The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

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PACRA Maintains Entity Ratings of Standard Chartered Bank (Pakistan) Limited

Rating Type Entity
(20-Jun-18 )
(29-Dec-17 )
Action Maintain Maintain
Long Term AAA AAA
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

The ratings reflect SCBPL's association with a financially sound and reputed international bank - Standard Chartered PLC. This is supplemented by SCBPL's strategic and operational integration into the parent as the bank continues to benefit from the technical resources and cumulative expertise developed at the group level. The risk profile of the parent institution has improved since last two years, as the quantum of impairment has subsided and has registered growth in profitability in 2017. Further improvement is essential. The ratings incorporate the bank's dominant position in its target niche market (MNCs, established domestic Corporates & affluent retail clients) through a comprehensive product suite and significant digital capabilities complemented by its international franchise and its extensive presence in tier-I cities. The bank is increasing its focus on deployment of advances leading to boost profitability, which has seen dilution. The ratings factor in sound management quality, healthy spreads, efficient operating structure and ample liquidity of the bank. SCBPL's pre-dominantly low cost deposit base enabled the bank to achieve one of the best CASA mix in the industry, while distinguishing it in its peer universe it also facilitates core operating activities. The bank is focused towards enhancing yield, cost efficiency, increasing client revenue and growing retail asset base.

The ratings remain dependent on the bank's ability to maintain its presence in profitable segments, while remaining abreast of changing domestic operating environment. Meanwhile, maintaining spreads whilst not compromising on the asset quality is important for the bank.

About the Entity
SCBPL, incorporated in Pakistan in Jul 2006, is ultimately owned (99%) by Standard Chartered PLC and operates with a network of 93 branches across 11 cities at end-Mar18. In the recent years, Bank has extensively focused on digitizing its services while rationalizing its branch network for operating efficiencies. The Bank intends to continue becoming more digital to further improve efficiencies. Standard Chartered PLC is rated (S&P: BBB+, Moody's: A2 and Fitch: A+) at end-Mar18.

SCBPL's seven-member BoD comprises qualified and experienced professionals. The board has four members of the Standard Chartered (SC) Group, including SCBPL's CEO. The remaining members of the board are independent directors. Mr. Shazad Dada, the CEO of the bank, is a seasoned Banker, he is assisted by an experienced team.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.