Lahore, February 01, 2023 (PPI-OT):The ratings reflect Soneri Bank’s (“SNBL” or the “Bank”) improved business profile as reflected by system share of 1.8% in terms of deposits as of Sep’22. SNBL’s customer deposits observed growth of 6.9% since Dec’21, where CASA recorded further 19.9% improvement to stand at PKR 337.2bln (Dec’21: PKR 281.3bln). Net income witnessed a decrease of 45.1% during 9MCY22 as compared to same period in previous year attributable to higher markup expense. Improvement in net mark-up income and continued enhancement in non-fund-based exposure are important for future years.

Advance book recorded 17.7% uptick whereas, infection ratio declined to 4.9% as of Sep’22 (Dec’21: 5.9%). The Investment book witnessed attrition by 16.2% since Dec’21, mainly due to divestment from market T-Bills. In order to increase the advances book capacity, the Bank has issued tier-II capital amounting PKR 4bln. The tier-II is exposed to non-payment (principal and interest) risk in case the CAR falls below the minimum regulatory requirements. Being cumulative in nature, the interest payment falling due during that specific period would be paid to the investors once the CAR meets minimum regulatory requirement.

The Bank’s total Capital Adequacy Ratio (CAR) stood at 14.14% as of Sep’22, while the issue of new tier-II instrument strengthens the CAR further. Going forward, the macro-economic environment is beset with myriad challenges due to heightened interest rate, tightening of demand, rupee depreciation and higher inflation. 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