PACRA Assigns Initial Entity Ratings to Mashreq Bank Pakistan Limited

The assigned rating reflects Mashreq Bank Pakistan Limited’s (“MBPL” or the “Bank”) strong sponsor profile, solid equity base, and well-integrated digital infrastructure. MBPL is a wholly owned subsidiary of Mashreq Bank P.S.C., UAE (The Parent Bank)—one of the region’s oldest and most resilient banking groups, with sound credit fundamentals, diversified operations, and a presence in over 14 international markets. This ownership structure provides MBPL with advanced technology platforms, digital-banking expertise, and strategic oversight, ensuring long-term operational stability. Mashreq Bank P.S.C., backed by a robust equity base of PKR 3 trillion, carries strong credit ratings of A, A, and A3 from Fitch, S&P, and Moody’s, respectively. In line with its global expansion strategy, the Parent Bank established Mashreq Bank Pakistan Limited in 2023 as a Digital Retail Bank. The strategic and operational support from Mashreq Bank P.S.C. serves as the foundation of MBPL’s business model. The Bank benefits from sound governance practices and an experienced management team, which provides critical support to its overall creditworthiness. The Bank successfully achieved key regulatory milestones, including SBP’s No Objection Certificate in Jan'23, In-principle Approval in Sep'23, and a restricted DRB license in Dec'24 for pilot operations. Upon completion of the pilot phase and fulfilment of regulatory requirements, the Bank received scheduled bank status on Sep 15, 2025, enabling full-scale digital retail banking operations.
The Bank plans to operate through two segments: (a) Mashreq NEO and (b) Mashreq NEOBiz. Mashreq NEO has been launched and caters to individual customers, providing digital accounts, high-yield savings, current accounts, and NRP accounts. Mashreq NEOBiz is expected to be launched in the coming months. Mashreq NEOBiz is Pakistan’s first fully digital banking solution for entrepreneurs and business owners, which will offer secure and seamless financial services through a single platform. The Bank’s technology architecture is built on the Oracle FLEXCUBE core-banking system, supported by AI-driven risk controls, strong cybersecurity, and advanced operational resilience. Initially, the Bank’s strategy will primarily emphasise deposit mobilisation through attractive returns on innovative products. These include Pakistan’s first Shariah-compliant, profit-bearing current account offering returns of up to 5%—well above the prevailing market average—alongside Islamic savings accounts and competitively priced conventional products, with a focus on attracting remittance inflows and digitally driven customers. The Bank also plans to launch credit cards in early 2027, while other lending operations will commence once a sufficient deposit base is established. The Bank’s capitalisation remains strong, supported by periodic equity injections by the Parent Bank. As of Sep'25, share capital stood at PKR 9.4bln, with equity at PKR 2.4bln after accounting for accumulated losses. Additional capital infusions are planned to support ongoing expansion. The investment portfolio—entirely comprising government securities—stood at PKR 6.5bln, with market risk managed through standardised sensitivity-based limits.
MBPL benefits from strong sponsor backing, a sound capital base, and a robust governance framework. The assigned ratings are supported by the financial strength and digital expertise of its parent, Mashreq Bank P.S.C., along with ongoing capital and operational support during the Bank’s early stages.

About the Entity
MBPL is overseen by a nine-member Board with strong expertise in banking, technology, and digital transformation. The Board is chaired by Mr. Fernando Morillo, a seasoned global banker and Group Head of Retail Banking at Mashreq Bank P.S.C., whose international experience supports the Bank’s strategic direction. The management team, led by the CEO, Mr. Muhammad Hamayun Sajjad, a recognized fintech leader, is supported by an experienced team advancing MBPL’s digital banking vision.