The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Habib Metropolitan Bank Limited at ‘AA+’ (Double A Plus) and ‘A1+’ (A One Plus), respectively. The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
The ratings incorporate HabibMetro’s association with a diversified and financially strong international bank – Habib Bank AG Zurich (HBZ). This association helps in assimilating the parent’s best practices into HabibMetro, while fostering control environment with enhanced level of regulatory oversight. The ratings recognize the bank’s healthy financial profile emanating from a strong equity base, that is supplemented by an adequate flow of profitability. The bank sustained its dominant position in its niche market – self liquidating trade finance – though with higher focus of other banks, the competition is increasing. The bank characterizes concentration in its deposit as well as loan books. The bank’s asset quality is relatively stressed compared to similar rated banks. However, the accumulation has stalled with high likelihood of reduction in the overall size of the infection. Nonetheless, strong provision coverage limit any drag on risk absorption.
