Pakistan Credit Rating Agency (PACRA) has upgraded the long-term and short-term entity ratings of BankIslami Pakistan Limited (BIPL) to A (Single A) and A1 (A One) respectively. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.
The ratings reflect BIPL’s significant advancement towards establishing itself as an active player in the emerging Islamic banking industry. The bank, in a short span of time, has established an effective operating platform, supplemented by requisite technological infrastructure and risk management systems. At the same time, the bank’s expanded outreach is expected to help maintain diversification in its deposit base and finances portfolio.
However, given weakened economic fundamentals, BIPL may take a relatively long period to achieve the envisaged profitability. Meanwhile, the ratings take into account the sound financial standing of sponsoring groups.
