Karachi: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Halan Microfinance Bank Limited at 'BBB/A3'. The medium to long term rating of 'BBB' suggests adequate credit quality, with the short term 'A3' rating indicating a fair likelihood of timely debt repayment. The outlook remains 'Positive' following the previous rating announcement on April 30, 2024.

Halan, established in Pakistan in 2012, underwent a significant ownership change when Advans S.A. Sicar, its former parent company based in Luxembourg, sold its shares to MNT-Halan Pak B.V., registered in the Netherlands. This transition was approved by the State Bank of Pakistan in October 2023, and finalized by March 2024. Halan has since applied for a national license, with the first meeting with the SBP occurring in April 2025.

The reaffirmation of Halan's ratings reflects the strategic reorientation and operational strengthening under its new ownership. The bank has revised its credit policies and digitized its loan processes to improve asset quality, despite a consolidation in its borrower base and a slowdown in credit growth.

Capital adequacy has been bolstered by fresh capital infusions in 2024 and the first quarter of 2025, with another round expected by April 2025. Liquidity has improved through enhanced deposit mobilization and investment in government securities. However, the concentration in the deposit base poses potential liquidity risks, which the bank aims to mitigate by diversifying its funding sources.

Looking ahead, Halan plans national expansion, product diversification, and the development of Islamic banking services. These initiatives, supported by sponsor capital commitments, aim to enhance growth, profitability, and financial inclusion. The ratings depend on Halan's successful execution of its strategic plan, including maintaining asset quality and capitalization, and ensuring continued sponsor support.