Pakistan Credit Rating Agency Limited maintains ratings of The Bank of Khyber

Lahore, June 30, 2015 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained long term and short term entity ratings of The Bank of Khyber [BoK] at ‘A’ (single A) and ‘A1′ (A One), respectively. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings of The Bank of Khyber reflect its strengthening market position – particularly in deposits – with increasing system share (CY14 ~ 1%). The bank still has reliance on large ticket deposits from Government of Khyber Pakhtunkhwa (GoKP) and its related agencies. However, stability is observed in such deposits over time. The bank intends to expand its branch network; this should help achieve growth and granularity in deposits.

The bank maintains sound capitalization, further supplemented by healthy bottom-line performance. Financial risk profile incorporates strong liquidity position. The bank has witnessed slight deterioration in asset quality; though, potential drag on equity is limited. However, this area requires management’s careful attention, given plans to expand the loan book. The ratings continue to draw comfort from the bank’s association with GoKP.

The ratings are dependent on bank’s ability to hold its risk profile, while expanding its size. Improvement in the technology platform is critical to foster the control environment including reporting framework. Meanwhile, any significant infection in asset quality, thereby weakening the bank’s risk absorption capacity, and/or any intervention compromising the governance standards would impact negatively.

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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