Lahore, February 14, 2023 (PPI-OT):Bank Alfalah Limited (“BAFL” or the “Bank”) is an active player in the lending market. Its presence around different segments of advances book is also meaningful. The ratings reflect the Bank’s performance, asset quality, strong financial profile and healthy liquidity. In line with the Bank’s overall growth strategy, as on Sep’22, the net advances of the Bank have increased by 15.3% YoY basis, contributing to increase in Risk Weighted Assets; along with regular dividend payouts, thereby CAR stood at 14.49% as of Sep’22 (CY21: 14.43%), well above the Regulatory threshold.

The bank’s advances have improved, However, the ADR (Advances to Deposits) decreased to 53.8% as of Sep’22 (Dec’21: 59.2%). Policy rates are continuously rising in CY22 increasing the Bank’s cost of funds. PAT of the Bank increased by 34.4% and stood at PKR 14.1bln during 9MCY22 (9MCY21: PKR 10.5bln). In order to support the Bank’s growth plans and expansion strategy, the Bank has issued additional tier-I capital amounting PKR 7bln. The additional tier-I is exposed to non-payment (principal and interest) risk in case the CAR falls below the minimum regulatory requirements.

Being non-cumulative in nature, the interest payment falling due during that specific period wouldn’t be paid to the investors as per the regulatory disclosures. Going forward, the macro-economic environment is beset with myriad challenges due to heightened interest rate, tightening of demand, rupee depreciation and higher infection. The growth trajectory of the bank especially nurturing of the deposit and advances base and enriching the granularity would be considered positive.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com