AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, September 26, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the rating of TFC-III of Standard Chartered Bank (Pakistan) Limited (SCBPL) at ‘AAA’ (Triple A) with ‘Stable’ Outlook.
The assigned rating takes into account the strong franchise established by the bank in the local market, as evidenced by a cost effective and granular deposit mix. Liquidity and capitalization indicators of the bank have remained consistently strong. Issue of additional sub-ordinated debt during the on-going year has enhanced the protection available to depositors.
During 2011, increase was witnessed in infection in the bank’s financing portfolio. In line with internal guidelines, conservative provisioning coverage has been maintained and SCBPL has availed limited benefit of forced sale value of collateral. There has been sizeable growth in the bank’s SME portfolio in 2011, with lending strategy focused on medium sized enterprises. The bank may be able to generate higher spreads from this segment.
Profitability of the bank improved in 2011. In line with the banking sector, mark-up spreads may narrow in the on-going year, as cost of deposits may witness some upward pressure in view of the increase in minimum return on savings deposits while return on mark-up bearing assets would adjust downwards in line with the revision in policy rate. Profitability of the bank is nevertheless expected to remain strong, with the impact of past credit losses absorbed to a large extent.
Operational risk infrastructure of the bank is being strengthened in line with changes at the group level. The Internal Audit processes have been re-defined during the out-going year in line with Group Internal Audit methodology. Moreover, SCBPL has increased focus on control activities and customer due diligence process.
For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk