Lahore, VIS Credit Rating Company Limited has maintained the entity ratings of Al Baraka Bank (Pakistan) Limited at ‘A+/A-1’. The long-term and short-term ratings reflect a solid credit quality with good protection factors and a high certainty of timely payment, respectively. Additionally, the ratings for the second and third issues of Tier II Sukuk remain at ‘A’. The outlook on these ratings has shifted from stable to positive.
According to VIS Credit Rating Company Limited, the ratings benefit from the support of Al Baraka Group, a key player in Islamic finance across 13 countries. This backing is bolstered by international ratings from the Islamic International Rating Agency. Over the past year, Al Baraka Bank has undertaken significant measures to boost its operational capabilities, including staffing enhancements, IT upgrades, and the implementation of new risk management policies.
The bank has seen an increase in its deposit base, primarily through low-cost funding sources, which has supported its net spreads. Despite a cautious financing approach due to economic challenges, the bank has managed to maintain robust liquidity and capital adequacy ratios. Profitability has improved significantly, aided by higher benchmark rates and efficient operations. The bank remains committed to expanding its network and enhancing its market share through strategic initiatives aimed at improving asset quality and deposit growth.