Final PR
The Pakistan Credit Rating Agency Limited

Jhangeer Hanif

Sehar Fatima

Applicable Criteria

  • Correlation between long-term and short-term rating scale (Jun 17) [View]
  • Methodology | Bank Rating (Jun 17) [View]

Related Research

  • Sector Study | Commercial Bank (Jun 17) [View]
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PACRA Maintains Entity Ratings of Allied Bank Limited
 Rating Type Entity
 Action Maintain Maintain
 Long Term AA+ AA+
 Short Term A1+ A1+
 Outlook Stable Stable
 Rating Watch - -

The ratings reflect sustained risk profile of Allied Bank Limited (ABL). This emanates from a sound equity base and robust liquidity profile. The bank has improved its equity base over the years. The bank continues to hold its position among the largest banks of the country in terms of deposits and advances. The bank remains focused on increasing its footprint in the market with consistent increase in number of branches / ATMs. The strengthening retail deposit market would enable further improvement in deposit granularity in terms of concentration as well as funding cost. The ratings recognize the management's concerted efforts in sustaining the sound asset quality, while expanding its advances portfolio. The concentration in lending portfolio is in line with bank's strategy of lending to large sized financially strong private groups and public sector entities.

Continuation of enhanced diversification in its revenue stream, higher penetration in retail deposits and continuous improvement in cost structure remain crucial for Bank's ratings.
About the Entity
ABL is a large sized Bank with a system share of ~7% as at end-Sep17 in the total deposits of the industry. Ibrahim Group (IG), through Ibrahim Holdings Pvt. Limited, owns 84% of shareholding in ABL. Apart from interest in financial sector; IG is engaged in manufacturing of yarn and polyester staple fiber. ABL has a growing subsidiary - ABL Asset Management Company (sustained 6.8% share in AUM's of industry at end-Sep17). The eight members BoD include the CEO, three sponsoring directors, two independent directors and two non-executive directors. Mr. Tahir Hassan Qureshi, associated with ABL for the last nine years, has been designated as the CEO since Jan-17. He has previously been serving as the Chief Operating Officer and Chief Financial Officer of the Bank. He is supported by a management team of experienced executives.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.