The Pakistan Credit Rating Agency (Pacra) has maintained the long-term and short-term entity ratings of the KASB Bank Limited at 'BBB+' (Triple B plus) and 'A2' (A two), respectively. These ratings denote a low expectation of credit risk emanating from an adequate capacity for timely payment of financial commitments.
The ratings reflect the bank's relatively subdued position in an increasingly competitive banking environment, mainly an outcome of its small size and limited franchise value. At the same time, the ratings recognise the strategy of the new management that envisions a broad-based aggressive expansion in the bank's asset portfolio, but with focused products for different segments - corporate, SMEs and consumer - while capitalising on the bank's recently extended outreach.
Meanwhile, the management is working in a structured manner to strengthen human and infrastructure resources to achieve the planned business growth.
Nevertheless, with restricted internal generation, the bank would remain dependent on its sponsors' support for meeting increasing capital requirements. The sponsors have recently demonstrated their support by injecting fresh equity to maintain the capital structure.
Pacra has also assigned a four-star rating to the Atlas Fund of Funds (Category: Balanced Fund), which reflects good performance relative to its peers. The rating is a composite measure of two factors namely (a) returns, and (b) risk associated with the returns measured by Sharpe Ratio.
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