The Pakistan Credit Rating Agency (Pacra) has maintained the entity ratings of Atlas Investment Bank (AIBL) at 'A-' (Single A Minus) and 'A 2' (A Two) for the long-term and short-term, respectively.
The entity ratings are applicable to senior unsecured creditors of the bank. The ratings of both tranches of secured TFCs (Rs 200 million and Rs 100 million) have also been maintained at 'A' (Single A).
These ratings denote low expectation of credit risk and strong capacity for timely payment of financial commitments.
Atlas ratings reflect the improvement in performance as well as the diversification and increased stability of revenue resources.
The rating also factors in the stressed risk absorption capacity emanating from sizeable uncovered exposure relative to the bank's equity.
Atlas performance, as measured by Return on Equity, in addition to increased net interest revenue and brokerage income, improved substantially on account of sizeable capital gains realised on government securities and equity investments, and dividend income.
Atlas strategy to replace foreign currency loans with lower cost institutional borrowings in local currency resulted in a decline in interest expense which, in turn, resulted in substantial increase in net interest revenue and helped ease pressure on spreads.
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