UBL ratings upgraded

KARACHI: JCR-VIS Credit Rating Company Limited (JCR-VIS) on Monday upgraded the entity ratings of United Bank Limited (UBL) to ‘AAA/A-1+’ (Triple A/A-One Plus) from AA+/A-1+ (Double A Plus/A-One Plus). Outlook on the assigned ratings is ‘stable’. The previous rating action was announced on June 30, 2015.

The assigned ratings incorporate sustained improvement by UBL across key performance areas, including asset quality, liquidity, capitalisation and profitability as well as the management’s commitment to maintain a positive trend, going forward, the statement said.

UBL is the second largest private sector bank in Pakistan with a market share of 8.95 percent (end-2015: 8.60 percent; end-2014: 8.36 percent) in domestic deposits at end March 2016, reflecting its systemic importance. Deposit base of UBL had crossed Rs1 trillion at the end-2015 with over 1,300 branches across Pakistan. UBL’s drive to innovate within the digital space continues to diversify and deliver its products and services.

Apart from being a strong domestic franchise, UBL’s diversified operations and revenue streams are also a key rating driver; the bank has a sizeable presence in the overseas market, largest by a local bank, representing around one-fourth of total assets. With minimal oil-related exposure, the management does not foresee any material non-performing loans emanating from the overseas portfolio. Besides overseas operations, diversification in domestic revenue streams, apart from growth in core revenues, is also evident from the bank’s branchless banking presence through its Omni platform (now at over 40,000 agents) and significant market share in home remittance business. The corporate loan book witnessed growth in 2015 with product pipeline for the ongoing year including a number of energy and infrastructure projects.