PACRA MAINTAINS THE RATINGS OF

THE BANK OF PUNJAB

 

Lahore: July 11, 2002

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating of 'A' (single A) and short-term rating of 'A1' (A one) for The Bank of Punjab. These ratings denote low expectation of credit risk emanating from strong capacity for timely payment of financial commitments. The ratings are applicable to the senior unsecured creditors (depositors) of the bank.

While assigning the ratings, PACRA has taken cognizance of the virtually unchanged risk absorption capacity. The ratings also recognize the increased risk of potential loss, emanating from a higher proportion of non-performing loans, though mitigated by the continuing reasonably successful efforts for recovery and settlement of the NPLs. At the same time, the ratings also take into account the improvement in RoE even though this is attributable entirely to the reduction in levels of provisioning for NPLs and tax rates. While the credit deposit ratio of the Bank is indicative of its relatively low risk appetite this is in fact, an outcome of human resource and technological constraints. The management is embarked on a strategy of removing these constraints through a well-conceived plan, the implementation of which is expected to position the Bank for pursuing growth more aggressively but prudently.