Lahore, June 25, 2018 (PPI-OT): The ratings reflect BOK’s sustained risk profile of the bank. Spreads remained low; showed a downward trend. NPLs has seen slight decreasing trend which improved asset quality. The bank has dependence on large ticket deposits from Government of Khyber Pakhtunkhwa (GoKP) and its related agencies. However, stability is observed in such deposits over time showing a 62% of the public deposits. The bank is expanding its branch network with high focus on KPK and Punjab; However, slightly establishing footprints in other cities especially Lahore and Karachi to compete with established banks.
The management plans to increase advances book with higher focus preferably on infrastructure. With desired credit growth, nurturing strength of management team is essential. The ratings incorporate association of the bank with the Government of Khyber Pakhtunkhwa (GoKP). The bank raised a sizeable liquidity from repo transactions. This was deployed in lending – generating a spread. Going forward, the bank will do well to enhance the bank’s deposit base, eliminating the mismatch and creating room.
The ratings are dependent on bank’s ability to hold its risk profile, while maintaining its relative market position. Improvement in the technology platform is critical to foster the control environment including reporting framework. Meanwhile, any significant infection in asset quality, thereby weakening the bank’s risk absorption capacity, and/or any intervention compromising the governance standards would impact negatively.
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