Samba Bank Limited | PPTFC

CREDIT RATING REPORT | Nov-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
21-Nov-25 AA- - Stable Maintain -
21-May-25 AA- - Stable Maintain -
15-Nov-24 AA- - Stable Maintain -
16-May-24 AA- - Stable Maintain -
16-Nov-23 AA- - Stable Maintain -
About the Instrument

Samba Bank issued PKR 5,000mln worth of PPTFC-Tier II TFCs ("TFCs") in March 2021, priced at 6-month KIBOR plus 135 basis points per annum, payable semi-annually. The TFC, with a tenor of 10 years, is callable from March 2026 with prior SBP approval. It is unsecured, subordinated to all other bank debts, and cannot be redeemed before maturity without SBP approval. Notably, the lock-in clause prohibits payment of profit or principal if it would breach MCR or CAR requirements. Additionally, it includes a loss absorbency clause where, upon a Point of Non-Viability event, SBP can convert the TFCs into common shares or write them off. As of September 2025, the Bank has duly executed its ninth scheduled profit disbursement, amounting PKR 331.4 million.

Rating Rationale

The credit rating of Samba Bank Limited (“Samba” or the "Bank”) is underpinned by the strong sponsorship of its parent entity, Saudi National Bank (SNB) — the largest commercial Bank in the Kingdom of Saudi Arabia (KSA). The Samba Bank continues to actively optimize its earning asset mix in line with its credit risk strategy. During the period 9MCY25, the Bank strategically expanded its investment portfolio by Rs. 39.9bln, which was partially offset by a Rs. 4.1bln reduction in the loans and advances book. On the funding side, interbank borrowings increased by Rs. 30bln, whereas customer deposits increased by Rs. 10.7bln, representing a 10% increase. However, in light of the declining policy rate environment, the Net Interest Income (NII) decreased by 23%, amounting to Rs. 4.3bln (9MCY24: Rs. 5.6bln). Meanwhile, non-interest income remained relatively stable over the period. As a result, the Bank’s Profit After Tax (PAT) declined to Rs. 472mln, compared to Rs. 766mln in 9MCY24. This decline is primarily attributable to a compression in Net Interest Margins (NIMs) and a rise in operating expenses, largely driven by the ongoing branch network expansion and technology upgrade initiative. As of September 2025, the Bank’s Capital Adequacy Ratio stood at 24.6% (CY24: 23.8%). The consistent improvement in CAR over the years highlights the Bank’s strengthened risk absorption capacity, which underpins the stability of its credit profile and supports the currently assigned rating for its debt instruments. The Bank expanded its physical presence by adding 8 new branches, bringing the total to 65, with plans to open more during CY25 in different strategic locations across Pakistan to boost customer acquisition and market reach. On the digital front, an enhanced Mobile and Internet Banking platform was launched, demonstrating the robustness and scalability of the Bank’s digital infrastructure. In alignment with its Islamic Vision 2027, the Board of Directors has, in principle, approved the Bank’s strategic plan to transition from a conventional to a full-fledged Islamic Bank. This would align its operations with Shariah principles while catering to evolving customer preferences in the local market. On March 13, 2025, the State Bank of Pakistan (SBP) granted In-Principle approval to Samba Bank Limited (SBL) to commence Shariah-compliant business and operations, subject to the completion of the prescribed regulatory requirements and conditions.

Key Rating Drivers

The rating relies on the key factors which include maintaining asset quality, increasing its deposit market share, diversifying income streams, preserving a buffer in CAR, and upholding a strong governance framework.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Samba Bank Limited | PPTFC

rating analysis

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Issuer Profile
Profile

Samba Bank Limited ("Samba" or the "Bank") is a banking company listed on the Pakistan Stock Exchange. In 2007, Samba Financial Group (SFG) of Saudi Arabia acquired a 68.4% stake in Crescent Commercial Bank Limited (CCBL), which was subsequently rebranded as Samba Bank Limited in 2008. In 2021, Saudi National Bank (SNB) was formed by the merger of two big banks National Commercial Bank and Samba Financial Group. As a result of the merger, the shares of Samba Bank held by SFG were transferred to SNB by operation of law, establishing SNB as a leading banking entity in Saudi Arabia. Samba operates as a scheduled bank with its registered office in Blue Area, Islamabad, and has 65 branches across 18 major cities nationwide.


Ownership

The majority of the Bank’s stake (84.51%) is held by Saudi National Bank (SNB) and the general public (9.67%). While the remaining stake vests with mutual funds (0.16%), public sector companies and corporations (0.26%), and others (5.40%). The Bank’s shareholding structure is considered strong, with Saudi National Bank (SNB) as its major shareholder. SNB, the largest financial group in Saudi Arabia, is government-owned and operates globally in eight countries with a significant presence across diverse sectors. SNB’s subsidiaries include SNB Capital Company (SNBC), NCB Capital Dubai, NCB Capital Real Estate Investment Company (REIC), SNB Markets Limited, and Al-Ahli Insurance Services Marketing Company. The equity of SNB stood at SAR 171.37bln at the end CY24 (CY23: SAR 160.71bln).


Governance

The Bank's Board structure primarily revolves around their group. There are eight directors on the Board with one serving as chairperson. The chairperson, Mr. Mustafa Ilyas also serves as an adviser to SNB and brings over 18 years of audit experience which focused exclusively on the banking sector. Each member of the Board contributes significant expertise, with the majority having extensive backgrounds in banking, thereby enhancing the overall strength of the Board The Bank has a process in place to enhance the overall effectiveness of the BOD, it’s committees, and individual directors on annual basis. To ensure effective governance, the Board has formed four committees, namely, (i) Audit Committee, and (ii) Risk Committee, iii) Nomination and Remuneration Committee and iv) IT Committee. To ensure operational efficiency, the Audit Committee ensures that the accounts fairly represent the financial position of the Bank. The Bank’s external auditors, M/s KPMG Taseer Hadi & CO. Chartered Accountants, have expressed an unqualified opinion on the Bank’s financial statements for the year ended Dec'24.


Management

The Banks operates through a well-defined organizational structure headed by the President and CEO. The organization is structured along functional lines with the various department heads, along with the management committees, reporting directly to the President and Deputy CEO. The Bank's CEO, Mr. Ahmed Tariq Azam has resigned from the position on April 28th, 2025. Mr. Rashid Jahangir has been appointed as acting President and CEO of the bank with effect from May 22, 2025 till the time permanent President and CEO is appointed in due time. The Bank have a highly experienced senior management team capable of ensuring that the bank remains top performing financial institution in Pakistan. A twelve members comprising of the CEO, Deputy CEO and the Group heads of each business and support function, is responsible for the supervision and control of the bank’s affairs. To ensure that an effective risk management framework is implemented in the Bank, the BOD and senior management are actively involved in the formulation of policies, procedures and limits.


Business Risk

In light of the declining policy rate environment, In 9MCY25 the Net Interest Income (NII) decreased by 23%, amounting to Rs. 4.3bln (9MCY24: Rs. 5.6bln), which is attributable to decrease in policy rate from 17.50% in September’24 to 11.00% in September’25. The markup earned was recorded as PKR 16.5bln (9MCY24: PKR 22.4bln). The contribution of markup from investments stood at 9MCY25: PKR 11bln (9MCY24: PKR 12.2bln) and advances remained low at 9MCY25: PKR 5.2bln (9MCY24: PKR 9.5bln). Non-interest income increased by PKR 96 mln, reaching PKR 1,412mln, driven by capital gains of PKR 547mln on investments, foreign exchange income of PKR 505mln and fee and commission income of Rs. 279mln. In addition, the Bank realized a gross capital gain of Rs. 714mln in its FVOCI investment portfolio, which has been directly recognized in the Statement of Changes in Equity (SOCE) in accordance with IFRS-9 requirements.


Financial Risk

In 9MCY25, the Bank’s net advances decreased by 8.9% on a YoY basis to stand at PKR 51.9bln (end-Dec24: PKR 56.4bln). The Bank’s advances to deposits ratio (ADR) recorded a decrease and stood at 44% (end-Dec24 :52.3% ) mainly on the back of a decline in advances and an increase in deposit base. The upward trend has been shown by the NPLs and the rise in infection ratio, which stood at 17.2% during 9MCY25 (endDec24:15%). As of Sep'2025, the Bank’s Capital Adequacy Ratio stood at 24.6% (end-Dec24: 23.8%). The Bank’s equity base stood at Rs. 18.2bln as of 9MCY25, up from Rs. 17.2bln at the end of CY24.


Instrument Rating Considerations
About the Instrument

Samba Bank issued PPTFC-TIER II in Mar-21. The amount of the instrument is PKR 5,000mln and priced at 6MK+135bps p.a. payable semiannually. The tenor of this instrument is 10 years, callable from Mar-26 or thereafter with prior approval of SBP. The TFC Issue is subordinated to the payment of principal and profit to all other indebtedness of the Bank, including deposits, and is not redeemable before maturity without prior approval of the SBP.


Relative Seniority/Subordination of Instrument

The TFC Issue is subordinated as to payment of principal and profit to all other indebtedness of the bank, including deposits and is not redeemable before maturity without prior approval of the SBP. Moreover, the investors shall have no right to accelerate the repayment of future scheduled payments (interest or principal) except in bankruptcy and/or liquidation. The lock-in clause states that neither profit nor principal may be paid (even at maturity) if such payments would result in a shortfall in the Bank's MCR or CAR or increase any existing shortfall in MCR or CAR. The TFCs is also subject to loss absorbency clause as stipulated in terms of the Basel III Guidelines wherein upon the occurrence of a Point of Non-Viability ("PONV") event as defined in the Basel III Guidelines, the SBP may at its option, fully and permanently convert the TFCs into common shares of the Bank and/or have them immediately written off (either partially or in full).


Credit Enhancement

The instrument is unsecured.
 
 

Nov-25

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Samba Bank Limited | PPTFC

financial summary

(PKR mln)

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Sep-25
9M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
A. BALANCE SHEET
1. Stage I | Advances - net 51,442 55,724 72,553 74,179
2. Stage II | Advances - net 0 0 0 0
3. Stage III | Non-Performing Advances 10,810 9,921 7,335 5,261
4. Stage III | Impairment Provision (10,278) (9,576) (6,451) (4,986)
5. Investments in Government Securities 136,231 97,796 67,724 74,838
6. Other Investments 3,454 2,480 2,688 2,066
7. Other Earning Assets 12,373 1,368 9,231 8,378
8. Non-Earning Assets 27,947 24,773 25,655 19,338
Total Assets 231,979 182,486 178,734 179,074
6. Deposits 117,803 107,142 114,732 105,244
7. Borrowings 77,083 47,467 35,977 50,823
8. Other Liabilities (Non-Interest Bearing) 18,824 10,652 11,662 8,354
Total Liabilities 213,709 165,261 162,371 164,421
Equity 18,269 17,225 16,363 14,653
B. INCOME STATEMENT
1. Mark Up Earned 16,592 28,721 28,705 22,545
2. Mark Up Expensed (12,287) (21,395) (20,604) (17,811)
3. Non Mark Up Income 1,413 1,687 1,208 244
Total Income 5,718 9,013 9,310 4,978
4. Non-Mark Up Expenses (3,904) (5,351) (4,830) (4,059)
5. Provisions/Write offs/Reversals (789) (1,758) (2,286) (1,845)
Pre-Tax Profit 1,025 1,904 2,193 (926)
6. Taxes (553) (1,204) (958) 498
Profit After Tax 472 699 1,235 (428)
C. RATIO ANALYSIS
1. Performance
Net Mark Up Income / Avg. Assets 2.8% 4.1% 4.5% 2.5%
Non-Mark Up Expenses / Total Income 68.3% 59.4% 51.9% 81.5%
ROE 3.5% 4.2% 8.0% -2.8%
2. Capital Adequacy
Equity / Total Assets (D+E+F) 7.9% 9.4% 9.2% 8.2%
Capital Adequacy Ratio 24.6% 23.8% 21.3% 18.7%
3. Funding & Liquidity
Liquid Assets / (Deposits + Borrowings Net of Repo) 65.1% 68.8% 46.6% 41.6%
Net Financial Assets to Deposits Ratio [(Total Finances - net + Non-Performing Finances - net) / Deposits] 44.12% 52.33% 64.01% 70.74%
Current Deposits / Deposits 27.0% 19.8% 22.2% 22.4%
Saving Deposits / Deposits 24.4% 22.6% 21.8% 28.1%
4. Credit Risk
Impaired Loan Ratio | [Stage III | Non-Performing Advances / Gross Advances] 17.2% 15.0% 9.1% 6.5%
Non-Performing Finances - net / Equity 2.9% 2.0% 5.4% 1.9%

Nov-25

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Samba Bank Limited | PPTFC

rating scale

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Nov-25

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Samba Bank Limited | PPTFC

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

Nov-25

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Samba Bank Limited | PPTFC

Regulatory and Supplementary Disclosure

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Nature of Instrument Size of Issue (PKR mln) Tenor Security Issue Agent Trustee
Samba Bank Limited PPTFC | Tier II PKR 5,000mln 10 years from the date of issue Unsecured N/A Pak Oman Investment Company
Name of Issuer Samba Bank Limited (''SBL'' or the ''Bank'')
Issue Date 1-Mar-23
Maturity 1-Mar-31
Call Option SBL May call the TFC with the prior written approval of SBP, on any profit payment date starting from and including the fifth aniversary of the issue date
Profit Rate 6MK+1.35%

Samba Bank | PPTFC

Sr. Due Date Principal Opening Principal Markup/Profit Rate (3MK + 75bps) Markup/Profit Payment Principal Payment Total Principal Outstanding
PKR (mln) PKR
Issue Date 1-Mar-21 5,000,000,000 0 0 5,000,000,000
1 1-Sep-21 5,000,000,000 7.65% 226,849,315 1,000,000 227,849,315 4,999,000,000
2 1-Mar-22 4,999,000,000 7.54% 220,379,203 1,000,000 221,379,203 4,998,000,000
3 1-Sep-22 4,998,000,000 11.03% 311,919,018 1,000,000 312,919,018 4,997,000,000
4 1-Mar-23 4,997,000,000 16.00% 429,926,821 1,000,000 430,926,821 4,996,000,000
5 1-Sep-23 4,996,000,000 20.06% 539,217,596 1,000,000 540,217,596 4,995,000,000
6 1-Mar-24 4,995,000,000 23.21% 610,034,164 1,000,000 611,034,164 4,994,000,000
7 1-Sep-24 4,994,000,000 21.73% 579,456,822 1,000,000 580,456,822 4,993,000,000
8 1-Mar-25 4,993,000,000 17.91% 475,995,685 1,000,000 476,995,685 4,992,000,000
9 1-Sep-25 4,992,000,000 11.82% 331,425,035 1,000,000 332,425,035 4,991,000,000
10 1-Mar-26 4,991,000,000 11.82% 325,956,057 1,000,000 326,956,057 4,990,000,000
11 1-Sep-26 4,990,000,000 11.82% 331,292,252 1,000,000 332,292,252 4,989,000,000
12 1-Mar-27 4,989,000,000 11.82% 325,825,439 1,000,000 326,825,439 4,988,000,000
13 1-Sep-27 4,988,000,000 11.82% 331,159,470 1,000,000 332,159,470 4,987,000,000
14 1-Mar-28 4,987,000,000 11.82% 327,494,241 1,000,000 328,494,241 4,986,000,000
15 1-Sep-28 4,986,000,000 11.82% 331,026,687 1,000,000 332,026,687 4,985,000,000
16 1-Mar-29 4,985,000,000 11.82% 325,564,204 1,000,000 326,564,204 4,984,000,000
17 1-Sep-29 4,984,000,000 11.82% 330,893,905 1,000,000 331,893,905 4,983,000,000
18 1-Mar-30 4,983,000,000 11.82% 325,433,587 1,000,000 326,433,587 4,982,000,000
19 1-Sep-30 4,982,000,000 11.82% 330,761,122 2,491,000,000 2,821,761,122 2,491,000,000
20 1-Mar-31 2,491,000,000 11.82% 162,684,139 2,491,000,000 2,653,684,139 0
7,173,294,760 5,000,000,000 12,173,294,760

Nov-25

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