Press Release
VIS Reaffirms Entity Ratings of Habib Bank Limited
Karachi, June 30, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Habib Bank Limited (‘HBL’ or the ‘Bank’) at ‘AAA/A1+’ (Triple A/A-One Plus). Medium to long term rating of ‘AAA' indicates highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short-term rating of ‘A1+’ denotes strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’ The ratings of HBL’s Basel III compliant Additional Tier-1 (ADT-1) TFC-2 and TFC-3 (issued in September 2019 and December 2022) have also been reaffirmed at ‘AA+’ (Double A Plus). The medium to long-term rating of ‘AA+’ denotes high credit quality, protection factors are strong; risk is modest but may vary slightly from time to time because of economic conditions. The previous rating action was announced on June 30, 2025.
HBL is operating with a domestic network of 1,723 (Dec’25: 1,715; Dec’24: 1,705) branches as of Mar’26, including 609 (Dec’25: 608; Dec’23: 408) Islamic Banking Branches. International operations are conducted through 25 branches (Dec’25: 25; Dec’24: 27), including a presence in the Karachi Export Processing Zone (KEPZ). The Bank operates as a subsidiary of the Aga Khan Fund for Economic S.A. (AKFED), which is incorporated and headquartered in Geneva, Switzerland.
HBL ratings reflect its significant domestic franchise, supported by strong institutional sponsorship and a robust corporate governance framework. The asset profile remains conservative, characterized by a substantial allocation to low-risk sovereign securities that mitigates portfolio credit risk. While the lending portfolio contracted as part of strategic balance sheet rebalancing, asset quality indicators remain stable, underpinned by prudent credit risk management and comfortable provisioning coverage.
Profitability continues to be supported by consistent recurring earnings and improved core operating efficiency, which help offset the spread compression arising from a downward trend in policy rates. The funding profile remains a key credit strength, anchored by a highly granular, well-diversified deposit base that ensures low concentration risk and funding stability. Liquidity buffers are robust, with key coverage metrics safely exceeding regulatory minimum requirements. Furthermore, the bank maintains sound capitalization, with capital adequacy ratios providing a solid cushion to absorb macroeconomic shocks.
Given the prevailing macroeconomic outlook, key risks include the presently heightened credit risks, pressure on margins and increased risk of revaluation losses, with higher interest rates. Robust capitalization and liquidity buffers and steady access to cost effective liquidity remain key credit positives.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Financial Institutions
https://docs.vis.com.pk/Methodologies-2026/FI-Methodology-26.pdf
Instrument Rating
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf