JCR-VIS Credit Rating Company Limited has reaffirmed credit ratings of Zarai Taraqiati Bank Limited (ZTBL) at 'AAA/A-1+' (Triple A / A-One plus) with 'Stable' outlook.
The credit lines obtained from the State Bank of Pakistan, that form the pre-dominant source of ZTBL's funding are guaranteed by the Federal Government and the safety of deposits by the GoP under the Banks' (Nationalisation) Act 1974. JCR-VIS has also reaffirmed the standalone ratings of 'BB+/A-3' (Double B Plus / A-Three) assigned to ZTBL, with a 'Stable' outlook.
As part of the Asian Development Bank (ADB) sponsored restructuring plan initiated during FY01, the process of induction of the Senior Management Team (SMT) of ZTBL was completed earlier during the current year and it has been assigned the task of implementing the restructuring plan, encompassing all facets of the institution. Efforts have been directed towards improving the control environment and policies & procedures for all operational areas are being re-designed to alleviate a number of concerns stemming from weak corporate governance. Emphasis is also being laid on upgradation of human resource and information management system available to the bank.
ZTBL continues to carry a substantial amount of classified assets on its books, though net infection is somewhat improved on account of provisions kept aside. Provisions have been kept over and above the prudential requirement to provide against accounts identified in the portfolio audit carried out under the ADB's RFSDP.
Recoveries against these will be monitored on an on-going basis. Further, the continued implementation of organisational initiatives taken will be a key factor in achieving a turnaround in the institution.
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