PACRA Assigns Initial Rating to Bank AL Habib Limited – Tier-II TFC (TFC-VII)

Lahore, June 28, 2019 (PPI-OT): The rating reflects the bank’s sustained performance, exceptional asset quality, satisfactory financial profile and healthy liquidity. The bank has solidified its relative positioning in the universe of large sized banks by improving its market share in terms of deposit base and advances book. The bank continued with its strategy for outreach expansion – adding significant branches every year – resulting in marginal uptick in cost-to-total net revenue. The benefits are expected to unfold in coming days. The strength of the bank is reflected in the high proportion of retail deposits in the total.

Hence, concentration is low and risk is reduced. The bank has gradually gained higher market share in deposits. Trade finance is the bank’s hallmark. The rating draws comfort from the bank’s experienced management team, prudent risk management policies and deep rooted relationship with clients – borrowers as well as depositors. The bank has issued additional Tier-I and Tier-II instruments, augmenting the bank’s CAR and providing room for growth. The bank’s CET-I stands at 9.01% as at end-Mar19 (Dec18: 9.04%).

The rating is dependent on the bank’s sustained risk profile. In the wake of heightened competition, profitable growth is a challenge while retaining the relative positioning in the industry. The equity base of the bank and CAR are satisfactory and may continually be enhanced in view of the expected growth in loans.

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