's obligations incurred on borrowings or guarantees under OCR. No call has ever been made on ADB's callable capital.

**Paid-in capital.** ADB's paid-in capital may be freely used in its ordinary operations, except that DMCs have the right under the Charter to restrict the use of a portion of their paid-in capital to make payments for goods and services produced and intended for use in their respective territories.

**New Regional Member.** Following the provisions of Board of Governor Resolution No. 431, Türkiye became a regional member effective 30 April 2025. Türkiye joined ADB as a nonregional member in 1991. With its new status, Türkiye becomes eligible for ADB's ordinary capital resources lending and full participation in ADB's operations.

**Allocation of OCR net income.**<sup>8</sup> In accordance with Article 40 of the Charter, the BOG annually approves the allocation of the previous year's net income to reserves and/or surplus. In addition, to the extent feasible, it approves the transfer of part of net income to Special Funds to support development activities in the DMCs. In May 2025 and 2024, the BOG approved the allocation of OCR's net income for 2024 and 2023, respectively, as shown in Table 13.

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<sup>8</sup> ADB. 2025. *Board of Governors' Resolution No. 434 – Allocation of Net Income.*

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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#### Table 13: Allocation of OCR Net Income
($ million)

---

| | | |
|:---|:---|:---|
|  | **For the years ended** | **For the years ended** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2024** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2023** |
|  Net Income | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1629 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 938 |
|  Adjustment to cumulative revaluation adjustments | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (63) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 513 |
|  Appropriation of guarantee fees to special reserve | (27) | (28) |
|  Allocable net income (non-GAAP measure) | 1539 | 1423 |
|  Allocation to ordinary reserve | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1016 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1005 |
|  Allocation to special funds |  |  |
| &nbsp;&nbsp;&nbsp; Asian Development Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 394 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 293 |
| &nbsp;&nbsp;&nbsp; Technical Assistance Special Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 130 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 110 |
| &nbsp;&nbsp;&nbsp; Asia Pacific Disaster Response Fund | – | 15 |
|  Total Allocated Net Income | 1539 | 1423 |
| () = negative, – = nil, OCR = ordinary capital resources.<br> Note: Numbers may not sum precisely because of rounding. |  |  |

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**Headrooms.** ADB's lending limitation policy limits the total amount of disbursed loans, disbursed equity investments, disbursed other debt securities, related prudential buffer, and the maximum amount that could be demanded from ADB under its guarantee portfolio, to the total amount of ADB's unimpaired subscribed capital, reserves, and surplus, exclusive of the special reserve. The Charter allows the use of OCR for equity investments up to 10% of ADB's unimpaired paid-in capital actually paid up at any given time together with reserves and surplus, excluding special reserves.

In February 2025, ADB's Board of Directors approved the report on the removal of the Charter lending limitation (CLL) together with a resolution for submission to the BOG requesting the BOG to cast their votes on the proposed resolution to remove the CLL within the specified voting period, which is expected to conclude in October 2025 (subject to extension by the Board of Directors as appropriate). Upon the adoption of the resolution by a supermajority of ADB's BOG, the removal of the CLL will enter into force and take effect 3 months after the date that ADB officially communicates the adoption of said resolution to its members. In conjunction with the CLL removal, the Board of Directors also approved in February 2025 the introduction of a new non- risk-based Basel-type capital-to-exposure ratio into ADB's CAF, which will replace the CLL and become effective as of the effective date of the amendment of the Charter.

As of 30 June 2025, ADB's lending headroom was $34,735 million, representing 82% utilization of the lending authority ($32,107 million representing 83% utilization – 31 December 2024). Equity investment headroom was $3,430 million, representing 35% utilization of the ceiling ($3,362 million representing 35% utilization – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Capital Adequacy** 

ADB's capital adequacy framework (CAF) aims to ensure that large risk events will not lead to a downgrade of ADB's AAA rating or to an erosion of investor confidence. The framework is designed to protect the risk-bearing capacity of ADB without relying on callable capital, and to maintain ADB's ability to lend even during crises.

Under the CAF, ADB holds capital to protect against eight risk types: credit risk in the operations portfolio, equity investment risk, interest rate risk, treasury credit risk, operational risk, pension risk, currency risk, and countercyclical lending buffer. ADB uses a capital utilization ratio (CUR)

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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17<br>

as the key metric in measuring capital adequacy. The CUR is the ratio of the total economic capital used (numerator) to usable equity (denominator).

As of 30 June 2025, ADB was adequately capitalized and reported CUR of 73.0% (71.5% – 31 December 2024).

**III.** SPECIAL FUNDS

ADB is authorized by the Charter to establish and administer Special Funds. These are the ADF, Technical Assistance Special Fund (TASF), Japan Special Fund (JSF), Asian Development Bank Institute (ADBI), Regional Cooperation and Integration Fund (RCIF), Climate Change Fund (CCF), Asia Pacific Disaster Response Fund (APDRF), and Financial Sector Development Partnership Special Fund (FSDPSF). Financial statements for each Special Fund are prepared in accordance with US GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Asian Development Fund** 

The ADF is ADB's largest Special Fund and main source of grant resources for supporting ADB's poorest and most vulnerable DMCs. Established in 1974, the ADF initially provided loans on concessional terms to ADB's lower income DMCs. ADF grants were introduced in 2005 to reduce debt burdens in ADB's poorest DMCs. Beginning in 2017 and following the merger of ADF lending with OCR, ADF is now focused exclusively on grants, while concessional lending is provided through the concessional OCR window. ADF resources mainly come from contributions of ADB's member countries, mobilized through periodic replenishments and net income transfers from OCR. ADF resources have been replenished 13 times, the latest being ADF 14 for the period 2025-2028, and received contributions from 39 regional and nonregional members since establishment.

**ADF 14 (Thirteenth Replenishment).** In September 2024, the Board of Governors adopted the resolution for the 13th replenishment of the ADF (ADF 14) and the eighth regularized replenishment of the TASF to provide grant and TA financing to eligible recipients from 2025 to 2028. ADF 14 became effective on 23 April 2025. As of 30 June 2025, the total replenishment size was $5,005 million, consisting of $4,445 million for ADF 14 and $560 million for TASF 8. The replenishment will be financed from four sources: (i) $2,574 million from new donor contributions; (ii) $1,574 million from OCR net income transfers subject to annual approvals by ADB's Board of Governors as part of the annual net income allocation; (iii) $351 million income from liquidity investments; and (iv) $506 million from other sources generated from savings and cancellations from previous ADF cycles, as well as partial releases of ADF 13 funds allocated to the expanded disaster and pandemic response facility and debt distress reserve. Of the new donor contributions, ADB received instruments of contribution from 26 donors totaling $1,935 million.<sup>9</sup>

**Contributed resources.** The balance of the commitment authority available for commitment as of 30 June 2025 was $1,574 million ($921 million – 31 December 2024) equivalent.<sup>10</sup>

In May 2025, the Board of Governors approved the transfer of $394 million to the ADF as part of OCR's 2024 net income allocation ($293 million – 2024) (footnote 8).

**Operations.** During the six months ended 30 June 2025, three grants totaling $100 million were committed (nine grants totaling $45 million – 2024) while 25 grants totaling $486 million (18 grants totaling $240 million – 2024) became effective. Grant expenses amounted to $486 million

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<sup>9</sup> US dollar equivalent based on the Board of Governor's Resolution No. 427 exchange rates.

<sup>10</sup> Includes $506 million funds from previous ADF cycles earmarked for ADF 14.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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($161 million – 2024), net of $0.4 million ($79 million – 2024) undisbursed grants that were reversed as reduction in grant expenses.

**Investments for liquidity purpose.** The ADF investment portfolio totaled $5,034 million as of 30 June 2025 compared with $4,661 million at the end of 2024.<sup>11</sup> As of 30 June 2025, about 14% of the portfolio was invested in time deposits (6% – 31 December 2024) and 86% in fixed-income securities (94% – 31 December 2024). For the six months ended 30 June 2025, the rate of return on ADF investments, excluding unrealized gains and losses, was 3.0% (2.9% – 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Technical Assistance Special Fund** 

The TASF is an important source of financing for ADB's TA activities. The TASF supports project preparation, policy advice, capacity development, and research and development in ADB developing member countries. The funds resources consist of regularized replenishments and direct voluntary contributions by members, allocations from the net income of OCR, and revenue from investments and other sources. The TASF provides a stable and predictable funding source and acts as a catalyst for mobilizing funding from other TA sources.

**TASF Eighth Regularized Replenishment.** In September 2024, as part of the ADF 14 replenishment, the donors agreed to allocate $560 million of the total replenishment size as the eighth regularized replenishment of the TASF. The replenishment, which became effective on 23 April 2025, covers TA financing for 2025 to 2028. TA will play an increasingly important role during the ADF 14 period as ADB expands its lending volumes under the Capital Utilization Plan.

**Contributed resources.** As of 30 June 2025, a total of $80 million in donor contributions have been received out of the $560 million allocated to TASF under ADF 14.

As of 30 June 2025, cumulative TASF resources totaled $4,786 million, of which $4,151 million had been used, leaving an uncommitted balance of $635 million ($94 million –31 December 2024).

In May 2025, the Board of Governors approved the transfer of $130 million to the TASF as part of OCR's 2024 net income allocation ($110 million – 2024) (footnote 8).

**Operations.** For the six months ended 30 June 2025, net TA expenses amounted to $30 million ($22 million – 2024), comprising $38 million for 26 TA projects and 31 supplementary TA ($33 million for 24 TA projects and 35 supplementary TA – 2024) made effective during the period, net of $8 million ($11 million – 2024) undisbursed amounts that were reversed as reduction in TA expenses. The undisbursed TA, net of TA advances of $3 million, amounted to $707 million as of 30 June 2025 ($778 million – 31 December 2024).

**Investments for liquidity purpose**. As of 30 June 2025, the total investment portfolio amounted to $757 million ($820 million – 31 December 2024). About 32% of the portfolio was invested in time deposits and 68% in fixed-income securities (39% in time deposits and 61% in fixed-income securities – 31 December 2024). For the six months ended 30 June 2025, the rate of return on TASF investments was 4.6% (3.9% – 2024).

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<sup>11</sup> Includes securities purchased under resale arrangements.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Japan Special Fund** 

The JSF was established in March 1988 when the Government of Japan and ADB entered into an agreement whereby the Government of Japan made an initial contribution of JPY 2.5 billion with ADB as the administrator. The purpose of JSF is to help ADB's DMCs restructure their economies in light of changing global environment and to broaden their investment opportunities.

In 2009, due to the global conditions and to align the assistance provided by the Government of Japan through other multilateral development banks, JSF's role and function was transferred to the Japan Fund for Poverty Reduction to cover support for ADB's TA operations. In January 2022, JSF operations were resumed to maximize its benefits in supporting the needs of ADB's DMC through TA operations.

**JSF IF-CAP Window**. In October 2024, the Board of Directors approved the establishment of the JSF Innovative Finance Facility for Climate in Asia and the Pacific Financing Partnership Facility (IF-CAP) Window (JSF IF-CAP Window) as a separate, special-purpose component of the JSF to channel the contribution of the Government of Japan to IF-CAP.<sup>12</sup> The contribution will be in the form of noninterest bearing, nonnegotiable government notes cashable by ADB at any time to meet the demands for non-payments under the IF-CAP Guarantee Mechanism. Any excess encashments, reflows, and other funds that may be contributed from the Government of Japan for the same purposes may be included as part of the arrangements of the JSF IF-CAP Window. The Government of Japan has also elected for any premium payable to them by the ADB to be deposited into the JSF IF-CAP Window for future obligations under the IF-CAP Guarantee Mechanism. For the six months ended 30 June 2025, a total of $3 thousand was recognized as revenue from guarantees in the JSF IF-CAP Window.

The JSF IF-CAP Window will be administered by ADB under the governance structure of the JSF.

**Contributed resources.** As of 30 June 2025, the cumulative fund resources of JSF totaled $1,013 million, of which $904 million had been used, leaving an uncommitted balance of $109 million ($111 million – 31 December 2024). The net assets with donor restrictions associated with the JSF IF-CAP Window totaled $3 thousand (nil – 31 December 2024).

**Operations.** For the six months ended 30 June 2025, two TA projects and one supplementary TA totaling $5 million became effective (one TA project and two supplementary TA totaling $3.75 million – 2024). The balance of undisbursed TA, net of TA advances, amounted to $18 million as of 30 June 2025 ($14 million – 31 December 2024).

**Investments for liquidity purpose.** As of 30 June 2025, the total investment portfolio, which was in time deposits, amounted to $125 million ($123 million – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Asian Development Bank Institute** 

ADBI was established in 1996 as a subsidiary body of ADB, whose objectives are to identify effective development strategies and capacity improvements for sound development management in the DMCs. Its operating costs are met by ADBI, and it is administered in accordance with the Statute of the ADBI.

For the six months ended 30 June 2025, committed contributions to ADBI totaled $5 million ($5 million – 2024), while expenses amounted to $6 million ($7 million – 2024). As of 30 June 2025, the balance of uncommitted balance without donor restriction (excluding property, furniture, and

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<sup>12</sup> In the event of a nonaccrual in the reference portfolio under the IF-CAP Guarantee Mechanism, the Government of Japan's payment of its share of risk participation will be channeled through the JSF IF-CAP Window.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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equipment and lease liability) available for future projects and programs was about $21 million ($20 million – 31 December 2024).

**Investments for liquidity purpose**. As of 30 June 2025, the total investment portfolio, which was in time deposits, amounted to $11 million ($12 million – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Regional Cooperation and Integration Fund** 

Established in February 2007 as a special fund under the Regional Cooperation and Integration Financing Partnership Facility, the RCIF aims to enhance regional cooperation and integration in Asia and the Pacific by financing TA projects that support greater and higher quality connectivity between economies, expand global and regional trade and investment opportunities, and increase and diversify regional public goods.

**Contributed resources.** As of 30 June 2025, cumulative RCIF resources totaled $107 million, of which $105 million had been used, leaving an uncommitted balance of $2 million ($2 million – 31 December 2024).

**Operations**. During the six months ended 30 June 2025, no TA project became effective (two TA projects amounting to $0.45 million – 2024)**.** Undisbursed TA reversed as reduction in TA expense totaled $0.2 million ($0.6 million – 2024). The balance of undisbursed TA, net of TA advances, as of 30 June 2025 amounted to $11 million ($14 million – 31 December 2024).

**Investments for liquidity purpose.** As of 30 June 2025, the total investment portfolio, which was in time deposits, amounted to $12 million ($14 million – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Climate Change Fund** 

The CCF was established in April 2008 to facilitate greater investments in DMCs to effectively address the causes and consequences of climate change. CCF supports investments on (i) adaptation; (ii) clean energy; and (iii) reducing emissions from deforestation and forest degradation (REDD+) and land use management by providing resources through technical assistance, grant components of investment projects, and direct charges.

**Contributed resources.** As of 30 June 2025, cumulative CCF resources totaled $105 million, of which $93 million had been used, leaving an uncommitted balance of $12 million ($12 million – 31 December 2024).

**Operations.** During the six months ended 30 June 2025 and 2024, no grant was committed while one grant amounting to $0.9 million became effective (three grants and one TA project totaling $2.4 million – 2024) and $0.04 million undisbursed amounts were reversed as a reduction in TA expense (nil – 2024). The balance of undisbursed grants and TA, net of advances as of 30 June 2025 amounted to $12 million ($13 million – 31 December 2024).

**Investments for liquidity purpose**. As of 30 June 2025, the total investment portfolio, which was in time deposits, amounted to $23 million ($25 million – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Asia Pacific Disaster Response Fund** 

The APDRF was established in April 2009 to provide timely incremental grant resources to DMCs affected by disasters triggered by natural hazards. In September 2021, a second window under the APDRF was established to finance experts to provide speedy post-disaster technical support for the preparation of post-disaster needs assessments, recovery plans, and post-disaster projects, including emergency assistance loan. The second window will not finance any technical

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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21<br>

support needs arising during post-disaster project implementation and will not be available should the fund's balance fall below $6 million.

**Contributed resources.** As of 30 June 2025, cumulative fund resources totaled $175 million, of which $147 million had been used, leaving an uncommitted balance of $27 million ($34 million – 31 December 2024). The net assets without donor restrictions as of 30 June 2025 amounted to $27 million ($34 million – 31 December 2024).

In May 2020, the Government of Japan contributed $75 million―valid for 2 years―to APDRF which was earmarked for ADB's response to the coronavirus disease (COVID-19) pandemic. In July 2023, the Government of Japan requested ADB to transfer the unused balance of its contributions to the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR), resulting in an initial transfer of $27 million in August 2024, and a final transfer of $0.27 million in June 2025 to JFPR.

In May 2024, the Board of Governors approved the transfer of $15 million to the APDRF as part of OCR's 2023 net income allocation. There was no allocation made for APDRF from OCR's 2024 net income.

**Operations.** For the six months ended 30 June 2025, three grants amounting to $5.5 million were committed (one grant amounting to $2.8 million – 2024), four grants amounting to $7.5 million became effective (one grant amounting to $2.8 million – 2024), and no undisbursed amounts were reversed as a reduction in grant expenses ($0.2 million – 2024).

**Investments for liquidity purpose.** As of 30 June 2025, the total investment portfolio, which was in time deposits amounted to $26 million ($32 million – 31 December 2024).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**H.** **Financial Sector Development Partnership Special Fund** 

The FSDPSF was established in January 2013 to strengthen regional, subregional, and national financial systems in Asia and the Pacific. With the approval of the Finance Sector Directional Guide on 22 November 2022, the FSDPSF will support the six areas of operational focus: (i) enhancing support to emerging areas such as sustainable development goal aligned financing, including green and blue financing; (ii) promoting long-term finance and quality infrastructure; (iii) leveraging digital technology to deliver financial services for financial inclusion; (iv) expanding financing to micro, small and medium enterprises and women; (v) establishing frameworks for disaster and epidemic risk financing; and (vi) strengthening the finance sector foundation.

**Contributed resources.** As of 30 June 2025, cumulative fund resources totaled $34 million, of which $30 million had been used, leaving an uncommitted balance of $4 million ($1 million – 31 December 2024).

In May 2025, the Government of Luxembourg committed a contribution of €2.5 million (equivalent to $2.8 million at the time of commitment), which was transferred to the FSDPSF in July 2025.

**Operations.** During the six months ended 30 June 2025, one TA project and two supplementary TA totaling $0.8 million became effective (two TA projects and four supplementary TA totaling $1.9 million – 2024), and $0.7 million undisbursed amount were reversed as reduction in TA expense ($34 thousand – 2024). The balance of undisbursed TA, net of TA advances as of 30 June 2025 amounted to $9 million ($10 million – 31 December 2024).

**Investments for liquidity purpose.** As of 30 June 2025, the total investment portfolio, which was in time deposits, amounted to $9 million ($10 million – 31 December 2024).

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

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**22<br> Appendix**

<br> #### <br>

#### ORDINARY CAPITAL RESOURCES

#### CONDENSED MANAGEMENT REPORTING (Non-GAAP measure) BALANCE SHEETS

#### As of 30 June 2025 and 31 December 2024
($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2024** |
| <br> **Item** | **Statutory**<br> **Reporting Basis** | <br> **Adjustments**<sup>a</sup> | **Management**<br> **Reporting Basis** | **Management**<br> **Reporting Basis** |
|  Due from banks | 447 | – | 447 | 2235 |
|  Investments for liquidity purpose | 59277 | – | 59277 | 46695 |
| Securities transferred under repurchase agreements | 1137 | – | 1137 | – |
| Securities purchased under resale arrangements | 38 | – | 38 | 260 |
|  Loans outstanding — operations | 158402 | – | 158402 | 153864 |
|  Equity investments — operations | 1722 | (339) | 1383 | 1329 |
|  Other debt securities — operations | 594 | – | 594 | 621 |
|  Derivative Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings | 74480 | (398) | 74082 | 62476 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments for liquidity purpose | 29047 | (348) | 28699 | 25669 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans — operations | 17895 | (275) | 17620 | 18149 |
|  Accrued interest receivable | 1680 | – | 1680 | 1697 |
|  Other assets | 1797 | 6 | 1803 | 2010 |
|  **TOTAL** | **346516** | **(1354)** | **345162** | **315005** |
|  Borrowings and accrued interest | 163605 | 3251 | 166856 | 151959 |
|  Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings | 77950 | (3591) | 74359 | 66906 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments for liquidity purpose | 28430 | (304) | 28126 | 23058 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans — operations | 16316 | 314 | 16630 | 15675 |
|  Payable under securities repurchase agreements | 1143 | – | 1143 | – |
|  Payable for swap related and other collateral | 437 | – | 437 | 857 |
|  Accounts payable and other liabilities | 1049 | – | 1049 | 977 |
| &nbsp;&nbsp;&nbsp;&nbsp; **Total Liabilities** | **288930** | **(330)** | **288600** | **259432** |
|  Paid-in capital | 7302 | 6 | 7308 | 6940 |
|  Net notional maintenance of value receivable | (1640) | – | (1640) | (1481) |
|  Ordinary reserve | 48556 | 2 | 48558 | 47542 |
|  Special reserve | 573 | – | 573 | 558 |
|  Surplus | 1065 | – | 1065 | 1065 |
|  Cumulative revaluation adjustments account | 525 | (525) | – | – |
|  Unallocated net income<sup>b</sup> | 663 | (18) | 645 | 1539 |
|  Accumulated other comprehensive loss | 542 | (489) | 53 | (590) |
| &nbsp;&nbsp;&nbsp;&nbsp; **Total Equity** | **57586** | **(1024)** | **56562** | **55573** |
|  **TOTAL** | **346516** | **(1354)** | **345162** | **315005** |

---

() = negative, – = nil.

a Unrealized gains or losses from fair value adjustments associated with certain financial instruments, share of unrealized gain or loss from equity method investments, and nonnegotiable and noninterest-bearing demand obligations on account of subscribed capital.

<sup>b</sup> After appropriation of guarantee fees to the Special Reserve.

ADB MANAGEMENT'S DISCUSSION AND ANALYSIS: 30 JUNE 2025

------

Financial Statements <br>

------

 **24**

<br> **** 

<br> **ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES** 

**CONDENSED BALANCE SHEET**

**30 June 2025 and 31 December 2024**

Expressed in Millions of US Dollars

---

| | | | | |
|:---|:---|:---|:---|:---|
| **A S S E T S** | **A S S E T S** | **A S S E T S** | **A S S E T S** | **A S S E T S** |
|  | **30 June**<br> (Unaudited) | **30 June**<br> (Unaudited) | **31 December**<br> (Audited) | **31 December**<br> (Audited) |
|  DUE FROM BANKS |  | $447 |  | 2235 |
|  INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and O) |  | 59277 |  | 46695 |
|  SECURITIES TRANSFERRED UNDER REPURCHASE AGREEMENT (Notes C, D, and O) |  | 1137 |  | - |
| SECURITIES PURCHASED UNDER RESALE ARRANGEMENTS (Notes C, D, and O) |  | 38 |  | 260 |
|  LOANS OUTSTANDING — OPERATIONS (Notes E and O) (Including net unamortized loan origination costs of $256 – 30 June 2025 and $245 – 31 December 2024) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Sovereign |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regular | $117543 |  | $115352 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Concessional | 35161 |  | 33332 |  |
|  | 152704 |  | 148684 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Nonsovereign | 6346 |  | 5720 |  |
|  | 159050 |  | 154404 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Less—allowance for credit losses | 648 | 158402 | 540 | 153864 |
|  EQUITY INVESTMENTS — OPERATIONS (Notes G and O) |  | 1722 |  | 1627 |
|  OTHER DEBT SECURITIES — OPERATIONS (Notes H and O) (Net of allowance for credit losses of $30 – 30 June 2025 and $14 – 31 December 2024) |  | 594 |  | 621 |
|  ACCRUED INTEREST RECEIVABLE |  | 1680 |  | 1697 |
|  DERIVATIVE ASSETS (Notes I and O) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings | 74480 |  | 61872 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments for liquidity purpose | 29047 |  | 26062 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans — operations | 17895 | 121422 | 17671 | 105605 |
|  OTHER ASSETS |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Property, furniture, and equipment (Note J) | 326 |  | 309 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Swap related and other collateral (Notes I and O) | 437 |  | 857 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net postretirement medical benefit plan asset | 259 |  | 253 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Miscellaneous (Notes C, F, K, and O) | 775 | 1797 | 579 | 1998 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** |  | $**346516** |  | $**314602** |

---

The accompanying Notes are an integral part of these condensed financial statements (OCR-6).

------

#### <br>

#### OCR-1

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** | **LIABILITIES AND EQUITY** |
|  | **30 June** <br> **(Unaudited)** | **30 June** <br> **(Unaudited)** | **30 June** <br> **(Unaudited)** | **31 December** <br> **(Audited)** | **31 December** <br> **(Audited)** | **31 December** <br> **(Audited)** |
|  BORROWINGS (Notes L and O) |  |  | $163605 |  |  | $146517 |
|  DERIVATIVE LIABILITIES (Notes I and O) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings |  | $77950 |  |  | $71703 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments for liquidity purpose |  | 28430 |  |  | 23292 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans — operations |  | 16316 | 122696 |  | 14821 | 109816 |
| PAYABLE UNDER SECURITIES REPURCHASE AGREEMENTS (Notes C, D, and O) |  |  | 1143 |  |  |  |
|  ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Swap related and other collateral (Notes I and O) |  | 437 |  |  | 857 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued pension benefit costs |  | 148 |  |  | 165 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Liability for credit losses on off-balance sheet exposures (Notes E, F, and H) |  | 110 |  |  | 121 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Miscellaneous (Notes C, F, J, K, and O) |  | 791 | 1486 |  | 691 | 1834 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities |  |  | 288930 |  |  | 258167 |
|  EQUITY (OCR-4) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Capital Stock (Note M) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Authorized and subscribed (SDR106,392 million) |  | 146117 |  |  | 138749 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less—"callable" shares subscribed (SDR101,061 million) |  | 138795 |  |  | 131796 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "Paid-in" shares subscribed (SDR5,331 million) |  | 7322 |  |  | 6953 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less—discount |  | 14 |  |  | 13 |  |
|  |  | 7308 |  |  | 6940 |  |
| Nonnegotiable, noninterest-bearing demand obligations on account of subscribed capital (Note M) |  | (6) | 7302 |  | (12) | 6928 |
| Net notional amounts required to maintain value of currency holdings |  | (1640) |  |  | (1481) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Ordinary reserve (Note M) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From ADF assets transfer | $30748 |  |  | $30748 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From retained earnings | 17808 | 48556 |  | 16792 | 47540 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Special reserve |  | 573 |  |  | 558 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Surplus |  | 1065 |  |  | 1065 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cumulative revaluation adjustments account |  | 525 |  |  | 462 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net income after appropriation to special reserve |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the calendar year 2024 |  | – |  |  | 1602 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the six months ended 30 June 2025 (OCR-2) |  | 663 |  |  | – |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income (loss) (Note M) |  | 542 | 50284 |  | (239) | 49507 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Equity |  |  | 57586 |  |  | 56435 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** |  |  | $**346516** |  |  | $**314602** |

---

------

26<br>

**OCR-2**<br>

**ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES**

**CONDENSED STATEMENT OF INCOME AND EXPENSES—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

---

| | | |
|:---|:---|:---|
| Expressed in Millions of US Dollars |  |  |
|  | **2025** | **2024** |
| REVENUE (Note N) |  |  |
| &nbsp;&nbsp;&nbsp; Loans — operations (Notes E and I) | $3578 | $4092 |
| &nbsp;&nbsp;&nbsp; Investments for liquidity purpose (Notes C and I) | 1270 | 1365 |
| &nbsp;&nbsp;&nbsp; Equity investments — operations | 61 | 44 |
| &nbsp;&nbsp;&nbsp; Guarantees — operations | 14 | 13 |
| &nbsp;&nbsp;&nbsp; Other debt securities — operations | 24 | 22 |
| &nbsp;&nbsp;&nbsp; Other sources—net | 47 | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 4994 | 5580 |
| EXPENSES (Note N) |  |  |
| &nbsp;&nbsp;&nbsp; Borrowings and related expenses (Note I) | (3789) | (4449) |
| &nbsp;&nbsp;&nbsp; Administrative expenses (Note M) | (383) | (333) |
| &nbsp;&nbsp;&nbsp;&nbsp;(Provision) Release of provision for credit losses—net (Notes E, F, and H) | (110) | 40 |
| &nbsp;&nbsp;&nbsp; Other expenses | (22) | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (4304) | (4755) |
| NET REALIZED GAINS (LOSSES) |  |  |
| &nbsp;&nbsp;&nbsp; Investments for liquidity purpose (Notes C, I, M, and N) | (1) | (15) |
| &nbsp;&nbsp;&nbsp; Equity investments — operations (Note N) | 0 | 7 |
| &nbsp;&nbsp;&nbsp; Other debt securities — operations (Note N) | 2 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 1 | (8) |
| NET UNREALIZED (LOSSES) GAINS (Notes G, I, L, and N) | (14) | 447 |
| **NET INCOME** | $**677** | $**1264** |

---

The accompanying Notes are an integral part of these condensed financial statements (OCR-6).

------

 **27**

#### OCR-3

#### <br>
**ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES**

**CONDENSED STATEMENT OF COMPREHENSIVE INCOME—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
| Expressed in Millions of US Dollars |  |  |  |  |
|  | **2025** | **2025** | **2024** | **2024** |
|  NET INCOME (OCR-2) |  | $677 |  | $1264 |
| Other comprehensive income (loss) (Note M) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Unrealized holding gains (losses) | $480 |  | $(485) |  |
| &nbsp;&nbsp;&nbsp; Currency translation adjustments | 313 |  | (125) |  |
| &nbsp;&nbsp;&nbsp; Pension/postretirement liability adjustments | (12) | 781 | (12) | (622) |
|  **COMPREHENSIVE INCOME** |  | $**1458** |  | $**642** |

---

The accompanying Notes are an integral part of these condensed financial statements (OCR-6).

---

| | | |
|:---|:---|:---|
| | | **OCR-4** |
| **ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES** | | |
| **CONDENSED STATEMENT OF CHANGES IN EQUITY—UNAUDITED** | | |
| **For the Six Months Ended 30 June 2025 and 2024** | | |
| Expressed in Millions of US Dollars |  |  |
|  | **2025** | **2024** |
|  Balance, beginning of period | $56435 | $55294 |
|  Comprehensive income for the period (OCR-3)<br>| 1458 | 642 |
|  Encashment of demand obligations  | 7 | 6 |
|  Change in US dollar value on |  |  |
| &nbsp;&nbsp;&nbsp; Paid-in capital<br>| 369 | (140) |
| &nbsp;&nbsp;&nbsp; Net notional maintenance of value receivable | (159) | 29 |
|  Allocation of prior year income to Special Funds (Note M)<br>| (524) | (418) |
|  **Balance, end of period**<br>| $**57586**  | $**55413** |

---

The accompanying Notes are an integral part of these condensed financial statements (OCR-6).

------

28<br>

**ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES** 

**CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Millions of US Dollars<br>

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other charges received on loans — operations | $3588 | $3970 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 1011 | 1079 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest received for securities purchased under resale/repurchase arrangement | 6 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other charges received on other debt securities — operations | 24 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp; Dividends and other cash distributions received on equity investments — operations | 61 | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and other financial expenses paid | (3806) | (4237) |
| &nbsp;&nbsp;&nbsp;&nbsp; Administrative expenses paid | (412) | (381) |
| &nbsp;&nbsp;&nbsp;&nbsp; Others—net | 46 | 62 |
| Net Cash Provided by Operating Activities | 518 | 579 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales of investments for liquidity purpose | 1908 | 1742 |
| &nbsp;&nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 143855 | 173945 |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (157143) | (185507) |
| &nbsp;&nbsp;&nbsp;&nbsp; Receipts from securities purchased under resale arrangements | 39323 | 61386 |
| &nbsp;&nbsp;&nbsp;&nbsp; Payments for securities purchased under resale arrangements | (39101) | (61113) |
| &nbsp;&nbsp;&nbsp;&nbsp; Principal collected on loans — operations | 6948 | 6019 |
| &nbsp;&nbsp;&nbsp;&nbsp; Loans — operations disbursed | (8544) | (6345) |
| &nbsp;&nbsp;&nbsp;&nbsp; Derivatives—net | 1077 | 947 |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in other collateral | (1) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp; Property, furniture, and equipment acquired | (32) | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp; Sales of equity investments — operations | 1 | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of equity investments — operations | (84) | (48) |
| &nbsp;&nbsp;&nbsp;&nbsp; Maturities of other debt securities — operations | 40 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of other debt securities — operations | (13) | (60) |
| Net Cash Used in Investing Activities | (11766) | (8970) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from new borrowings | 31610 | 130639 |
| &nbsp;&nbsp;&nbsp;&nbsp; Borrowings redeemed | (20756) | (121768) |
| &nbsp;&nbsp;&nbsp;&nbsp; Issuance expenses paid | (20) | (17) |
| &nbsp;&nbsp;&nbsp;&nbsp; Demand obligations of members encashed | 7 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp; Derivatives—net | (380) | (276) |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in swap related collateral | (419) | 460 |
| &nbsp;&nbsp;&nbsp;&nbsp; Resources transferred to Special Funds | (524) | (170) |
| Net Cash Provided by Financing Activities | 9518 | 8874 |
| Effect of Exchange Rate Changes on Cash | (478) | (122) |
| Net (Decrease) Increase in Cash | (2208) | 361 |
| Cash at Beginning of Period  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Due from Banks | 2235  | 998  |
| &nbsp;&nbsp;&nbsp;&nbsp; Swap Related and Other Collateral | 857 | 393 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | 3092 | 1391 |
| Cash at End of Period  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Due from Banks | 447 | 902 |
| &nbsp;&nbsp;&nbsp;&nbsp; Swap Related and Other Collateral | 437 | 850 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total | $884 | $1752 |

---

The accompanying Notes are an integral part of these condensed financial statements (OCR-6).

------

29<br>

#### OCR-6

 **ASIAN DEVELOPMENT BANK—ORDINARY CAPITAL RESOURCES** 

**NOTES TO CONDENSED FINANCIAL STATEMENTS**<br>

#### For the Six Months Ended 30 June 2025 and 2024 <br>
 **(Unaudited)**<br>

**NOTE A—INTERIM FINANCIAL INFORMATION<br>** <br> These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.<br>**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**<br>The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosed contingent liabilities at the end of the period and the reported amounts of revenues and expenses during the period. The actual results could differ from those estimates.<br>

The functional currencies of ordinary capital resources (OCR) comprise the currencies of all members and special drawing right (SDR) as these are the currencies of the primary economic environments in which Asian Development Bank (ADB) operates. The reporting currency is the United States (US) dollar, and the financial statements are reported in US dollars.<br>

<br> *Allowance for Credit Losses*<br>

ADB records an allowance for credit losses over the remaining lifetime of financial assets measured at amortized cost (including loans and held-to-maturity debt securities). In addition, a liability is recorded for off- balance sheet credit exposures for undisbursed loan commitments and financial guarantees over the contractual period. ADB estimates the expected credit losses based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The expected credit losses are measured as the product of exposure at default (EAD), probability of default (PD), and loss given default (LGD). When loans are considered impaired, they are individually reviewed and assessed to determine the expected credit losses using appropriate methods, including discounted cash flow method.<br>

The allowance for credit losses and liability for credit losses on off-balance sheet exposures such as guarantees and undisbursed commitments for loans, and debt securities, are reviewed quarterly, and the amount necessary to adjust the allowance and liability for credit losses is reported as Provision for credit losses in the Statement of Income and Expenses under EXPENSES. ADB elects not to record the allowance on accrued interest receivables as it reverses the accrued interest of the loans under non-accrual status in accordance with its non- accrual policy. Partial or full write-off of financial assets will be deducted from the allowance. Expected recoveries of amounts previously written-off or expected to be written-off are recognized as a negative allowance which does not exceed the aggregate of amounts previously written off and expected to be written off.<br>ADB uses risk transfer contracts between ADB and third parties such as insurance companies or banks, where the third parties agree to assume a portion of the credit risk in a loan, held-to-maturity debt security, or guarantee provided by ADB. A recovery asset related to the risk transfer contracts is recognized at the time of recording of expected credit losses for the loans, held-to-maturity debt securities, and guarantees. The recovery asset is reviewed quarterly, and the amount to adjust the recovery asset is reflected in Provision for credit losses.<br>When an available-for-sale (AFS) debt security's fair value is lower than amortized cost, ADB recognizes impairment losses in earnings if ADB has the intent to sell the debt securities or if it is more likely than not that ADB will be required to sell the debt securities before recovery of the amortized cost. When ADB intends to<br>

------

30<br>

**OCR-6**<br>

continued

hold and is not required to sell the debt securities, ADB will evaluate to determine if a credit loss exists. Portion of the decline in fair value below amortized cost basis due to credit-related factors will be recognized as an allowance for credit losses with a related charge to Provision for credit losses.<br>

For certain financial assets, such as Due from Banks, Securities Purchased under Resale Arrangements, and Swap related and other collateral, no expected loss is determined based on the credit quality.<br>

*Derivative Financial Instruments*<br>ADB reports all derivative transactions in accordance with Accounting Standards Codification (ASC) 815, "Derivatives and Hedging." ADB has elected not to define any qualifying hedging relationships, not because economic hedges do not exist, but rather because the application of ASC 815 hedging criteria does not make fully evident ADB's risk management strategies. All derivative instruments are reported at fair value (FV) and changes in FV have been recognized in net income. ADB records derivatives in the Balance Sheet as either assets or liabilities, consistent with the legal rights and way the instruments are settled. Individual interest rate swaps are recorded on a net basis, while all other swaps, including cross currency and foreign exchange (FX) swaps, are recorded on a gross basis.<br>*Fair Value of Financial Instruments*<br>

ASC 820, "Fair Value Measurement" defines FV as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.<br>

*Fair Value Hierarchy*<br>ASC 820 establishes an FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).<br>The FVs of ADB's financial assets and liabilities are categorized as follows:<br>

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.<br>

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable. <br> Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.<br>*Accounting and Reporting Developments*<br>

In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2022-03, *"Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions"*. The amendment clarifies what contractual sale restrictions of an equity security are inconsistent with the unit of account of the equity security, and, therefore, should not be considered in measuring the fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure certain contractual sale restrictions. The amendments also require certain disclosures for equity securities subject to contractual sales restrictions. The update is effective for ADB on 1 January 2024. The adoption of this ASU did not have a material impact on OCR's financial statements.<br>In December 2022, the FASB issued ASU 2022-06, *"Reference Rate Reform (Topic 848) —Deferral of the Sunset Date of Topic 848,"* with immediate effectivity to extend the optional relief provided in Topic 848 for<br>

------

31<br>

**OCR-6**

continued

eligible contracts and transactions affected by reference rate reform from 31 December 2022 to 31 December 2024. ADB has adopted the provisions of Topic 848, and as provided by the Update, will continue monitoring and assessing contract modifications for the use of the optional expedients and exceptions provided as we continue to amend the remaining nonsovereign LBLs and LIBOR-based swaps. ADB does not expect the adoption of this Update to have a significant impact on the financial statements.<br>

In October 2023, the FASB issued ASU 2023-06, *"Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative"*. This Update incorporates certain disclosures requirements referred to by the SEC in its final rule in August 2018 that overlap or are incremental to those in GAAP and introduces technical corrections and clarifications. The SEC intends to eliminate the related disclosure requirements from its existing regulations when the amendments in GAAP are issued to avoid duplication. The effective date of each amendment will be the date on which the SEC's removal of that related disclosure from its regulations becomes effective, with early adoption prohibited. ADB does not expect the adoption of this Update to have a material impact on the financial statements.<br>

In November 2023, the FASB issued ASU 2023-07, "*Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures*". This Update expands reportable segment disclosure requirements by primarily requiring public entities to disclose significant expenses for reportable segments in both interim and annual reporting periods. In addition, it now requires public entities with a single reportable segment to provide all segment disclosures under Topic 820. The amendments in this Update are effective for fiscal years beginning after 15 December 2023, and interim periods within fiscal years beginning after 15 December 2024. Early adoption is permitted. ADB is evaluating the disclosure requirements in the ASU and does not expect the adoption of this Update to have a material impact on the financial statements.<br>

In March 2024, the FASB issued ASU 2024-02, "*Codification Improvements – Amendments to Remove References to the Concepts Statements*". This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted. ADB is evaluating the disclosure requirements in the ASU and does not expect the adoption of this Update to have a material impact on the financial statements.<br>

**NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE**<br>

The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors.<br>

All investment securities and time deposits held by ADB are considered to be AFS and are reported at FV. Unrealized gains and losses are reported in EQUITY as part of Accumulated other comprehensive income (loss). Realized gains and losses are reported in the Statement of Income and Expenses under NET REALIZED (LOSSES) GAINS from investments for liquidity purpose and are measured by the difference between amortized cost and the net proceeds of the sale using the specific identification method for internally managed investment portfolio and the weighted average cost method for externally managed investment portfolio.<br>

Interest income on investment securities and time deposits is recognized as earned and reported, net of amortizations of premium and discounts.<br>

ADB may engage in securities lending of government or government-related obligations and corporate obligations, for which ADB receives a guarantee from the securities custodian and a fee. Transfers of securities by ADB to counterparties are not accounted for as sales as the accounting criteria for the treatment of a sale have not been met. These securities are available to meet ADB's obligation to counterparties. Included in investments as of 30 June 2025 were securities transferred under securities lending<br>

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32<br>

**OCR-6**

continued

arrangements of government or government-related obligations and corporate obligations totaling $131 million ($153 million – 31 December 2024).<br>

ADB records time deposits on the settlement dates and all other investment securities on the trade date. As of 30 June 2025, there were $254 million unsettled sales and uncollected maturities ($37 million – 31 December 2024) included under OTHER ASSETS – Miscellaneous and $191 million unsettled purchases ($86 million – 31 December 2024) included under ACCOUNTS PAYABLE AND OTHER LIABILITIES – Miscellaneous.<br>The FV and amortized cost of the investments by contractual maturity as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  |  | **Amortized** |  | **Amortized** |
|  | **Fair Value** | **Cost**  | **Fair Value** | **Cost**  |
| Due in one year or less | $27222 | $27267 | $14824 | $14857 |
| Due after one year through five years | 26325 | 26519 | 27734 | 28270 |
| Due after five years through ten years | 2768 | 2780 | 2459 | 2599 |
| Due after ten years through fifteen years | 2188 | 2202 | 949 | 987 |
| Due after fifteen years | 774 | 858 | 729 | 830 |
| **Total** | $**59277** | $**59626** | $**46695** | $**47543** |

---

Additional information relating to investments for liquidity purpose in government or government-related obligations and other securities classified as AFS are as follows:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | **Amortized** | **Gross Unrealized** | **Gross Unrealized** |  |
| **30 June 2025** | **Cost**  | **Gains**  | **Losses**  | **Fair Value**  |
| Government or government-related obligations | $41250 | $146 | $(445) | $40951 |
| Other securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate obligations | 9266 | 81 | (45) | 9302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset/Mortgage-backed securities | 1842 | 9 | (95) | 1756 |
| **Total** | $**52358** | $**236** | $**(585)** | $**52009** |
| **31 December 2024** |  |  |  |  |
| Government or government-related obligations | $31759 | $59 | $(761) | $31057 |
| Other securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate obligations | 9359 | 48 | (84) | 9323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset/Mortgage-backed securities | 1823 | 5 | (115) | 1713 |
| &nbsp;&nbsp;&nbsp; **Total** | $**42941** | $**112** | $**(960)** | $**42093** |
| **For the six months ended 30 June:** |  |  | **2025** | **2024** |
| Change in net unrealized gains or losses from prior period |  |  | $499 | $48 |
| Proceeds from sales |  |  | 1218 | 1742 |
| Gross gain on sales |  |  | 7 | 2 |
| Gross loss on sales |  |  | (9) | (18) |

---

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33<br>

**OCR-6**

continued

The following table shows the gross unrealized losses and fair value of investments with unrealized losses aggregated by investment category and length of time that individual securities had unrealized losses position as of 30 June 2025 and 31 December 2024. There were 128 government or government-related obligations (148 – 31 December 2024), 272 corporate obligations (411 – 31 December 2024), and 150 asset- backed/mortgage-backed securities (161 – 31 December 2024) that had unrealized losses for over one year representing 27.45% (38.65% – 31 December 2024) of the total investments.<br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |
|  | **One year or less** | **One year or less** | **Over one year** | **Over one year** | **Total** | **Total** |
|  | **Fair Value** | **Unrealized**<br> **Losses** | **Fair Value** | **Unrealized**<br> **Losses** | **Fair Value** | **Unrealized**<br> **Losses** |
| **30 June 2025** |  |  |  |  |  |  |
| Government or government-related obligations | $9902 | $43 | $14270 | $402 | $24172 | $445 |
| Other securities <br>|  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 851 | 8 | 1390 | 37 | 2241 | 45 |
| &nbsp;&nbsp;&nbsp; Asset/Mortgage-backed securities | 160 | 1 | 612 | 94 | 772 | 95 |
| **Total** | $**10913** | $**52** | $**16272** | $**533** | $**27185** | $**585** |
| <u>**31 December 2024**</u> |  |  |  |  |  |  |
| Government or government- related obligations  | $9819 | $142 | $15623 | $619 | $25442 | $761 |
| Other securities <br>|  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 1954 | 14 | 1766 | 70 | 3720 | 84 |
| &nbsp;&nbsp;&nbsp; Asset/Mortgage-backed securities | 434 | 4 | 659 | 111 | 1093 | 115 |
| **Total** | $**12207** | $**160** | $**18048** | $**800** | $**30255** | $**960** |

---

As of 30 June 2025, ADB had the intent to hold and was not required to sell the AFS debt securities of which the fair value is lower than amortized cost. ADB also assessed and determined that the decline of fair value below the amortized cost basis of the AFS securities was not due to credit-related factors.<br>Fair Value Disclosure<br>

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE and related financial assets as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| <u>**30 June 2025**</u> |  |  |  |  |
| Investments for liquidity purpose  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government-related obligations  | $40951 | $36652 | $4299 | $– |
| &nbsp;&nbsp;&nbsp; Time deposits | 7268 | – | 7268 | – |
| &nbsp;&nbsp;&nbsp; Other securities | 11058 | 7786 | 3272 | – |
| Securities transferred under repurchase agreements | 1137 | 1137 | – | – |
| Securities purchased under resale arrangements | 38 | – | 38 | – |
| &nbsp;&nbsp;&nbsp; **Total at fair value** | $**60452** | $**45575** | $**14877** | $**–** |

---

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34<br>

**OCR-6**

continued

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fair Value Measurements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fair Value Measurements** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
|  **<u>31 December 2024</u>** |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government-related obligations | $31057 | $28474 | $2583 | $– |
| &nbsp;&nbsp;&nbsp; Time deposits | 4602 | – | 4602 | – |
| &nbsp;&nbsp;&nbsp; Other securities | 11036 | 7123 | 3913 | – |
|  Securities transferred under repurchase agreements | – | – | – | – |
|  Securities purchased under resale arrangements | 260 | – | 260 | – |
| &nbsp;&nbsp;&nbsp; **Total at fair value** | $**46955** | $**35597** | $**11358** | $**–** |

---

If available, active market quotes are used to assign fair values to investment securities and related financial assets. These include most government or government-related obligations and corporate obligations. Investments and related financial assets where active market quotes are not available are categorized as Level 2 or Level 3, and valuations are obtained from independent valuation services, custodians, and asset managers, and are based on discounted cash flow model using market observable inputs, such as interest rates, FX rates, basis spreads, cross currency rates, volatilities, and unobservable inputs, such as option adjusted spreads, and other techniques. Time deposits are reported at cost, which approximates FV.<br>

#### NOTE D—SECURITIES TRANSFERRED UNDER REPURCHASE AGREEMENTS AND
**SECURITIES PURCHASED UNDER RESALE ARRANGEMENTS**<br>

Transfer of financial assets are accounted for as sales when control over the transferred assets has been relinquished. Otherwise, the transfers are accounted for as repurchase/resale agreements and collateralized financing arrangements. Under repurchase agreements, securities transferred are recorded as assets and reported at FV and cash received as collateral is recorded as a liability. ADB monitors the FV of securities transferred under repurchase agreements and the received collateral. Under resale arrangements, securities purchased are recorded as assets and are not re-pledged.<br>ADB has entered into Global Master Repurchase Agreements (GMRA) in which ADB agrees to transfer securities under repurchase agreements. The agreements provide for the right of a party to terminate if any of the specified default and termination events occur and include provisions to offset the sum due from one party against the sum due from the other. All securities transferred under repurchase agreements are investment grade government or government-related securities. ADB monitors periodically the FV of securities transferred against the amount of cash received under the agreement and the counterparty credit exposure against approved limits. ADB only deals with counterparties that meet the required credit rating and have signed a GMRA or its equivalent.<br>

The gross amounts of PAYABLE UNDER SECURITIES REPURCHASE AGREEMENTS subject to enforceable master netting agreements as of 30 June 2025 and 31 December 2024 are summarized below.<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | (a) | **&nbsp;&nbsp;&nbsp;&nbsp;(b)** |  | (c) = (a) – (b) |
|  | **Gross amount** | **Gross amounts not offset in the** | **Gross amounts not offset in the** |  |
|  | **of liabilities** | **balance sheet** | **balance sheet** |  |
|  | **presented in the** | **Financial** | **Collateral** |  |
|  | **balance sheet** | **instruments** | **pledged** | **Net amount** |
| **<u>30 June 2025</u>** |  |  |  |  |
| Payable under securities repurchase agreements | $1143 | $1137 | $– | $6 |
| **<u>31 December 2024</u>** |  |  |  |  |
| Payable under securities repurchase agreements | $– | $– | $– | $– |

---

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35<br>

**OCR-6**

continued

The contractual maturity of payable under securities repurchase agreements as of 30 June 2025 and 31 December 2024 are summarized below:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | **Remaining contractual maturity of the agreements** | **Remaining contractual maturity of the agreements** | **Remaining contractual maturity of the agreements** | **Remaining contractual maturity of the agreements** |
|  | **1-30 Days** | **31-90 Days** | **> 90 Days** | **Total** |
| **<u>30</u>**<u> </u>**<u>June</u>**<u> </u>**<u>2025</u>** |  |  |  |  |
| **Payable under securities repurchase agreement** | **Payable under securities repurchase agreement** |  |  |  |
| Government or government-related obligations | $1143 | $– | $– | $1143 |
| **Gross amount of recognized liabilities for repurchase agreements disclosed above** | **Gross amount of recognized liabilities for repurchase agreements disclosed above** | **Gross amount of recognized liabilities for repurchase agreements disclosed above** |  | **1143** |
| **Amounts related to agreements not included in offsetting disclosure** | **Amounts related to agreements not included in offsetting disclosure** | **Amounts related to agreements not included in offsetting disclosure** |  | $**–** |
|  **<u>31 December 2024</u>** |  |  |  |  |
| **Payable under securities repurchase agreement** | **Payable under securities repurchase agreement** |  |  |  |
| Government or government-related obligations | $– | $– | $– | $– |
|  **Gross amount of recognized liabilities for repurchase agreements disclosed above** | **Gross amount of recognized liabilities for repurchase agreements disclosed above** | **Gross amount of recognized liabilities for repurchase agreements disclosed above** |  | **–** |
| **Amounts related to agreements not included in offsetting disclosure** | **Amounts related to agreements not included in offsetting disclosure** | **Amounts related to agreements not included in offsetting disclosure** |  | $**–** |

---

**NOTE E—LOANS — OPERATIONS**<br>

ADB offers sovereign and nonsovereign loans. Sovereign loans consist of regular OCR loans and concessional OCR loans.<br>

ADB's available loan products are the Flexible Loan Product (FLP) and the local currency loan (LCL) product. The FLP is the primary loan product for sovereign regular OCR and nonsovereign operations.<br>ADB provides sovereign regular OCR borrowers of FLP loans with options to manage their interest rate and exchange rate risks, while providing low intermediation risk to ADB. Borrowers may request a conversion of all or any portion of the principal amount of the loan through: (i) currency conversion to an approved currency of all or any portion of the principal amount of the loan whether unwithdrawn or withdrawn and outstanding; (ii) an interest rate conversion of all or any portion of the principal amount of the loan withdrawn and outstanding; and (iii) establishment of an interest rate cap or an interest rate collar on a floating rate applicable to all or any portion of the principal amount of the loan withdrawn and outstanding.<br>

ADB offers LCLs to sovereign and nonsovereign borrowers in different local currencies which ADB can effectively intermediate. ADB responds to the evolving financial needs of borrowers to reduce their currency mismatch in DMCs.<br>

In addition to the FLP loans and LCLs, ADB offers sovereign concessional OCR loans to eligible DMCs. Concessional loans represent the concessional financing to DMCs with (i) per capita gross national income below the International Development Association (IDA) operational cut-off; (ii) least developed countries with per capita gross national income above the IDA operational cut-off; and (iii) per capita gross national income above the IDA operational cut-off with limited or lack of creditworthiness.<br>

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As of 30 June 2025 and 31 December 2024, the outstanding loans to borrowers that exceeded 5% of total outstanding loans, before the effect of any risk transfers, are as follows:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
| **Borrower** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **$ million** | **%** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **$ million** | **%** |
| India | $26388 | 17 | $26012 | 17 |
| People's Republic of China | 17853 | 11 | 18101 | 12 |
| Bangladesh | 17828 | 11 | 16373 | 10 |
| Pakistan | 17006 | 11 | 16042 | 11 |
| Philippines | 16961 | 11 | 15728 | 10 |
| Indonesia | 15015 | 9 | 13903 | 9 |
| Others (individually less than 5% of total loans) | 48721 | 30 | 48411 | 30 |
|  | 159772 | 100 | 154570 | 100 |
| Fair value adjustment on loans | (978) |  | (411) |  |
| Allowance for credit losses | (648) |  | (540) |  |
| Unamortized loan origination costs—net | 256 |  | 245 |  |
|  | (1370) |  | (706) |  |
| **Loans Outstanding** | $**158402** |  | $**153864** |  |

---

The following table summarizes the net loans outstanding by major category as of 30 June 2025 and 31 December 2024:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **30 June 2025**  | **31 December 2024** |
| Sovereign loans |  |  |
| &nbsp;&nbsp;&nbsp; Regular | $117445 | $115261 |
| &nbsp;&nbsp;&nbsp; Concessional | 34984 | 33169 |
| &nbsp;&nbsp;&nbsp; Subtotal | 152429 | 148430 |
| Nonsovereign loans | 5973 | 5434 |
| **Total** | $**158402** | $**153864** |

---

As of 30 June 2025 and 31 December 2024, the undisbursed balances of committed loans and approved loans that are not yet committed, are as follows:<br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** | **31 December 2024** |
|  | **Undisbursed** | **Undisbursed** | **Loans** | **Undisbursed** | **Undisbursed** | **Loans** |
|  | **Committed Loans** | **Committed Loans** | **Approved** | **Committed Loans** | **Committed Loans** | **Approved** |
|  |  | **Not Yet** | **Not Yet** |  | **Not Yet** | **Not Yet** |
|  | &nbsp;&nbsp;&nbsp; **Effective** | **Effective** | **Committed** | **Effective** | **Effective** | **Committed** |
| Sovereign loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Regular | $33743 | $1431 | $110 | $29025 | $6338 | $1020 |
| &nbsp;&nbsp;&nbsp; Concessional | 11639 | 904 | 28 | 11500 | 2033 | – |
| &nbsp;&nbsp;&nbsp; Subtotal | 45382 | 2335 | 138 | 40525 | 8371 | 1020 |
| Nonsovereign loans | 1236 | – | 464 | 2219 | – | 350 |
| **Total** | $**46618** | $**2335** | $**602** | $**42744** | $**8371** | $**1370** |

---

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37<br>

**OCR-6**

continued

*Past Due Loans*<br>An analysis of the age of the recorded loans outstanding that are past due as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |
|  | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** |  |  |
|  | **1-90** | **91-180** | **> 180** | **Total** |  |  |
|  | **Days** | **Days** | **Days** | **Past Due** | **Current** | **Total** |
| <u>**30 June 2025**</u> |  |  |  |  |  |  |
| Sovereign loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Regular | $– | $– | $– | $– | $118129 | $118129 |
| &nbsp;&nbsp;&nbsp; Concessional | 3 | 4 | 16 | 23 | 35235 | 35258 |
| &nbsp;&nbsp;&nbsp; Subtotal | 3 | 4 | 16 | 23 | 153364 | 153387 |
| Nonsovereign loans | 6 | 3 | 43 | 52 | 6333 | 6385 |
| Total | $9 | $7 | $59 | $75 | $159697 | 159772 |
| Fair value adjustment on loans |  |  |  |  |  | (978**)** |
| Allowance for credit losses |  |  |  |  |  | (648**)** |
| Unamortized loan origination cost—net |  |  |  |  |  | 256 |
| **Loans Outstanding** |  |  |  |  |  | $**158402** |

---

Notes: The amount of accrued interest excluded from the amortized cost basis in the above table is $1,384 million.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |
|  | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** | **Overdue Loan Service Payments** |  |  |
|  | **1-90** | **91-180** | **> 180** | **Total** |  |  |
|  | **Days** | **Days** | **Days** | **Past Due** | **Current** | **Total** |
| **<u>31 December 2024</u>** |  |  |  |  |  |  |
| Sovereign loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Regular | $– | $– | $– | $– | $115377 | $115377 |
| &nbsp;&nbsp;&nbsp; Concessional | 2 | 4 | 10 | 16 | 33423 | 33439 |
| &nbsp;&nbsp;&nbsp; Subtotal | 2 | 4 | 10 | 16 | 148800 | 148816 |
| Nonsovereign loans | 3 | 2 | 44 | 49 | 5705 | 5754 |
| Total | $5 | $6 | $54 | $65 | $154505 | 154570 |
| Fair value adjustment on concessional loans |  |  |  |  |  | (411) |
| Allowance for credit losses |  |  |  |  |  | (540) |
| Unamortized loan origination cost—net |  |  |  |  |  | 245 |
| **Loans Outstanding** |  |  |  |  |  | $**153864** |

---

Note: The amount of accrued interest excluded from the amortized cost basis in the above table is $1,427 million.

*Loans in Non-Accrual Status*<br>ADB places loans in non-accrual status when the principal, interest, or other charges are overdue by more than 180 days or in case of loans that are not yet overdue by more than 180 days, when there is expectation that loan service payment will not be collected when they become due, at the point when such information is known. Once a loan to a borrower is placed in non-accrual status, all other overdue loans to the same borrower will be placed in non-accrual status. On the date a borrower's loans are placed into non-accrual status, unpaid interest and other charges accrued are deducted from the revenue of the current period. Interest on non-accruing loans is included in revenue only to the extent that payments have actually been received by ADB.<br>

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38<br>

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The following tables provide a summary of financial information related to loans in non-accrual status:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  **As of** | **30 June 2025** | **31 December 2024** |
|  **Amortized cost basis of loans in non-accrual status<sup>a</sup>** |  |  |
| &nbsp;&nbsp;&nbsp; Sovereign |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regular | $– | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Concessional | 511 | 486 |
| &nbsp;&nbsp;&nbsp; Nonsovereign | 92 | 98 |
| &nbsp;&nbsp;&nbsp; **Total** | $**603** | $**584** |
|  **Loans past due for more than 90 days not in non-accrual status**  |  |  |
| &nbsp;&nbsp;&nbsp; Sovereign |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regular | $– | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Concessional | – | – |
| &nbsp;&nbsp;&nbsp; Nonsovereign | – | – |
| &nbsp;&nbsp;&nbsp; **Total** | $**–** | $**–** |
|  **For the six months ended 30 June:**  | **2025** | **2024** |
|  **Interest income recognized on payments received for loans in non-accrual status**  |  |  |
| &nbsp;&nbsp;&nbsp; Sovereign |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regular | $– | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Concessional | – | 6 |
| &nbsp;&nbsp;&nbsp; Nonsovereign | 2 | – |
| &nbsp;&nbsp;&nbsp; **Total**  | $**2** | $**6** |

---

<sup>a</sup> An allowance for credit losses has been recorded against each of the loans in non-accrual status.<br>*Fair Value Adjustment on Loans*<br>Fair value adjustments on loans involve recognizing the loans at their FV at initial recognition, considering market conditions or specific loan terms. This adjustment includes the FV adjustment for ADF loans at the time of their transfer to OCR, as detailed below.<br>

On 1 January 2017, concessional loans from Asian Development Fund (ADF) were transferred to OCR at FV. The FV of the ADF loan was approximated by the nominal value of the loan outstanding amount adjusted for credit risk, which was measured by the expected loss of the ADF loan portfolio based on ADB credit risk management framework.<br>The FV adjustment of concessional loans transferred was $281 million. The FV adjustment is recognized as income over the life of the loans based on the maturity structure of the transferred loans and as the loan service payments are received. As of 30 June 2025, the unamortized balance of the FV adjustment on concessional loans was $147 million ($154 million – 31 December 2024).<br> *<br> Credit Quality Information*

ADB is exposed to credit risks in the loan portfolio if a borrower defaults or its creditworthiness deteriorates. Credit risks represent the potential loss due to possible nonperformance by borrowers under the terms of the contract. ADB manages credit risk for lending operations by monitoring creditworthiness of the borrowers and the capital adequacy framework.<br>ADB monitors credit quality of the loans by assigning a risk rating to each loan on an internal scale from 1 to 14 with 1 denoting the lowest expectation of credit risk and 14 denoting that the borrower has defaulted. The rating scale corresponds to the rating scales used by international rating agencies. For sovereign loans, ADB has a process of assigning internal ratings to provide more accurate inputs for risk measurements. For nonsovereign loans, each transaction is reviewed and assigned a rating based on a methodology that is<br>

------

39<br>

**OCR-6**

continued

broadly aligned with the rating approach of international rating agencies. The risk ratings are used to monitor the credit quality in the portfolio.<br>The amortized cost basis by origination year and internal risk rating for loans as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | **30 June 2025** | **30 June 2025** |  |  |  |
|  |  |  |  |  |  |  |  | **Private** |  |
|  |  |  |  | **Origination Year** | **Origination Year** |  |  | **sector** |  |
| **Risk Class** | **Risk Rating** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **programs** | **Total** |
| **Sovereign Loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Low credit risk | &nbsp;&nbsp;&nbsp; 1–5 (AAA to BBB–) | $505 | $4092 | $4785 | $4217 | $6635 | $54439 | $– | $74673 |
| &nbsp;&nbsp;&nbsp; Medium credit risk | &nbsp;&nbsp;&nbsp; 6–8 (BB+ to BB–) | – | 73 | 18 | 118 | 443 | 10871 | – | 11523 |
| &nbsp;&nbsp;&nbsp; Significant credit risk | &nbsp;&nbsp;&nbsp; 9–10 (B+ to B) | 902 | 2354 | 2288 | 2292 | 2788 | 24889 | – | 35513 |
| High credit risk and non-accrual | &nbsp;&nbsp;&nbsp; 11–14 (B– to D) | 621 | 1850 | 1307 | 2496 | 2331 | 22390 | – | 30995 |
|  Total Sovereign Loans |  | 2028 | 8369 | 8398 | 9123 | 12197 | 112589 | – | 152704 |
| **Nonsovereign Loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Low credit risk | &nbsp;&nbsp;&nbsp; 1–5 (AAA to BBB–) | 24 | 376 | 120 | 114 | – | 958 | 67 | 1659 |
| &nbsp;&nbsp;&nbsp; Medium credit risk | &nbsp;&nbsp;&nbsp; 6–8 (BB+ to BB–) | 81 | 535 | 455 | 204 | 175 | 919 | 62 | 2431 |
| &nbsp;&nbsp;&nbsp; Significant credit risk | &nbsp;&nbsp;&nbsp; 9–10 (B+ to B) | 40 | 290 | 159 | 136 | 27 | 693 | 70 | 1415 |
| High credit risk and non-accrual | &nbsp;&nbsp;&nbsp; 11–14 (B– to D) |  | 14 | 58 | 9 | 11 | 725 | 24 | 841 |
| Total Nonsovereign Loans | Total Nonsovereign Loans | 145 | 1215 | 792 | 463 | 213 | 3295 | 223 | 6346 |
| **Total** |  | $**2173** | $**9584** | $**9190** | $**9586** | $**12410** | $**115884** | $**223** | $**159050** |

---

Notes:<br>

1. Private sector programs include Trade and Supply Chain Finance Program and Microfinance Program.

2. The amount of accrued interest excluded from the amortized cost basis in the above table is $1,384 million.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | **31 December 2024** | **31 December 2024** |  |  |  |
|  |  |  |  |  |  |  |  | **Private** |  |
|  |  | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | **sector** |  |
| **Risk Class** | **Risk Rating** | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **programs** | **Total** |
| Sovereign Loans: |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Low credit risk | 1–5 (AAA to BBB–) | $1721 | $4464 | $3982 | $6594 | $9902 | $46925 | $– | $73588 |
| &nbsp;&nbsp;&nbsp; Medium credit risk | 6–8 (BB+ to BB–) | 33 | 16 | 104 | 430 | 408 | 10413 | – | 11404 |
| &nbsp;&nbsp;&nbsp; Significant credit risk | 9–10 (B+ to B) | 2088 | 1949 | 2220 | 2704 | 3527 | 21203 | – | 33691 |
| &nbsp;&nbsp;&nbsp; High credit risk and |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; non-accrual | 11–14 (B– to D) | 1651 | 1237 | 2439 | 2222 | 2518 | 19934 | – | 30001 |
|  Total Sovereign Loans |  | 5493 | 7666 | 8745 | 11950 | 16355 | 98475 | – | 148684 |
|  Gross write-offs |  | – | – | – | – | – | 10 | – | 10 |
|  **Nonsovereign Loans:**  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Low credit risk | 1–5 (AAA to BBB–) | (1) | 122 | 232 | – | 47 | 973 | 82 | 1455 |
| &nbsp;&nbsp;&nbsp; Medium credit risk | 6–8 (BB+ to BB–) | 248 | 303 | 322 | 202 | 157 | 870 | 47 | 2149 |
| &nbsp;&nbsp;&nbsp; Significant credit risk | 9–10 (B+ to B) | 64 | 243 | 119 | 17 | 96 | 526 | 92 | 1157 |
| &nbsp;&nbsp;&nbsp; High credit risk and |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; non-accrual | 11–14 (B– to D) | 14 | 65 | 9 | 11 | – | 848 | 12 | 959 |
| Total Nonsovereign Loans | Total Nonsovereign Loans | 325 | 733 | 682 | 230 | 300 | 3217 | 233 | 5720 |
| Gross write-offs |  | – | – | – | – | – | 65 | – | 65 |
| **Total** |  | $**5818** | $**8399** | $**9427** | $**12180** | $**16655** | $**101692** | $**233** | $**154404** |

---

Notes:<br>

1. Private sector programs include Trade and Supply Chain Finance Program and Microfinance Program.

2. The amount of accrued interest excluded from the amortized cost basis in the above table is $1,427 million.

No sovereign and nonsovereign loans were written off during the six months ended 30 June 2025.<br>

------

40<br>

**OCR-6**

continued

No trade and supply chain finance, and microfinance programs were converted to term loans for the six months ended 30 June 2025 and for the year ended 31 December 2024.<br>

ADB's internal risk ratings are reviewed at least annually for sovereign and nonsovereign exposures and may be revised based on the availability of new/updated information. ADB's internal risk ratings are mapped into the corresponding PD for sovereign and nonsovereign borrowers based on ADB's risk rating model.<br> *<br> Rollforward of the Allowance for Credit Losses*<br>The changes in the allowance for credit losses on loans outstanding during the six months ended 30 June 2025 and for the year ended 31 December 2024, are as follows:<br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** | **31 December 2024** |
|  | **Sovereign** | **Nonsovereign** |  | **Sovereign** | **Nonsovereign** |  |
|  | **Loans** | **Loans** | **Total** | **Loans** | **Loans** | **Total** |
| Beginning balance | $254 | $286 | $540 | $271 | $381 | $652 |
| Provision (Release of provision) | 21 | 87 | 108 | (7) | (30) | (37) |
| Write-off | – | – | – | (10)<sup>a</sup> | (65) | (75) |
| Ending balance | $275 | $373 | $648 | $254 | $286 | $540 |

---

<sup>a</sup> Represents write-off of provision for HIPC debt relief to Afghanistan.<br>For the six months ended 30 June 2025 and for the year ended 31 December 2024, there were no loan modifications for borrowers facing financial difficulties.<br>*Liability for Credit Losses*<br>ADB recognizes expected credit losses for undisbursed loan commitments as these cannot be cancelled by ADB unconditionally. EAD for undisbursed commitments is estimated based on projected disbursements, prepayments, cancellations considering historical experience, and contractual amortization schedule. The credit losses are determined based on the same methodology that is used for loans. As of 30 June 2025, the amount of liability for credit losses on undisbursed loan commitments was $57 million ($64 million – 31 December 2024) and reported under ACCOUNTS PAYABLE AND OTHER LIABILITIES – Liability for credit losses on off-balance sheet exposures in the Balance Sheet.<br> *<br> Fair Value Disclosure*<br>ADB does not sell its sovereign loans. As of 30 June 2025 and 31 December 2024, all loans are carried at amortized cost.<br>The FV hierarchy of ADB loans as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| Level 1 | $– | $– |
| Level 2 | – | – |
| Level 3 | 159127 | 154436 |
| **Total at fair value** | $**159127** | $**154436** |

---

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41<br>

**OCR-6**

continued

#### NOTE F—GUARANTEES — OPERATIONS<br>

ADB provides project guarantees and guarantees under its private sector programs. While counter-guarantees from the host government are required for all sovereign guarantees, guarantees for nonsovereign projects may be provided with or without a host government counter-guarantee. ADB also seeks risk-sharing arrangements that set ADB's net exposure under a guarantee at the lowest level required to mobilize the necessary financing while maintaining a participation that is meaningful to its financing partners. A counter-guarantee takes the form of a counter-guarantor's agreement to indemnify ADB for any payment it makes under the guarantee. In the event that a guarantee is called, ADB has the contractual right to require payment from the counter-guarantor, on demand, or as ADB may otherwise direct.<br>Tenors of guarantees are subject to risk considerations and market conditions. They should normally not exceed the maximum tenor of ADB's ordinary capital resources lending operations, as may be adjusted from time to time, and there is no minimum tenor. In some cases however, guarantees may be for short tenors if the underlying obligations are short term, such as trade-related products.<br>The maximum potential exposure and outstanding amounts of these guarantee obligations as of 30 June 2025 and 31 December 2024 covered:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  | **Maximum** |  | **Maximum** |  |
|  | **Potential** | **Outstanding** | **Potential** | **Outstanding** |
|  | **Exposure** | **Amount** | **Exposure** | **Amount** |
|  **Project**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Sovereign |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with counterguarantee | $533 | $500 | $33 | $– |
| &nbsp;&nbsp;&nbsp;&nbsp; without counterguarantee | 394 | 322 | 427 | 344 |
|  | 927 | 822 | 460 | 344 |
| &nbsp;&nbsp;&nbsp; Nonsovereign |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with counterguarantee | 79 | 34 | 81 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; without counterguarantee | 103 | 45 | 99 | 46 |
|  | 182 | 79 | 180 | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subtotal | 1109 | 901 | 640 | 425 |
|  **Private Sector Programs**  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Nonsovereign |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with counterguarantee | 634 | 634 | 964 | 964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; without counterguarantee | 967 | 967 | 989 | 989 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subtotal | 1601 | 1601 | 1953 | 1953 |
| **Under Exposure Exchange Agreement** | 6000 | 6000 | 6000 | 6000 |
|  **Total** | $**8710** | $**8502** | $**8593** | $**8378** |

---

The maximum potential exposure represents the undiscounted future payments that ADB could be required to make, inclusive of standby portion for which ADB is committed but not currently at risk. The outstanding amount represents the guaranteed amount utilized under the related loans, which have been disbursed as of the end of a reporting period, exclusive of the standby portion.<br>ADB entered into an exposure exchange agreement (EEA) with other multilateral development banks (MDBs) which is recognized as financial guarantees in the financial statements. The EEA provides for the simultaneous exchange of credit risk coverage for potential non-accrual events on the exchanged sovereign exposures. In case of non-accrual events, the party providing protection would pay the other counterparty interest for any period the covered exposure is in non-accrual, and principal when the covered exposure is fully or partially written-off. The EEA transaction is treated as an exchange of two separate financial guarantees (guarantee<br>

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42<br>

**OCR-6**

continued

provided and guarantee received). Under the EEA, (i) ADB provides a guarantee for the sovereign exposures received from the counterpart MDB (ADB as a seller of protection), and (ii) ADB receives a guarantee for the sovereign exposures transferred to the counterpart MDB (ADB as a buyer of protection). As of 30 June 2025, outstanding amount of guarantee provided under EEA amounted to $6.0 billion ($6.0 billion – 31 December 2024).<br>As of 30 June 2025, a total liability of $323 million ($331 million – 31 December 2024) relating to standby ready obligations for nine credit risk guarantees (eight – 31 December 2024) and one political risk guarantee (one – 31 December 2024)<sup>1</sup> is reported in ACCOUNTS PAYABLE AND OTHER LIABILITIES – Miscellaneous in the Balance Sheet for all guarantees issued after 31 December 2002. Of this amount, $279 million ($293 million – 31 December 2024) pertains to EEA.<br>*Credit Quality Information*<br>For guarantees, each transaction is reviewed and assigned a rating based on the same methodology as the loans, that is broadly aligned with the rating approach of international rating agencies (See Note E). The risk ratings are used to monitor the credit quality of guarantees.<br>

*Liability for Credit Losses*<br>ADB recorded a liability for estimated expected credit losses on off-balance sheet credit exposures over the contractual lifetime of guarantees. The credit losses are estimated based on the same methodology that is used for loans (See Note E). The liability for credit losses on off-balance sheet exposures for guarantees is reviewed quarterly, and the amount to adjust the liability is recorded in the Statement of Income and Expenses as Provision for credit losses.<br>As of 30 June 2025, a liability of $52 million ($56 million – 31 December 2024) for the expected credit losses from guarantees have been included in ACCOUNTS PAYABLE AND OTHER LIABILITIES – Liability for credit losses on off-balance sheet exposures in the Balance Sheet.<br>

*Fair Value Disclosure*<br>As of 30 June 2025 and 31 December 2024, all of ADB's future guarantee receivables and guarantee liabilities are classified as Level 3 within the FV hierarchy.<br>

Future guarantee receivables and guarantee liabilities are stated at discounted present value using significant unobservable inputs such as discount rates applicable to individual guarantee contracts that are internally determined and are classified under Level 3. An increase (decrease) in discount rates generally results in a decrease (increase) in the FV of the guarantees.<br>

The valuation technique and significant unobservable quantitative input for guarantee receivables/guarantee liabilities classified as Level 3 as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | | |
|:---|:---|:---|:---|
|  | **Unobservable** |  |  |
| **Valuation Technique** | **Input** | **30 June 2025** | **31 December 2024** |
| Discounted cash flows | Discount rates | 2.22% | 2.22% |

---

------

---

| | |
|:---|:---|
| 1 | ADB provides two primary guarantee products – a credit guarantee and a political risk guarantee. ADB's credit guarantee is designed as credit enhancements for eligible projects to cover risks that the project and its commercial cofinancing partners cannot easily absorb or manage on their own. ADB also provides political risk guarantees to cover specifically defined political risks such as expropriation, currency inconvertibility or non-transfer. Reducing these risks can make a significant difference in mobilizing private sector financing for projects. |

---

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43<br>

**OCR-6**

<br> continued <br>

The following table presents the changes in the carrying amounts of ADB's Level 3 future guarantee receivable and liability for the six months ended 30 June 2025 and for the year ended 31 December 2024:<br>

($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  | **Receivable** | **Liability** | **Receivable** | **Liability** |
| Balance, beginning of the period | $331 | $331 | $207 | $207 |
| &nbsp;&nbsp;&nbsp; Issuances | 11 | 21 | 172 | 172 |
| &nbsp;&nbsp;&nbsp; Amortization | (29) | (29) | (48) | (48) |
| Balance, end of the period | $313 | $323 | $331 | $331 |

---

Note: There were no realized/unrealized gains and losses included in earnings and other comprehensive income (loss).<br>

#### NOTE G—EQUITY INVESTMENTS — OPERATIONS<br>

ADB's equity investments may be in the form of direct equity investments (e.g. common, preferred, or other capital stock) or through private equity funds. All equity investments (except for those that are accounted for under the equity method) are reported at FV with changes in FV reported in the Statement of Income and Expenses under NET UNREALIZED (LOSSES) GAINS. Realized gains and losses are reported in the Statement of Income and Expenses under NET REALIZED (LOSSES) GAINS from equity investments – operations and are measured by the difference between cost and sales proceeds. Previously recognized unrealized gains and losses are reversed upon sale of investments.<br>

Breakdown of equity investments as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025**  | **31 December 2024** |
| Equity method | $1292 | $1254 |
| Fair value method | 430 | 373 |
| **Total** | $**1722** | $**1627** |

---

Additional information relating to equity investments reported at FV are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
| **As of** | **30 June 2025**  | **31 December 2024** |
| Cost | $380 | $333 |
| Fair value | 430 | 373 |
| Gross unrealized gains | 117 | 98 |
| Gross unrealized losses | (67) | (58) |

---

---

| | | |
|:---|:---|:---|
| **For the six months ended 30 June:** | **2025** | **2024** |
| Net unrealized (losses) gains | $7 | $8 |
| Net realized gains | 0 | 7 |
| Net (losses) gains<br> 0 = amount less than $0.5million | 7 | 15 |

---

As of 30 June 2025, approved equity investments that have not been committed/signed amounted to $32 million ($14 million – 31 December 2024) and committed/signed equity investments that have not been disbursed amounted to $701 million ($761 million – 31 December 2024).<br>

*Fair Value Disclosure*<br>

ADB's equity investments reported at FV as of 30 June 2025 were $399million ($373 million – 31 December 2024). Equity investments with readily determinable market prices are valued using quoted<br>

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44<br>

**OCR-6**

continued

prices in active markets and are classified as Level 1. Equity investments valued using inputs other than quoted prices within Level 1 that are observable, such as prices of recent investments, are classified as Level 2. Equity investments valued with financial models using unobservable inputs are classified as Level 3.<br>The FV hierarchy of ADB's equity investments at FV as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| Level 1 | $95 | $96 |
| Level 2 | 120 | 124 |
| Level 3 | 216 | 153 |
| **Total equity investments at fair value** | $**430** | $**373** |

---

The valuation techniques and significant unobservable inputs for equity investments classified as Level 3 as of 30 June 2025 and 31 December 2024 are presented as follows.<br>

---

| | | | |
|:---|:---|:---|:---|
|  | **Fair Value** |  | **Range**  |
| **Valuation Technique** | ($ million) | **Unobservable Inputs** | **(Weighted Average)<sup>a</sup>** |
| **<u>30</u><u> </u><u>June</u><u> </u><u>2025</u>**  |  |  |  |
| Discounted cash flow | $68 | Discount rate | 10.00% – 23.61% (14.23%) |
| Comparable valuations | 81 | Price-to-book multiples  | 0.43x – 1.20x (0.89x) |
|  |  | EV/EBITDA | 14.90x |
| Net asset value | 67 | Discount | 40% |
|  | $**216** |  |  |
| **<u>31 December 2024</u>** |  |  |  |
| Discounted cash flow | $19 | Discount rate | 13.4% – 14.6% (14.24%) |
| Comparable valuations | 85 | Price-to-book multiples  | 0.50x – 1.10x(0.92x) |
|  |  | EV/EBITDA | (17.50x) |
| Net asset value | 49 | Discount | (40%) |
|  | $**153**  |  |  |

---

EV/EBITDA = enterprise value/earnings before interest, taxes, depreciation, and amortization. WACC = weighted average cost of capital.<br> <sup>a</sup> Unobservable inputs were weighted by the relative fair value of the instruments.<br>An increase (decrease) in the discount rate, independently, will decrease (increase) the FV of equity investments. Conversely, significant increase (decrease) in price-to-book multiples, and EV/EBITDA will generally increase (decrease) the FV of the equity investments. The valuation technique used for four Level 2 and one Level 3 equity investments was changed during the six months ended 30 June 2025 (two Level 2 and two Level 3 equity investments – for the year ended 31 December 2024) to reflect a more relevant FV measurement.<br>

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45<br>

**OCR-6**

<br> continued

The following table presents the changes in the carrying amounts of ADB's Level 3 equity investment for the six months ended 30 June 2025 and for the year ended 31 December 2024:<br>

($ million)

---

| | | |
|:---|:---|:---|
|  | **Equity investments under FV Method** | **Equity investments under FV Method** |
|  | **30 June 2025**  | **31 December 2024** |
| Balance, beginning of period | $153 | $240 |
| &nbsp;&nbsp;&nbsp; Transfer to Level 3 | 55 | 34 |
| &nbsp;&nbsp;&nbsp; Disbursement | (0) | 0 |
| &nbsp;&nbsp;&nbsp; Divestment | (0) | (48) |
| &nbsp;&nbsp;&nbsp; Reclassified out of Level 3 | (8) | (24) |
| &nbsp;&nbsp;&nbsp; Total unrealized losses  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in earnings<sup>a</sup> | 9  | (44) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in other comprehensive income (loss)<sup>b</sup> | 7 | (5) |
| Balance, end of period | $216 | $153 |
| The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at reporting date<sup>a</sup> | $(7) | $(41) |

---

0 = less than $0.5 million.<br> <sup>a</sup> Included in net unrealized (losses) gains (OCR-2).<br> <sup>b</sup> Included in accumulated translation adjustments (Note M).<br>

****

<br> **NOTE H—OTHER DEBT SECURITIES — OPERATIONS**<br>ADB's financial assistance to nonsovereign entities in its developing member countries may be made by way of subscription to an entity's debt instruments such as bonds and debentures issued for the purpose of financing development projects. Investments in other debt securities may be classified as held-to-maturity (HTM) or AFS based on the intent and ability of ADB to hold these securities to maturity. HTM securities are reported at amortized cost while AFS securities are reported at FV. As of 30 June 2025 and 31 December 2024, HTM and AFS other debt securities are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025**  | **31 December 2024** |
| Available for sale | $124 | $120 |
| Held-to-maturity | 500 | 515 |
|  | 624 | 635 |
| Allowance for credit losses | (30) | (14) |
| **Total** | $**594** | $**621** |

---

The amortized cost and FV of the outstanding other debt securities by contractual maturity as of 30 June 2025 and 31 December 2024 are presented below:<br>

($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  | **Amortized** <br> **Cost**  | **Fair Value** | **Amortized** <br> **Cost**  | **Fair Value** |
| Due in one year or less | $180 | $194 | $179 | $202 |
| Due after one year through five years | 401 | 390 | 411 | 407 |
| Due after five years through ten years | 42 | 30 | 48 | 35 |
| Due after ten years through fifteen years | – | – | – | – |
| Due after fifteen years through twenty years | 0 | 1 | – | 1 |
| **Total** | $**623** | $**615** | $**638** | $**645** |

---

0 = less than $0.5 million.

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46<br>

**OCR-6**

continued

*Credit Quality Information*<br>For HTM debt securities, each transaction is reviewed and assigned a rating based on the same methodology as the loans, that is broadly aligned with the rating approach of international rating agencies (See Note E). The risk ratings are used to monitor the credit quality of HTM debt securities.<br>The amortized cost basis by origination year and internal risk rating for HTM debt securities as of 30 June 2025 and 31 December 2024 are as follows:<br>

<br> ($ million)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** |
|  |  | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | **Origination Year** | |
| **Risk Class** | **Risk Rating** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total** |
| Low credit risk | 1-5 (AAA to BBB–) | $– | $– | $– | $10 | $– | $– | $10 |
| Medium credit risk | 6-8 (BB+ to BB–) | – | 38 | 88<br>| 22 | 36<br>| 194 | 378 |
| Significant credit risk | 9-10 (B+ to B) | – | 13 | 7 | – | – | – | 20 |
| &nbsp;&nbsp;&nbsp; High credit risk and<br> non-accrual<br>| 11-14 (B– to D) | – | – | – | – | – | 92 | 92 |
| **Total** |  | $**–** | $**51** | $**95** | $**32** | $**36**  | $**286** | $**500** |

---

Note: The amount of accrued interest excluded from the amortized cost basis in the above table is $12 million.<br>

($ million)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 |
|  |  | Origination Year | Origination Year | Origination Year | Origination Year | Origination Year | Origination Year | |
| **Risk Class** | **Risk Rating** | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Total** |
| Low credit risk | 1-5 (AAA to BBB–) | $– | $– | $10 | $– | $– | $– | $10 |
| Medium credit risk | 6-8 (BB+ to BB–) | 24 | 92 | 25 | 40 | 38 | 172 | 391 |
| Significant credit risk | 9-10 (B+ to B) | 12 | 7 | 7 | – | – | – | 26 |
| High credit risk and |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; non-accrual | 11-14 (B– to D) | – | – | – | – | – | 88 | 88 |
| **Total** |  | $**36** | $**99** | $**42** | $**40** | $**38** | $**260** | $**515** |

---

Note: The amount of accrued interest excluded from the amortized cost basis in the above table is $12 million.<br>Internal risk ratings of HTM debt securities are updated at least annually and may be revised based on the availability of new/updated information. Internal risk ratings are mapped into the corresponding probability of default for issuers of HTM debt securities based on ADB's risk rating model.<br>

*Rollforward of the Allowance for Credit Losses*

The changes in the allowance for credit losses on outstanding other debt securities for the six months ended 30 June 2025 and for the year ended 31 December 2024 are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025**  | **31 December 2024** |
| Balance, beginning of the period | $14 | $4 |
| (Release of provision) Provision | 16 | 10 |
| Balance, end of the period | $30 | $14 |

---

*Past Due Status and Non-Accrual Status*<br>ADB places HTM debt securities in non-accrual status when the principal, interest, or other charges are overdue by more than 180 days or in case of securities that are not yet overdue by more than 180 days, when there is expectation that interest and other charges will not be collected when they become due, at the

------

47<br>

**OCR-6**

<br> continued

point when such information is known. Interest on non-accruing HTM debt securities is included in revenue only to the extent that payments have been received by ADB.<br>As of 30 June 2025 and 31 December 2024, there are no HTM debt securities that are past due or in non- accrual status.<br>*Liability for Credit Losses*<br>ADB recorded a liability for estimated expected credit losses on off-balance sheet credit exposures over the undisbursed portion of HTM debt securities. The credit losses are estimated based on the same methodology that is used for loans (See Note E). The liability for credit losses on off-balance sheet exposures for HTM debt securities is reviewed quarterly, and the amount to adjust the liability is recorded in net income as Provision for credit losses.<br>As of 30 June 2025, the amount of liability for credit losses on undisbursed HTM debt securities commitments was $1 million ($1 million – 31 December 2024) and reported under ACCOUNTS PAYABLE AND OTHER LIABILITIES – Liability for credit losses on off-balance sheet exposures in the Balance Sheet.<br>*Fair Value Disclosure*<br>The FV hierarchy of ADB's other debt securities as of 30 June 2025 and 31 December 2024 is as follows:<br>

($ million)

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **31 December 2024** |
| Level 1 | $114 | $95 |
| Level 2 | – | 15 |
| Level 3 | 501 | 535 |
| **Total at fair value** | $**615** | $**645** |

---

There are two AFS other debt security classified as Level 3 as of 30 June 2025 and 31 December 2024.<br>The valuation technique and significant unobservable input for AFS other debt securities classified as Level 3 as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | | |
|:---|:---|:---|:---|
|  | **Unobservable** | **Range (Average)<sup>a</sup>** | **Range (Average)<sup>a</sup>** |
| **Valuation Technique** | **Inputs** | **30 June 2025** | **31 December 2024** |
| Discounted cash flows | Discount rate | 20.29% | 18.30% |
| Scenario-based |  |  |  |
| &nbsp;&nbsp;&nbsp; financial model | Future cash flows | 0% to 91.10% (90.54%) | 79.00% to 96.00% (80.00%) |

---

<sup></sup> 

<sup>a</sup> Average represents the arithmetic average of the unobservable inputs.<br>Significant increase (decrease) in the discount rate, independently, will generally decrease (increase) the FV of the debt securities. The valuation technique used for one Level 2 ODS was changed during the six months ended 30 June 2025 (one Level 2 ODS – for year ended 31 December 2024) to reflect a more relevant FV measurement. The transfer into Level 3 in 2024 was due to a change of valuation method from the price of recent investment to discounted cash flow.<br>

------

48<br>

**OCR-6**

continued

The following table presents the changes in the carrying amounts of ADB's Level 3 other debt securities at fair value method for the six months ended 30 June 2025 and for the year ended 31 December 2024:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| Balance, beginning of the period | $10 | $– |
| Transfer into Level 3 | – | 10 |
| Total unrealized gains (losses) included in accumulated other comprehensive income<sup>a</sup> | 0 | (0) |
| Balance, end of the period | $10 | $10 |
|  The amount of total gains for the period included in other comprehensive income attributable to the change in net unrealized gains or losses<sup>b</sup> relating assets still held at the reporting date | $0 | $(0) |

---

0 = less than $0.5 million.<br> <sup>a</sup> Included in unrealized holding gains from other debt securities — operations and accumulated translation adjustments (Note M).<br> <sup>b</sup> Included in unrealized holding gains from other debt securities — operations (Note M).<br>Additional information relating to other debt securities classified as AFS are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
| **As of** | **30 June 2025**  | **31 December 2024** |
| Amortized cost | $123 | $123 |
| Fair value | 124 | 120 |
| Gross unrealized gains | 4 | 1 |
| Gross unrealized losses | (3) | (4) |
| **For the six months ended 30 June:** | **2025** | **2024** |
| Change in net unrealized gains or losses from prior period | $4 | $(4) |
| Proceeds from sales | 2 | – |
| Gross gain from sales | 2 | – |

---

As of 30 June 2025, ADB had the intent to hold and was not required to sell the AFS other debt securities of which the fair value is lower than amortized cost. ADB also assessed and determined that the decline of fair value below the amortized cost basis of the AFS securities was not due to credit-related factors.<br> **<br> NOTE I—DERIVATIVE INSTRUMENTS**<br>ADB uses derivative instruments such as interest rate swaps, currency swaps, and FX swaps and forward contracts for asset and liability management of individual positions and portfolios. The FV of outstanding currency and interest rate swap agreements is determined at the estimated amount that ADB would receive or pay to terminate the agreements using market-based valuation models. The basis of valuation is the present value of expected cash flows based on market data.<br>Included in DERIVATIVE ASSETS/DERIVATIVE LIABILITIES – Borrowings are interest rate and currency swaps that ADB has entered into for the purpose of hedging specific borrowings. The terms of ADB's interest rate and currency swaps usually match the terms of particular borrowings. Included in DERIVATIVE ASSETS/DERIVATIVE LIABILITIES – Investments for liquidity purpose are interest rate, currency and FX swaps and forward contracts that ADB has entered into for the purpose of hedging specific investments. Included in DERIVATIVE ASSETS/DERIVATIVE LIABILITIES – Loans – Operations are interest rate, and currency swaps that ADB has entered into for the purpose of hedging specific loans or a portfolio of loans. The loans related swaps were executed to better align the composition of certain outstanding loans with funding sources and future requirements.<br>

------

49<br>

**OCR-6**

<br> continued

Future dated derivatives as of 30 June 2025 amounted to $186 million for derivative assets ($620 million – 31 December 2024) and $162 million for derivative liabilities ($477 million – 31 December 2024).<br>

*Fair Value Disclosure*

The FV hierarchy of ADB's derivatives and the balance sheet location as of 30 June 2025 and 31 December 2024 are as follows:<br>

<br> ($ million)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Balance Sheet**  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Location** | **Total** | **Level 1** | **Level 2**  | **Level 3** |
| **<u>30 June 2025</u>** |  | | | | |
| **Assets** |  | | | | |
| Borrowings related derivatives | Derivative Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Currency swaps | - Borrowings | $73981 | $– | $70810 | $3171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps |  | 499 | – | 497 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments related derivatives<br> Currency swaps | Derivative Assets<br> - Investments for | <br> 19952 | <br> – | <br> 19952 | <br> – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps | liquidity purpose | 263 | – | 263 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 8741 | – | 8741 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange forward |  | 91 | – | 91 | – |
| &nbsp;&nbsp;&nbsp; Loans related derivatives<br> Currency swaps | Derivative Assets<br> - Loans—Operations | <br> 17687 | <br> – | <br> 17687 | <br> – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps |  | 208 | – | 208 | – |
| &nbsp;&nbsp;&nbsp; **Total assets at fair value** |  | $**121422** | $**–** | $**118249** | $**3173** |
| **Liabilities** |  |  |  |  |  |
| Borrowings related derivatives | Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Currency swaps | - Borrowings | $74946 | $– | $74946 | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps |  | 3004 | – | 3004 | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investments related derivatives<br> Currency swaps | Derivative Liabilities<br> - Investments for | <br> 19304 | <br> – | <br> 19304 | <br> – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps | liquidity purpose | 129 | – | 129 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 8905 | – | 8905 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Foreign exchange forward |  | 92 | – | 92 | – |
| Loans related derivatives | Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Currency swaps | - Loans—Operations | 16245 | – | 12630 | 3615 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest rate swaps |  | 71 | – | 71 | – |
| **Total liabilities at fair value** |  | $**122696** | $**–** | $**119081** | $**3615** |

---

0 = less than $0.5 million.

------

50<br>

**OCR-6**

continued

<br> ($ million)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Balance Sheet** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
| ****<br>| **Location** | **Total**  | **Level 1** | **Level 2** | **Level 3** |
| **<u>31 December 2024</u>** |  | | | | |
| **Assets** |  | | | | |
| Borrowings related derivatives | Derivative Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Borrowings | $61141 | $– | $58608 | $2533 |
| &nbsp;&nbsp;&nbsp; Interest rate swaps |  | 143 | – | 143 | 0 |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 588 | – | 588  | –  |
| Investments related derivatives | Derivative Assets <br>|  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Investments for  | 16485 | – | 16485 | – |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | liquidity purpose  | 299 | – | 299 | – |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 9077 | – | 9077 | – |
| &nbsp;&nbsp;&nbsp; Foreign exchange forward |  | 201 | – | 201 | – |
| Loans related derivatives | Derivative Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Loans — Operations | 17415 | – | 17415 | – |
| &nbsp;&nbsp;&nbsp; Interest rate swaps |  | 256 | – | 256 |  |
| &nbsp;&nbsp;&nbsp; **Total assets at fair value** |  | $**105605** | $**–** | $**103072** | $**2533**<br>|
| **Liabilities** |  |  |  |  |  |
| Borrowings related derivatives | Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Borrowings | $66502 | $– | $66502 | $– |
| &nbsp;&nbsp;&nbsp; Interest rate swaps |  | 4615 | – | 4614 | 1 |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 586 |  | 586 | –  |
| Investments related <br> derivatives | Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Investments for | 14388 | – | 14388 | – |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | liquidity purpose | 99 | – | 99 | – |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps |  | 8599 | – | 8599 | – |
| &nbsp;&nbsp;&nbsp; Foreign exchange forward |  | 206 | – | 206 | – |
| Loans related derivatives | Derivative Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | - Loans — Operations | 14698 | – | 12986 | 1712 |
| &nbsp;&nbsp;&nbsp; Interest rate swaps |  | 123 | – | 123 |  |
| &nbsp;&nbsp;&nbsp; **Total liabilities at fair value** |  | $**109816** | $**–** | $**108103** | $**1713** |

---

0 = less than $0.5 million.

ADB uses discounted cash flow models in determining FV of derivatives. Market inputs, such as yield curves, FX rates, cross currency basis spreads, yield basis spread, interest rates and FX volatilities and correlation are obtained from market data providers and applied to the models. ADB has a process to validate the appropriateness of the models and inputs in determining the hierarchy levels. This involves evaluating the nature of rates and spreads to determine if they are indicative and binding.<br>The valuation technique and quantitative information on significant unobservable inputs used in valuing ADB's derivative instruments classified as Level 3 as of 30 June 2025 and 31 December 2024 are presented below:<br>

---

| | | | |
|:---|:---|:---|:---|
|  | | **Range (Weighted Average)<sup>a</sup>** | **Range (Weighted Average)<sup>a</sup>** |
| **Valuation Technique** | **Unobservable Inputs** | **30 June 2025** | **31 December 2024** |
| Discounted cash flows | &nbsp;&nbsp;&nbsp; Basis swap spreads | -0.47% to 35.16% (-29.85%) | -0.47% to 38.83% (6.05%) |

---

<sup>a</sup> Unobservable inputs were weighted by the relative fair value of the instruments.<br>

------

51<br>

**OCR-6**

<br> continued

A significant increase (decrease) in the basis swap spread will generally decrease (increase) the FV of derivatives.<br>The following tables present the changes in the carrying amounts of ADB's Level 3 derivative assets and derivative liabilities for the six months ended 30 June 2025 and for the year ended 31 December 2024:<br>

($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Borrowings related** | **Borrowings related** | | |
|  | **derivatives**  | **derivatives**  | &nbsp;&nbsp;&nbsp;&nbsp; **Loans related derivatives** | &nbsp;&nbsp;&nbsp;&nbsp; **Loans related derivatives** |
|  | **Assets** | **Liabilities** | &nbsp;&nbsp;&nbsp;&nbsp; **Assets** | **Liabilities** |
| **<u>30 June 2025</u>** | | | | |
| Balance, beginning of period | $2533 | $(1) | $0 | $(1712) |
| &nbsp;&nbsp;&nbsp; Total realized/unrealized gains (losses) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in earnings<sup>a</sup> | 208 | 1 | – | (182) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in other comprehensive (loss) income<sup>b</sup> | 131 | 0 | – | (62) |
| &nbsp;&nbsp;&nbsp; Issuances | 369 | – | – | (1839) |
| &nbsp;&nbsp;&nbsp; Maturities/Redemptions | (68) | – | – | 180 |
| Balance, end of period | $3173 | $(0) | $– | $(3615) |
|  The amount of total gains (losses) for the period included in earnings attributable to the change in net unrealized gains or losses<sup>a</sup> relating to assets/liabilities still held at the reporting date | $(16) | $1 | $0 | $(153) |
| **<u>31 December 2024</u>** |  |  |  |  |
| Balance, beginning of year | $2083 | $(1) | $0 | $(913) |
| &nbsp;&nbsp;&nbsp; Total realized/unrealized gains (losses) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in earnings<sup>a</sup> | (57) | (0) | (0) | (41) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in other comprehensive (loss) income<sup>b</sup> | (112) | 0 | – | 27 |
| &nbsp;&nbsp;&nbsp; Issuances | 1073 | – | – | (910) |
| &nbsp;&nbsp;&nbsp; Maturities/Redemptions | (454) | – | – | 125 |
| Balance, end of year | $2533 | $(1) | $0 | $(1712) |
|  The amount of total gains (losses) for the year included in earnings attributable to the change in net unrealized gains or losses<sup>a</sup> relating to assets/liabilities still held at the reporting date | $(21) | $(0) | $0 | $(39) |

---

0 = less than $0.5 million.<br> <sup>a</sup> Included in net unrealized gains (losses) (OCR-2).<br> <sup>b</sup> Included in accumulated translation adjustments (Note M).<br>

------

52<br>

**OCR-6**

continued

**

<br> *Effect of Derivative Instruments on the Statement of Income and Expenses*<br>ADB reports changes in the FV of its derivative instruments as part of net unrealized gains and losses in its Statement of Income and Expenses while all interest income, expenses, and related amortization of discounts, premiums, and fees are reported as part of revenue and expenses. These are summarized below:<br>

<br> ($ million)

---

| | | | |
|:---|:---|:---|:---|
|  |  | **Amount of Gain (Loss) recognized** | **Amount of Gain (Loss) recognized** |
|  | **Location of Gain (Loss)**  | **in Income (Expenses) on** | **in Income (Expenses) on** |
|  | **recognized in Income (Expenses)**  | **Derivatives** | **Derivatives** |
|  | **on Derivatives** | **30 June 2025** | **30 June 2024** |
| Borrowings related derivatives |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | Borrowings and related expenses | $(384) | $(704) |
|  | **Net Unrealized (Losses) Gains**  | 538 | (284)<br>|
| &nbsp;&nbsp;&nbsp; Interest rate swaps | Borrowings and related expenses | (823) | (1569) |
|  | Net Unrealized (Losses) Gains | 1758 | (675) |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps | Borrowings and related expenses | 1 | – |
|  | Net Unrealized (Losses) Gains | (0) | – |
|  |  | $1090 | $(3232) |
| Investments related derivatives |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | Revenue from Investments for |  |  |
|  | liquidity purpose | $297 | $388 |
|  | Net Unrealized (Losses) Gains | (41) | 61 |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | Revenue from Investments for liquidity purpose | 20 | 40 |
|  | Net Realized Gains | -  | 1 |
|  | Net Unrealized (Losses) Gains | (64) | 8 |
| &nbsp;&nbsp;&nbsp; Foreign exchange swaps | Revenue from Investments for |  |  |
|  | liquidity purpose | 141 | 150 |
|  | Net Unrealized (Losses) Gains | (4) | (4) |
|  |  | $349 | $644 |
| Loans related derivatives |  |  |  |
| &nbsp;&nbsp;&nbsp; Currency swaps | Revenue from Loans — Operations | $784 | $387 |
|  | Net Unrealized (Losses) Gains | 108 | 6 |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | Revenue from Loans — Operations | 11 | 16 |
|  | Net Unrealized (Losses) Gains | (1) | (8) |
|  |  | $902 | $401 |

---

*Counterparty Credit Risks*

ADB has entered into several agreements with its derivative counterparties under the International Swaps and Derivatives Association (ISDA) Master Agreement and the Master Agreement of the National Association of Financial Market Institutional Investors. The agreements provide for the right of a party to terminate the derivative transaction if any of the various events of default and termination events specified occur. Events of default include failure to pay and cross default. Termination events include the situation where (i) the long term unsecured and unsubordinated indebtedness of ADB or the counterparty ceases to be rated at the minimum credit rating level negotiated with the relevant counterparty, or (ii) such indebtedness ceases to be rated by any international credit rating agencies. If ADB's counterparties are entitled under the agreements to terminate their derivative transactions with ADB, ADB will be required to pay an amount equal to its net liability position with each counterparty (in the case of counterparties who have entered into the ISDA Master Agreement absent of local market constraints) and an amount equal to its gross liability position with each counterparty (in the case of counterparties without enforceable netting agreement).<br>

------

53<br>

**OCR-6**

<br> continued

Counterparty credit risk is also mitigated by requiring counterparties to post collateral based on specified credit rating driven thresholds. As of 30 June 2025, ADB had received collateral of $1,225 million ($1,053 million – 31 December 2024) in connection with swap agreements, comprising of $407 million ($827 million – 31 December 2024) in cash included under swap related and other collateral in the balance sheet and $818 million ($226 million – 31 December 2024) in liquid securities.<br>ADB has elected not to offset any derivative instruments by counterparty in the balance sheet. Gross amounts of DERIVATIVE ASSETS and DERIVATIVE LIABILITIES not offset in the balance sheet that are subject to enforceable master netting agreements as of 30 June 2025 and 31 December 2024 are summarized as follows (see Note D for PAYABLE UNDER SECURITIES REPURCHASE AGREEMENTS):<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) | ($ million) | ($ million) | ($ million) | ($ million) |
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  | **Derivative** | **Derivative** | **Derivative** | **Derivative** |
|  | **assets** | **liabilities** | **assets** | **liabilities** |
| Gross amounts presented in the balance sheet | $121422 | $(122696) | $105605 | $(109816) |
| Gross amounts not offset in the balance sheet |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Financial instruments | (120190) | 120190 | (104561) | 104561 |
| &nbsp;&nbsp;&nbsp; Collateral received<sup>a</sup> | (1102) | – | (728) | – |
| **Net amount<sup>b</sup>** | $**130**  | $**(2506)** | $**316** | $**(5255)** |

---

<sup>a</sup> Includes cash and securities collateral used to cover positive marked-to-market exposures.<br> <sup>b</sup> ADB is not required to post collateral to counterparties when it is in a net liability position.<br>**NOTE J—PROPERTY, FURNITURE, AND EQUIPMENT**<br>Property, furniture, and equipment includes (i) land; (ii) buildings and improvements; (iii) office furniture and equipment; and (iv) right-of-use asset. Breakdown as of 30 June 2025 and 31 December 2024 is as follows:<br>

($ million)

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **31 December 2024** |
| Land | $10 | $10 |
| Buildings and improvements | 118 | 121 |
| Office furniture and equipment | 139 | 127 |
| Right-of-use asset | 59 | 51 |
| **Total** | $**326** | $**309** |

---

Land, buildings and improvements, and office furniture and equipment are shown at net book value.<br>

<br> Right-of-use asset pertains to lease of real properties such as offices, buildings and parking lots in field offices, classified as operating lease. Right-of-use asset is derived from the lease liability, which is the present value of future lease payments using the applicable discount rate, adjusted by prepaid rent and deferred rent. As of 30 June 2025, lease liability amounted to $55 million ($45 million – 31 December 2024) and is recorded as part of Miscellaneous under ACCOUNTS PAYABLE AND OTHER LIABILITIES.<br>

------

54<br>

**OCR-6**

continued

**NOTE K—RELATED PARTY TRANSACTIONS**

**** 

<br> As of 30 June 2025 and 31 December 2024, ADB had the following net receivables and payables to ADF, other Special Funds, external trust funds under ADB administration (Trust Funds), and employee benefit plans consisting of the Staff Retirement Plan, the Retiree Medical Plan Fund, and the Defined Contribution Plan. These are included in Miscellaneous under OTHER ASSETS and ACCOUNTS PAYABLE AND OTHER LIABILITIES:

---

| | | |
|:---|:---|:---|
| ($ million) | ($ million) | ($ million) |
|  | **30 June 2025** | **31 December 2024** |
| **Amounts receivable from:** |  |  |
| &nbsp;&nbsp;&nbsp; Asian Development Fund (Note N) | $23 | $29 |
| &nbsp;&nbsp;&nbsp; Other Special Funds | 2 | 1 |
| &nbsp;&nbsp;&nbsp; Trust Funds and Others—net | 6 | 5 |
| &nbsp;&nbsp;&nbsp; Employee Benefit Plans—net | – | 3 |
| **Total** | $**31** | $**38** |
| **Amounts payable to:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Employee Benefit Plans—net | $4 | $– |

---

**NOTE L—BORROWINGS**<br>The key objective of ADB's borrowing strategy is to raise funds at the most stable and lowest possible cost for the benefit of its borrowers. ADB uses financial derivative instruments in connection with its borrowing activities to increase cost efficiency, while achieving risk management objectives. Currency and interest rate swaps enable ADB to raise operationally needed currencies in a cost-efficient way and to maintain its borrowing presence in the major capital markets. Interest rate swaps are used to reduce interest rate mismatches arising from lending and liquidity operations.<br>The carrying amounts of ADB's outstanding borrowings as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| At Amortized cost | $3369 | $2394 |
| At Fair value | 160236 | 144123 |
| **Total** | $**163605** | $**146517** |

---

<br> *Fair Value Disclosure*<br>

Plain vanilla borrowings are valued using discounted cash flow methods with market-based observable inputs such as yield curves, FX rates, and credit spreads. On some borrowings, significant unobservable input is also used such as derived credit spread. Structured borrowings issued by ADB are valued using financial models that discount future cash flows and simulated expected cash flows. These involve the use of pay-off profiles within the realm of accepted market valuation models such as Hull-White and Black-Scholes. The model incorporates market observable inputs, such as yield curves, FX rates, credit spreads, interest rates and FX volatilities and correlation.<br>ADB reports borrowings that are swapped or are intended to be swapped in the future and selected floating- rate borrowings at FV. Changes in FV are reported in the Statement of Income and Expenses under NET UNREALIZED (LOSSES) GAINS. ADB measures the portion of the FV change due to instrument-specific credit risk and presents the amount separately in Accumulated other comprehensive income (loss) account.<br>

------

55<br>

**OCR-6** <br>

continued

The FV hierarchy of ADB's outstanding borrowings reported at amortized cost and FV as of 30 June 2025 and 31 December 2024 are as follows:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| **At Amortized cost** |  |  |
| Level 1 | $– | $– |
| Level 2 | 2963 | 2040 |
| Level 3 | 478 | 441 |
| Subtotal | 3441 | 2481 |
| **At Fair value** |  |  |
| Level 1 | – | – |
| Level 2 | 149222 | 136948 |
| Level 3 | 11014 | 7175 |
| Subtotal | 160236 | 144123 |
| **Total borrowings at fair value** | $**163677** | $**146604** |

---

For Level 3 borrowings carried at FV, the quantitative information on significant unobservable input used for valuation as of 30 June 2025 and 31 December 2024 are presented below:

---

| | | | |
|:---|:---|:---|:---|
|  | | **Range (Weighted Average)<sup>a</sup>** | **Range (Weighted Average)<sup>a</sup>** |
| **Valuation Technique** | <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Unobservable Inputs** | **30 June 2025** | **31 December 2024** |
| Discounted cash flows | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derived credit spreads | -2.16% to 5.37% (0.11%) | -1.54% to 6.11% (0.1%) |

---

<sup>a</sup> Unobservable inputs were weighted by the relative fair value of the instruments.

A significant increase (decrease) in credit spreads generally decreases (increases) the FV of the borrowings.<br>The following table presents the changes in the carrying amounts of ADB's Level 3 borrowings reported at FV for the six months ended 30 June 2025 and the year ended 31 December 2024:

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025** | **31 December 2024** |
| Balance, beginning of the period | $7175 | $7033 |
| &nbsp;&nbsp;&nbsp; Total losses (gains) - (realized/unrealized) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in earnings<sup>a</sup> | 361 | (27) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Included in other comprehensive income<sup>b</sup> | 139 | (151) |
| &nbsp;&nbsp;&nbsp; Issuances | 3707 | 3540 |
| &nbsp;&nbsp;&nbsp; Maturities/Redemptions | (368) | (3220) |
| Balance, end of the period | $11014 | $7175 |
| The amount of total losses for the period included in earnings attributable to the change in net unrealized gains or losses<sup>a</sup> relating to liabilities still held at the reporting date | $176 | $(29) |
| The amount of total losses (gains) for the period included in other comprehensive income attributable to the change in net unrealized gains or losses<sup>c</sup> relating to liabilities still held at the reporting date | $(70) | $54 |

---

<sup>a</sup> Included in net unrealized (losses) gains (OCR-2).

<sup>b</sup> Included in unrealized holding gains from borrowings and accumulated translation adjustments (Note M).

<sup>c</sup> Included in unrealized holding gains from borrowings (Note M).

------

56<br>

**OCR-6**

continued

 **NOTE M—EQUITY**<br>

*Capital Stock*<br>

The authorized capital stock of ADB as of 30 June 2025 totaling 10,639,233 shares, was fully subscribed by members. Of the subscribed shares, 10,106,089 are "callable" and 533,144 are "paid-in". The "callable" share capital is subject to call by ADB only as and when required to meet ADB's obligations incurred on borrowings of funds for inclusion in its OCR or on guarantees chargeable to such resources. The "paid-in" share capital has been received, partly in convertible currencies and partly in the currency of the subscribing member which may be convertible. In accordance with Article 6, paragraph 3 of the Charter, ADB accepts nonnegotiable, noninterest-bearing demand obligations in satisfaction of the portion payable in the currency of the member, provided such currency is not required by ADB for the conduct of its operations. Nonnegotiable, noninterest- bearing demand obligations received on demand amounted to $6 million ($12 million – 31 December 2024).<br>

As of 30 June 2025, the value of the SDR in terms of the US dollar was $1.373379 ($1.304130 – 31 December 2024) giving a value for each share of ADB's capital equivalent to $13,733.79 ($13,041.30 – 31 December 2024).<br>In September 2024, Israel became ADB's 69th member, subscribing to 150 shares of ADB's authorized capital stock.<br>

*Allocation of One-Time Income from Asset Transfer from ADF*<br>

On 15 March 2017, the Board of Governors approved the allocation of the one-time income of $30,748 million from ADF assets transfer to OCR ordinary reserve effective 1 January 2017, pursuant to Resolution No. 387.<br>

*Allocation of Net Income*<br>In May 2025, the Board of Governors approved the following with respect to ADB's 2024 net income of $1,602 million, after the appropriation of guarantee fees of $27 million to the Special Reserve: (i) the following adjustments be made to the net income amount to determine the allocable net income: $63 million representing adjustments for the net unrealized gains for the year ended 31 December 2024, be added to the cumulative revaluation adjustments (CRA) account; (ii) $1,016 million be allocated to the Ordinary Reserve; (iii) $394 million be allocated to the ADF; and (iv) $130 million be allocated to the Technical Assistance Special Fund (TASF).<br>

In May 2024, the Board of Governors approved the following with respect to ADB's 2023 net income of $910 million, after the appropriation of guarantee fees of $28 million to the Special Reserve: (i) the following adjustments be made to the net income amount to determine the allocable net income: $513 million representing adjustments for the net unrealized losses for the year ended 31 December 2023, be added from the cumulative revaluation adjustments (CRA) account; (ii) $1,005 million be allocated to the Ordinary Reserve; (iii) $293 million be allocated to the ADF; (iv) $110 million be allocated to the Technical Assistance Special Fund (TASF); and (v) $15 million be allocated to the Asia Pacific Disaster Response Fund.<br>

*Accumulated Other Comprehensive Income (Loss)*<br>Comprehensive income (loss) has two major components: net income and other comprehensive income (loss) comprising gains and losses affecting equity that, under US GAAP, are excluded from net income (loss). Other comprehensive income (loss) includes items such as translation adjustments for functional currencies; pension and postretirement liability adjustment; and unrealized gains and losses on financial instruments classified as AFS, equity investments under equity method and fair value changes of borrowings related to ADB's own credit spread.<br>

------

57<br>

**OCR-6** <br>

continued

The changes in Accumulated Other Comprehensive Income (Loss) balances for the six months ended 30 June 2025 and 2024 are as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) |
|  |  | **Unrealized Holding (Losses) Gains** | **Unrealized Holding (Losses) Gains** | **Unrealized Holding (Losses) Gains** |  | **Pension/** | **Accumulated** |
|  | **Accumulated** | **Investments** | **Equity** | **Other Debt** |  | **Postretirement** | **Other** |
|  | **Translation** | **for liquidity**  | **investments —** | **Securities —** |  | **Liability** | **Comprehensive** |
|  | **Adjustments** | **purpose<sup>a</sup>** | **Operations** | **Operations** | **Borrowings** | **Adjustments** | **Income (Loss)** |
| Balance, 1 January 2025 | $(161) | $(848) | $(4) | $(3) | $253 | $524 | $(239) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; income (loss) before |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; reclassifications | 313 | 460 | (5) | 4 | 13 | – | 785 |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts reclassified |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; from accumulated other |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; comprehensive income |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(loss) | – | 8 | – | – | – | (12) | (4)<br>|
| Net current-period other |  |  |  |  |  |  |  |
| comprehensive income (loss) | <sup>313</sup> | 468 | (5) | 4 | 13 | (12) | 781 |
| **Balance, 30 June 2025** | $**152** | $**(380)** | $**(9)** | $**1** | $**266** | $**512** | $**542** |

---

<sup>a</sup> Includes securities transferred under repurchase agreements.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) | ($ million) |
|  |  | **Unrealized Holding (Losses) Gains** | **Unrealized Holding (Losses) Gains** | **Unrealized Holding (Losses) Gains** |  | **Pension/** | **Accumulated** |
|  | **Accumulated** | **Investments** | **Equity** | **Other Debt** |  | **Postretirement** | **Other** |
|  | **Translation** | **for liquidity**  | **investments —** | **Securities —** |  | **Liability** | **Comprehensive** |
|  | **Adjustments** | **purpose<sup>a</sup>** | **Operations** | **Operations** | **Borrowings** | **Adjustments** | **Income (Loss)** |
| Balance, 1 January 2024 | $58<br>| $(1057) | $(16) | $(5) | $496 | $221 | $(303) |
| &nbsp;&nbsp;&nbsp;&nbsp; Other comprehensive |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(loss) income before |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; reclassifications | (125) | (53) | 6 | 1 | (455) | – | (626) |
| &nbsp;&nbsp;&nbsp;&nbsp; Amounts reclassified |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; from accumulated other |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; comprehensive income |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;(loss) | – | 16 | – | – | – | (12) | 4 |
| Net current-period other |  |  |  |  |  |  |  |
|  comprehensive (loss) income<br>| (125) | (37) | 6 | 1 | (455) | (12) | (622) |
| **Balance, 30 June 2024** | $**(67)**<br>| $**(1094)** | $**(10)** | $**(4)**<br>  | $**41** | $**209** | $**(925)** |

---

<sup>a</sup> Includes securities transferred under repurchase agreements.

The reclassifications of Accumulated Other Comprehensive Income (Loss) to Net Income for the six months ended 30 June 2025 and 2024 are presented below:<br>

---

| | | | |
|:---|:---|:---|:---|
| ($ million) |  |  |  |
| **Accumulated Other Comprehensive**<br> **Income (Loss) Components** | **Amounts Reclassified from <br> Accumulated Other <br> **Comprehensive** Income **(Loss)**<sup>a</sup>** | **Amounts Reclassified from <br> Accumulated Other <br> **Comprehensive** Income **(Loss)**<sup>a</sup>** | **Affected Line Item in the Statement of**<br> **Income and Expenses**  |
|  | **2025** | **2024** |  |
| Unrealized Holding (Losses) Gains |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments for liquidity purpose | $(8) | $(16) | NET REALIZED GAIN (LOSSES) |
|  |  |  | From investments for liquidity purpose |
| Pension/Postretirement Liability |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments Actuarial losses | 12 | 12 | Administrative expenses |
| Total reclassifications for the period | $4 | $(4) |  |

---

<sup>a</sup> Amounts in parentheses indicate debits to net income.

------

58<br>

**OCR-6**

continued

 **NOTE N—INCOME AND EXPENSES**<br>

REVENUE from loan operations for the six months ended 30 June 2025 was $3,578 million ($4,092 million – 2024). This comprises interest income totaling $3,559 million ($4,074 million – 2024), and commitment charges and other income<sup>2</sup> totaling $19 million ($18 million – 2024). The average return on the loan portfolio for the six months ended 30 June 2025 was 4.5% (5.0% – 2024).<br>

REVENUE from investments for liquidity purpose for the six months ended 30 June 2025 was $1,270 million ($1,365 million – 2024). This comprises interest income including interest earned for securities transferred under repurchase agreements, and securities purchased under resale arrangements. The annualized rate of return on the average investments held during the six months ended 30 June 2025, excluding unrealized gains and losses on investments, was 4.1% (5.0% – 2024).<br>

REVENUE from equity investment operations for the six months ended 30 June 2025 amounted to $61 million ($44 million – 2024). This comprises gains from equity method investments totaling $56 million ($41 million – 2024), and dividend and other income and expenses from equity investments totaling $5 million ($3 million – 2024).<br>REVENUE from other debt securities for the six months ended 30 June 2025 was $24 million ($22 million – 2024) consisting mostly of interest income.<br>

REVENUE from other sources for the six months ended 30 June 2025 was $47 million ($44 million – 2024). This included income received as administration fees for projects and/or programs totaling $14 million ($17 million – 2024), and other miscellaneous income of $33 million ($27 million – 2024).<br>Borrowings and related expenses for the six months ended 30 June 2025 amounted to $3,789 million ($4,449 million – 2024). These consist of interest expense and other related expenses such as amortization of issuance costs, discounts, and premiums. The average cost of borrowings outstanding after swaps was 4.6% (5.4% – 2024).<br>

Administrative expenses for the six months ended 30 June 2025 were allocated between OCR and the ADF in proportion to the relative volume of operational activities. Of the total administrative expenses for the six months ended 30 June 2025 of $426 million ($373 million – 2024), $43 million ($40 million – 2024) was accordingly charged to the ADF.<br>For the six months ended 30 June 2025, the net provision for credit losses amounted to $110 million ($40 million net release of provision for credit losses – 2024).<br>

Net realized gains for the six months ended 30 June 2025 was $1 million ($8 million losses – 2024). This included losses on sale of investments for liquidity purpose totaling $1 million ($15 million – 2024) and gains on sale of equity investments of $0.5 million ($7 million – 2024) and gains on sale of other debt securities of $2 million (nil – 2024).<br>

------

2 Includes amortized front-end fees and loan origination costs, risk participation charges, and other loan-related income and/or expenses.

------

59<br>

**OCR-6** <br>

continued

The following table provides information on the net unrealized gains or losses included in income for the six months ended 30 June 2025 and 2024:<br>

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **2025** | **2024** |
| Fair value changes from: |  |  |
| &nbsp;&nbsp;&nbsp; Borrowings and related derivatives | $(19) | $378 |
| &nbsp;&nbsp;&nbsp; Investments related derivatives | (109) | 65 |
| &nbsp;&nbsp;&nbsp; Loans related derivatives | 107 | (2) |
| &nbsp;&nbsp;&nbsp; Equity investments | 7 | 11<br>|
| Reclassification of unrealized gains on divested equity investment | – | (3) |
| Translation adjustments of nonfunctional currencies | 0 | (2) |
| **Total** | $**(14)** | $**447** |

---

 **NOTE O—OTHER FAIR VALUE DISCLOSURES**<br>The carrying amounts and FVs of ADB's financial instruments as of 30 June 2025 and 31 December 2024 are summarized below:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ million) |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  | **Carrying** | **Fair** | **Carrying** | **Fair** |
|  | **Amount** | **Value** | **Amount** | **Value** |
| **On-balance sheet financial instruments:**  |  |  |  |  |
| ASSETS: |  |  |  |  |
| Due from banks | $447 | $447 | $2235 | $2235 |
| Investments for liquidity purpose (Note C) | 59277 | 59277 | 46695 | 46695 |
| Securities transferred under repurchase agreements (Note C) | 1137 | 1137 | – | – |
| Securities purchased under resale arrangements (Note C) | 38 | 38 | 260 | 260 |
| Loans outstanding (Note E) | 158402 | 159127 | 153864 | 154436 |
| Equity investments — operations carried at fair value (Note G) | 430 | 430 | 373 | 373 |
| Other debt securities — operations (Note H) | 594 | 615 | 621 | 645 |
| Derivative assets - borrowings (Note I) | 74480 | 74480 | 61872 | 61872 |
| Derivative assets - investments for liquidity purpose (Note I) | 29047 | 29047 | 26062 | 26062 |
| Derivative assets - loans — operations (Note I) | 17895 | 17895 | 17671 | 17671 |
| Swap related and other collateral (Note I) | 437 | 437 | 857 | 857 |
| Future guarantee receivable (Note F) | 313 | 313 | 331 | 331 |
| LIABILITIES: |  |  |  |  |
| Borrowings (Note L) | 163605 | 163677 | 146517 | 146604 |
| Derivative liabilities - borrowings (Note I) | 77950 | 77950 | 71703 | 71703 |
| Derivative liabilities - investments for liquidity purpose (Note I) | 28430 | 28430 | 23292 | 23292 |
| Derivative liabilities - loans — operations (Note I) | 16316 | 16316 | 14821 | 14821 |
| Payable under securities repurchase agreements (Note D) | 1143 | 1143 | – | – |
| Swap related and other collateral (Note I) | 437 | 437 | 857 | 857 |
| Guarantee liability (Note F) | 323 | 323 | 331 | 331 |

---

As of 30 June 2025 and 31 December 2024, ADB has no material assets or liabilities measured at FV on a non-recurring basis.<br>**NOTE P—SUBSEQUENT EVENTS**<br>ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. During this period, ADB has raised additional borrowings of approximately $4,154 million in various currencies.<br>

------

60<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **ADF-1**<br>

**ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND** 

**CONDENSED BALANCE SHEET <br> 30 June 2025 and 31 December 2024**

Expressed in Millions of US Dollars<br>

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June** | **30 June** | **31 December** | **31 December** |
|  | (Unaudited) | (Unaudited) | (Audited) | (Audited) |
| &nbsp;&nbsp;&nbsp; **ASSETS**  |  |  |  |  |
| DUE FROM BANKS |  | $45 |  | $16 |
| INVESTMENTS FOR LIQUIDITY PURPOSE (Note C) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government-related obligations | $3533 |  | $3641 |  |
| &nbsp;&nbsp;&nbsp; Time deposits | 726 |  | 289 |  |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 753 | 5012 | 707 | 4637 |
| SECURITIES PURCHASED UNDER |  |  |  |  |
| &nbsp;&nbsp;&nbsp; RESALE ARRANGEMENTS (Note C) |  | 22 |  | 24 |
| ACCRUED REVENUE |  | 31<br>|  | 29 |
| ADVANCES UNDER GRANTS (Note I) |  | 373 |  | 385 |
| OTHER ASSETS (Note F) |  | 135 |  | 53 |
| &nbsp;&nbsp;&nbsp; **TOTAL**  |  | $**5618** |  | $**5144** |
| &nbsp;&nbsp;&nbsp; **LIABILITIES AND FUND BALANCES**  |  |  |  |  |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Payable to related funds and other liabilities (Note E) |  | $101 |  | $29 |
| &nbsp;&nbsp;&nbsp; Advance payments on contributions (Note F) |  | 119 |  | 103 |
| &nbsp;&nbsp;&nbsp; Undisbursed grants (Note I) |  | 3275 |  | 3044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities |  | 3495 |  | 3176 |
| FUND BALANCES (ADF-4) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Contributions received |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contributed resources (Note F) | $37108 |  | $36694 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unamortized discount | (110) | 36998 | (37) | 36657 |
| Transfers from Ordinary Capital Resources and Technical Assistance Special Fund  |  | 4304 |  | 3910 |
|  |  | 41302 |  | 40567 |
| Nonnegotiable, noninterest-bearing demand obligations on account of contributions  |  | (628) |  | (419) |
| &nbsp;&nbsp;&nbsp; Accumulated deficit |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From assets transfer to OCR | (31029) |  | (31029) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From others | (5957) | (36986) | (5497) | (36526) |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss (Note G) |  | (1565) |  | (1654) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Fund Balance |  | 2123 |  | 1968 |
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**5618** |  | $**5144** |

---

The accompanying Notes are an integral part of these condensed financial statements (ADF-6).

------

61<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **ADF-2**<br>

**ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND** 

<br> **CONDENSED STATEMENT OF INCOME AND EXPENSES—UNAUDITED<br> For the Six Months Ended 30 June 2025 and 2024**

Expressed in Millions of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| REVENUE |  |  |
| &nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | $72 | $63 |
| &nbsp;&nbsp;&nbsp; From other sources<br>| 1 | 0 |
| &nbsp;&nbsp;&nbsp; Total<br>| 73 | 63 |
| EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp; Grants (Note I) | (486) | (161) |
| &nbsp;&nbsp;&nbsp; Administrative expenses (Notes E and H) | (43) | (40) |
| &nbsp;&nbsp;&nbsp; Amortization of discounts on contributions | (3) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total<br>| (532) | (203) |
| NET UNREALIZED LOSSES | (1) | (0) |
| **NET LOSS** | $**(460)** | $**(140**) |

---

0 = less than $0.5 million.

The accompanying Notes are an integral part of these condensed financial statements (ADF-6).

------

62<br>

#### ADF-3

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND

#### CONDENSED STATEMENT OF COMPREHENSIVE LOSS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024<br> Expressed in Millions of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| NET LOSS (ADF-2) | $(460) | $(140) |
| Other comprehensive income (loss) (Note G) |  |  |
| Unrealized investment holding gains (losses) on investments for liquidity purpose | 89 | (14) |
| **COMPREHENSIVE LOSS** | $**(371)** | $**(154)** |

---

The accompanying Notes are an integral part of these condensed financial statements (ADF-6).<br>

**ADF-4** <br>

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND

#### CONDENSED STATEMENT OF CHANGES IN FUND BALANCES —UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024

#### Expressed in Millions of US Dollars <br>

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Balance, 1 January | $1968 | $1947 |
| Comprehensive loss (ADF-3, Note G) | (371) | (154) |
| Contributions made available for operational commitment | 415 | 369 |
| Net amortization of discount on donor's contribution | (74) | 2 |
| Demand obligations received | (253) | (268) |
| Encashment of demand obligations | 44 | 109 |
| Transfers from ordinary capital resources | 394 | 293 |
| **Balance, 30 June**<br>| $**2123** | $**2298** |

---

The accompanying Notes are an integral part of these condensed financial statements (ADF-6).

------

#### 63 <br>

#### ADF-5<br>

#### <br>

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND

#### CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Millions of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Interest received from investments for liquidity purpose | $65<br>| $59 |
| &nbsp;&nbsp;&nbsp; Interest received from securities purchased under resale arrangement | 1 | 1 |
| &nbsp;&nbsp;&nbsp; Administrative expenses paid | (49) | (26) |
| &nbsp;&nbsp;&nbsp; Grants disbursed | (242) | (195) |
| &nbsp;&nbsp;&nbsp; Others—net<br>| 2  | 0  |
| Net Cash Used in Operating Activities | (223) | (161) |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 8942 | 9205 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (9223) | (9296) |
| &nbsp;&nbsp;&nbsp; Receipts from securities purchased under resale arrangements | 2763 | 2986 |
| &nbsp;&nbsp;&nbsp; Payments for securities purchased under resale arrangements | (2761) | (2983) |
| Net Cash Used in Investing Activities | (279) | (88) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Contributions received and encashed | 137 | 215 |
| &nbsp;&nbsp;&nbsp; Cash received from ordinary capital resources<br>| 394 | 45 |
| Cash Provided by Financing Activities | 531 | 260 |
| Effect of Exchange Rate Changes on Due from Banks | 0 | (1) |
| Net Increase in Due from Banks | 29 | 10 |
| Due from Banks at Beginning of Period | 16 | 2 |
| Due from Banks at End of Period | $45 | $12 |

---

------

0 = less than $0.5 million.

The accompanying Notes are an integral part of these condensed financial statements (ADF-6).

------

64<br>

 **ADF-6**<br>

<br> **ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT FUND** 

<br> #### NOTES TO CONDENSED FINANCIAL STATEMENTS<br>

#### For the Six Months Ended 30 June 2025 and 2024
(Unaudited)<br>

****

<br> **NOTE A—INTERIM FINANCIAL INFORMATION**<br>

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.<br>*Replenishments*<br>In September 2024, the Board of Governors adopted a resolution providing for the 13th replenishment of the Asian Development Fund (ADF 14) and the eighth regularized replenishment of the Technical Assistance Special Fund (TASF).<sup>1</sup> The replenishment which became effective on 23 April 2025 provides resources to finance the ADF grant program and the TASF operations from 2025-2028. As of 30 June 2025, ADB received instruments of contributions from 26 donors totaling $1,935 million, which represent 75.2% of the total ADF and TASF donor contribution commitment amounting to $2,574 million. Donors agreed to allocate $560 million out of the total donor contributions to TASF.<br>

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**<br>*Presentation of the Financial Statements*<br>

The financial statements of ADF are prepared in accordance with the accounting principles generally accepted in the United States of America (US GAAP).<br>The preparation of financial statements requires management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates. Judgements have been used in the valuation of certain financial instruments.<br>The US dollar is the functional and reporting currency for the purpose of presenting the financial position and the results of operations.<br>

*Fair Value of Financial Instruments*<br>Accounting Standards Codification (ASC) 820, "Fair Value Measurement" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction cost.<br>

------

<sup>1</sup> ADB. 2024. *Board of Governors' Resolution No. 427: Thirteenth Replenishment of the Asian Development Fund and Eighth Regularized Replenishment of the Technical Assistance Special Fund.*

------

65<br>

#### <br>

#### ADF-6

continued

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable. <br>

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

** 

<br> *Contributions and Contributed Resources*

Upon effectivity of replenishment, contributions committed are recorded as Contributed Resources when the Instruments of Contribution are acknowledged and are made available for operational commitment. Contributions are generally paid in the currency of the contributor either in cash or promissory notes, based on agreed payment and encashment schedules.

Donors have the option to pay their contributions under the accelerated note encashment (ANE) program and receive a discount. ADF invests the cash generated from this program and the investment income is used to finance operations. The related contributions are recorded at the full undiscounted amount, and the discount is amortized over the standard encashment period of 10 years for ADF IX and ADF 12, 9 years for ADF X and ADF XI, and 11 years for ADF 13 and ADF 14.

*Advanced Payments on Contributions*

Payments received in advance or as qualified contributions that cannot be made available for operational commitment are recorded as advance payments on contributions and included under ACCOUNTS PAYABLE AND OTHER LIABILITIES.

*Allowance for Credit Losses*

When an available-for-sale (AFS) debt security's fair value is lower than amortized cost, ADB recognizes impairment losses in earnings if ADB has the intent to sell the debt securities or if it is more likely than not that ADB will be required to sell the debt securities before recovery of the amortized cost. When ADB intends to hold or is not required to sell the debt securities, ADB will evaluate to determine if a credit loss exists. A portion of the decline in fair value below amortized cost basis due to credit-related factors will be recognized as an allowance for credit losses with a related charge to provision for credit losses. For certain financial assets, such as Due from Banks and Securities Purchased under Resale Arrangements, no expected loss is determined based on the credit quality.

A liability is recorded for off-balance sheet credit exposures for financial guarantees over the contractual period. ADB estimates the expected credit losses based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The expected credit losses are measured as the product of exposure at default (EAD), probability of default (PD), and loss given default (LGD).

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, *"Codification Improvements – Amendments to Remove References to the Concepts Statements"*. This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years

------

66<br>

continued

beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

Investment securities and time deposits are classified as available for sale and are reported at FV. Unrealized gains and losses are reported in FUND BALANCES as part of Accumulated other comprehensive loss. Realized gains and losses are measured by the difference between amortized cost and the net proceeds of sales.

Interest income on investment securities and time deposits is recognized as earned, and reported net of amortizations of premiums and discounts.

ADB records time deposits on the settlement dates and all other investment securities on the trade date.

The FV and amortized cost of investments for liquidity purpose as of 30 June 2025 and 31 December 2024 are as follows:

($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** |
|  |  | **Amortized** |  | **Amortized** |
|  | **Fair Value** | **Cost** | **Fair Value** | **Cost** |
| Due in one year or less | $1910 | $1920 | $1455 | $1469 |
| Due after one year through five years | 2397 | 2444 | 2490 | 2586 |
| Due after five years through ten years | 702 | 710 | 686 | 731 |
| Due after ten years through fifteen years | 3 | 3 | 6 | 6 |
| &nbsp;&nbsp;&nbsp; **Total** | $**5012** | $**5077** | $**4637** | $**4792** |

---

Additional information relating to investments in government or government-related obligations and corporate obligations classified as available for sale are as follows:

---

| | | |
|:---|:---|:---|
| ($ million) |  |  |
|  | **30 June 2025**  | **31 December 2024** |
| **As of**<br> Amortized cost | $4351 | $4503 |
| Fair value | 4286 | 4348 |
| Gross unrealized gains | 23 | 4 |
| Gross unrealized losses | (88) | (159) |
| **For the six months ended 30 June** | **2025** | **2024** |
| Change in net unrealized losses from prior period | 89 | (14) |

---

The annualized rate of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, including securities purchased under resale arrangements, was 3.0% (2.9% – 2024) excluding unrealized gains and losses on investments, and 4.9% (2.5% – 2024) including unrealized gains and losses on investments.

------

67<br>

#### ADF-6

continued

The table below provides a listing of investments that sustained unrealized losses as of 30 June 2025 and 31 December 2024. There were 135 government or government-related obligations (159 – 31 December 2024) and 8 corporate obligations (10 – 31 December 2024) that have been in continuous losses for over one year.

($ million)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **One year or less** | **One year or less** | **Over one year** | **Over one year** | **Total** | **Total** |
|  | **Fair** | **Unrealized** | **Fair** | **Unrealized** | **Fair** | **Unrealized** |
|  | **Value** | **Losses** | **Value** | **Losses** | **Value** | **Losses** |
| **<u>As of 30 June 2025</u>** |  |  |  |  |  |  |
| Government or government-related obligations | $281 | $3 | $2391 | $82 | $2672 | $85 |
| Corporate obligations | 33 | 0 | 147 | 3 | 180 | 3 |
| **Total** | $**314** | $**3** | $**2538** | $**85** | $**2852** | $**88** |
| **<u>As of 31 December 2024</u>** |  |  |  |  |  |  |
| Government or government- |  |  |  |  |  |  |
| related obligations | $718 | $17 | $2777 | $135 | $3495 | $153 |
| Corporate obligations | 76 | 0 | 170 | 6 | 246 | 6 |
| **Total** | $**794** | $**17** | $**2947** | $**141** | $**3741** | $**159** |

---

0 = less than $0.5 million.

Note: Numbers may not sum precisely because of rounding.

As of 30 June 2025, ADB had the intent and ability to hold the AFS debt securities of which the fair value is lower than amortized cost. ADB also assessed and determined that the decline of fair value below the amortized cost basis of the AFS securities was not due to credit-related factors.

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE and related financial assets as of 30 June 2025 and 31 December 2024 are as follows:

($ million)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
|  **<u>30 June 2025</u>** | | | | |
| Investments for liquidity purpose <br>|  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government- related obligations | $3533 | $3412 | $121 | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 726 | – | 726 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate obligations | 753 | 753 | – | – |
| Securities purchased under resale arrangements | 22 | – | 22 | – |
| &nbsp;&nbsp;&nbsp; **Total at fair value** | $**5034** | $**4165** | $**869** | $**–** |
|  **<u>31 December 2024</u>** |  |  |  |  |
| Investments for liquidity purpose <br>|  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government- related obligations | $3641 | $3470 | $171 | $– |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 289 | – | 289 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Corporate obligations | 707 | 707 | – | – |
| Securities purchased under resale arrangements | 24 | – | 24 | – |
| &nbsp;&nbsp;&nbsp; **Total at fair value** | $**4661** | $**4177** | $**484** | $**–** |

---

If available, active market quotes are used to measure fair values of investment securities and related financial assets. Otherwise, they are categorized as Level 2 or Level 3, and valuation is provided by independent valuation services, custodians, and asset managers, or based on discounted cash flow model using market observable inputs, such as interest rates, foreign exchange rates, basis spreads, cross currency rates, and volatilities. Time deposits are reported at cost, which approximates FV.

------

68<br>

**ADF-6**

continued <br>

#### NOTE D—GUARANTEES

ADB provides guarantees under the Private Sector Window (PSW) of the ADF. Such guarantees include credit guarantees where certain principal is covered. As of 30 June 2025, the guarantees have a maximum potential exposure of $5 million ($6 million – 31 December 2024) and an outstanding amount of $5 million ($5 million – 31 December 2024). The maximum potential exposure represents the undiscounted future payments that ADB could be required to make, inclusive of standby portion for which ADB is committed but not currently at risk. The outstanding amount represents the guaranteed amount utilized under the related loans, which have been disbursed as of the end of a reporting period, exclusive of the standby portion.

#### NOTE E—RELATED PARTY TRANSACTIONS AND OTHER LIABILITIES

Included in Payable to related funds and other liabilities as of 30 June 2025 is the net amount of $23 million ($29 million – 31 December 2024) payable to ordinary capital resources (OCR) and $77 million (nil – 31 December 2024) payable to TASF. The payable to OCR represents the amount of administrative and operational expenses allocated to the ADF pending settlement (see Note H) while the payable to TASF represents a specific portion of installment payments received from donors for ADF 14 that were allocated to the TASF.

As of 30 June 2025, ADF guarantees to OCR under the PSW had a maximum potential exposure of $5 million ($6 million – 31 December 2024).

#### NOTE F—CONTRIBUTED RESOURCES AND ADVANCED CONTRIBUTIONS

In May 2025, the Board of Governors approved the transfer of $394 million ($293 million – 2024) to the ADF as part of OCR's 2024 net income allocation.

As of 30 June 2025, a total of $1,917 million was committed and acknowledged for ADF 13, of which $1,632 million was made available for operational commitment, and a total of $1,498 million was committed and acknowledged for ADF 14, of which $278 million was made available for operational commitment, and recorded in Contributed Resources.

Advance payments on contributions received from donors as of 30 June 2025 totaled $119 million ($103 million – 31 December 2024) and are presented under ACCOUNTS PAYABLE AND OTHER LIABILITIES. Of this amount, $49 million ($50 million – 31 December 2024) were received in cash, while the remaining $70 million ($53 million – 31 December 2024) were received in demand obligations and reported under OTHER ASSETS.

------

69<br>

#### <br> ADF-6

continued

#### NOTE G—ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive Loss has two major components: net loss (ADF-2) and other comprehensive income (loss) (ADF-3). Other comprehensive income (loss) includes unrealized gains and losses on available for sale securities.

The following table presents the changes in Accumulated other comprehensive loss balances for the six months ended 30 June 2025 and 2024:

---

| | | |
|:---|:---|:---|
| ($ million) | ($ million) | ($ million) |
|  | **Accumulated other**<br> **comprehensive loss** | **Accumulated other**<br> **comprehensive loss** |
|  | **2025** | **2024** |
|  Balance, 1 January | $(1654) | $(1685) |
|  Unrealized Holding Gains (Losses) on Investments for Liquidity Purpose <br>|  |  |
| &nbsp;&nbsp;&nbsp; Other comprehensive gains (losses) before reclassification | 89 | (14) |
|  **Balance, 30 June** | $**(1565)** | $**(1699)** |

---

There were no reclassifications of Accumulated other comprehensive loss to Income and Expenses for the six months ended 30 June 2025 and 2024.

#### NOTE H—ADMINISTRATIVE EXPENSES

Administrative expenses represent administration charges allocated to ADF, which is an apportionment of all administrative expenses of ADB in the proportion of the relative volume of operational activities.

#### NOTE I—GRANTS AND UNDISBURSED GRANTS

Undisbursed grants are denominated in US dollars and represent effective grants not yet disbursed and unliquidated. During the period, 25 grants (18 grants – 2024) became effective resulting in a total Grants expense of $486 million ($161 million – 2024), net of $0.4 million ($79 million – 2024) undisbursed grants that were reversed as reduction in grant expenses. The undisbursed grants of $3,275 million as of 30 June 2025 ($3,044 million – 31 December 2024) includes $373 million ($385 million – 31 December 2024) advances under grants.

The FV of undisbursed commitments approximates the amount outstanding, because ADB expects that disbursements will substantially be made for all the projects/programs covered by the commitments.

#### NOTE J—SUBSEQUENT EVENTS

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the ADF's condensed financial statements.

------

70<br>

#### TASF-1

**ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND**<br> **CONDENSED STATEMENT OF FINANCIAL POSITION**<br> **30 June 2025 and 31 December 2024**<br> Expressed in Thousands of US Dollars<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June**<br> (Unaudited) | **30 June**<br> (Unaudited) | **31 December**<br> (Audited) | **31 December**<br> (Audited) |
| &nbsp;&nbsp;&nbsp; **ASSETS** |  |  |  |  |
| DUE FROM BANKS (Note H) |  | $137471 |  | $7553 |
| INVESTMENTS FOR LIQUIDITY PURPOSE |  |  |  |  |
| &nbsp;&nbsp;&nbsp; (Notes C and H) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government-related obligations | $379259 |  | $352280 |  |
| &nbsp;&nbsp;&nbsp; Time deposits | 240911 |  | 317496 |  |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 136714 | 756884 | 150122 | 819898 |
| ACCRUED REVENUE |  | 3468 |  | 3512 |
| DUE FROM CONTRIBUTORS (Note F) |  | 366298 |  | 39217 |
| ADVANCES FOR TECHNICAL ASSISTANCE (Note E) |  | 3350 |  | 4579 |
| OTHER ASSETS (Notes C and D) |  | 78032 |  | 2227 |
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**1345503** |  | $**876986** |
| &nbsp;&nbsp;&nbsp; **LIABILITIES AND UNCOMMITTED BALANCES** |  |  |  |  |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES (Note D) |  | $618 |  | $464 |
| UNDISBURSED TECHNICAL ASSISTANCE (Note E) |  | 710140 |  | 782952 |
| TOTAL LIABILITIES |  | 710758 |  | 783416 |
| &nbsp;&nbsp;&nbsp; UNCOMMITTED BALANCES (TASF-2), represented by:<br> Net assets without donor restrictions |  | 634745 |  | 93570 |
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**1345503** |  | $**876986** |

---

The accompanying Notes are an integral part of these condensed financial statements (TASF-4).

------

71<br>

#### TASF-2

---

| | | |
|:---|:---|:---|
| **ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND**<br> **CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**<br> **For the Six Months Ended 30 June 2025 and 2024**<br> Expressed in Thousands of US Dollars | **ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND**<br> **CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**<br> **For the Six Months Ended 30 June 2025 and 2024**<br> Expressed in Thousands of US Dollars | **ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND**<br> **CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**<br> **For the Six Months Ended 30 June 2025 and 2024**<br> Expressed in Thousands of US Dollars |
|  | **2025**  | **2024**  |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; CONTRIBUTIONS (Note F) | $540476 | $110000 |
| &nbsp;&nbsp;&nbsp; REVENUE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From investments for liquidity purpose—net (Note C) | 22903 | 15276 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources (Notes D) | 5880 | 5340 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 569259 | 130616 |
| &nbsp;&nbsp;&nbsp; EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical assistance—net (Notes E and G) | (30294) | (22011) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Administrative expenses (Note D) | (5156) | (5147) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial expenses | (31) | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (35481) | (27186) |
| &nbsp;&nbsp;&nbsp; CONTRIBUTIONS AND REVENUE IN EXCESS OF EXPENSES | 533778 | 103430 |
| &nbsp;&nbsp;&nbsp; EXCHANGE GAINS (LOSSES)—net | 7397 | (7095) |
| INCREASE IN NET ASSETS | 541175 | 96335 |
| NET ASSETS AT BEGINNING OF PERIOD | 93570 | 213299 |
| **NET ASSETS AT END OF PERIOD** | $**634745** | $**309634** |

---

The accompanying Notes are an integral part of these condensed financial statements (TASF-4).

------

72<br>

#### TASF-3

---

| | | |
|:---|:---|:---|
| **ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND<br> CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**<br> **For the Six Months Ended 30 June 2025 and 2024**<br> Expressed in Thousands of US Dollars | | |
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Contributions received | $143769 | $152477 |
| &nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 13805 | 14490 |
| &nbsp;&nbsp;&nbsp; Technical assistance disbursed | (100508) | (101803) |
| &nbsp;&nbsp;&nbsp; Financial expenses paid | (31) | (28) |
| &nbsp;&nbsp;&nbsp; Others—net | 725 | 193 |
| Net Cash Provided by Operating Activities | 57760 | 65329 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 5348644 | 2563257 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (5276488) | (2628849) |
| Net Cash Provided by (Used in) Investing Activities | 72156 | (65592) |
| Effect of Exchange Rate Changes on Due from Banks | 2 | (2) |
| Net Increase (Decrease) in Due from Banks | 129918 | (265) |
| Due from Banks at Beginning of Period | 7553 | 7947 |
| Due from Banks at End of Period | $137471 | $7682 |

---

The accompanying Notes are an integral part of these condensed financial statements (TASF-4).

------

73<br>

**TASF-4**

#### ASIAN DEVELOPMENT BANK—TECHNICAL ASSISTANCE SPECIAL FUND

#### NOTES TO CONDENSED FINANCIAL STATEMENTS

#### For the Six Months Ended 30 June 2025 and 2024
(Unaudited)

#### NOTE A—INTERIM FINANCIAL INFORMATION

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

*Replenishments*

In November 2020, the Board of Governors adopted a resolution for the 12th replenishment of the Asian Development Fund and the seventh regularized replenishment of the Technical Assistance Special Fund (ADF 13).<sup>1</sup> The replenishment which became effective on 8 June 2021 provides grant financing to eligible recipients from 2021 to 2024. Donors agreed to allocate $517 million to TASF out of the total replenishment. As of 30 June 2025, TASF received contribution commitments from 32 donors totaling $517 million, or 100% of the total commitment.

In September 2024, the Board of Governors adopted a resolution for the 13th replenishment of the ADF and the eighth regularized replenishment of the TASF (ADF 14).<sup>2</sup> The replenishment will provide grant financing to eligible recipients from 2025 to 2028. Donors agreed to allocate $560 million to TASF out of the total replenishment. As of 30 June 2025, TASF received contribution commitments from 22 donors totaling $410 million, or 73% of the total commitment.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

*Presentation of Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) requires management to make reasonable estimates and assumptions that affect the reported amounts of assets, liabilities and uncommitted balances as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency and is used to measure exchange gains and losses*.*

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, *"Fair Value Measurement"* defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

------

<sup>1</sup> ADB. 2020. *Board of Governors' Resolution No. 408: Twelfth Replenishment of the Asian Development Fund and Seventh Regularized Replenishment of the Technical Assistance Special Fund.*

<sup>2</sup> ADB. 2024. *Board of Governors' Resolution No. 427 – Thirteenth Replenishment of the Asian Development Fund and Eighth Regularized Replenishment of the Technical Assistance Special Fund*.

------

74<br>

#### TASF-4

continued

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable. <br>

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, *"Codification Improvements – Amendments to Remove References to the Concepts Statements"*. This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

The main investment management objective is to maintain security and liquidity. Subject to these parameters, ADB seeks the highest possible return on its investments. Investments are governed by the Investment Authority approved by the Board of Directors.

All investments for liquidity purpose held by TASF are reported at FV. Interest income earned, realized and unrealized gains and losses are included in REVENUE From investments for liquidity purpose. During the six months ended 30 June 2025, REVENUE From investments for liquidity purpose of $22,903,000 ($15,276,000 – 2024) included income from securities, time deposits and corporate obligations of $13,849,000 ($14,692,000 – 2024), and unrealized investment holding gains of $9,054,000 ($584,000 – 2024).

The annualized rate of return on the average investments held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.6% (3.9% – 2024).

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE and related financial assets by contractual maturity as of 30 June 2025 and 31 December 2024 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |  |  |
|  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **31 December 2024** | **31 December 2024** | **31 December 2024** |
|  **Investments for liquidity purpose** | **0-1 year** | **> 1 year** | **Total** | **0-1 year** | **> 1 year** | **Total** |
| Government or government-related obligations | $125926 | $253333 | $379259 | $64658 | $287622 | $352280 |
| &nbsp;&nbsp;&nbsp; Time deposits | 240911 | – | 240911 | 317496 | – | 317496 |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 62782 | 73932 | 136714 | 49773 | 100349 | 150122 |
| **Total at fair value** | $**429619** | $**327265** | $**756884** | $**431927** | $**387971** | $**819898** |

---

------

75<br>

#### TASF-4

continued

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE and related financial assets as of 30 June 2025 and 31 December 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30 June 2025</u>** |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government- related obligations | $379259 | $351887 | $27372 | $– |
| &nbsp;&nbsp;&nbsp; Time deposits | 240911 | – | 240911 | – |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 136714 | 136714 | – | – |
| **Total at fair value** | $**756884** | $**488601** | $**268283** | $**–** |
| **<u>31 December 2024</u>** |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Government or government- related obligations | $352280 | $299736 | $52544 | $– |
| &nbsp;&nbsp;&nbsp; Time deposits | 317496 | – | 317496 | – |
| &nbsp;&nbsp;&nbsp; Corporate obligations | 150122 | 150122 | – | – |
| **Total at fair value** | $**819898** | $**449858** | $**370040** | $**–** |

---

If available, investments are fair valued based on active market quotes. These include government or government-related obligations. Time deposits are reported at cost, which approximates FV.

#### NOTE D—RELATED PARTY TRANSACTIONS

The OCR and Special Funds resources are at all times used, committed, and invested entirely separately from each other. Under the four most recent replenishments, a specific portion of the total contributions is allocated to the TASF as regularized replenishments. ADF receives the contributions from members and subsequently transfers the specified portion to the TASF. Regional technical assistance projects and program activities may be cofinanced by ADB's other special funds and trust funds administered by ADB. Interfund accounts are settled regularly between the TASF and the other funds.

ADB does not allocate any service fees to TASF for administering Technical Assistance (TA) which involves a range of personnel services. The TASF has estimated the FV of personnel services involved in administering TA projects to be 5% of amounts disbursed for TA projects. For the six months ended 30 June 2025, the calculated service fee was $5,156,000 ($5,147,000 – 2024) recorded as Administrative expenses under EXPENSES, and REVENUE From other sources. The transaction has no impact on the net assets of TASF.

------

76<br>

#### TASF-4

continued

The interfund account balances included in OTHER ASSETS and ACCOUNTS PAYABLE AND OTHER LIABILITIES are as follows:

($ thousand)

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **31 December 2024** |
| **Receivable from:** |  |  |
| &nbsp;&nbsp;&nbsp; Asian Development Fund | $76985 | $– |
| &nbsp;&nbsp;&nbsp; Climate Change Fund—net | 187 | 265 |
| &nbsp;&nbsp;&nbsp; Regional Cooperation and Integration Fund—net | 93 | 154 |
| &nbsp;&nbsp;&nbsp; Financial Sector Development Partnership Special Fund | 8 | 7 |
| &nbsp;&nbsp;&nbsp; Japan Special Fund | – | 68 |
| &nbsp;&nbsp;&nbsp; Trust Funds—net | 738 | 1722 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $78011 | $2216 |
| **Payable to:** |  |  |
| &nbsp;&nbsp;&nbsp; Ordinary capital resources—net | $606 | $463 |

---

#### NOTE E—TECHNICAL ASSISTANCE AND UNDISBURSED TECHNICAL ASSISTANCE

TA is recognized as expense in the financial statements when the project becomes effective. During the six months ended 30 June 2025, 26 TA projects and 31 supplementary TA (24 TA projects and 35 supplementary TA – 2024) became effective resulting in a total TA expense of $30,294,000 ($22,011,000 – 2024), net of

$7,955,000 ($10,944,000 – 2024) undisbursed TA that were reversed as a reduction in TA expenses.

Undisbursed TA are denominated in US dollars and represent effective TA not yet disbursed and unliquidated. The undisbursed TA of $710,140,000 as of 30 June 2025 ($782,952,000 – 31 December 2024) includes $3,350,000 ($4,579,000 – 31 December 2024) advances for TA.

#### NOTE F—CONTRIBUTIONS

During the six months ended 30 June 2025, TASF received total contributions of $540,476,000 ($110,000,000 – 2024) from OCR's 2024 net income allocation and additional contributions from ADF 14. During the period, TASF received cash and promissory notes from ADF replenishments and direct voluntary comprising of the following:

($ thousand)

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **30 June 2024**  |
| Direct Voluntary | $– | $70 |
| Regularized Replenishments |  |  |
| &nbsp;&nbsp;&nbsp; ADF 14 | $80256 | $– |
| &nbsp;&nbsp;&nbsp; ADF 13 | 9712 | 138517 |
|  | 89968 | 138517 |
| Total | $89968 | $138587 |

---

------

77<br>

#### TASF-4

continued

Total contributions not yet received and reported as DUE FROM CONTRIBUTORS are as follows:

<br> ($ thousand)<br>

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **31 December 2024** |
| Direct Voluntary | $– | $– |
| Regularized Replenishments |  |  |
| &nbsp;&nbsp;&nbsp; ADF 14 | $336327 | $– |
| &nbsp;&nbsp;&nbsp; ADF 13 | 6067 | 15779 |
| &nbsp;&nbsp;&nbsp; ADF X | 19740 | 19342 |
| &nbsp;&nbsp;&nbsp; ADF IX | 4164 | 4096 |
|  | 366298 | 39217 |
| Total | $366298 | $39217 |

---

#### NOTE G—TECHNICAL ASSISTANCE EXPENSES

#### <br>
TA expenses are classified according to their nature using the budget allocation specified in the relevant TA agreement for the TA projects that became effective during the period. The details of TA expenses for the six months ended 30 June 2025 and 2024 are as follows:

($ thousand)

---

| | | |
|:---|:---|:---|
|  | **2025**  | **2024**  |
| Consultants | $27480 | $24879 |
| Trainings and seminars | 7511 | 5799 |
| Studies | 434 | 512 |
| Equipment | 260 | 46 |
| Other expenses—net<sup>a</sup> | (5391) | (9225) |
| &nbsp;&nbsp;&nbsp; Total | $30294 | $22011 |

---

<sup>a</sup> Net of undisbursed commitment balances that were reversed as a reduction in TA expenses. (See Note E).

#### NOTE H—LIQUIDITY AND AVAILABILITY OF RESOURCES

Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of TASF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, TASF invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, TASF has liquidity of $567,090,000 ($439,480,000 – 31 December 2024) consisting of DUE FROM BANKS of $137,471,000 ($7,553,000 – 31 December 2024), INVESTMENTS FOR LIQUIDITY PURPOSE in Time deposits of $240,911,000 ($317,496,000 – 31 December 2024), Government or government-related obligations of $125,926,000 ($64,658,000 – 31 December 2024), and Corporate obligations of $62,782,000 ($49,773,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure.

#### NOTE I—SUBSEQUENT EVENTS

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the TASF's condensed financial statements as of 30 June 2025.

------

78<br>

 **JSF-1**<br>

#### <br>

#### ASIAN DEVELOPMENT BANK—JAPAN SPECIAL FUND

#### CONDENSED STATEMENT OF FINANCIAL POSITION
30 June 2025 and 31 December 2024

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **30 June** | **31 December** |
|  | (Unaudited) | (Audited) |
| &nbsp;&nbsp;&nbsp;&nbsp; **ASSETS**  |  |  |
| DUE FROM BANKS (Note I) | $940 | $1046 |
| INVESTMENTS FOR LIQUIDITY PURPOSE (Notes D and I) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 124874 | 123205 |
| ACCRUED REVENUE | 759 | 929 |
| ADVANCES FOR TECHNICAL ASSISTANCE (Note G) | – | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** | $**126573** | $**125182** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **LIABILITIES AND NET ASSETS** |  |  |  |  |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Payable to related funds (Note E) | $14 |  | $92 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | – | $14 | 20 | $112 |
| UNDISBURSED TECHNICAL ASSISTANCE (Note G) |  | 17741 |  | 14192 |
| TOTAL LIABILITIES |  | 17755 |  | 14304 |
| UNCOMMITTED BALANCES (JSF-2), represented by: <br>|  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net assets without donor restrictions | 108815 |  | 110878 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net assets with donor restrictions (Note C) | 3 | 108818 | - | 110878 |
| **TOTAL** |  | $**126573** |  | $**125182** |

---

The accompanying Notes are an integral part of these condensed financial statements (JSF-4).

------

#### 79

#### JSF-2

#### ASIAN DEVELOPMENT BANK—JAPAN SPECIAL FUND

#### CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; REVENUE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note D) | $2799 | $3271 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources | 20 | 47<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 2819  | 3318 |
| &nbsp;&nbsp;&nbsp; EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical assistance (Notes G and H) | (4850) | (3750**)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Administrative expenses (Note H) | (32) | (29**)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (4882) | (3779**)** |
| DECREASE IN NET ASSETS |  |  |
| WITHOUT DONOR RESTRICTIONS | (2063) | (461) |

---

#### CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS

#### <br>
REVENUE

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From guarantees (Notes C and F) | 3 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources | 0 | – |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; INCREASE IN NET ASSETS <br> WITH DONOR RESTRICTIONS | 3 | – |
| DECREASE IN NET ASSETS | (2060) | (461) |
| NET ASSETS AT BEGINNING OF PERIOD | 110878 | 112123 |
| **NET ASSETS AT END OF PERIOD** | $**108818** | $**111662** |

---

0 = Less than $500.

The accompanying Notes are an integral part of these condensed financial statements (JSF-4).

------

#### 80 <br>

#### JSF-3

#### ASIAN DEVELOPMENT BANK—JAPAN SPECIAL FUND

#### CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Thousands of US Dollars<br>

------

---

| | | |
|:---|:---|:---|
| CASH FLOWS FROM OPERATING ACTIVITIES | **2025**  | **2024**  |
| &nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | $2969 | $3390 |
| &nbsp;&nbsp;&nbsp; Income from guarantees | 1 | – |
| &nbsp;&nbsp;&nbsp; Net cash received from other sources | 20 | 47 |
| &nbsp;&nbsp;&nbsp; Technical assistance disbursed | (1375) | (349) |
| &nbsp;&nbsp;&nbsp; Administrative expenses paid | (52) | (51<br><u>)</u> |
| Net Cash Provided by Operating Activities | 1563 | 3037 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 545208 | 1314960 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (546877) | (1322050<br><u>)</u> |
| Net Cash Used in Investing Activities | (1669) | (7090<br><u>)</u> |
| Net Decrease in Due From Banks | (106) | (4053) |
| Due from Banks at Beginning of Period | 1046 | 4959 |
| Due from Banks at End of Period | $940 | $906 |

---

The accompanying Notes are an integral part of these condensed financial statements (JSF-4).

------

#### 81 <br>

#### JSF-4

#### ASIAN DEVELOPMENT BANK—JAPAN SPECIAL FUND

#### NOTES TO CONDENSED FINANCIAL STATEMENTS

#### For the Six Months Ended 30 June 2025 and 2024
(Unaudited)

#### NOTE A—INTERIM FINANCIAL INFORMATION

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

#### <br>
*Presentation of the Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations and as net assets with and without donor restrictions. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency of the Japan Special Fund (JSF), representing the currency of the primary economic operating environment.

The JSF reports donor's contributed cash and other assets as support without donor restrictions when they are made available to the JSF without conditions other than for the purposes of pursuing the objectives of the JSF.

Contributions with donor-imposed limitations on the use of assets are reported as support with donor restrictions. These pertain to assets associated with the Japan Special Fund Innovative Finance Facility for Climate in Asia and the Pacific Partnership Facility (JSF IF-CAP). See Note C.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "*Fair Value Measurement*" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable.

------

#### 82 <br>

#### JSF-4

continued

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, *"Codification Improvements – Amendments to Remove References to the Concepts Statements"*. This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—JSF IF-CAP Window (Donor-Restricted Fund)

#### <br>
In October 2024, the Board of Directors approved the establishment of the JSF IF-CAP Window as a separate, special-purpose component of the JSF to channel the contribution of the Government of Japan to the IF-CAP Guarantee Mechanism. The government has also elected for any premium payable to them by OCR be deposited into the JSF IF-CAP Window for future obligations under the IF-CAP Guarantee Mechanism.

The following table provides a summary of financial information related to the JSF IF-CAP Window:

---

| | |
|:---|:---|
| ($ thousand) |  |
|  | 30 June 2025 |
| **As of** |  |
| &nbsp;&nbsp;&nbsp; Due from Banks | $1 |
| &nbsp;&nbsp;&nbsp; Receivable from OCR (Note E) | 2 |
| &nbsp;&nbsp;&nbsp; Net Assets with Donor Restrictions | $3 |
| **For the Six Months Ended 30 June:** | 2025 |
| &nbsp;&nbsp;&nbsp; Revenue from guarantees (Note F) | $3 |
| &nbsp;&nbsp;&nbsp; Revenue from other sources | 0 |
| &nbsp;&nbsp;&nbsp; Total | $3 |

---

0 = Less than $500.

#### NOTE D—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purposes held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits.

Interest income on time deposits is recognized as earned and reported in REVENUE FROM INVESTMENTS FOR LIQUIDITY PURPOSE.

The annualized rates of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.5% (5.5% – 2024).

------

83<br>

continued

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30 June 2025</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $124874 | $– | $124874 | $– |
| **<u>31 December 2024</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $123205 | $– | $123205 | $– |

---

Time deposits are reported at cost, which approximates FV.

#### NOTE E—RELATED PARTY TRANSACTIONS

The ordinary capital resources (OCR) and Special Funds resources are, at all times, used, committed, and invested entirely separately from each other. The administrative and operational expenses pertaining to JSF are settled regularly with OCR and other funds. Regional technical assistance projects and programs may be combined activities financed by Special Funds and trust funds.

Guarantee premiums payable to the Government of Japan under the IF-CAP Guarantee Mechanism are settled by OCR through the JSF IF-CAP window and are recorded as Receivable from OCR in JSF. As of 30 June 2025, Receivable from OCR totaled $2,000 (nil — 31 December 2024), and was netted against Payable to OCR.

The interfund account balances included in ACCOUNTS PAYABLE AND OTHER LIABILITIES as of 30 June 2025 and 31 December 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
| **Payable to:** | **30 June 2025**  | **31 December 2024** |
| &nbsp;&nbsp;&nbsp; Ordinary capital resources—net | $6 | $9 |
| &nbsp;&nbsp;&nbsp; Technical Assistance Special Fund | 8 | 68 |
| &nbsp;&nbsp;&nbsp; Trust Fund | – | 15 |
| &nbsp;&nbsp;&nbsp; Total | $14 | $92 |

---

#### NOTE F—REVENUE FROM GUARANTEES

For the six months ended 30 June 2025, revenue from guarantees in the JSF IF-CAP window totaled $3,000 (nil - 2024). See Note C.

#### NOTE G—TECHNICAL ASSISTANCE AND UNDISBURSED TECHNICAL ASSISTANCE

TA is recognized as expense in the financial statements when the project becomes effective. Upon completion or cancellation of a TA project, any undisbursed committed balance is reversed. TA expenses are also reversed accordingly. During the six months ended 30 June 2025, two TA projects and one supplementary TA (one TA continued project and two supplementary TA – 2024) became effective resulting in a total TA expense of $4,850,000 ($3,750,000 – 2024).

------

84<br>

#### JSF-4

#### <br>
continued

Undisbursed TA is denominated in US dollars and represents effective TA projects not yet disbursed and unliquidated. As of 30 June 2025, undisbursed TA totaled $17,741,000 ($14,192,000 – 31 December 2024), with no outstanding advances for TA ($2,000 – 31 December 2024) .

#### NOTE H—EXPENSES

*Technical assistance*

TA expenses are classified according to its nature using the budget allocation specified in the relevant TA agreement for the TA projects that became effective during the year.

The details of TA expenses for the six months ended 30 June 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **<u> </u>2025**  | **2024**  |
| &nbsp;&nbsp;&nbsp; Consultants | $3997 | $2850 |
| &nbsp;&nbsp;&nbsp; Trainings and seminars | 526 | 551 |
| &nbsp;&nbsp;&nbsp; Studies | 180 | – |
| &nbsp;&nbsp;&nbsp; Other expenses | 147 | 349 |
| &nbsp;&nbsp;&nbsp; Total | $4850 | $3750 |

---

** 

<br> *Administrative expenses*

Administrative expenses include salaries and benefits, which are incurred for management and general supporting activities. For the six months ended 30 June 2025, salaries and benefits totaled $32,000 ($29,000 – 2024).

#### NOTE I—LIQUIDITY AND AVAILABILITY OF RESOURCES
Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of JSF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditure, liabilities, and other obligations come due. In addition, JSF invests cash in excess of daily requirements in short- term investments.

As of 30 June 2025, the JSF's general window<sup>1</sup> has liquidity of $125,813,000 ($124,251,000 – 31 December 2024) consisting of DUE FROM BANKS of $939,000 ($1,046,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $124,874,000 ($123,205,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure.

#### NOTE J—SUBSEQUENT EVENTS
ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the JSF's financial statements as of 30 June 2025.

------

<sup>1</sup> Pertains to JSF's unrestricted assets. <br>

------

#### 85 <br>

#### ADBI-1

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT BANK INSTITUTE

#### CONDENSED STATEMENT OF FINANCIAL POSITION

#### 30 June 2025 and 31 December 2024
Expressed in Thousands of US Dollars

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June** | **30 June** | **31 December** | **31 December** |
| &nbsp;&nbsp;&nbsp; **ASSETS** | (Unaudited) | (Unaudited) | (Audited) | (Audited) |
| &nbsp;&nbsp;&nbsp; **ASSETS** |  |  |  |  |
|  DUE FROM BANKS (Note I) |  | $14837 |  | $10259 |
|  INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and I) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits |  | 10886 |  | 11640 |
|  PROPERTY, FURNITURE, AND EQUIPMENT (Note D) |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Property, Furniture, and Equipment | $4053 |  | $4677 |  |
| &nbsp;&nbsp;&nbsp; Less—allowance for depreciation | 2218 | 1835 | 2003 | 2674 |
|  DUE FROM CONTRIBUTORS (Note F) |  | 167 |  | 4452 |
|  LONG-TERM GUARANTEE DEPOSITS (Note E) |  | 984 |  | 908 |
|  OTHER ASSETS (Note G) |  | 441 |  | 470 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**29150** |  | $**30403** |
| &nbsp;&nbsp;&nbsp; **LIABILITIES AND UNCOMMITTED BALANCES** |  |  |  |  |
|  ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Accrued pension and postretirement |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; medical benefit costs | $3575 |  | $3621 |  |
| &nbsp;&nbsp;&nbsp; Asset reinstatement obligations (Note E) | 1383 |  | 1275 |  |
| &nbsp;&nbsp;&nbsp; Lease liability (Note E) | 1357 |  | 2190 |  |
| &nbsp;&nbsp;&nbsp; Others (Note H) | 781<br>| $7096<br>| 1463 | $8549 |
|  UNCOMMITTED BALANCES (ADBI-2), represented by: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net assets without donor restrictions | 21017 |  | 20631 |  |
| &nbsp;&nbsp;&nbsp; Net assets with donor restrictions (Note G) | 1037 | 22054 | 1223 | 21854 |
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**29150** |  | $**30403** |

---

The accompanying Notes are an integral part of these condensed financial statements (ADBI-4).

------

#### 86 <br>

#### ADBI-2

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT BANK INSTITUTE

#### CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Thousands of US Dollars

**<u> </u>**

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| CONTRIBUTIONS (Note F) | $4507 | $5286 |
| REVENUE |  |  |
| &nbsp;&nbsp;&nbsp; From rental (Note G) | 117 | 118 |
| &nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | 243 | 305 |
| &nbsp;&nbsp;&nbsp; From other sources—net (Notes G and H) | 409 | 401 |
| NET ASSETS RELEASED FROM ASSETS |  |  |
| &nbsp;&nbsp;&nbsp; WITH DONOR RESTRICTIONS (Note G) | 198 | 114 |
| &nbsp;&nbsp;&nbsp; Total | 5474 | 6224 |
| &nbsp;&nbsp;&nbsp; EXPENSES<br> Administrative expenses (Notes G and H) | (3835) | (4027) |
| &nbsp;&nbsp;&nbsp; Program expenses (Note G) | (2165) | (2980<br><u>)</u> |
| &nbsp;&nbsp;&nbsp; Total | (6000) | (7007<br><u>)</u> |
| CONTRIBUTIONS AND REVENUE LESS THAN EXPENSES | (526) | (783) |
| EXCHANGE GAINS (LOSSES)—net | 1299 | (1822) |
| TRANSLATION ADJUSTMENTS | (387) | (2<br><u>)</u> |
| INCREASE (DECREASE) IN NET ASSETS |  |  |
| &nbsp;&nbsp;&nbsp; WITHOUT DONOR RESTRICTIONS | 386 | (2607<br><u>)</u> |

---

#### CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; REVENUE FROM OTHER SOURCES (Note G) | 12 | 345 |
| &nbsp;&nbsp;&nbsp; NET ASSETS RELEASED TO ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WITHOUT DONOR RESTRICTIONS (Note G) | (198) | (114) |
| &nbsp;&nbsp;&nbsp;&nbsp;(DECREASE) INCREASE IN NET ASSETS WITH DONOR RESTRICTIONS | (186) | 231 |
| INCREASE (DECREASE) IN NET ASSETS | 200 | (2376) |
| NET ASSETS AT BEGINNING OF PERIOD | 21854 | 26165 |
| **NET ASSETS AT END OF PERIOD** | $**22054** | $**23789** |

---

The accompanying Notes are an integral part of these condensed financial statements (ADBI-4). <br>

------

#### 87 <br>

#### ADBI-3

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT BANK INSTITUTE CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp; CASH FLOWS FROM OPERATING ACTIVITIES<br> Contributions received | $8765 | $10297 |
| &nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 246 | 310 |
| &nbsp;&nbsp;&nbsp; Expenses paid | (6673) | (7282) |
| &nbsp;&nbsp;&nbsp; Others—net | 545 | (950) |
| Net Cash Provided by Operating Activities | 2883 | 2375 |
| &nbsp;&nbsp;&nbsp; CASH FLOWS FROM INVESTING ACTIVITIES<br> Maturities of investments for liquidity purpose | 143703 | 161062 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (142949) | (161772) |
| &nbsp;&nbsp;&nbsp; Purchase of property, furniture, and equipment | – | (85) |
| Net Cash Provided by (Used in) Investing Activities | 754 | (795) |
| Effect of Exchange Rate Changes on Due from Banks | 941 | 319 |
| Net Increase in Due From Banks | 4578 | 1899 |
| Due From Banks at Beginning of Period | 10259 | 13514 |
| Due From Banks at End of Period | $14837 | $15413 |

---

The accompanying Notes are an integral part of these condensed financial statements (ADBI-4).

------

88<br>

#### ADBI-4

#### ASIAN DEVELOPMENT BANK—ASIAN DEVELOPMENT BANK INSTITUTE

#### NOTES TO CONDENSED FINANCIAL STATEMENTS

#### For the Six Months Ended 30 June 2025 and 2024
(Unaudited)

#### NOTE A—INTERIM FINANCIAL INFORMATION

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
*Presentation of the Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The functional currency of Asian Development Bank Institute (the Institute) is yen, representing the currency of primary economic operating environment of the Institute. The reporting currency is the US dollar and the financial statements are expressed in US dollars.

The Institute reports donor's contributed cash and other assets as support without donor restrictions as these are made available to the Institute without conditions other than for the purposes of pursuing the objectives of the Institute.

The Institute reports donor's contributed cash and other assets as support with donor restrictions if they are received with donor stipulations that limit the use of the donated assets. When the donor restriction expires, that is, when a stipulated time or purpose restriction is accomplished, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the Statement of Activities and Changes in Net Assets as NET ASSETS RELEASED TO ASSETS WITHOUT DONOR RESTRICTIONS.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "*Fair Value Measurement*" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction cost.

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

------

#### 89 <br>

#### ADBI-4

continued

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable. <br>

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, *"Codification Improvements – Amendments to Remove References to the Concepts Statements"*. This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purpose held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits. ADB records time deposits on the settlement dates and all other investment securities on the trade date.

Interest income on time deposits is recognized as earned and reported in REVENUE From investments for liquidity purpose.

The annualized rates of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.4% (5.5% – 2024).

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30 June 2025</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $10886 | $– | $10886<br>| $– |
| **<u>31 December 2024</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $11640 | $– | $11640 | $– |

---

Time deposits are reported at cost, which approximates FV.

#### NOTE D—PROPERTY, FURNITURE, AND EQUIPMENT
As of 30 June 2025, property, furniture, and equipment totaled $1,835,000 ($2,674,000 – 31 December 2024), which consist of $37,000 for office furniture ($42,000 – 31 December 2024), $91,000 for office equipment ($94,000 – 31 December 2024), $181,000 for information system and software ($192,000 – 31 December 2024), and $1,526,000 for right-of-use asset relating to the Institute's office lease ($2,346,000 – 31 December 2024). Additional information on right-of-use asset is provided in Note E.

------

90<br>

#### ADBI-4

continued

#### NOTE E—LEASE
*Right-of-use asset and Lease liability*

The Institute's right-of-use asset and lease liability pertain to its leased office space, classified as an operating lease. Rental expenses under operating lease for the six months ended 30 June 2025 amounted to $972,000 ($988,000 – 2024). As of 30 June 2025, the right-of-use asset of $1,526,000 ($2,346,000 – 31 December 2024), which included prepaid rent of $170,000 ($156,000 – 31 December 2024), was presented as part of PROPERTY, FURNITURE, AND EQUIPMENT. The lease liability of $1,357,000 as of 30 June 2025 ($2,190,000 – 31 December 2024) was presented as part of ACCOUNTS PAYABLE AND OTHER LIABILITIES in the Institute's Statement of Financial Position.

The Institute's lease agreement for its office space was renewed until 31 March 2026. The Institute's sublease agreement for a part of its office space was also renewed accordingly. The sublease has been classified as an operating lease. Additional information on the sublease is provided in Note G.

*Long-term guarantee deposits*

The Institute leases office space and deposits the equivalent of six months of office rent to the lessor, as stipulated in the contract of lease signed in 1997. The amount is updated every contract renewal. The last renewal date was 1 April 2023. As of 30 June 2025, the LONG-TERM GUARANTEE DEPOSITS presented in the Institute's Statement of Financial Position amounted to $984,000 ($908,000 – 31 December 2024).

*Asset reinstatement obligations*

The Institute has recorded estimated asset reinstatement obligations for restoration costs to be incurred upon termination of its office space lease. As of 30 June 2025, asset reinstatement obligations amounted to $1,383,000 ($1,275,000 – 31 December 2024) and presented as part of ACCOUNTS PAYABLE AND OTHER LIABILITIES in the Institute's Statement of Financial Position.

#### NOTE F—CONTRIBUTIONS

Contributions pertain to donations from governments of ADB's member countries and are approved by the ADB Board of Directors. Contributions are recognized in the Statement of Activities and Changes in Net Assets at date of commitment.

Contributions committed and received during the six months ended 30 June 2025 and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (in thousands) |  |  |  |  |
|  | **Amount of commitment** | **Amount of commitment** | **Commitment** |  |
| **Donor** | **LC** | **USD**<sup>a</sup> | **date** | **&nbsp;&nbsp;&nbsp;&nbsp;Receipt date**  |
| Government of Japan |  |  |  |  |
| &nbsp;&nbsp;&nbsp; 46th contribution | ¥504777 | $3507 | June 2025 | June 2025 |
| &nbsp;&nbsp;&nbsp; 45th contribution | ¥672069 | $4285 | December 2024 | January 2025 |
| &nbsp;&nbsp;&nbsp; 44th contribution | ¥672070 | $4286 | May 2024 | June 2024 |
| &nbsp;&nbsp;&nbsp; 43rd contribution | ¥743069 | $5268 | December 2023 | January 2024 |
| &nbsp;&nbsp;&nbsp; Government of Republic of Korea<br> 3rd installment of the 6th contribution |  | $1000 | <br> May 2025 | <br> May 2025 |
| &nbsp;&nbsp;&nbsp; 1st installment of the 6th contribution |  | $1000 | May 2024 | May 2024 |
| LC = local currency, USD = US dollar. |  |  |  |  |

---

<sup>a</sup> The USD equivalent of Japan's contributions is valued at exchange rate at date of commitment.

------

91<br>

#### ADBI-4

continued

#### NOTE G—REVENUE AND EXPENSES
*Revenue from rental*

Revenue from rental totaled $117,000 for the six months ended 30 June 2025 ($118,000 – 2024). This pertains to the sublease rental income received according to a space-sharing agreement with the Japanese Representative Office of ADB. The transactions with ADB were made in the ordinary course of business and negotiated at arm's length. See Note H.

*Revenue from other sources*

Revenue from other sources include service fees to OCR (See Note H), fees from honorariums, publication royalties, and grants from private donors and other government agencies.

Grants received from private donors and other government agencies for a specific purpose or program are classified as support with donor restrictions. No grants were committed during the six months ended 30 June 2025 ($333,000 – 2024).

As of 30 June 2025, receivable from private donors totaled $292,000 ($292,000 – 31 December 2024) and is included in OTHER ASSETS. The net assets with donor restrictions including net accumulated interest income totaled $1,037,000 as of 30 June 2025 ($1,223,000 – 31 December 2024) and are restricted for

(i) the city-wide inclusive sanitation program expenses and program activities that enhance climate resilience in the Asia-Pacific region, and (ii) research and capacity development activities on climate-resilient agriculture and food security in the same region.

Net assets released to assets without donor restrictions amounted to $198,000 during the six months 30 June 2025 ($114,000 – 2024) which have satisfied the conditions specified by the donors.

*Administrative expenses*

Administrative expenses include salaries and benefits, office and occupancy, external services, travel, and other expenses, which are incurred for management and general supporting activities. The following table summarizes administrative expenses for the six months ended 30 June 2025 and 2024:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **2025**  | **2024**  |
| Salaries and benefits | $1883 | $2126 |
| Office and occupancy<sup>a</sup> | 1213 | 1238 |
| External services | 460 | 395 |
| Travel | 161 | 220 |
| Other expenses | 118 | 48 |
| &nbsp;&nbsp;&nbsp; **Total Administrative Expenses** | $**3835** | $**4027** |

---

<sup>a</sup> Includes operating lease expense (Note E).

------

92<br>

#### ADBI-4

continued

*Program expenses*

Program expenses generally represent trainings and seminars and consultant expenses related to research and capacity building projects of the Institute.

The following table summarizes program expenses for the six months ended 30 June 2025 and 2024:

($ thousand)

---

| | | |
|:---|:---|:---|
|  | **2025**  | **2024**  |
| Trainings and seminars | $1688 | $2424 |
| Consultants | 477 | 556 |
| &nbsp;&nbsp;&nbsp; **Total Program Expenses** | $**2165** | $**2980** |

---

#### NOTE H—RELATED PARTY TRANSACTIONS

ADB has not allocated service fees to the Institute for a range of administrative and financial services such as managing the investments or administering the Staff Retirement Plan and Health Benefit Plan for Retirees. The fair value of those personnel services has been estimated to be 10 basis points of the average balance of the Institute's liquid assets. For the six months ended 30 June 2025, the calculated service fee was $10,000 ($11,000 – 2024) and recorded as Administrative expenses and REVENUE From other sources—net. The transaction has no impact on the net assets of the Institute.

The Institute is a lessor in a sublease agreement with the Japan Representative Office of ADB. For the six months ended 30 June 2025, the revenue from the sublease rental amounted to $117,000 ($118,000 – 2024). See Note G.

Included in ACCOUNTS PAYABLE AND OTHER LIABILITIES were the amounts net payable to OCR of $377,000 at 30 June 2025 ($715,000 – 31 December 2024). The payable resulted from transactions in the normal course of business.

#### NOTE I—LIQUIDITY AND AVAILABILITY OF RESOURCES
Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of the Institute's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, the Institute invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, the Institute has liquidity of $25,723,000 ($21,899,000 – 31 December 2024) consisting of DUE FROM BANKS of $14,837,000 ($10,259,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $10,886,000 ($11,640,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure. See Note G for discussions relating to donor restrictions on the Institute's uncommitted balance.

#### NOTE J—SUBSEQUENT EVENTS

The Institute has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the Institute's condensed financial statements as of 30 June 2025.

------

93<br>

#### RCIF-1

**ASIAN DEVELOPMENT BANK—REGIONAL COOPERATION AND INTEGRATION FUND**

**CONDENSED STATEMENT OF FINANCIAL POSITION**

**30 June 2025 and 31 December 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **ASSETS**  | **30 June**<br> **(Unaudited)** | **31 December**<br> **(Audited)** <br>|
| DUE FROM BANKS (Note G) | $965 | $1019 |
| &nbsp;&nbsp;&nbsp; INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and G)<br> Time deposits | 11767 | 14461 |
| ACCRUED REVENUE | 65 | 79 |
| ADVANCES FOR TECHNICAL ASSISTANCE (Note E) | 51 | 107 |
| OTHER ASSETS (Note D) | – | 1 |
| &nbsp;&nbsp;&nbsp; **TOTAL** | $**12848** | $**15667** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; **LIABILITIES AND UNCOMMITTED BALANCES** |  |  |  |  |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Payable to related funds (Note D) | $119 |  | $234 |  |
| &nbsp;&nbsp;&nbsp; Accrued Expenses | – | $119 | 20 | $254 |
| UNDISBURSED TECHNICAL ASSISTANCE (Note E) |  | 10845 |  | 13857 |
| TOTAL LIABILITIES |  | 10964 |  | 14111 |
|  UNCOMMITTED BALANCES (RCIF-2), represented by: Net assets without donor restrictions |  | 1884 |  | 1556 |
| &nbsp;&nbsp;&nbsp; **TOTAL** |  | $**12848** |  | $**15667** |

---

The accompanying Notes are an integral part of these condensed financial statements (RCIF-4).

------

94<br>

#### RCIF-2

**ASIAN DEVELOPMENT BANK—REGIONAL COOPERATION AND INTEGRATION FUND**

**CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; REVENUE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | $291 | $531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources | 0<br>| 4<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 291<br>| 535<br>|
| &nbsp;&nbsp;&nbsp; EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical assistance—net (Notes E and F)  | 177 | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Administrative and financial expenses (Notes D and F) | (142) | (187) |
| &nbsp;&nbsp;&nbsp; Total | 35 | (56) |
| &nbsp;&nbsp;&nbsp; REVENUE IN EXCESS OF EXPENSES<br>| 326 | 479 |
| &nbsp;&nbsp;&nbsp; EXCHANGE GAINS (LOSSES)—net | 2 | (8) |
| INCREASE IN NET ASSETS | 328 | 471 |
| NET ASSETS AT BEGINNING OF PERIOD | 1556 | 639 |
| **NET ASSETS AT END OF PERIOD** | $**1884** | $**1110** |

---

0 = Less than $500.

The accompanying Notes are an integral part of these condensed financial statements (RCIF-4). <br>

------

95<br>

#### RCIF-3

**ASIAN DEVELOPMENT BANK—REGIONAL COOPERATION AND INTEGRATION FUND**

**CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars<br>

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;&nbsp; CASH FLOWS FROM OPERATING ACTIVITIES<br> Interest received on investments for liquidity purpose | $305 | $552 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash received from other sources | 0 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp; Technical assistance disbursed | (2868) | (3645) |
| &nbsp;&nbsp;&nbsp;&nbsp; Administrative and financial expenses paid | (185) | (244) |
| Net Cash Used in Operating Activities | (2748) | (3333<br><u>)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp; CASH FLOWS FROM INVESTING ACTIVITIES<br> Maturities of investments for liquidity purpose | 110350 | 257430 |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (107656) | (255482) |
| Net Cash Provided by Investing Activities | 2694 | 1948 |
| Net Decrease in Due From Banks | (54) | (1385) |
| Due from Banks at Beginning of Period | 1019 | 2309 |
| Due from Banks at End of Period | $965 | $924 |

---

0 = Less than $500.

The accompanying Notes are an integral part of these condensed financial statements (RCIF-4).

------

96<br>

#### RCIF-4
**ASIAN DEVELOPMENT BANK—REGIONAL COOPERATION AND INTEGRATION FUND**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**For the Six Months Ended 30 June 2025 and 2024**

**(Unaudited)**

**NOTE A—INTERIM FINANCIAL INFORMATION**

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements, and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

*Presentation of the Financial Statements*

** 

<br> The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency of the Regional Cooperation and Integration Fund (RCIF), representing the currency of the primary economic operating environment.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "Fair Value Measurement" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets. <br>

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable.

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

------

<br> RCIF-4 <br>

#### continued

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, "Codification Improvements – Amendments to Remove References to the Concepts Statements". This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purpose held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits.

Interest income on time deposits is recognized as earned and reported in REVENUE From investments for liquidity purpose.

The annualized rate of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.5% (5.5% – 2024).

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:

($ thousand)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
| **<u>30</u>**<u> </u>**<u>June</u>**<u> </u>**<u>2025</u>** | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30</u>**<u> </u>**<u>June</u>**<u> </u>**<u>2025</u>** | | | | |
|  Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $11767 | $– | $11767 | $– |
| **<u>31</u>**<u> </u>**<u>December</u>**<u> </u>**<u>2024</u>** |  |  |  |  |
|  Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $14461 | $– | $14461 | $– |

---

Time deposits are reported at cost, which approximates FV.

#### NOTE D—RELATED PARTY TRANSACTIONS

#### <br>
The ordinary capital resources (OCR) and Special Funds resources are at all times used, committed, and invested entirely separately from each other. The administrative and operational expenses pertaining to the RCIF are settled regularly with OCR and the other funds. Regional technical assistance projects and programs may be combined activities financed by Special Funds and trust funds. ADB charges a service fee to cover ADB's incremental cost for the administration, management, supervision and operation of the RCIF and RCI Trust Fund, a trust fund administered by ADB. The service fee is currently 5% of the amount disbursed for technical assistance and 2% of the amount disbursed for grant components of investment projects. As of 30 June 2025, all service fees pertain to the administration of TA projects. See Note F for service fees during the six months ended 30 June 2025 and 2024.

------

98<br>

#### RCIF-4
continued

The interfund account balances included in OTHER ASSETS and ACCOUNTS PAYABLE AND OTHER

LIABILITIES as of 30 June 2025 and 31 December 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **30 June 2025**  | **31 December 2024**  |
| **Receivable from:** |  |  |
| &nbsp;&nbsp;&nbsp; Trust Funds | $- | $1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $- | $1 |
| **Payable to:** |  |  |
| &nbsp;&nbsp;&nbsp; Ordinary capital resources—net | $23 | $75 |
| &nbsp;&nbsp;&nbsp; Technical Assistance Special Fund—net | 93 | 154 |
| &nbsp;&nbsp;&nbsp; Trust Funds | 4 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $119 | $234 |

---

Note: Numbers may not sum precisely because of rounding.

**NOTE E—TECHNICAL ASSISTANCE AND UNDISBURSED TECHNICAL ASSISTANCE** <br>

TA is recognized as expense in the financial statements when the project becomes effective. Upon completion or cancellation of a TA project, any undisbursed committed balance is reversed. TA expenses are also reversed accordingly. During the six months ended 30 June 2025, no TA project (two TA projects totaling $450,000 – 2024) became effective. Undisbursed TA reversed as reduction in TA expenses totaled $177,000 ($581,000 – 2024) during the period, resulting in total TA expense of -$177,000 (-$131,000 – 2024)

Undisbursed TA are denominated in US dollars and represent effective TA projects not yet disbursed and unliquidated. The undisbursed TA of $10,845,000 as of 30 June 2025 ($13,857,000 – 31 December 2024), includes $51,000 ($107,000 – 31 December 2024) of advances for TA.

**NOTE F—EXPENSES**

*Technical assistance—net*

TA expenses are classified according to its nature using the budget allocation specified in the relevant TA agreement for the TA that became effective during the period. The details of TA expenses for the six months ended 30 June 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp; **2025**  | &nbsp;&nbsp;&nbsp;&nbsp; **2024**  |
| Consultants | $– | $325 |
| Trainings and seminars | – | 110 |
| Other expenses<sup>a</sup> | (177) | (566) |
| Total | $(177) | $(131) |

---

<sup>a</sup> Net of undisbursed TA reversed as reduction in TA expenses (See Note E).

------

99<br>

continued

*Administrative and financial expenses*

Administrative expenses include service fees to OCR, which are incurred for management and general supporting activities. The table below summarizes administrative and financial expenses for the six months ended 30 June 2025 and 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp; **2025**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **2024**  |
| Service fees to OCR (Note D) | $142 | $186 |
| Financial expenses | 0 | 1 |
| Total | $142 | $187 |

---

0 = Less than $500.

**NOTE G—LIQUIDITY AND AVAILABILITY OF RESOURCES**

Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of RCIF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, RCIF invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, the RCIF has liquidity of $12,732,000 ($15,480,000 – 31 December 2024) consisting of DUE FROM BANKS of $965,000 ($1,019,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $11,767,000 ($14,461,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure. None of the financial assets are subject to donor or other contractual restrictions that make them unavailable for general expenditure within one year of the balance sheet date.

**NOTE H—SUBSEQUENT EVENTS**

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the RCIF's condensed financial statements as of 30 June 2025.

------

#### 100 <br>

#### <br>

#### CCF-1

#### <br>

#### ASIAN DEVELOPMENT BANK—CLIMATE CHANGE FUND CONDENSED STATEMENT OF FINANCIAL POSITION 30 June 2025 and 31 December 2024 Expressed in Thousands of US Dollars

---

| | | |
|:---|:---|:---|
|  | **30 June** | **31 December** |
|  | (Unaudited) | (Audited) |
| **ASSETS** |  |  |
| DUE FROM BANKS (Note G) | $1037 | $1059 |
| INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and G) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 22856 | 24790 |
| ACCRUED REVENUE | 130 | 158 |
| ADVANCES UNDER TECHNICAL ASSISTANCE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; AND GRANTS (Note E) | 541 | 278 |
| OTHER ASSETS | 13 | 3 |
| **TOTAL** | $**24577** | $**26288** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **LIABILITIES AND UNCOMMITTED BALANCES** |  |  |  |  |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Payable to related funds (Note D) | $226 |  | $344 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 64 | $290 | 312 | $656 |
| UNDISBURSED TECHNICAL ASSISTANCE |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; AND GRANTS (Note E) |  | 12257 |  | 13274 |
| TOTAL LIABILITIES |  | 12547 |  | 13930 |
| UNCOMMITTED BALANCES (CCF-2), represented by: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net assets without donor restrictions |  | 12030 |  | 12358 |
| **TOTAL** |  | $**24577** |  | $**26288** |

---

The accompanying Notes are an integral part of these condensed financial statements (CCF-4).

------

101<br>

#### CCF-2

**ASIAN DEVELOPMENT BANK—CLIMATE CHANGE FUND**

**CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; REVENUE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | 538 | 811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources | 20 | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 558 | 842 |
| &nbsp;&nbsp;&nbsp; EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical assistance (Notes E and F) | 37 | (400) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grants (Note E) | (900) | (2000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Administrative and other expenses (Notes D and F) | (23) | (812) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (886) | (3212) |
| DECREASE IN NET ASSETS | (328) | (2370) |
| NET ASSETS AT BEGINNING OF PERIOD | 12358 | 14550 |
| **NET ASSETS AT END OF PERIOD** | $**12030** | $**12180** |

---

The accompanying Notes are an integral part of these condensed financial statements (CCF-4).

------

102<br>

#### CCF-3
**ASIAN DEVELOPMENT BANK—CLIMATE CHANGE FUND**

**CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**<br>

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 566 | 843 |
| &nbsp;&nbsp;&nbsp; Cash received from other activities | 20 | 31 |
| &nbsp;&nbsp;&nbsp; Technical assistance and grants disbursed | (2232) | (2614) |
| &nbsp;&nbsp;&nbsp; Administrative and other expenses paid | (310) | (664) |
| Net Cash Used in Operating Activities | (1956) | (2404) |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 164615 | 369203 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (162681) | (368245) |
| Net Cash Provided by Investing Activities | 1934 | 958 |
| Net Decrease in Due From Banks | (22) | (1446) |
| Due from Banks at Beginning of Period | 1059 | 2098 |
| Due from Banks at End of Period | $1037 | $652 |

---

The accompanying Notes are an integral part of these condensed financial statements (CCF-4).

------

103<br>

#### CCF-4

#### ASIAN DEVELOPMENT BANK—CLIMATE CHANGE FUND

#### NOTES TO CONDENSED FINANCIAL STATEMENTS

#### For the Six Months Ended 30 June 2025 and 2024
(Unaudited)

#### NOTE A—INTERIM FINANCIAL INFORMATION

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

*Presentation of the Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets and liabilities as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency of the Climate Change Fund (CCF), representing the currency of the primary economic operating environment.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "Fair Value Measurement" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable.

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

------

#### 104 <br>

#### CCF-4
continued

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, "Codification Improvements – Amendments to Remove References to the Concepts Statements". This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purpose held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits.

Interest income on time deposits is recognized as earned and reported in REVENUE From investments for liquidity purpose.

<br> The annualized rate of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.5% (5.5% – 2024).

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30</u><u> </u><u>June</u><u> </u><u>2025</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $22856 | $– | $22856 | $– |
| **<u>31</u><u> </u><u>December</u><u> </u><u>2024</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $<u>24790</u> | $– | $<u>24790</u> | $– |

---

Time deposits are reported at cost, which approximates FV.

**NOTE D—RELATED PARTY TRANSACTIONS**

The ordinary capital resources (OCR) and Special Funds resources are at all times used, committed, and invested entirely separately from each other. The administrative and operational expenses pertaining to the CCF are settled regularly with OCR and the other funds. Regional technical assistance projects and programs may be combined activities financed by Special Funds and trust funds. ADB charges a service fee to cover ADB's incremental cost for the administration, management, supervision, and operation of the CCF. The service fee is set at 5% of the amount disbursed for technical assistance and 2% of the amount disbursed for grant components of investment projects. See Note F for service fees during the six months ended 30 June 2025 and 2024.

------

105<br>

#### CCF-4
continued

The interfund account balances included in ACCOUNTS PAYABLE AND OTHER LIABILITIES as of 30 June 2025 and 31 December 2024 are as follows:

---

| | | |
|:---|:---|:---|
| ($ thousand)<br>|  |  |
| **Payable to:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **30 June 2025**  | &nbsp;&nbsp; **31 December 2024** |
| &nbsp;&nbsp;&nbsp; Ordinary capital resources—net | $39 | $62 |
| &nbsp;&nbsp;&nbsp; Technical Assistance Special Fund—net | 187 | 265 |
| &nbsp;&nbsp;&nbsp; Trust Funds | -  | 17  |
| Total | $226  | $344  |

---

**NOTE E—TECHNICAL ASSISTANCE, GRANTS, AND UNDISBURSED TECHNICAL ASSISTANCE AND GRANTS**

Technical assistance (TA) and grants are recognized as expense in the financial statements when the project becomes effective. Upon completion or cancellation of a TA project or grant, any undisbursed committed balance is reversed. TA or grant expenses are also reversed accordingly.

During the six months ended 30 June 2025, no TA project became effective (one TA project amounting to $400,000 – 2024). Undisbursed TA reversed as reduction in TA expenses totaled $37,000 (nil – 2024). Additionally, one grant (three – 2024) became effective, resulting in total grant expense of $900,000 ($2,000,00 – 2024).

Undisbursed TA or grants are denominated in US dollars and represent effective TA projects or grants not yet disbursed and unliquidated. As of 30 June 2025, undisbursed TA totaled $9,084,000 ($10,974,000 – 2024), which includes $7,000 ($6,000 – 2024) of advances for TA, while undisbursed grants totaled $3,173,000 ($2,300,000 – 31 December 2024), including $534,000 ($272,000 – 31 December 2024) of advances for grants.

NOTE F—EXPENSES

*Technical assistance—net*

TA expenses are classified according to its nature using the budget allocation specified in the relevant TA agreement for the TA that became effective during the period. The details of TA expenses for the six months ended 30 June 2025 and 2024 is as follows:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **2025**  | **2024**  |
| Consultants | $– | $369 |
| Studies | – | 8 |
| Other expenses—net | (37)<sup>a</sup> | 23 |
| Total | $(37) | $400 |

---

<sup>a</sup> Undisbursed TA reversed as reduction in TA expenses (See Note E).

------

#### 106 <br>

#### CCF-4
continued

Administrative and other expenses

Administrative expenses include service fees to OCR, which are incurred for management and general supporting activities. Other expenses include direct charges for project-related and operational-related expenses that are not part of a TA and/or part of an investment project.

The following table summarizes administrative and other expenses for the six months ended 30 June 2025 and 2024:

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **2025** | **2024** |
| Administrative expenses |  |  |
| &nbsp;&nbsp;&nbsp; Service fees to OCR (Note D) | $93 | $129 |
| Other expenses  |  |  |
| &nbsp;&nbsp;&nbsp; Direct charges |  |  |
| &nbsp;&nbsp;&nbsp; Consultants | (92) | 670 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Studies | 22 | 13 |
| Total | $23 | $812 |

---

**** 

<br> **NOTE G—LIQUIDITY AND AVAILABILITY OF RESOURCES**

Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of CCF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, CCF invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, the CCF has liquidity of $23,893,000 ($25,849,000 – 31 December 2024) consisting of DUE FROM BANKS of $1,037,000 ($1,059,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $22,856,000 ($24,790,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure. None of the financial assets are subject to donor or other contractual restrictions that make them unavailable for general expenditure within one year of the balance sheet date. <br>

**NOTE H—SUBSEQUENT EVENTS**

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the CCF's condensed financial statements as of 30 June 2025.

------

#### 107 <br>

#### APDRF-1

**ASIAN DEVELOPMENT BANK—ASIA PACIFIC DISASTER RESPONSE FUND**

**CONDENSED STATEMENT OF FINANCIAL POSITION**

**30 June 2025 and 31 December 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
| **ASSETS** | **30 June** <br> **(Unaudited)** | **31 December**<br> **(Audited)** |
| DUE FROM BANKS (Note H) | $1504 | $2840 |
| &nbsp;&nbsp;&nbsp;&nbsp; INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and H) Time deposits<br>| 25827 | 31643 |
| ACCRUED REVENUE | 111 | 174 |
| ADVANCES FOR GRANTS (Note E) | 7500 | 2800 |
| **TOTAL** | $**34942** | $**37457** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **LIABILITIES AND UNCOMMITTED BALANCES** | | | | |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Payable to related funds (Note D) | $60 |  | $266 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses | 73 | $133 | 20 | $286 |
| UNDISBURSED GRANTS (Note E) |  | 7500 |  | 2800 |
| TOTAL LIABILITIES |  | 7633 |  | 3086 |
| &nbsp;&nbsp;&nbsp;&nbsp; UNCOMMITTED BALANCES (APDRF-2, Note F), represented by:<br> Net assets without donor restrictions |  | 27309 |  | 34371 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** |  | $**34942** |  | $**37457** |

---

The accompanying Notes are an integral part of these condensed financial statements (APDRF-4).

------

#### 108 <br>

#### <br>

#### APDRF-2

**ASIAN DEVELOPMENT BANK—ASIA PACIFIC DISASTER RESPONSE FUND**

**CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ****

<br> ---

| | | |
|:---|:---|:---|
|  | **2025**  | **2024**  |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| CONTRIBUTIONS (Note F) | $– | $15000 |
| REVENUE |  |  |
| &nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | 621 | 1255 |
| &nbsp;&nbsp;&nbsp; From other sources | 14 | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 635 | 16285 |
| EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp; Grants—net (Note E) | (7500) | (2603) |
| &nbsp;&nbsp;&nbsp; Administrative and other expenses (Notes D and G) | (197) | (80) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (7697) | (2683) |
| (DECREASE) INCREASE IN NET ASSETS |  |  |
| &nbsp;&nbsp;&nbsp; WITHOUT DONOR RESTRICTIONS | (7062) | 13602 |
| **CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; TRANSFER OF RESIDUAL FUNDS TO JFPR (Note F) | – | (27250) |
| &nbsp;&nbsp;&nbsp; DECREASE IN NET ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; WITH DONOR RESTRICTIONS | – | (27250) |
| DECREASE IN NET ASSETS | (7062) | (13648) |
| NET ASSETS AT BEGINNING OF PERIOD | 34371 | 47013 |
| **NET ASSETS AT END OF PERIOD** | $**27309** | $**33365** |

---

The accompanying Notes are an integral part of these condensed financial statements (APDRF-4).

------

#### 109 <br>

#### APDRF-3

**ASIAN DEVELOPMENT BANK—ASIA PACIFIC DISASTER RESPONSE FUND**

**CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Transfer of residual funds to JFPR | $(267) | $– |
| &nbsp;&nbsp;&nbsp; Contributions received | – | 15000 |
| &nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 684 | 1284 |
| &nbsp;&nbsp;&nbsp; Cash received from other sources | 14 | 30 |
| &nbsp;&nbsp;&nbsp; Grants disbursed | (7500) | (3300) |
| &nbsp;&nbsp;&nbsp; Administrative and other expenses paid | (83) | (44) |
| Net Cash (Used in) Provided by Operating Activities | (7152) | 12970 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 350809 | 949302 |
| &nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (344993) | (970786) |
| Net Cash Provided by (Used in) Investing Activities | 5816 | (21484) |
| Net Decrease in Due From Banks | (1336) | (8514) |
| Due from Banks at Beginning of Period | 2840 | 9722 |
| Due from Banks at End of Period | $1504 | $1208 |

---

The accompanying Notes are an integral part of these condensed financial statements (APDRF-4).

------

#### 110 <br>

#### <br>

#### APDRF-4
**** 

<br> **ASIAN DEVELOPMENT BANK—ASIA PACIFIC DISASTER RESPONSE FUND**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**For the Six Months Ended 30 June 2025 and 2024 (Unaudited)** <br>

**NOTE A—INTERIM FINANCIAL INFORMATION** <br>

These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

**NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Presentation of Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets, liabilities and uncommitted balances as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency of the Asia Pacific Disaster Response Fund (APDRF), representing the currency of the primary economic operating environment.

The APDRF reports donor's contributed cash and other assets as support without donor restrictions as these are made available to the APDRF without conditions other than for the purposes of pursuing the objectives of the APDRF.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "Fair Value Measurement" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

*Fair Value Hierarchy*

ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable.

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

------

111<br>

continued

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, "Codification Improvements – Amendments to Remove References to the Concepts Statements". This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purpose held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits.

Interest income on time deposits is recognized as earned and reported in REVENUE From investments for liquidity purpose.

The annualized rate of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.5% (5.5% – 2024).

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30</u><u> </u><u>June</u><u> </u><u>2025</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $25827 | $– | $25827 | $– |
| **<u>31 December 2024</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $31643 | $– | $31643 | $– |

---

Time deposits are reported at cost, which approximates FV.

**** 

<br> **NOTE D—RELATED PARTY TRANSACTIONS**

The ordinary capital resources (OCR) and Special Funds resources are at all times used, committed, and invested entirely separately from each other. The administrative and operational expenses pertaining to the APDRF are settled regularly with OCR and the other funds. Grants programs may be combined activities financed by Special Funds and trust funds. ADB charges a service fee to cover ADB's cost for the administration, management, supervision, and operation of the APDRF. The service fee is currently set at 2% of the amount disbursed for grant components of investment projects. See Note G for service fees during the six months ended 30 June 2025 and 2024.

------

112<br>

#### APDRF-4
continued

The interfund account balances included in ACCOUNTS PAYABLE AND OTHER LIABILITIES as of 30 June 2025 and 31 December 2024 are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u> </u>****

<br> ---

| | | |
|:---|:---|:---|
| ($ thousand)  |  |  |
|  | **30 June 2025**&nbsp;&nbsp;&nbsp;&nbsp;  | **31 December 2024** |
| **Payable to:** |  |  |
| &nbsp;&nbsp;&nbsp; Ordinary capital resources | $60 | $– |
| &nbsp;&nbsp;&nbsp; JFPR (Note F) | –<br>| 266<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $60 | $266 |

---

JFPR = Japan Fund for Prosperous and Resilient Asia and the Pacific.

#### NOTE E—GRANTS AND RELATED UNDISBURSED GRANTS

Grants are recognized as expenses in the financial statements when the project becomes effective. Upon completion or cancellation of a grant, the corresponding undisbursed balance, if any, is reversed as reduction in Grants expense. During the six months ended 30 June 2025, four grants (one grant – 2024) became effective resulting in a total Grants expense of $7,500,000 ($2,603,000 – 2024). There were no undisbursed grants that were reversed as a reduction in grant expense during the period ($197,000 – 2024).

Undisbursed grants are denominated in US dollars and represent effective grants not yet disbursed and unliquidated. The undisbursed grants of $7,500,000 as of 30 June 2025 ($2,800,000 – 31 December 2024), includes $7,500,000 ($2,800,000 – 31 December 2024) of advances for grants.

#### NOTE F—CONTRIBUTIONS AND UNCOMITTED BALANCES

Contributions received for specific purpose or grant programs are classified as support with donor restrictions. In May 2020, the Government of Japan contributed $75,000,000 to the APDRF, valid for two years, earmarked for ADB's response to the coronavirus disease (COVID-19) pandemic. In July 2023, the government requested ADB to transfer the unused remaining balance of its contributions to the Japan Fund for Prosperous and Resilient Asia and the Pacific (JFPR), resulting in an initial transfer of $27,000,000 in August 2024, and a final transfer of $267,000 in June 2025 to JFPR.

Uncommitted balances comprise amounts which have not been committed by APDRF as of 30 June 2025 and 31 December 2024.

#### NOTE G—ADMINISTRATIVE AND OTHER EXPENSES

Administrative expenses include service fees to OCR, which are incurred for management and general supporting activities. Other Expenses include direct charges of consultants engaged under the second window of APDRF to provide a speedy post-disaster technical support.

------

#### 113 <br>

#### APDRF-4
continued

The following table summarizes administrative and other expenses for the six months ended 30 June 2025 and 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **2025**  | **2024**  |
| Administrative expenses |  |  |
| Service fees to OCR (Note D) | $56 | $80 |
| Other expenses |  |  |
| &nbsp;&nbsp;&nbsp; Direct charges |  |  |
| &nbsp;&nbsp;&nbsp; Consultants | 141 | 0 |
| Total | $197 | $80 |

---

0 = Less than $500.

#### NOTE H—LIQUIDITY AND AVAILABILITY OF RESOURCES

Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of APDRF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, as part of its liquidity management, APDRF invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, APDRF has liquidity of $27,331,000 ($34,483,000 – 31 December 2024) consisting of DUE FROM BANKS of $1,504,000 ($2,840,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $25,827,000 ($31,643,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure.

#### NOTE I—SUBSEQUENT EVENTS

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the APDRF's financial statements as of 30 June 2025. <br>

------

114<br>

#### FSDPSF-1

#### ASIAN DEVELOPMENT BANK—FINANCIAL SECTOR DEVELOPMENT PARTNERSHIP SPECIAL FUND

#### CONDENSED STATEMENT OF FINANCIAL POSITION

#### 30 June 2025 and 31 December 2024
Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **30 June** | **31 December** |
|  | (Unaudited) | (Audited) |
| &nbsp;&nbsp;&nbsp;&nbsp; **ASSETS** |  |  |
| DUE FROM BANKS (Note H) | $411 | $557 |
| &nbsp;&nbsp;&nbsp;&nbsp; INVESTMENTS FOR LIQUIDITY PURPOSE (Notes C and H)<br> Time deposits | 9490 | 10458 |
| ACCRUED REVENUE | 44 | 53 |
| DUE FROM CONTRIBUTORS (Note F) | 2929 |  |
| ADVANCES FOR TECHNICAL ASSISTANCE (Note E) |  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** | $**12874**  | $**11076** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; **LIABILITIES AND UNCOMMITTED BALANCES** | | | | |
| ACCOUNTS PAYABLE AND OTHER LIABILITIES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Payable to related funds (Note D) | $34 |  | $21 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued Expenses | –<br>| $34 | 20 | $41 |
| UNDISBURSED TECHNICAL ASSISTANCE (Notes E and G) |  | 8606 |  | 9830 |
| TOTAL LIABILITIES |  | 8640 |  | 9871 |
| &nbsp;&nbsp;&nbsp;&nbsp; UNCOMMITTED BALANCES (FSDPSF-2), represented by:<br> Net assets without donor restrictions |  | 4234 |  | 1205 |
| &nbsp;&nbsp;&nbsp;&nbsp; **TOTAL** |  | $**12874** |  | $**11076** |

---

The accompanying Notes are an integral part of these condensed financial statements (FSDPSF-4).

------

#### 115 <br>

#### FSDPSF-2

#### ASIAN DEVELOPMENT BANK—FINANCIAL SECTOR DEVELOPMENT PARTNERSHIP SPECIAL FUND

#### CONDENSED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS—UNAUDITED

#### For the Six Months Ended 30 June 2025 and 2024
Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS** |  |  |
| &nbsp;&nbsp;&nbsp; CONTRIBUTIONS (Note F) | 2824 | - |
| &nbsp;&nbsp;&nbsp; REVENUE |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From investments for liquidity purpose (Note C) | 223 | 303 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; From other sources | 4 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 3051 | 317 |
| &nbsp;&nbsp;&nbsp; EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Technical assistance—net (Notes E and G) | (62) | (1866) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Administrative and financial expenses (Notes D and G) | (65) | (53) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | (127) | (1919) |
| &nbsp;&nbsp;&nbsp; REVENUE IN EXCESS OF (LESS THAN) EXPENSES | 2924 | (1602) |
| &nbsp;&nbsp;&nbsp; EXCHANGE GAIN (LOSSES)—net | 105 | (38) |
| INCREASE (DECREASE) IN NET ASSETS | 3029 | (1640) |
| NET ASSETS AT BEGINNING OF PERIOD | 1205 | 4894 |
| **NET ASSETS AT END OF PERIOD** | $**4234** | $**3254** |

---

The accompanying Notes are an integral part of these condensed financial statements (FSDPSF-4).

------

116<br>

#### FSDPSF-3

**ASIAN DEVELOPMENT BANK—FINANCIAL SECTOR DEVELOPMENT PARTNERSHIP SPECIAL FUND**

**CONDENSED STATEMENT OF CASH FLOWS—UNAUDITED**

**For the Six Months Ended 30 June 2025 and 2024**

Expressed in Thousands of US Dollars

------

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Contributions received | $– | $2170 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest received on investments for liquidity purpose | 232 | 310 |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash received from other sources | 4 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp; Technical assistance disbursed | (1267) | (972) |
| &nbsp;&nbsp;&nbsp;&nbsp; Administrative and financial expenses paid | (83) | (71) |
| Net Cash (Used in) Provided by Operating Activities | (1114) | 1451 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Maturities of investments for liquidity purpose | 106364 | 184983 |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of investments for liquidity purpose | (105396) | (188293) |
| Net Cash Provided by (Used in) Investing Activities | 968 | (3310) |
| Net Decrease in Due From Banks | (146) | (1859) |
| Due from Banks at Beginning of Period | 557 | 2262 |
| Due from Banks at End of Period | $411 | $403 |

---

The accompanying Notes are an integral part of these condensed financial statements (FSDPSF-4).

------

117<br>

#### FSDPSF-4
**ASIAN DEVELOPMENT BANK—FINANCIAL SECTOR DEVELOPMENT PARTNERSHIP SPECIAL FUND**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**For the Six Months Ended 30 June 2025 and 2024**

**(Unaudited)**

**NOTE A—INTERIM FINANCIAL INFORMATION**

**** 

<br> These unaudited condensed interim financial statements should be read in conjunction with the 31 December 2024 audited financial statements, and the notes included therein. In the opinion of Management, all material adjustments necessary for a fair statement of the results of operations for the six months ended 30 June 2025 and 2024 have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

#### NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

#### <br>
*Presentation of Financial Statements*

The financial statements are presented on the basis of those for not-for-profit organizations. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) requires Management to make reasonable estimates and assumptions that affect the reported amounts of assets, liabilities and uncommitted balances as of the end of the period and the reported amounts of revenue and expenses during the period. The actual results could differ from those estimates.

The financial statements are expressed in US dollars. The US dollar is the functional and reporting currency of the Financial Sector Development Partnership Special Fund (FSDPSF), representing the currency of the primary economic operating environment.

*Fair Value of Financial Instruments*

Accounting Standards Codification (ASC) 820, "Fair Value Measurement" defines fair value (FV) as the price that would be received to sell an asset or paid to transfer a liability at measurement date in an orderly transaction among willing participants with an assumption that the transaction takes place in the entity's principal market, or in the absence of principal market, in the most advantageous market for the asset or liability. The most advantageous market is the market where the sale of the asset or transfer of liability would maximize the amount received for the asset or minimize the amount paid to transfer the liability. The FV measurement is not adjusted for transaction costs.

*Fair Value Hierarchy*

** 

<br> ASC 820 establishes a FV hierarchy that gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), next priority to observable market inputs or market corroborated data (Level 2), and the lowest priority to unobservable inputs without market corroborated data (Level 3).

The FVs of ADB's financial assets and liabilities are categorized as follows:

Level 1: FVs are based on unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2: FVs are based on quoted prices for similar assets or liabilities in active markets or markets that are not active; or valuation models for which significant inputs are obtained from market-based data that are observable.

Level 3: FVs are based on prices or valuation models for which significant inputs to the model are unobservable.

------

118<br>

#### FSDPSF-4
continued

*Accounting and Reporting Developments*

In March 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-02, "Codification Improvements – Amendments to Remove References to the Concepts Statements". This Update contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments in this Update are effective for public business entities for fiscal years beginning after 15 December 2024. For all other entities, the amendments are effective for fiscal years beginning after 15 December 2025. Early adoption is permitted for all entities. ADB does not expect the adoption of this Update to have a material impact on the financial statements.

#### NOTE C—INVESTMENTS FOR LIQUIDITY PURPOSE

All investments for liquidity purpose held as of 30 June 2025 and 31 December 2024 were in US dollar time deposits.

Interest income on time deposits is recognized as earned and reported in REVENUE From investments for liquidity purpose.

The annualized rate of return on the average investments for liquidity purpose held during the six months ended 30 June 2025, based on the portfolio held at the beginning and end of each month, was 4.5% (5.5% – 2024).

*Fair Value Disclosure*

The FV of INVESTMENTS FOR LIQUIDITY PURPOSE as of 30 June 2025 and 31 December 2024 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ($ thousand) |  |  |  |  |
|  |  | **Fair Value Measurements** | **Fair Value Measurements** | **Fair Value Measurements** |
|  | **Total** | **Level 1** | **Level 2** | **Level 3** |
| **<u>30 June 2025</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $9490 | $– | $9490 | $– |
| **<u>31 December 2024</u>**  |  |  |  |  |
| Investments for liquidity purpose |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Time deposits | $10458 | $– | $10458 | $– |

---

Time deposits are reported at cost, which approximates FV.

#### NOTE D—RELATED PARTY TRANSACTIONS

The ordinary capital resources (OCR) and Special Funds resources are at all times used, committed, and invested entirely separately from each other. The administrative and operational expenses pertaining to the FSDPSF is settled regularly with OCR and the other funds. Regional technical assistance projects and programs may be combined activities financed by Special Funds and trust funds. ADB charges a service fee to cover ADB's incremental cost for the administration, management, supervision, and operation of the FSDPSF. The service fees are set at (i) 5% of amounts disbursed for technical assistance projects; and (ii) 5% of amounts disbursed for grant components of investment projects up to $5,000,000, or 2% of amounts disbursed for grant components of investment projects above $5,000,000 with a minimum of $250,000, whichever is greater. As of 30 June 2025, all service fees pertain to the administration of TA projects. See Note G for service fees during the six months ended 30 June 2025 and 2024.

------

119<br>

#### FSDPSF-4
continued

The interfund account balances included in ACCOUNTS PAYABLE AND OTHER LIABILITIES as of 30 June 2025 and 31 December 2024 are as follows:

($ thousand)

------

---

| | | |
|:---|:---|:---|
|  | **30 June 2025**  | **31 December 2024** |
| **Payable to:** | | |
| &nbsp;&nbsp;&nbsp;&nbsp; Ordinary capital resources–net | $26 | $14 |
| &nbsp;&nbsp;&nbsp;&nbsp; Technical Assistance Special Fund–net | 8 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $34 | $21 |

---

#### NOTE E—TECHNICAL ASSISTANCE AND UNDISBURSED TECHNICAL ASSISTANCE

TA is recognized as expense in the financial statements when the project becomes effective. Upon completion or cancellation of a TA project, any undisbursed committed balance is reversed. TA expenses are also reversed accordingly. During the six months ended 30 June 2025, one TA project and two supplementary TAs (two TA projects and four supplementary TAs – 2024) became effective resulting in a total TA expense of $62,000 ($1,866,000 – 2024), net of $712,000 ($34,000 – 2024) undisbursed TA reversed as reduction in TA expenses.

Undisbursed TA are denominated in US dollars and represent effective TA projects not yet disbursed and unliquidated. The undisbursed TA of $8,606,000 as of 30 June 2025 (9,830,000 – 31 December 2024), includes nil ($8,000 – 31 December 2024) advances for TA.

#### NOTE F—CONTRIBUTIONS

In May 2025, the Government of Luxembourg committed a contribution of €2,500,000 (equivalent to $2,800,000 at the time of commitment), which was transferred to the FSDPSF in July 2025.

#### NOTE G—EXPENSES

Technical assistance–net

TA expenses are classified according to their nature using the budget allocation specified in the relevant TA agreement for the TA that became effective during the period. The details of TA expenses for the six months ended 30 June 2025 and 2024 are as follows:

($ thousand)

------

---

| | | |
|:---|:---|:---|
|  | **2025**  | **2024**  |
| Consultants | $617 | $1418 |
| Trainings and Seminars | 25 | 222 |
| Studies | 5 | 10 |
| Other expenses–net<sup>a</sup> | (585)<sup>a</sup> | 216 |
| Total | $62 | $1866 |

---

 <sup></sup> 

<sup>a</sup> Net of undisbursed TA reversed as reduction in TA expenses (See Note E).

------

120<br>

#### FSDPSF-4
continued

*Administrative expenses*

Administrative expenses include service fees to OCR, which are incurred for management and general supporting activities. The table below summarizes the administrative and financial expenses for the six months ended 30 June 2025 and 2024.

---

| | | |
|:---|:---|:---|
| ($ thousand) |  |  |
|  | **2025** | **2024** |
| Service fees to OCR (Note D) | $64 | $52 |
| Financial expenses | 0 | 1 |
| Total | $65 | $53 |

---

0 = Less than $500. Numbers may not sum precisely because of rounding.

#### NOTE H—LIQUIDITY AND AVAILABILITY OF RESOURCES

Liquidity risk refers to the risk that the fund has difficulties in meeting its short-term obligations. As part of FSDPSF's liquidity management, it has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due. In addition, FSDPSF invests cash in excess of daily requirements in short-term investments.

As of 30 June 2025, FSDPSF has liquidity of $9,901,000 ($11,015,000 – 31 December 2024) consisting of DUE FROM BANKS of $411,000 ($557,000 – 31 December 2024) and INVESTMENTS FOR LIQUIDITY PURPOSE in time deposits of $9,490,000 ($10,458,000 – 31 December 2024), available within one year of the balance sheet date to meet cash needs for general expenditure. None of the financial assets are subject to donor or other contractual restrictions that make them unavailable for general expenditure within one year of the balance sheet date.

#### NOTE I—SUBSEQUENT EVENTS

ADB has evaluated subsequent events after 30 June 2025 through 19 August 2025, the date these condensed financial statements are available for issuance. As a result of this evaluation, there are no subsequent events that require recognition or disclosure in the FSDPSF's condensed financial statements as of 30 June 2025.

------