Lahore, June 25, 2018 (PPI-OT): The ratings reflect improving relative position of JS Bank in the country’s competitive banking landscape. This stems from enhanced system share in deposit and advances. The bank added a sizable amount of ~PKR 63bln to its customer deposit base YOY basis at Dec-17. The bank’s borrowings from financial institutions increased, alongside rise in SBP refinance. The increased liquidity has been deployed in advances (96% rise on YOY basis). The growth is substantial and needs continuous vigilance. The comforting factor is sizeable uptick in total investment book, of which government PIBs are dominant.
The current NPLs absolute amount is low. The strategy of the bank is i) to foster penetration of existing network beyond 323 branches over the near-term; ii) spread advances book through different products over multiple sectors; The Bank has designed a broad spectrum of new products. iii) build non-fund based income; and iv) hold strength in treasury operations. The challenge to profitability is dried return of capital gains. The bank expects the profits to be boosted from growing direct and ancillary business. JS Bank has adequate capital level (CAR at end-Mar18: ~11.4% primarily tier I).
Ratings are dependent on JS Bank’s ability to maintain its growth continuously to establish itself in the medium-sized banking space of Pakistan. Meanwhile, upholding asset quality, maintaining system share in terms of advances and deposits, adding diversity to income stream, sound CAR and strong governance framework are critical.
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
Category: General Business News