PACRA Maintains Entity Ratings of Askari Bank Limited : AsiaNet-Pakistan

PACRA Maintains Entity Ratings of Askari Bank Limited

December 30, 2019 | General Business News | Share:

Lahore, December 30, 2019 (PPI-OT): Askari Bank has shown stable growth rate over the years. This has ensured its relative profitability to remain intact. The bank has a strong brand image, aided by its affiliation with one of the strongest conglomerate, Fauji Foundation Group. The ownership structure has proven itself a strong support, as reflected by Askari Bank’s history. The Bank has continued the growth trajectory during 9MCY19.

The net spread has inched up on the back of significant improvement in asset yield amidst higher cost of funds leading to enhanced profitability for 9MCY19. Volumetric increase in earning assets, led by loan portfolio augmentation, provided support to profitability; but was impacted due to higher provisioning expense on mark-to market loss of investment. The bank recorded reversal in specific charge NPL provisioning during CY18 and 9MCY19 which supported bottom-line.

The Bank’s CAR is 12.73% at end-Sep19. The Tier 1 capital increased from 10.92% in 2018 to 11.25% in 9MCY19 while the overall CAR improved by 22 basis points. The Bank is issuing tier II TFC of PKR 7bln inclusive of PKR 2bln green shoe option which will enhance its capital base, thereby boosting its lending capacity. Additionally, the Bank will comfortably comply with statutory requirement of 12.5% CAR as at end-Dec19. The deposit growth was sizeable, enabling the bank to hold its relative position. The ratings are dependent upon sustainability of the bank’s relative positioning and continuous improvement in capital adequacy, whereas, effective management of spreads remains important. Meanwhile, holding the asset quality is a pre-requisite.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com

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Category: General Business News