PACRA Maintains The Entity Ratings of Bank AL Habib Limited

The assigned ratings of Bank AL Habib Limited ("BAHL" or "the Bank") reflect its strong market position, prudent lending approach developed over more than three decades, and a consistent record of financial stability across different economic cycles. These foundational strengths, drawn from one of Pakistan's most distinguished banking heritages and reflected in the Bank's trade finance leadership, good asset quality, and resilient funding profile, collectively position BAHL among the most credibly rated commercial banks in Pakistan. BAHL is widely recognized for its strong focus on trade finance, which remains a key pillar of its business model. The Bank also benefits from established expertise in remittances, supporting stable fee-based income and foreign exchange earnings. During CY25, the Bank continued its branch expansion strategy in a measured and targeted manner to strengthen its market presence and customer reach. The addition of 102 new branches brought the total network to 1,323 branches, with the Islamic banking network now encompassing 392 dedicated branches (1QCY26: 1,329). The scale of its current Islamic footprint is the compounding result of a long-term conviction, and Islamic banking is increasingly emerging as a consequential contributor to the Bank's future growth trajectory. On the balance sheet, the investment portfolio stood at PKR 2.03trln (CY24: PKR 1.92trln), concentrated predominantly in government securities — an allocation consistent with the Bank's long-held preference for asset quality and capital preservation over yield maximisation. The Bank's capitalisation profile remained sound. Shareholders' equity, excluding revaluation surplus, grew by 8.7% to PKR 141.8bln (CY24: PKR 130.4bln), while total equity stood at PKR 171.3bln. Capital adequacy remained comfortably above regulatory requirements, supported by retained earnings and Tier-II capital instruments. Advances declined to PKR 792.1bln (CY24: PKR 910.9bln), which is an outcome of the management’s consolidation drive. BAHL's credit philosophy is anchored in the Bank's enduring discipline of declining exposure where the risk-reward does not meet its established standards, irrespective of prevailing market appetite. During CY25, the Bank recorded net credit loss allowance reversals of PKR 2.4bln (CY24: charge of PKR 14.9bln), driven by recoveries against previously provisioned exposures — an outcome that affirms the underlying quality of the advances book and the rigour of the Bank's provisioning practices. Profitability moderated during the year, with net mark-up income declining to PKR 130.6bln (CY24: PKR 156.2bln), a direct consequence of policy rate compression. Profit after tax declined by 23.1% to PKR 30.6bln (CY24: PKR 39.9bln). The Bank’s profitability is supported by its strong and stable deposit base, extensive trade finance relationships, and disciplined cost management practices.
Going forward, BAHL is well-positioned to sustain its defining presence across deposits, trade finance, and Islamic banking, even as net interest margin pressures persist in the near term.

About the Entity
BAHL, incorporated in Oct-91, operates through a network of 1,329 branches, including 398 Islamic Banking branches, as of end March 2026. The sponsors of BAHL are members of the Habib Family one of the oldest and most distinguished names in Pakistan's banking sector. BAHL's ten-member Board includes representatives of the Habib Family. Mr. Mansoor Ali Khan, the Bank's CEO, has been associated with the Bank for almost three decades. He is supported by a team of experienced professionals, most of whom have had a long association with the Bank.