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The ratings reflect
Absolute NPLs declined which led to improvement in impairment ratio (CY19: 5.1%; CY18: 5.8%). Covid-19 has posed challenges to all segments of the economy, worldwide and domestically, most sectors are getting negatively impacted. The ramifications would continue to unfold, warranting vigilance and timely actions where needed. The central bank has taken well-tailored and comprehensive actions including reduction in key policy rates (~525bps down since
While reduction in interest rates would determine the bank's profitability, these measures have cushioned the allied risks surrounding the credit exposures. The Investment book has expanded significantly and fuelled by borrowings from financial institution. The bank's total CAR stands at 15.8%. The bank has also issued additional Tier-1 TFC (
The rating is a function of bank's ability to maintain its market position in the banking industry while strengthening its overall risk profile. Bringing efficiency in operational structure is important for long term growth. In the comparative landscape, adding granularity to deposits and advances is critical. Meanwhile, a sustainable increase in system share and consequent profitability would be ratings positive.
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