Pakistan Credit Rating Agency Limited maintains rating of Term Finance Certificates issued by Soneri Bank Limited

Lahore, December 17, 2015 (PPI-OT):The Pakistan Credit Rating Agency Limited (PACRA) has maintained the rating of unsecured, subordinated, and listed TFCs issue of PKR 3,000mln by Soneri Bank Limited (SBL) at “A+” (Single A plus). This rating denotes a low expectation of credit risk.

The TFCs rating reflects SBL’s improving profitability, a factor of volumetric growth in earning assets. Although the bank’s strategy incorporates increase in advances, the management remained cautious towards private sector lending.

Hence, net advances witnessed shrinkage during 9MCY15. Fresh accretion in NPLs is limited. Nevertheless, a comprehensive approach to further rationalize infection ratio remains essential. Deposits grew – mainly savings – as against squeeze in the industry’s deposit base. The bank enhanced its exposure in money market operations; although these are low-yielding investments, the profitability improved. The bank maintained sound liquidity and good risk absorption capacity. With issuance of new subordinated TFCs, the overall CAR improved (end-Sep15: ~17%); providing room to accommodate projected growth.

The rating is dependent on the bank’s ability to maintain its market position in banking industry while strengthening its overall risk profile. Bringing efficiency in overall operational structure is important to rationalize costs. In comparative landscape, adding granularity to core operations – deposits and advances – is critical. Meanwhile, increase in system share would be rating positive.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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