The Pakistan Credit Rating Agency (Pacra) has made downward adjustment to the long-term entity rating of Askari Bank Limited to 'AA' (Double A) while maintaining the short-term rating at 'A 1+' (A One Plus).
The first and the second unsecured, subordinated TFC issues of Rs 1,500 million have been assigned ratings of 'AA-' (Double A Minus). The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The slippage in the Bank's relative standing compared to some peer banks, which have demonstrated superior performance--both in terms of profitability and asset quality--was the main reason prompting one notch adjustment in the long-term rating. Otherwise, the bank maintains a strong capital structure supported by sound profitability, though lately under pressure mainly due to higher provisioning against NPLs.
Moreover, the management, taking note of the fast changing banking dynamics, has put in place a well conceived strategy, which, while improving the bank's performance and strengthening its risk management framework, is expected to help it in ensuring its strong standing within the sector. -PR
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