PACRA Maintains Entity Ratings of First Women Bank Limited | RW | Developing Outlook

The ratings reflect financial health, operational stability, and overall risk profile of the Bank. The rating also reflects Bank's ownership structure and the continued support from its strong sponsor. The Government of Pakistan (GoP) is the major shareholder of the bank. The bank has benefitted from multiple capital infusions provided by the Ministry of Finance (MoF), primarily aimed at ensuring the bank's adherence to the mandated minimum capital requirements (MCR). The audit of CY22 and CY23 are underway which will be completed in the quarter timeline. As per the unaudited financial statements CY23, profitability increased by 1.2 times on YoY basis clocked at PKR 523mln (CY22: PKR 168mln). This growth is mainly due to a 74% rise in net markup income to PKR 2.09 billion, fueled by higher returns from advances and investments. The bank's capital structure showcases a notable increase in equity to PKR 3.6bln (CY22: PKR 2.5bln), alongside an improvement in the capital adequacy ratio to 32.2% (CY22: 20.6%) far surpassing the minimum requirement of 18% for FWBL. It signifies the solid capacity to absorb potential losses, thereby providing greater security to depositors and stakeholders. The minimum capital requirement (MCR) of the bank was reported at PKR 2.4bln as of CY23 (end-CY22: PKR 1.9bln), against the minimum requirement of PKR 3bln (net of losses). As of CY23, advance portfolio reduced by 18% clocked at PKR 8.5bln (CY22: PKR 11.1bln). Meanwhile, a rise of 8% has been observed in NPLs. The bank’s investment portfolio rose by 51% clocking PKR 44bln as of end-Dec 23 (Dec 22: PKR 29bln). The investment book is predominantly allocated to PIBs, comprising ~99% of the investment portfolio, with mark-to-market gain recorded at PKR 93mln. The Bank’s prudent strategy in long-term government securities ensures capital preservation, mitigates risk, and secures steady returns. The deposit system share inched down (end-CY23: 0.1%, end-CY22: 0.2%). Whilst, FWBL's CASA ratio remains robust, underscoring the Bank's strong foundation in low-cost deposit acquisition. The Government of Pakistan approved the privatization of the First Women Bank in Feb'24. This privatization is expected to bring strategic partnerships and technological advancements by leveraging private sector expertise. Going forward, the management is planning to implement strategic initiatives to enhance net spread, expand the retail customer base, improve lending and SME business, and rebrand the corporate image.
The ratings capture the need to sustain a growth trend in profitability and deposits. Revision and successful execution of the business strategy, while improving the efficacy of the risk management framework to improve asset quality.

About the Entity
First Women Bank Limited (FWBL) was established in 1989. The bank focuses on catering to women at all levels of economic activity; micro, SME, and corporate. The Government of Pakistan owns a majority stake - ~85% (~83% through the Ministry of Finance and ~2% through NBP) in the bank. The rest of the shareholding comprises four large banks (ABL, UBL, HBL, and MCB). MoF appointed Chairman/Directors on the Board on Sep 09, 2021. Mr. Najeeb Agrawalla is the Chairman of the Board and has 31 years of experience. Mr. Farrukh Iqbal Khan is appointed by the Ministry of Pakistan (MoF) Government of Pakistan on Dec 30, 2019, as President & CEO of FWBL. He joined the Bank as President/CEO on Jan 03, 2022. He is a veteran banking professional with 30 years of diversified experience.