Lahore, December 12, 2022 (PPI-OT):The ratings reflect Soneri Bank’s (“SNBL” or the “Bank”) improved business profile as reflected by system share of 1.9% in terms of deposits as of Jun’22. SNBL’s customer deposits observed growth of 32.4% as of Jun’22, where CASA recorded further improvement (Jun’22: 69.5%). Net income witnessed a decrease of 70% during 1HCY22 as compared to same period in previous year attributable to higher markup expense. Improvement in net mark-up income, non-markup income and continued enhancement in non-fund-based exposure are important for future years. Advance book recorded marginal uptick whereas, infection ratio declined to 4.5% as on Jun’22 (Jun’21: 5.7%).
The Investment book has expanded significantly by 3.6% YoY, dominated by investments in PIBs. The bank’s strategy is to strengthen the existing good relationships and digital platforms by offering various unique solutions to its clients. The bank issued current TFC to support Tier-II capital in 2015 and a PKR 4bln Tier-I capital TFC in 2018. New issue of PKR 4bln Tier-II TFC is under process and the previous Tier-II TFC, being completely phased out of supplementary capital as per BASEL III regulations, will be tentatively called back in Dec’22.
Going forward, the macro-economic environment is beset with myriad challenges due to heightened interest rate, tightening of demand, rupee depreciation and higher inflation. This has repercussions for all segments of the economy including the banking industry. The Bank’s total Capital Adequacy Ratio (CAR) stood at 14.14% as of Sep’22, while the issue of new tier-II instrument would strengthen the CAR further. 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