PACRA Maintains Entity Ratings of Standard Chartered Bank (Pakistan) Limited

The ratings reflect the Standard Chartered Bank (Pakistan) Limited “SCBPL”, strong association with the globally renowned and financially sound institution, Standard Chartered PLC. SCBPL's strategic alignment and operational integration within the parent company enable it to leverage the technical resources and extensive expertise cultivated at the Group level, reinforcing its position as a leading bank in Pakistan's financial landscape. The Bank's core competencies are its robust technology infrastructure, exceptional service delivery, and differentiated customer base. The Bank is predominately digitally operated in retail banking. In Mortgage financing, the Bank ranks at 3rd highest in the country and % 2nd highest in credit card spend. For CY23, the Bank's net markup income stood at PKR ~94.1bln registering an increase of 107%. This increase was primarily driven by a significant rise in returns from the Bank’s advances and investments which outpaced the growth in interest expenses. The bank's efficiency ratio, dropped to 8.7% in CY23 from 19.9% in CY22, which indicates enhanced operational efficiency. This improvement reflects the bank's ability to manage its expenses more effectively relative to its income. The Income from derivatives constitute the largest share of non-markup income, followed by Income from foreign exchange. The Bank reported a Profit after tax of PKR ~42.6bln (CY:22 PKR ~19.8bln). Standard Chartered Bank Pakistan Limited maintained a more conservative approach, in alignment with its parent company's policy to mitigate significant country-specific risks. The advances portfolio grew modestly by 1.6%, reaching PKR 240.8bln, reflecting a conservative approach to credit expansion. The ADR edged up to 30.6% (CY:22 30%). The Bank reported NPLs of PKR 21bln (CY22: 21.2bln). This stability was complemented by enhanced loan loss coverage, which increased to 98% from 97.5%, showcasing the bank’s prudent risk management, However, the infection ratio of the Bank stood at 8.7% (CY:22 8.9%). The Investment stood at PKR 226.7bln compared to (CY22: 477.7bln), and the bank’s investment book represented 22.6% (CY22: 51.5%) of the total assets. Short-term government securities continue to dominate the investment portfolio representing 99.8%. The bank’s market share in customer deposits has decreased to 2.7% as of Dec'23 (CY22: 3.2%), as part of group's global approach. SCBPL's deposit base largely comprised of low-cost deposits that has allowed the bank to maintain one of the most favourable CASA mixes in the industry, standing at 97% in CY23 compared to 95.5% in CY22, SCBPL stands out among its peers with the highest Return on Equity and Return on Assets, reflecting its financial performance and operational efficiency. The Bank's CAR improved to 20.07% (CY22: 18.68%).
The ratings depends on the Bank's ability to maintain profitability in changing domestic conditions while safeguarding spreads without compromising asset quality.

About the Entity
SCBPL, established in Pakistan in July 2006, is predominantly owned (98.99%) by Standard Chartered PLC, operating through a network of 40 branches across 10 cities as of December 2023, including 2 Islamic branches. With a strong focus on digitalization in recent years, this emphasis is set to persist. Standard Chartered PLC holds credit ratings of ''A+'' (S&P), ''A3'' (Moody’s), and ''A'' (Fitch) as of September and October 2023, respectively. SCBPL's six-member Board of Directors includes four members from the Standard Chartered Group, including CEO Mr. Rehan Shaikh, alongside independent or non-executive directors. Mr. Shaikh, a seasoned banker, assisted by an experienced team.