Pacra maintains entity ratings of HabibMetro Bank

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Habib Metropolitan Bank Limited at 'AA+' (Double A Plus) and 'A1+' (A One Plus), respectively. The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings incorporate HabibMetro's association with a diversified and financially strong international bank - Habib Bank AG Zurich (HBZ). This association helps in assimilating the parent's best practices into HabibMetro, while fostering control environment with enhanced level of oversight. The ratings recognise the bank's healthy financial profile reflected in its strong CAR, pre-dominantly constituting Tier-I Capital (-16 percent).
The bank sustained its dominant position in its niche market - self liquidating trade finance - though with higher focus of other banks, the competition is increasing. The bank needs to diversify its deposit as well as loan books. The bank's NPLs is a drag; management's efforts must translate in sustained asset quality - indeed improvement. The ratings draw comfort from high provision coverage. The ratings are dependant on the management's ability to uphold the position in its market niche while marking its footprints in northern region in terms of business diversification and growth.-PR