Analyst
Sehar Fatima
sehar.fatima@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Entity Ratings of Bank AL Habib Limited
Rating Type | Entity | |
Current (28-Jun-19 ) |
Previous (31-Dec-18 ) |
|
Action | Maintain | Maintain |
Long Term | AA+ | AA+ |
Short Term | A1+ | A1+ |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating reflects the bank's sustained performance, exceptional asset quality, satisfactory financial profile and healthy liquidity. The bank has solidified its relative positioning in the universe of large sized banks by improving its market share in terms of deposit base and advances book. The bank continued with its strategy for outreach expansion - adding significant branches every year – resulting in marginal uptick in cost-to-total net revenue. The benefits are expected to unfold in coming days. The strength of the bank is reflected in the high proportion of retail deposits in the total. Hence, concentration is low and risk is reduced. The bank has gradually gained higher market share in deposits. Trade finance is the bank's hallmark. The rating draws comfort from the bank's experienced management team, prudent risk management policies and deep rooted relationship with clients - borrowers as well as depositors. The bank has issued additional Tier-I and Tier-II instruments, augmenting the bank's CAR and providing room for growth. The bank's CET-I stands at 9.01% as at end-Mar19 (Dec18: 9.04%).
The rating is dependent on the bank's sustained risk profile. In the wake of heightened competition, profitable growth is a challenge while retaining the relative positioning in the industry. The equity base of the bank and CAR are satisfactory and may continually be enhanced in view of the expected growth in loans.
About
the Entity
BAHL, incorporated in Oct 1991, operates with a network of 726 branches /sub-branches, including 71 Islamic banking branches at end-Mar19. BAHL has secured 6% share in banking industry's customer deposits. The sponsors of BAHL are members of the Habib family - one of the oldest and most distinguished names in Pakistan's banking sector.
BAHL's ten-member BoD includes representatives of Habib family and independent members. Mr Mansoor Ali Khan, the bank's CEO, has been associated with the bank for almost 25 years. He is backed by a team of experienced professionals, most of whom have long association with the bank.