Moody's Investors Service has assigned Ba3/Not-Prime global local currency (GLC) deposit ratings, B3/Not-Prime foreign currency deposit ratings and a D- bank financial strength rating (BFSR) to Allied Bank Limited. All ratings carry a stable outlook.
The bank's D- BFSR, which translates into a baseline credit assessment (BCA) of Ba3, is supported by the bank's strong position in the domestic market; strong profitability and asset quality that is commensurate with that of higher-rated domestic peers; adequate liquidity profile despite certain systemic concerns; and improvements in the bank's governance, controls, management and business focus in recent years.
Allied Bank's GLC deposit ratings of Ba3/Not-Prime are at the same level as the bank's BCA despite Moody's assessment of a very high probability of systemic support for the bank in case of a stress situation (a result of its importance to the Pakistani financial system due to its strong market share in core deposits).
The systemic support indicator for Pakistan is at B2, which is lower than the stand-alone rating of Allied Bank, and thus does not provide any rating uplift to the bank. Moody's has also assigned B3/Not-Prime foreign currency deposit ratings to Allied Bank, which is constrained by the foreign currency deposit ceiling of B3/Not-Prime for Pakistan.-PR
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