Samba Bank Limited Strengthens Position Despite Profit Dip, Maintains Credit Rating

Karachi: The Pakistan Credit Rating Agency (PACRA) has upheld the debt instrument rating of Samba Bank Limited, supported by its parent company, Saudi National Bank, the largest commercial bank in Saudi Arabia. Despite a decline in profit after tax and net interest income, the bank has demonstrated resilience through strategic expansion and digital advancements.

During the review period, Samba Bank bolstered its investment portfolio by Rs. 29.9 billion, although this was partly counterbalanced by a reduction of Rs. 17.4 billion in loans and advances. The bank’s funding strategy saw an increase in interbank borrowings by Rs. 11.5 billion, while customer deposits fell by 6.6%, amounting to a Rs. 7.6 billion decrease.

Net interest income decreased by 9.6%, down to Rs. 7.3 billion, primarily due to a decline in policy rates. Consequently, profit after tax dropped to Rs. 699 million from Rs. 1.2 billion the previous year, attributed to compressed net interest margins and increased operating expenses linked to branch network expansion and technology upgrades.

Samba Bank’s Capital Adequacy Ratio improved to 23.8% from 21.3% the previous year, reflecting enhanced risk absorption capacity. The bank’s strategic growth included the addition of 10 new branches, increasing the total to 57, with plans for 20 more in the upcoming year to enhance market reach. Digitally, the bank launched a strengthened mobile and internet banking platform.

In line with its Islamic Vision 2027, Samba Bank’s board has approved a strategic plan to transition to a full-fledged Islamic bank, aligning operations with Shariah principles to meet changing customer preferences. The rating reflects the bank’s focus on maintaining asset quality, expanding deposit market share, diversifying income streams, and ensuring strong governance.