JCRVIS Credit Rating Company Limited upgrades Corporate Governance Rating of Allied Bank Limited to CGR-9
Karachi, October 22, 2013 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Corporate Governance Rating of Allied Bank Limited (ABL) from ‘CGR-8++’ to ‘CGR-9’, denoting ‘very high level of corporate governance’. This rating is based on the scale ranging from ‘CGR-1’ (lowest) to ‘CGR-10’ (highest).
Corporate governance ratings are based on evaluation of key governance areas of the rated institution, which include regulatory compliance; board oversight; management profile; self regulation; financial transparency and relationship with stakeholders.
The rating incorporates ABL’s commitment to adopt best practices with respect to corporate governance, as also stipulated in the revised Code of Corporate Governance (CCG) introduced by the Securities and Exchange Commission of Pakistan.
ABL has achieved compliance with most of required changes stipulated in the new CCG, baring few provisions in respect of which compliance is proposed to be achieved within the regulatory stipulated timeframe.
The composition and size of board remained unchanged vis-à-vis prior year except for the change at the position of CEO. Stability is evident in senior management team of the bank. Senior executives are consistently rotated to provide cross functional exposure which has facilitated succession planning for key positions. In 2012, overall organogram of the bank has been restructured; the objective of the exercise was to create symmetry and uniformity in functional designations across all groups. Number of management committees has been rationalized.
Implementation of core banking software, Temenos (T-24), in branches continued at accelerated pace and surpassed the target set for year-end 2012. By end-Sep’13, the bank had migrated 732 branches to T-24; the system is expected to be deployed across the network by end Mar’14. In order to enhance internal control mechanism and detect suspicious transactions, automation of Know Your Customer (KYC) and Anti-Money Laundering (AML) has been accomplished through implementation of software.
The process of internal audit has evolved overtime while reporting process has been automated. All exceptions pertaining to branch audit have been coded and standardized in the shape of checklist.
The credit approval process in the bank is also automated by way of a loan origination system. Furthermore, the bank plans to initiate parallel run for the reporting of operational risk capital charge. In this regard, timely implementation of Enterprise Risk Management Solution is considered important.
Overall financial position of the bank has strengthened on a timeline basis and is considered sound. Financial statements of the bank provide comprehensive financial and corporate governance related disclosures.
For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
Tel: at 021-35311861-70
Fax: +9221 35311872-3
Category: General Business News