The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Zain Ayaz

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PACRA Maintains The Rating of Bank Alfalah Ltd. | TFCs | Series A

Rating Type Debt Instrument
(16-Feb-22 )
(16-Feb-21 )
Action Maintain Initial
Long Term AAA AAA
Short Term - -
Outlook Stable Stable
Rating Watch - -

The Bank Alfalah Limited (or ''BAFL'') has entity rating of “AA+/A1+” which reflects its strong positioning in the market. The Bank is well positioned to benefit from the ensuing advantages. The Bank's rating take comfort from its diversified loan book which is maintained at a notable level; along with healthy CAR. BAFL has a sound foothold with a considerable presence across the country, enabling its deposit base growth. The Bank has sustained good profit base. Overall infection ratio remained at the lower edge. The rating of TFCs reflects the supreme security structure of the Instrument. The Instrument is secured through lien over GoP issued securities – 10 years PIBs. The securities marked under lien are 105% of the issue, reflecting comprehensive coverage including any unforeseen fluctuation in prices. The securities are placed in BAFL SGL account maintained with the State Bank of Pakistan. The rating draws comfort from the Bank's stable ownership, experienced management team, prudent risk management policies and distinct emphasis on sustaining the position.
The rating is derived on the basis of sovereign risk on the GoP issued securities. Further, the rating is also dependent on maintaining the Bank's capitalization backed by strong sponsors and adding granularity to its advances and deposits book are essential. Continued effective management of spreads remains important, meanwhile, holding the asset quality is a pre-requisite.

About the Entity
Bank Alfalah Limited (BAFL) is one of the largest private banks in Pakistan with a network of 780+ ATMs and branches in more than 200 cities across Pakistan and with an international presence in Bangladesh, Afghanistan, Bahrain and UAE. Bank's main sponsor, Abu Dhabi Group (ADG), comprises of some of the prominent members of UAE's ruling family and leading businessmen of UAE, continues to own majority stake (~49.84% at end-Dec'21) in the bank.
At present, BAFL's BoD comprises eight members including President & CEO and seven Non-Executive Directors, of which four of whom are representatives of ADG, while three are independent. Mr. Atif Bajwa is the President & CEO of the Bank. He carries extensive international career experience spanning 39 years of executive leadership roles in banking.

About the Instrument
The Bank has issued Rated, Secured, Listed, Redeemable Term Finance Certificates (TFCs), having total approved Issue Size of up to PKR 50bln. Issue size of current tranche Series A is PKR 11bln. The tenor of Series A is 3 years where rate is 9.03% per annum. Profit is payable semi-annually in arrears on the outstanding principal amount, based on 365 days a year and on non-cumulative basis. Interim Coupon Payment shall be equal to profit on investment amounts invested by each investor from date on which such investment amounts are received by Issuer until the date which is one day prior to Issue Date.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.