December 28, 2018 (MLN): Pakistan Credit Rating Agency has maintained entity ratings of Allied Bank Limited at ‘AAA’ for long-term and ‘A1+’ for short-term, with a stable outlook forecast.
As per the report issued by PACRA, The bank’s risk absorption capacity, as reflected in its sound equity base, has grown more than the market average over the years. This is supplemented by a significantly higher CAR (22.4% at end-Sep18), beyond the industry average. The bank has adopted a multi-faceted approach to augment its relative standing in the market.
Increased attention is being diverted towards deepening of current business relationships and an enduring emphasis has been laid on building trade business. The bank’s technology platform is a strength. This has facilitated fast and effective decision making while extending quality conventional and digital services to its customers, the report added.
The bank remains focused on increasing its footprint in the market with consistent increase in number of branches / ATMs along with gradual penetration in digital banking. The ratings recognize the management's concerted efforts in sustaining the sound asset quality, while expanding its advances portfolio.
The continued strengthening in retail deposit market would enable further improvement in deposit granularity in terms of concentration as well as funding cost. At the same time, achieving efficiency in terms of utilization of its healthy CAR may help in further boosting ABL’s market share and profitability.
“The management’s ongoing concerted efforts towards enhancing diversification in its revenue stream, achieving reduction in overall concentration, higher penetration in retail deposits and continuous improvement in cost structure remain important.”
