KARACHI: The Pakistan Credit Rating Agency Limited (PACRA) has affirmed the credit ratings of Bank Alfalah Limited’s Additional Tier 1 Term Finance Certificate, maintaining its standing at PKR 7 billion as of December 2022. Bank Alfalah has demonstrated consistent growth, transitioning from a mid-sized entity to one of the leading banks in the country, with a reported deposit base of PKR 2,136.9 billion.

This growth is attributed to a strategic shift in the bank’s deposit mobilization approach, emphasizing deposit quality and maintaining positive spreads, which are crucial for long-term sustainability. Bank Alfalah’s robust financial fundamentals and strategic execution have been key in sustaining its current credit rating. The bank’s strong ownership profile and sound governance practices add to its creditworthiness.

Bank Alfalah’s management team is experienced, and its risk management framework is prudent. The bank has expanded its digital footprint and increased its market share. Its diverse product portfolio and significant presence in remittances and trade also bolster its standing. On the lending front, the bank reported gross performing advances of PKR 1,113.9 billion, a notable increase from the previous year, with credit quality remaining stable.

In the calendar year 2024, Bank Alfalah recorded a net profit of PKR 38.3 billion, up from PKR 36.5 billion in 2023. The capital adequacy ratio improved to 17.96%, indicating a strengthened capital base. The bank continues to retain its presence in allied financial services such as asset management and insurance.

Looking ahead, Bank Alfalah plans to enhance its presence in the small and medium enterprise (SME) sector, expand supply chain and cash management solutions, and strengthen its home remittance corridor. The bank’s ratings are contingent on the continued strength of key performance and risk indicators in line with ‘AAA’ benchmarks, with any significant weakening in these areas potentially affecting the ratings.