PACRA Maintains Entity Ratings of Allied Bank Limited

The assigned ratings reflect Allied Bank Limited’s (“ABL” or the “Bank”) position as one of the country’s leading commercial banks, supported by a robust technology infrastructure that provides a key competitive edge. This strong foundation enables agile, data-driven decision-making and facilitates the delivery of high-quality services across both conventional and digital banking platforms. ABL’s core strengths are evident in its primary business areas: lending, mobilizing low- and no-cost deposits, prudent investment management, and transactional banking. The Bank maintains a highly cautious and disciplined approach to risk, ensuring sound asset quality and long-term stability. During CY24, the Bank expanded its branch network to 1,510 branches, up from 1,483 in CY23. The continued expansion of ABL’s branch network strengthens its market reach and customer accessibility. This growth supports deposit mobilization and reinforces the Bank’s competitive positioning. ABL continues to enhance its digital offerings, with the "myABL" platform surpassing 2 million registrations — a 28% YoY growth. New features such as Virtual Debit Cards and RAAST P2M QR payments have enriched the user experience, while a redesigned interface has improved accessibility and security through biometric verification and device binding. Additionally, "myABL" WhatsApp Banking, now serving over 1.6 million users, offers an upgraded, user-friendly interface for convenient account inquiries and transactions on customers' preferred messaging platform. The Bank’s leadership in digital innovation was recognized with Pakistan’s "Best Digital Bank 2024" award at the Euromoney Awards for Excellence, and the "Most Innovative Use of Technology award at Finance Asia 2024" underscoring its ongoing commitment to excellence in technology and innovation. The Bank’s deposit base grew by 20% in CY24, surpassing PKR 2 trillion, up from PKR 1.6 trillion in CY23. The focus on low- and no-cost deposits resulted in a slight improvement in the CASA ratio to 86% (CY23: 85%). Supported by a high-quality advances portfolio and prudent risk management, the Bank maintained one of the lowest infection ratios in the industry at 1.2% in CY24. The investment portfolio saw a marginal 2% decline to PKR 1,129 billion, primarily due to a reduction in federal government securities (CY23: PKR 1,150 billion). Net profitability rose by 6% to approximately PKR 43 billion in CY24 (CY23: PKR 40.6 billion). The Bank’s total equity increased by 21% to PKR 233.9 billion (CY23: PKR 194.2 billion), further supported by a robust Capital Adequacy Ratio (CAR) of 26.7%, a focus on enhancing environmental safety, Green Banking has remained a core component of the Bank’s long-term strategy, channelling its financing toward eco-friendly projects and activities across the country. ABL maintains strong relationships with top-tier corporate clients and remains committed to deepening its engagement with this segment. While the Bank’s presence in the trade finance segment remains relatively modest, management is cognizant of the opportunity and plans to expand the dollar-based export side of the business. Strengthening trade-related services forms part of ABL’s broader strategic vision, which continues to place digital transformation at its core.
The management’s ongoing concerted efforts towards enhancing diversification in its revenue stream, achieving reduction in overall concentration, higher penetration in retail deposits and continuous improvement in cost structure remain important.

About the Entity
Ibrahim Group (IG), through Ibrahim Holdings Pvt. Limited, owns 90% of shareholding in ABL. Apart from its interest in the financial sector, IG is also engaged in the manufacturing of polyester and yarn. ABL spread over a network of 1,510 branches, has enabled sustainable footprints in the country’s deposit base. ABL is a large sized Bank with a system share of 6.6% as of end-Dec24 in the total deposits of the industry. The eight-member BoD includes the CEO, three sponsors/non-executive directors, three independent directors, and one non-executive director. Mr. Aizid Razzaq Gill has been designated as the CEO since Jan-21.