KARACHI: The Pakistan Credit Rating Agency Limited (PACRA) has affirmed the ratings of Bank Alfalah Limited (BAFL) for its Additional Tier 1 Term Finance Certificates, amounting to PKR 7 billion. This confirmation reflects the bank’s sustained growth and robust financial performance across various metrics.

Since its establishment nearly 30 years ago, Bank Alfalah has transitioned from a mid-sized institution to one of Pakistan's leading banks. As of December 2023, the bank reported a substantial deposit base of PKR 2,136.9 billion, up from PKR 2,084.9 billion the previous year. This growth is attributed to a strategic shift in deposit mobilization, focusing on deposit quality and maintaining positive spreads, essential for long-term sustainability.

Bank Alfalah's maintained credit rating is supported by its sound financial fundamentals, strategic execution, and ability to operate effectively within a competitive banking landscape. The bank’s creditworthiness is further bolstered by a strong ownership profile and sound governance practices.

Key factors contributing to the bank’s robust performance include an experienced management team, a prudent risk management framework, and an expanding digital footprint. The bank has also increased its market share, offering a diverse product portfolio and maintaining a sizeable share in remittances and trade.

On the lending side, Bank Alfalah's gross performing advances rose significantly to PKR 1,113.9 billion, compared to PKR 739.7 billion in the previous year. The bank maintained stable credit quality with an infection ratio of approximately 3.7%, down from 4.8% the prior year.

In the financial year 2024, the bank recorded a net profit of PKR 38.3 billion, an increase from PKR 36.5 billion in 2023. Furthermore, the Capital Adequacy Ratio improved to 17.96%, indicating a strengthened capital base.

Looking ahead, Bank Alfalah plans to enhance its presence in the small and medium enterprise sector and expand its supply chain and cash management solutions. The bank also aims to further strengthen its home remittance corridor. The ratings remain contingent upon the continued strength of key performance and risk indicators in alignment with 'AAA' benchmarks. Any significant weakening in these fundamentals may impact the ratings.