Lahore, June 29, 2020 (PPI-OT): The rating reflects the bank’s improved performance, exceptional asset quality, satisfactory financial profile and healthy liquidity. The bank has solidified its relative positioning in the universe of large sized banks by improving its market share in terms of deposit base and advances book. The bank continued with its strategy for outreach expansion – adding significant branches every year. Cost to total income declined during the year.
The benefits are expected to unfold in coming days. The bank’s strong mark up income was further augmented by enhanced fee commission and foreign exchange income. The strength of the bank is reflected in the high proportion of retail deposits in the total. Hence, concentration is low and risk is reduced.
The Bank grew its customers deposit base higher than the sector’s growth. Trade finance is the bank’s hallmark. The rating draws comfort from the bank’s experienced management team, prudent risk management policies and deep-rooted relationship with clients – borrowers as well as depositors.
NPLs slightly inched up, however, strong coverage is a positive. The bank has issued additional Tier-I and Tier-II instruments, augmenting the bank’s CAR and providing room for growth. The bank’s CET-I improved to 9.98% as at end Dec-19 (end Dec-18: 9.04%), and Total CAR improved to 14.35% as at end Dec-19 (end Dec-18: 13.43%). Covid-19 has posed challenges to the banking sector, as almost all segments of the economy, worldwide and domestically, are getting negatively impacted. The ramifications would continue to unfold, warranting vigilance and timely actions where needed.
The rating is dependent on the bank’s sustained risk profile. In the wake of heightened competition, profitable growth is a challenge while retaining the relative positioning in the industry. The equity base of the bank and CAR are satisfactory and may continually be enhanced.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425