PACRA Assigns Initial Rating to Bank Alfalah Limited – TFCs – Series A : AsiaNet-Pakistan

PACRA Assigns Initial Rating to Bank Alfalah Limited – TFCs – Series A

February 16, 2021 | | Share:

Lahore, February 16, 2021 (PPI-OT): The rating of TFCs reflect the supreme security structure of Instrument. The Instrument shall be secured through lien over GoP issued securities – PIBs (Fixed and Floating). The maturity of the securities will match / be higher than the maturity of Instrument. The securities marked under lien will be 105% of the issue, reflecting comprehensive coverage including any unforeseen fluctuation in prices. The Securities will be placed in BAFL SGL account maintained with the State Bank of Pakistan. The Bank has entity ratings of “AA+/A1+” which reflects its strong positioning in the market. With this issuance, the Bank is expected to boost the market of covered instruments.

The Bank is well positioned to benefit from the ensuing advantages. The Bank’s ratings take comfort from its diversified loan book which is maintained at a notable level; along with healthy CAR. The mix of deposits improved as the Bank added a few percentage points to the CA portion in the CASA mix. BAFL has a sound foothold with a considerable presence across the country, enabling its deposit base growth. The Bank has sustained good profit base.

Overall infection ratio remained at the lower edge. The rating draws comfort from the Bank’s stable ownership, experienced management team, prudent risk management policies and distinct emphasis on sustaining the position. Covid-19 pandemic has posed challenges to the banking sector, almost all segments of the economy, worldwide and domestically, are impacted. The ramifications would continue to unfold, warranting vigilance and timely actions where needed. The Bank has also formed a board level Corona Crisis Management Committee in order to formulate future strategies for diminishing the financial and business risks.

Maintaining Bank’s capitalization backed by strong sponsors and adding granularity to its advances and deposits book are essential. Continued effective management of spreads remains important, meanwhile, holding the asset quality is a pre-requisite.

For more information, contact:
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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