BOP achieves highest AAA credit rating

July 01, 2026 (MLN): The Bank of Punjab's (BOP) long-term entity rating has been upgraded to AAA from AA+ by the Pakistan Credit Rating Agency (PACRA), with the short-term rating maintained at A1+ and a Stable Outlook, making it the first and only provincial bank in Pakistan to achieve the country's highest credit rating.

BOP's deposits crossed Rs 2tr in 2025, while operating profit before credit loss allowance nearly doubled, rising 98.5% to Rs 40.7bn, driven by an improved deposit mix and a substantially lower cost of funds that translated into stronger core earnings and tighter cost management.

"AAA is more than a rating, it is proof of what disciplined, professional banking can build," said Zafar Masud, President & CEO of The Bank of Punjab, adding that the Bank has built a commercially strong institution delivering sustainable value for shareholders while staying committed to financial inclusion and responsible banking.

BOP is Pakistan's leading digital lender and a frontrunner in priority-sector finance, SME, agriculture, women's financial inclusion and housing, with flagship Government of Punjab programmes including Asaan Karobar, Kissan Card, Livestock Card and Apni Chhat Apna Ghar extending formal financial access to entrepreneurs, farmers, women and first-time borrowers across the province.

The rating upgrade rests on a strengthened standalone credit profile and the Bank's deepening role in the Government of Punjab's economic and development program, given its majority ownership and control by the provincial government.

While public sector deposits remain a major contributor to the Bank's Rs 2tr deposit base, private sector deposits have also grown substantially, comfortably surpassing Rs1tr on their own, showing genuine franchise depth and a broadening retail and commercial relationship base.

Current account deposits have likewise expanded, with average current account balances rising steadily over the last couple of years. The eased cost of funds, following a revised pricing structure, has allowed BOP to avoid the sector-wide trend of margin compression, instead posting expanding net interest margins and a rising trajectory in core profitability.

Three parallel financing programs under the Government of Punjab's economic development initiatives have reinforced the Bank's franchise depth and diversified its earning asset base.

Under the housing finance initiative Apni Chhat Apna Ghar, executed through partner institutions, the program has supported over 121,000 borrowers with total exposure reaching Rs 155bn as of end-2025.

The Kissan Card and Livestock Card schemes have materially expanded financial inclusion in agriculture, supported by a technological edge in origination, disbursement, recovery and monitoring.

The Asaan Karobar Finance Scheme, launched in January 2025, has captured 11% of national SME outstanding credit and 37% of total SME borrowers, with disbursements exceeding Rs 44bn across more than 104,000 borrowers through the fully digital Asaan Karobar Card.

On the balance sheet, gross advances grew 12% YoY to Rs 926bn, showing sizeable deployment into higher-yielding assets and an improved asset mix, while equity strengthened to Rs 104.1bn from Rs 92.5bn in CY24.

Net interest income rose 83.6% YoY to Rs 81.1bn, driven by favorable repricing of liabilities and a higher share of low-cost deposits, while the cost-to-income ratio declined to 59.6% on the back of automation, digital transformation and process optimization.

Management has devised a strategy to strengthen the Bank's positioning across its overall performance, including trade business, alongside a capital management policy aimed at maintaining a cushion over the regulatory requirement.

Continued growth in key performance parameters, a seamless governance framework, independence in decision-making, and ongoing improvements in earnings diversification, trade and digital advancements remain important for future ratings.

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