Lahore, December 29, 2017 (PPI-OT):The ratings reflect BOK’s strong fundamentals. This includes sound liquidity and high capital adequacy, accompanied by improving profitability. Spreads remained low, showed a downward trend. NPLs has seen slight rise hence require management attention though provision coverage is adequate. The bank has dependence 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 is expanding its branch network with high focus on KPK and Punjab; However, slightly establishing footprints in other provinces may be needed to better compete with established banks. The management plans to increase advances book with higher focus preferably on power, cement and infrastructure. With desired credit growth, nurturing strength of management team is essential. The ratings incorporate association of the bank with the Government of Khyber Pakhtunkhwa (GoKP).
The ratings are dependent on bank’s ability to hold its risk profile, while maintaining its relative market position. 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:
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