PACRA Maintains the Rating of Bank AL Habib Limited | Tier-II | TFC X | PKR 7bln | Dec'22

The ratings of Bank AL Habib Limited (BAHL) reflect the Bank’s continued emphasis on sustaining and reinforcing its relative positioning in an increasingly competitive banking landscape. Under strong and consistent leadership, the Bank is executing targeted strategic initiatives to maintain its competitiveness and expand its market presence. BAHL has built a long-standing track record of steady growth, anchored in sound governance, prudent risk management, and a strong customer-centric approach. A distinctive feature of the Bank’s strategy is its unwavering focus on nurturing customer relationships—this remains a key driver of both loyalty and growth. Core strengths in trade finance and foreign remittances continue to contribute meaningfully to revenue diversification and industry positioning. In CY24, foreign trade volumes remained on the higher side, while the Bank’s renewed focus on remittances has borne fruit, improved its market share, and allowed it to maintain a net positive contribution in forex terms. In 9MCY25, the Bank’s deposit base grew to PKR 2.5 trillion (CY’24: PKR 2.2 trillion), pushing its market share to 7.00%, with a CASA ratio of 90.2%. Advances stand at PKR 906.6 billion. However, after a period of stability, non-performing loans remain intact, primarily tied to a few large, concentrated exposures. These are adequately provided for, and management remains optimistic about recoveries. Profit after tax stands at PKR 25.3 billion (CY24': PKR 33.1 billion). BAHL is also expanding its acquisition business and deepening its reach across the broader financial services spectrum to meet evolving customer expectations. Looking ahead, while sector-wide margin compression is likely amid monetary easing, BAHL’s strategic clarity, experienced leadership, and deep-rooted customer relationships position it well to sustain growth and maintain its standing as a stable and trusted institution in Pakistan’s banking sector.
The ratings are dependent on the sustained market positioning of the Bank in all areas of its business leadership, while preserving the asset quality. A strong capital adequacy remains essential.

About the Entity
BAHL, incorporated in Oct 1991, operates with a network of 1,295 branches, including 350 Islamic Banking branches at end-Sep'25. 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 nine-member BoD includes representatives of the Habib Family and independent members. Mr. Mansoor Ali Khan, the Bank’s CEO, has been associated with the Bank for almost three decades. He is supported by a team of experienced professionals, most of whom have a long association with the Bank.

About the Instrument
The Bank issued unsecured, rated, listed and subordinated, up to ten years tenured TFCs with an issue size of PKR 7bln. The instrument bears a call option, exercisable (either partially or in full) on or after five years of the issue date. Neither profit nor principal will be payable if such payment results in a shortfall in the Bank’s Minimum Capital Requirement (MCR) or Capital Adequacy Ratio (CAR) or Leverage Ratio (LR). The Issue contributes toward the Bank’s Tier II Capital for CAR requirements and bears a floating rate of 6MK+1.35% p.a. The instrument redeems 0.02% of the issue amount semi-annually during first 9 years and the remaining amount in two equal semi-annual installments in the 10th year. The instrument is subordinated as to payment of principal and profit to all other indebtedness of the Bank but superior to outstanding Additional Tier 1 issues and ordinary shares.