PACRA Assigns Initial Rating to Soneri Bank Limited : AsiaNet-Pakistan

PACRA Assigns Initial Rating to Soneri Bank Limited

September 26, 2018 | General Business News | Share:

Lahore, September 26, 2018 (PPI-OT): The ratings reflect Soneri Bank’s sustained business profile; system share slightly improved YoY. The bank expanded its deposit base in line with the industry growth, while maintaining the contribution of low cost deposits. The bank witnessed a rise in ADR subsequent to fresh deployment in advances. The cost structure (cost to total net revenue) has increased. The marginal increase in net interest revenue translated into slight improvement in profitability (YoY).

Going forward, the bank, while focusing on improving asset quality, intends to follow a prudent strategy in terms of advances growth. Continued enhancement in non-fund based exposure, delivering higher fee income, focusing on low cost deposit mobilization and to capitalize on various business opportunities including those which are a part of CPEC. At the same time, the strategy would be to mobilize low cost deposits with an increase in branch network. The bank’s CAR reduced with decline in Tier-I YoY (end-Jun18: 9.7%, end-Dec17: 9.9%) owing to increase in risk weighted assets. The bank is in the process of issuing Tier-1 TFC (PKR 4,000mln), expected to boost its total eligible capital.

The rating is a function of bank’s ability to maintain its market position in the banking industry while strengthening its overall risk profile. Bringing efficiency in overall operational structure is important for long term growth. In the comparative landscape, adding granularity to deposits and advances is critical. Meanwhile, a sustainable increase in system share and consequent profitability would be ratings positive.

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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Category: General Business News