Pakistan Credit Rating Agency Maintains Ratings Of Askari Bank Limited

Lahore, June 14, 2012 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Askari Bank Limited (AKBL) at “AA” (Double A) and “A1+” (A One plus), respectively. The ratings of the four unsecured and subordinated TFCs issues (PKR 1,500mln, PKR 1,500mln, PKR 3,000mln, PKR 1,000mln) have also been maintained at “AA-” (Double A minus). The ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments.

The ratings reflect AKBL’s strong market position mainly emanating from established franchise supported by its brand “Askari” and association with Pakistan Army. The bank, while benefiting from its recovery efforts, managed to limit any significant fresh infection in its loan book.

The core performance of the bank remained stable. At the same time, low provisioning requirement resulted in significant improvement in the reported bottom line. While the bank maintains adequate capitalization, financial profile draws significant comfort from strong liquidity profile. The ratings recognize the bank’s established organizational structure, experienced management, and improving control environment.

As the management intends to expand its loan book, though gradually, its ability to improve overall risk framework would remain important. Meanwhile, success in recoveries of non-performing assets is important to avoid any potential drag of un-provided loans on the performance of the bank. At the same time, implementation of technological infrastructure as envisaged would be required to achieve overall operational efficiencies.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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