Karachi, In its latest evaluation, VIS Credit Rating Company Limited (VIS) has reaffirmed the ‘AA+’ rating for the Basel III Compliant Additional Tier-I (TFC-V) debt instrument of United Bank Limited (UBL), indicating high credit quality with a stable outlook.
According to VIS Credit Rating Company Limited, the ‘AA+’ rating reflects strong protection factors and only moderate risk, which may fluctuate slightly due to economic conditions. This rating action, which follows the previous assessment announced on June 27, 2023, underscores the bank’s robust financial health and adherence to regulatory requirements.
UBL initially raised Rs 10.0 billion in January 2019 through this perpetual and unsecured Term Finance Certificate issuance. The bank retains the option to redeem these certificates after five years from the issue date, with the necessary approval from the State Bank of Pakistan (SBP). The conditions for payment of the mark-up on these TFCs include the bank’s compliance with the SBP’s Minimum Capital Requirement (MCR), Capital Adequacy Ratio (CAR), and Liquidity Ratio (LR) standards.
Furthermore, the ratings consider the terms of the TFCs that allow for the possibility of conversion into ordinary shares or a write-off, either partially or fully, under the SBP’s loss absorbency clause. This additional layer of risk management is a critical factor in the financial instrument’s rating.