PACRA maintains entity ratings of Soneri Bank Limited

June 27, 2025 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has maintained a long-term rating of ‘AA-’ and a short-term rating of 'A1+' to Soneri Bank (PSX: SNBL), according to the latest press release issued by PACRA.

The ratings reflect the astute leadership of SNBL, 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 in CY24, adding 101 new branches to reach a total of 544 (up from 443 in CY23).

This milestone of 500+ branches reflects the Bank’s strategic growth and strong focus on customer satisfaction. Notably, the newly established branches contributed 46% to the total deposit growth from CY23 to CY24.

Additionally, in CY24, the Bank recorded a remarkable growth of 119% in its overall customer base.

Over the same period, SNBL’s deposits observed growth of ~5%, where Current Account and Savings Account Ratio (CASA) was inclined to 82% (CY23: 79%).

With a greater contribution of 52% (CY23: 49%) from the Saving Account (SA) and Current Account (CA), stood the same as last year at 30%.

The advances portfolio inclined by 18.2%, resulting incline in the Advance-to-Deposit Ratio (ADR) to 44.8% (CY23: 39.7%). The NPL coverage ratio rose to 90% (CY23: 80%) while the infection ratio declined to 3.1% (CY23: 4.9%).

This positive trend is attributed to the Bank’s robust recovery efforts, driven by a dedicated and well-equipped recovery team.

Notably, the current infection ratio is among the lowest in the industry, reflecting the Bank’s strong asset quality and effective risk management practices in comparison to industry peers.

The investment portfolio grew by 23.8%, with a significant skew of 99% toward government securities.

The majority of these investments are in floating-rate Pakistan Investment Bonds (PIBs), with an average maturity for both fixed and floating-rate PIBs at Aug'28.

In CY24, Net-markup income witnessed an increase of 9.6% YoY to stand at Rs24.9 billion (CY23: Rs22.8bn), on the back of improvement in average volumes, more than offsetting small compression in spreads.

Non-markup income also rose by 4.6% to Rs6.8bn (CY23: Rs6.5bn), mainly driven by higher fee and commission income of Rs4.3bn (CY23: Rs3.1bn), with trade-related commissions accounting for 40% of this segment.

Net profits, however, declined by 2.86% to Rs5.9bn (CY23: Rs6.1bn), primarily due to a 26.2% YoY increase in non-markup expenses to Rs19.5bn (CY23: Rs15.5bn).

This rise in expenses is attributable to elevated inflation, particularly in 1QCY24, and the expansion of the branch network nationwide.

During CY24, the Bank’s equity base increased to Rs30.8bn (CY23: Rs28.6bn), while the Capital Adequacy Ratio (CAR) stood at 17.7% (CY23: 18.4%).

The Bank aims to strengthen its deposit base and deepen customer relationships through digital innovation and tailored solutions.

Sustained growth in core and non-core income, particularly from trade-related services, will be key.

Strategy focus on non-fund-based exposures and operational efficiency will support 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.

SNBL was incorporated as a public limited company and commenced operations as a Scheduled Commercial Bank in 1991, with its primary sponsors being the Feerasta Family, who collectively own a majority share in the Bank.

The overall control of SNBL rests with an eight-member Board of Directors comprising four non-executive directors, three independent directors, and one executive director, the Chief Executive Officer (CEO).

Three of the Board members are nominees of the Feerasta Family, one represents the National Investment Trust (NIT), and Amin A. Feerasta serves as the Chairperson of the Board.