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 recognize the bank's healthy financial profile reflected in its strong CAR, pre-dominantly constituting Tier-I Capital (~17% at end Dec-15) and improved profitability. The bank experienced relatively high infection compared to most peers, though coverage is high. Lately it has been successful in arresting the trend. 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 while bringing efficiency to its cost structure.
The ratings are dependent 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. Any weakening in asset quality, in turn, putting pressure on the bank's profitability and risk absorption capacity, may have negative implications for the ratings.-PR
Comments
Comments are closed.