PACRA Maintains the Rating of Soneri Bank Limited | Tier 2 Capital TFC | PKR 4bln | Dec'22

The ratings reflect the astute leadership of Soneri Bank ("SNBL" or the "Bank"), which has played a pivotal role in building and sustaining a strong business profile over the years. The Bank has achieved sizeable growth in its low-cost deposit base and continues to work on optimizing deposit composition and enhancing cost efficiency. In addition, it is experiencing notable growth in trade business volumes and is actively expanding its footprint through a growing branch network. The Bank is also taking strategic initiatives to strengthen its digital presence, aiming to improve customer experience and operational efficiency while staying aligned with evolving industry trends. The Bank expanded its branch network significantly during 9MCY25, adding 74 new branches to reach a total of 618 (up from 544 in CY24). This milestone of 600+ branches reflects the Bank’s strategic growth and strong focus on customer satisfaction. During 9MCY25, the CASA was inclined to 84% (CY24: 82%). With a greater contribution of 51% (CY24: 52%) from the SA, while the CA share increased to 33% (CY24: 30%). The Bank’s advances declined by 19.7%, decreasing the Net Advances to Deposit Ratio (ADR) to 30.9% (CY24: 44.5%). Asset quality remained moderate, with the NPL coverage ratio standing at 84.5% (CY24: 90%) and the infection ratio slightly increasing to 4.3% (CY24: 3.2%). As of 9MCY25, net-markup income rose by 11.5% YoY to stand at PKR 20.9bln (9MCY24: PKR 18.8bln), while non-markup income increased by 24.7% to stand at PKR 6.5bln (9MCY24: PKR 5.2bln), mainly due to higher fee and commission income (9MCY25: PKR 3.6bln; 9MCY24: PKR 3.2bln), with 36.6% from trade-related services. However, net profit declined by 30.7% to PKR 3.3bln (9MCY24: PKR 4.8bln), mainly due to a 22.8% rise in non-markup expenses to PKR 17.8bln (9MCY24: PKR 14.5bln), driven by nationwide branch expansion. The equity base grew to PKR 33.2bln (CY24: PKR 30.8bln), while the Capital Adequacy Ratio (CAR) stood at 16.3% (CY24: 17.7%). The Bank plans to enhance its deposit base and customer relationships through digital innovation and customized solutions. Continued growth in core and trade-related income, along with a focus on non-fund-based exposures and operational efficiency, will drive long-term sustainability.
The sustained growth in the deposit share, while keeping the low cost deposit base and improvement in the risk absorption capacity would be important.

About the Entity
SNBL was established in 1991. The Bank’s primary sponsors are the Feerasta Family, who collectively own a majority share in SNBL. The overall control of the Bank vests with an eight-member Board. Mr. Amin A. Feerasta acts as Chairperson of the Board.

About the Instrument
SNBL issued unsecured, DSLR listed, subordinated and rated TFCs ("TFCs" or the "Instrument") in Dec-22 of PKR 4bln to contribute towards Bank's Tier II Capital. The funds raised were utilized in the Bank's normal business operations. The TFCs carry a profit rate of 6MK + 1.70%, paid semiannually in arrears, with a 10-year tenure and a callable option after five years, subject to SBP approval. A lock-in clause restricts payments if regulatory capital thresholds (MCR, CAR, LR) are breached. The TFCs include a loss-absorption clause, allowing SBP to convert them into common shares in the event of non-viability. It is subordinated to other Bank debts, but ranks equally with Tier II TFCs and higher than Additional Tier I TFCs and common shares. The principal will be redeemed gradually: 0.36% over the first 9 years and 99.64% in two semi-annual installments in the final year. The Bank made a total profit payment of 258.45mln in December 2025.