PACRA Maintains Entity Ratings of The Bank of Punjab
The ratings reflect improved risk profile of Bank of Punjab (BoP) with an appreciable enhancement in profitability and asset quality over the last few years which supplemented the equity base. During the current year, the bank has recorded commendable uptick in revenue base – both interest earned and income from fee, commission. Hence, an uptick witnessed in asset yield. NPLs inched down; trend needs to continue in future. Customer deposits – part of funding base – witnessed increase; contribution of CA deposits declined. During 9MCY18, the bank recorded sizable improvement in profitability which was further supplemented by reversal in provisioning. The bank's Capital Adequacy Ratio (CAR) clocked in at 13.29% for the period ending-Sep18. Going forward, the bank envisages growth in advances wherein the criteria is higher margins with sustained risk profile. Meanwhile, expansion in deposit base with low cost focus, while attracting a wide customer range, is on the cards.
The ratings are dependent on the financial risk profile of the bank, mainly emanating from sustenance of capital adequacy and continued healthy profitability trend in line with the management's plans. Meanwhile, improvement in asset quality and upholding better governance standards remain imperative.
The Bank of Punjab, established under the BOP Act 1989, is listed on Pakistan Stock Exchange (PSX). The bank operates a vast network of 545 branches as at end Sep-18, mainly concentrated in Punjab (85%). The Government of Punjab (GoPb) holds majority stake in BOP (58%), whereas the rest is widely dispersed.
Mr. Naeemuddin Khan, President of the Bank since Sep-08, has lately resigned. Mr. Khalid Tirmizey, former deputy CEO, has become Acting-CEO in Dec-18. The senior management consists of seasoned bankers. The current team has played a pivotal role in the bank's revival; their continuity and cohesiveness is critical for successful execution of the envisaged business plan.