PACRA Maintains Entity Ratings of Soneri Bank Limited

September 27, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained the entity ratings of Soneri Bank Limited at AA- for Long term and A1+ for short term. The outlook forecasted for the company is stable.

Previously on June 14^th 2018, PACRA had maintained the aforementioned ratings with a stable outlook.

According to the credit rating agency, the ratings reflect Soneri Bank’s sustained business profile and their system share slightly improved on a year-on-year (YoY) basis.

The bank expanded its deposit base in line with the industry growth, while maintaining the contribution of low cost deposits. It also witnessed a rise in ADR subsequent to fresh deployment in advances, as per an official press release by the agency.

PACRA further informed that the cost structure (cost to total net revenue) of the bank has increased and the marginal increase in net interest revenue translated into slight improvement in profitability (YoY).

“Going forward, the bank, while focusing on improving asset quality, intends to follow a prudent strategy in terms of advances growth,” told PACRA, “Continued enhancement in non-fund based exposure, delivering higher fee income, focusing on low cost deposit mobilization and to capitalize on various business opportunities including those which are a part of CPEC,” they elaborated.

Adding to this, PACRA said, “The rating is a function of bank's ability to maintain its market position in the banking industry while strengthening its overall risk profile. Bringing efficiency in overall operational structure is important for long term growth. In the comparative landscape, adding granularity to deposits and advances is critical. Meanwhile, a sustainable increase in system share and consequent profitability would be ratings positive.”

Soneri Bank Limited SBL, established in 1991, operates with a network of 290 (CY16: 288) branches across the country. The Bank’s primary sponsors are the Feerasta Family who collectively own a 61% share in SBL. The Feerasta Family is one of the leading business groups in Pakistan with diverse commercial interests ranging from manufacturing, exporting, banking and trade financing.

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