PACRA Maintains the Entity Ratings of Bank of Khyber.

The ratings reflect the Bank’s enhanced stability, underpinned by an improved business profile and a largely sustained share of customer deposits. They also take into account the Bank’s ownership structure and the ongoing support from its strong sponsors. Additionally, the Government of Khyber Pakhtunkhwa (KPK), which remains committed to retaining its controlling stake, is fully aware of and supportive of the Bank’s growth strategy. The Bank has delivered healthy financial performance. The Bank is taking steps towards enhancing its management quality and for this, it went through the structural changes during CY24. The Bank is also placing a strong focus on expanding its home remittance business by diversifying its product offerings and leveraging its digital banking platform to enhance service delivery. It recently launched its home remittances service brand by the name of “BOK KorPay” in Feb'25. The Bank posted a strong 45% growth in advances, amounting to PKR 160bln in CY24 (CY23: PKR 110bln), majorly in the textile and petrochemical sectors, while non-performing advances remained stable at PKR 13.3bln (CY23: 13.2bln). This led to a significant decline in the infection ratio to 8.2% (CY23: 12.1%). The Bank’s investment portfolio exhibited a robust YoY escalation surging to PKR 283bln (CY23: PKR 223.3bln). This significant uptick reflects a deliberate strategy, with a greater allocation towards government securities. The Bank’s deposit base recorded a decrease to stand at PKR 278bln (CY23: PKR 289bln) primarily driven by a reduction in term deposits. During CY24, net markup income surged to PKR 16.5bln (CY23: PKR 13.9bln), due to enhanced revenue generation from interest-earning assets. The non-markup income decreased by 15.6% on a YoY basis to stand at PKR 1.8bln (CY23: PKR 2.1bln). This contraction was primarily driven by a sharp reduction in foreign exchange income, which fell to PKR 0.5bln (CY23: PKR 1.5bln). Despite the pressure on non-markup income, the Bank’s net profitability remains largely intact at PKR 3.6bln (CY23: PKR 3.5bln). At the end of CY24, the Bank’s equity base was recorded at PKR 21.9bln (CY23: PKR 20.3bln) with capital adequacy ratio stands at 17.81%. It signifies a marked fortification of the Bank's capital structure and financial stability, reflecting enhanced resilience and a more robust capacity to absorb potential losses.
Looking ahead, the Bank’s strategic focus will continue to center on enhancing service quality and delivering cutting-edge banking solutions by harnessing technology and skilled human capital. It aims to diversify its financing portfolio by prioritizing fresh lending to the private sector, to unlock ancillary business and trade finance prospects. Other target areas will include branch expansion in high demand areas, consumer financing, agriculture, and SMEs to foster development and generate economic activity. In alignment with SBP vision, the Bank is set to commence its transition from conventional to Islamic banking. This conversion will be carried out in a phased and structured manner, aimed at ensuring a smooth, comprehensive integration of Shariah-compliant principles throughout the Bank’s operations.
The rating reflects the Bank's ability to hold its risk profile while maintaining its relative market position.

About the Entity
Bank of Khyber (BoK) was established in 1991 under the BoK Act and was awarded the status of a scheduled bank in September 1994. The Government of Khyber Pakhtunkhwa (KPK) has a majority stake in BoK (70.2%), whereas, Ismail Industries' stake is 24.4% in BoK. Mr. Ikramullah Khan was appointed as Secretary Finance on August 27, 2024. He has been appointed as Chairperson on the Board of BoK on September 14, 2024 by virtue of his position as Additional Chief Secretary, Government of Khyber Pakhtunkhwa. Mr. Hassan Raza was appointed as CEO of Bank on November 11, 2024. He is a seasoned banker with over thirty years of banking experience. He has remained on key positions at various esteemed national and multinational banks. He is supported by a team of highly qualified and seasoned professionals.