Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

PACRA assigns an initital rating of ‘A’ to BIPL’s debt instrument

BIPL's 1QCY24 profit surges 79% YoY to Rs3.22bn
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

April 15, 2024 (MLN): Pakistan Credit Rating Agency Limited (PACRA) has assigned an initial rating of "A" to BankIslami Pakistan Limited (PSX: BIPL’s) debt instrument (ADT-1 Modaraba Sukuk II), latest press release issued by PACRA showed.

The debt instrument is worth Rs1 billion, and the assigned outlook on the instrument is ‘Stable’.

BIPL has demonstrated remarkable growth over the last couple of years in areas crucial to the risk profiling of any commercial bank.

The bank, under the new leadership, has recorded expansion in the deposit base.

There has been enhancement in the system share as well, enabling the bank to fare better with the banks rated higher.

The delta achieved with the peers supported the rating ascension. The Islamic banking space is expanding and some mentionable players are taking the lead. BIPL is fast-rising in this space.

During CY23, the Bank’s net profitability increased to Rs11 billion (CY22: Rs4.4bn), attributable to an impressive increase in markup earned.

The net markup income surged by 97% and clocked in at Rs40.18bn (CY22: Rs20.40bn) attributable to appreciable growth in the investment book primarily driven by the allocation of excess liquidity in GoP Ijara Sukuk.

The Bank’s spread ratio displayed an improvement to 8.9% (CY22: 6%). The cost of funding base for Islamic banks is efficient and it is contributing towards internal capital generation.

The Bank’s deposit base reflected significant additions tilted towards term deposits followed by saving and current deposits.

During CY23, the Bank’s CAR inclined to 23.79% (CY22: 17.92%) reflecting ample room for growth.

The Bank’s asset quality has largely remained sustained with an increase in coverage. The equity base, in turn, the risk absorption capacity of the Bank has recorded a commendable improvement.

The banking sector has continued to flourish with high profitability. Going forward, the macroeconomic environment is beset with myriad challenges due to heightened interest rates, tightening of demand, rupee depreciation, and higher infection.

This has repercussions for the entire system including banking. Sustained asset quality and profitable growth are essential for ratings.

Copyright Mettis Link News

Posted on: 2024-04-15T11:06:19+05:00