PACRA keeps ABL at AAA, outlook stable

June 30, 2026 (MLN): PACRA has maintained the entity ratings of Allied Bank Limited (ABL) at AAA for the long term and A1+ for the short term, with a stable outlook, according to PACRA.

The ratings show the Bank's sound and consistent financial profile, characterised by one of the lowest infection ratios in the industry, a stable low-cost deposit base, a prudent and selective approach to credit deployment, and a growing non-markup income base.

ABL has navigated successive economic cycles without compromising on credit quality or capital adequacy, a track record that continues to distinguish it within Pakistan's commercial banking sector and supports its position at the highest end of the domestic rating scale.

ABL sustains a diversified and deeply entrenched presence across corporate and investment banking, commercial and retail banking, Islamic banking, SME financing, trade finance, remittances, digital banking, and treasury operations, a breadth of business lines that supports earnings diversification and mitigates single-segment concentration risk.

The deposit base expanded 16% to Rs2.35tr (CY24: Rs2.02tr), driven by a 21% increase in current account deposits. The CASA mix stood at 83% (CY24: 86%), showing a cost-efficient funding structure and a favourable comparison against industry peers.

The branch network was extended to 1,535 locations (CY24: 1,510), with dedicated Islamic banking branches nearly doubling to 302 (CY24: 160), showing accelerated execution of the Bank's Shariah-compliant transition strategy ahead of the SBP's 2027 conversion deadline.

Total assets advanced to Rs3.37tr (CY24: Rs2.82tr). Gross advances declined by 25% to Rs802bn (CY24: Rs1.06tr), showing the Bank's prudent credit posture, selective lending stance amid a declining interest rate environment, and portfolio optimisation following the withdrawal of the ADR-linked tax incentive.

The investment portfolio expanded 89% to Rs2.14tr (CY24: Rs1.13tr), as the Bank redeployed surplus liquidity into Pakistan Investment Bonds and Treasury Bills.

On the digital front, the myABL platform surpassed 2.6m registered users and processed over 121m transactions valued at Rs3.9tr, while myABL WhatsApp Banking reached 2.1m users.

Non-markup income stood at Rs28.6bn (CY24: Rs27.9bn), underpinned by 17% growth in fee and commission income to Rs16.5bn, driven by card-related fees, investment banking fees, and branch banking charges.

Profit after tax moderated to Rs35.2bn (CY24: Rs43.1bn), primarily attributable to compressed benchmark rates, with the impact partially offset by credit loss reversals of Rs7.6bn.

The Capital Adequacy Ratio improved to 27.74% (CY24: 26.71%), positioning ABL among the most well-capitalised institutions within Pakistan's banking sector.

The management's continued efforts to broaden revenue diversification, reduce overall concentration, deepen retail deposit penetration, and sustain structural improvements in the cost base remain important rating considerations going forward, PACRA noted.

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