Credit Rating



JCR-VIS Reaffirms Entity Ratings of Samba Bank Limited

Karachi, June 22, 2018: JCR-VIS Credit Rating Company Limited has reaffirmed entity ratings of Samba Bank Limited (SBL) at ‘AA/A-1’ (Double A/A-One). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on June 23, 2017.

Assigned ratings reflect support emanating from its key sponsor - Samba Financial Group. SBL has benefited from its sponsor’s expertise in various aspects of banking operations in the past as well as financial support including multiple equity injections. Financial risk profile of SBL has remained strong during the year as signified by the Bank’s capitalization and asset quality indicators.

Gross financing portfolio of SBL increased on the back of ample growth depicted in commercial segment. However, market share in terms of domestic gross advances has remained lowest among peers due to limited loan book. At present, corporate financing continues to be the largest portion of the bank’s lending portfolio, however, SBL’s management has strategized to target commercial clients for the financing portfolio to improve profitability, going forward.

During the outgoing year, SBL’s management was able to attract low to no cost deposits along with improving the proportion of Current & Saving Accounts (CASA). However, due to limited branch network, deposit concentration continues to remain on the higher side. With significant deployment in government papers, the Bank has a relatively liquid balance sheet mix.

Net Interest Margin of the bank increased during 2017 due to volumetric growth in advances. Furthermore, the net profit of the bank was higher on account of utilization of tax adjustments available for previous years.

Ratings take into account the increased focus in commercial, SME and consumer lending along with expansion of branch network in addition to the efforts to initiate and expand the digital banking footprint.