PACRA upgrades entity rating of BoK to "A-"

The Pakistan Credit Rating Agency (PACRA) has upgraded long-term entity rating of Bank of Khyber (BoK) to "A-" (Single A minus) [previous: BBB+(Triple B Plus)], while maintaining short-term entity rating at "A2" (A two). The ratings denote low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.
The ratings reflect Bank of Khyber's strong association with the Government of Khyber Paktunkhwa (GoKP), a major shareholder in the bank. GoKP has demonstrated its support by agreeing to inject fresh capital to the tune of PKR 3 billion in the bank. The flow of funds is expected soon, which, while ensuring compliance with regulatory requirements, will have a positive impact on the risk absorption capacity of the bank.
Meanwhile, expanding outreach of the bank is expected to aid envisaged growth. Nonetheless, the bank's limited institutional profile in terms of small size, lack of brand equity, and constrained operating environment would remain key challenges.
The ratings would remain dependent on efficient utilisation of new funds in strengthening the bank's earning and risk profile. Meanwhile, the management's ability to effectively implement its overall business strategy and strengthening of systems and procedures would remain critical.-PR