Lahore, May 23, 2022 (PPI-OT):Samba Bank (“SBL” or the “Bank”) has a healthy Capital Adequacy Ratio (“CAR”) (Dec21: 20.2%, Dec20: 18.2%). This reflects the impeccable risk absorption capacity, which is integral to the rating. Total Income increased by 14.6% by the end Dec’21. This increase was attributable to increase in net markup income by 16.4%. The Bank recorded net profit of PKR 789mln at the end of year, Dec’21 declining by 22% from last year majorly on account of increased provisioning against advances. The bank has continued its efforts to improve low-cost deposit mix by mobilizing medium to small ticket deposit.

The cost of deposits has been restricted at 4.9% by the end Dec’21. The deposit base of the Bank has slightly improved and standing at PKR 79bln at the end Dec’21. With the issue of TFC-TIER II, the bank intended to augment its growth in high-yielding lending segments. Samba Bank Limited is a majority owned subsidiary of Saudi National Bank (SNB) of KSA with a shareholding of 84.51%. The SNB is the largest Bank in the KSA, formed as a result of acquisition of the SBL’s former parent Samba Financial Group (SFG) by the National Commercial Bank (NCB) of Saudi Arabia. As the part of strategic review initiated by SNB, the parent has concluded that it will continue to retain its existing equity stake in SBL.

The risk metrics and the compliance ratios are well in range and further adherence will be important. The rating is dependent on the Bank’s sustained risk profile. In the wake of heightened competition, profitable growth while retaining the relative positioning in the industry will be a challenge. The equity base of the bank is satisfactory.

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