PACRA Reaffirms Bank of Punjab’s Ratings Amid Strategic Shifts

Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has maintained its ratings for The Bank of Punjab (BOP) Tier 2, TFC-III, issued in April 2023. The ratings, which remain at “AA” for long-term debt instruments with a stable outlook, reflect the bank’s solid standing and robust support from its parentage.

According to a statement by The Pakistan Credit Rating Agency Limited, BOP has leveraged its strong franchise to navigate challenging market conditions and secure entry into profitable market segments. As of September 2024, the bank’s deposit base increased to PKR 1,574 billion from PKR 1,521 billion in December 2023. Despite this growth, the bank’s market share of deposits remained steady at around 5%.

The bank experienced a 20% decline in gross advances during the first nine months of 2024, decreasing to PKR 682 billion and resulting in a drop in the Advances-to-Deposit Ratio to 39.9%. The bank’s infection ratio also increased to 8.24% due to a rise in non-performing loans.

BOP’s investment portfolio expanded significantly from PKR 913 billion at the end of December 2023 to PKR 1,210 billion by September 2024. With a significant portion of investments in government securities, the bank is well-positioned for improved profitability moving forward.

For the calendar year 2023, BOP reported a 15% increase in Profit Before Tax, reaching PKR 21.2 billion. This growth was driven by an increase in non-markup income, notably gains on investments and recoveries. The bank’s Profit After Tax for the first nine months of 2024 was PKR 14.1 billion, compared to PKR 8.9 billion for the same period in 2023.

The bank’s Capital Adequacy Ratio improved from 18.4% to 20.2% by September 2024, supported by the issuance of Additional Tier-1 and Tier-II bonds, as well as retained capital. The bank’s management is focusing on diversifying revenue streams with an emphasis on small and medium-sized enterprises, retail, and trade finance, while exploring opportunities for global expansion.

The post PACRA Reaffirms Bank of Punjab’s Ratings Amid Strategic Shifts appeared first on Pakistan Business News.