Meezan Bank’s entity ratings reaffirmed

KARACHI: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Meezan Bank at AA+/A-1+ (Double A Plus/ A-One Plus) with stable outlook.

“VIS has also reaffirmed ratings of the outstanding Basel 3 Compliant Tier 1 and Tier 2 Sukuk of Meezan Bank at ‘AA-’ (Double A Minus) and ‘AA’ (Double A), respectively,” the bank said in a statement issued on Tuesday.

The assigned ratings incorporate the bank’s dominant market positioning, particularly in the Islamic banking market, and strong franchise value. In comparison to peers, Meezan Bank’s profit strategy focuses on financing. Accordingly, the advance to deposit ratio of the lender was higher vis-à-vis peers. Even though corporate financing remains the mainstay of the bank’s financing operations, constituting two-thirds of the financing portfolio, healthy growth has been witnessed in CBSME (Commercial Banking and Small & Medium Enterprises) and consumer financing portfolios. The bank has been able to maintain its asset quality. As of December 2018, Meezan Bank’s gross infection stood at 1.3 percent.