PACRA Upgrades Entity and TFCs Ratings of Bank Alfalah Limited

The Pakistan Credit Rating Agency (PACRA) has upgraded the Entity and TFCs rating of Bank Alfalah Limited. The Bank’s Long Term Entity Rating was upgraded to AA+ (Double A Plus) from the previous rating of AA (Double A), while its Long Term Debt Instrument Rating was upgraded to AA (Double A) from the previous rating of AA- (Double A Minus), while the outlook has been changed from Positive to Stable in both cases.

The ratings reflect the relative positioning of the Bank Alfalah, among large banks of the country. The Bank has a stronger position in advances – sustained by fresh deployments. The deposit system share has witnessed dilution as the Bank embarked upon a strategy to sustainably rationalize its cost of funding with enduring focus on low cost deposits. Resultantly, BAFL’s cost of fund is comparable to some of the large banks.

Bank Alfalah enjoys an extended outreach across the country which has augmented its deposit base. The operating cost structure has also improved on a Year-on-Year basis, on account of cost rationalization. The Bank’s asset quality has also sustained over the last three years on account of prudent risk management.

Going forward, Bank Alfalah is focused on consolidating its position further by introducing technology-led banking products, focusing on SME & transactional banking, and shifting from conventional to the digital banking model. The assigned ratings also recognize the demonstrated support of Abu Dhabi group (ADG) as a key factor.