The Pakistan Credit Rating Agency (PACRA) has maintained long-term and short-term entity ratings of Bank AL Habib Limited (BAHL) at "AA+" (Double A Plus) and "A1+" (A One Plus), respectively. The rating of one privately placed, unsecured subordinated TFC issue of Rs 3,000 million has been maintained at "AA" (Double A). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings reflect BAHL's strong performance, exceptional asset quality, and healthy financial profile, emanating from a strong equity base. The bank's business strategy derives strength from its strong positioning in niche market - trade finance. The ratings draw comfort from the bank's experienced management team, prudent risk management policies, and deep rooted relationship with its clients - borrowers as well as depositors. The ratings incorporate the bank's ability to capitalise on its branch network, expansion of deposit base via product innovation, and diversification of advances portfolio by establishing relations with business entities in various sectors. Notably, the bank's deposits emanate from a wide client base, with a major proportion from individuals.
Pakistan's banking landscape - particularly for established banks like BAHL - is experiencing high competition and requires dynamism to retain the existing market position. BAHL's ratings remain dependent on the bank's ability to achieve a sustainable market share of above 5% in both core deposits and advances; BAHL is already on this curve. Meanwhile, a meaningful representation in the bigger financial services spectrum, along with effective execution of the management's initiative to strengthen its operational infrastructure and efficient management of its growing size is important.-PR