Bank of Khyber witnesses substantial growth in its deposit base: PACRA

December 26, 2018 (MLN): PACRA has maintained entity ratings of the Bank of Khyber at ‘A’ for long-term and ‘A1’ for short term, with a stable outlook forecast.

According to PACRA, the ratings reflect the bank’s sustained risk profile. The bank’s lending portfolio continued ascending trajectory while NPLs continued witnessing declining trend; resulting in improved asset quality.

The bank’s funding base includes customer’s deposits and borrowings. The deposit base witnessed substantial growth; led by saving deposits. The bank has dependence on large ticket deposits from Government of Khyber Pakhtunkhwa (GoKP) and its related institutions.

The bank is expanding its branch network in KPK and Punjab; establishing footprints in major cities especially Lahore and Karachi to compete with established banks. The management plans to further increase advances book with higher focus on infrastructure. With desired credit growth, nurturing strength of management team is essential. The ratings incorporate association of the bank with the Government of Khyber Pakhtunkhwa (GoKP).

The ratings are dependent on bank's ability to hold its risk profile, while maintaining its relative market position. Improvement in the technology platform is critical to foster the control environment including reporting framework. Meanwhile, any significant infection in asset quality, in the wake of significant expansion in the loan book, and/or any intervention compromising the governance standards would impact negatively.

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