Bank AL Habib Limited Maintains AA+ Rating Amid Competitive Landscape

Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has confirmed that it is maintaining the AA+ long-term rating for Bank AL Habib Limited’s Tier-I TFC VI, with a stable outlook. The decision reflects the bank’s consistent efforts to strengthen its market position despite growing competition.

According to The Pakistan Credit Rating Agency Limited, Bank AL Habib Limited has demonstrated substantial growth in its financial metrics. As of the first nine months of the calendar year 2024, the bank’s deposit base increased by 15%, reaching PKR 2,222 billion, up from PKR 1,934 billion in 2023. The bank experienced a significant 17% rise in customer deposits, contributing to an improved CASA ratio of approximately 75% by the end of September 2024. However, the bank’s gross advances saw a slight decrease to PKR 814 billion from PKR 896 billion in the previous year, resulting in an advance share of 7.0%.

The report also noted a 38% increase in non-performing loans, totaling PKR 35 billion, and a corresponding infection ratio increase to 4.29% by September 2024. In terms of investments, the bank reported an increase to PKR 1.81 trillion, although the advances-to-deposits ratio declined to approximately 37%. Profit after tax for the bank reached PKR 33 billion, supported by a rise in net interest margin revenue and a 33% increase in other income sources.

The bank’s capital adequacy ratio improved to 19.63%, indicating enhanced profitability and providing a cushion for future growth. PACRA emphasized that the bank’s sustained risk profile and satisfactory equity base are crucial in navigating the challenges of profitable growth and maintaining its competitive standing in the industry.

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