VIS Reaffirms Corporate Governance Rating of Allied Bank Limited.

Karachi: VIS Credit Rating Company Limited (VIS) has reaffirmed the Corporate Governance Rating (CGR) of Allied Bank Limited (‘ABL’ or the ‘Bank’) at ‘CGR-9++’. The rating signifies a very high level of corporate governance. The previous rating action was announced on October 25, 2023.

According to VIS Credit Rating Company Limited, the corporate governance ratings assess various key governance areas of an institution, including its regulatory compliance, ownership structure, board composition and operations, financial transparency, and stakeholders’ relationship. ABL, incorporated in Pakistan and listed on the Pakistan Stock Exchange, is a scheduled bank engaged in commercial banking and related services. The Bank is predominantly owned by Ibrahim Holdings (Private) Limited, which holds 90% of the shareholding.

The rating reflects the Bank’s strong corporate governance framework with a well-structured Board and its Committees, promoting best governance practices. Notably, all members of the Board Audit Committee are independent directors, enhancing the degree of oversight. Overall, participation of the members in the Board proceedings is excellent, while the diverse skill set of Board members ensures comprehensive oversight. The Board promotes and adheres to best governance practices. The minutes of both Board and its committees’ meetings were observed to be well drafted and comprehensive. Agenda items and material information were timely disseminated to the Board members to facilitate effective decision-making. The rating also reflects the management’s effective and proactive approach in aligning the Bank’s strategic objectives with operational implementation. The management team at ABL comprises seasoned professionals, demonstrating stability over the review period. This is further supported by a well-structured s
uccession plan for key positions, ensuring a smooth transition of responsibilities. Limited turnover in senior management and a preference for internal promotions reflect positively on the Bank’s corporate governance framework.

ABL has put in place a comprehensive risk management framework, well aligned with the Bank’s risk acceptance criteria. This framework is overseen by management committees, which develop guidelines, procedures and systems, while the Board of Directors sets limits to prevent concentration of risk. The Bank has established effective systems for monitoring and controlling risk exposures, as well as automating a wide range of information security and enterprise risk processes as part of the business continuity plans. A robust internal audit function is in place to ensure compliance with regulatory requirements and promote transparency, with the Audit and Risk Review Group (A and RRG) operating under the Board’s Audit Committee to assess and strengthen internal controls on a continuous basis. Additionally, ABL’s IT governance framework aligns with regulatory standards and significantly enhances service delivery. In digital banking, ABL has introduced various platforms to enhance customer experience, leading to si
gnificant growth in transaction volumes. The Human Resource Group (HRG) prioritizes internal recruitment and development, achieving high retention rates while actively promoting diversity within the workforce. In line with its commitment to sustainability, ABL emphasizes Green Financing by directing financial support toward environmentally friendly projects, thereby reinforcing its role in promoting sustainable practices. The Bank’s Shariah governance framework ensures compliance with Islamic banking principles through ongoing policy development and rigorous audits, facilitating the growth of Shariah-compliant products that cater to diverse customer needs and also maintaining purity of earnings. Moreover, ABL maintains transparency by providing adequate financial and qualitative disclosures to relevant stakeholders, which further reinforces its commitment to effective governance and building stakeholder confidence.

The post VIS Reaffirms Corporate Governance Rating of Allied Bank Limited. appeared first on Pakistan Business News.