Press Release
VIS Assigns Initial Entity Ratings to Bank Makramah Limited (Formerly: Summit Bank Limited)
Karachi, March 24, 2026: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings to Bank Makramah Limited (‘BML’ or the ‘Bank’) at ‘A-/A2’ (Single A minus/A Two). The medium-to long-term rating of ‘A-’ indicates ‘good credit quality; protection factors are adequate. Risk factors may vary with changes in economic conditions.’ The short-term rating of ‘A2’ indicates a good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating remains ‘Stable’.
BML is a mid-sized commercial bank in Pakistan, formerly known as Summit Bank Limited, operating under a renewed strategic direction following a change in ownership. The Bank is engaged in banking services as described in the Banking Companies Ordinance, 1962 and is operating through its 149 Conventional Banking Branches and 12 Islamic Banking Branches in Pakistan as of Dec’25. The Bank’s sponsor base includes sole sponsor and principal investor, Nasser Abdulla Hussain Lootah, having acquired controlling ownership (86.12%) as part of the Bank’s strategic turnaround. As a prominent UAE-based businessman with diversified investments across banking, real estate, and industrial sectors, his backing has been central to the Bank’s recapitalization and restructuring efforts.
The assigned ratings reflect the significant transformation undertaken by BML following the change in ownership and subsequent recapitalization by the sponsor shareholder. The Bank’s profile has improved materially after the acquisition, supported by strong sponsor backing and a clear strategic direction aimed at restructuring the institution and transitioning towards a full-fledged Islamic banking model. Capital strengthening measures undertaken through equity injection, restructuring initiatives, and the amalgamation of sponsor-owned assets into the Bank have improved the solvency position and enabled compliance with minimum regulatory capital requirements. Governance and oversight frameworks have also strengthened with the presence of an experienced board and board committees, and an independent Shariah governance structure supporting the Bank’s planned Islamic transformation. Under the strategic guidance of the Board, the management team is focused on operational restructuring, digital enhancement, and the development of Shariah-compliant products to support future growth.
The ratings also incorporate the Bank’s improved liquidity profile, supported by a diversified deposit base, with a sizable retail component and a strong buffer of liquid assets, which provide adequate coverage against short-term obligations. However, the ratings remain constrained by legacy asset quality challenges, which despite sizable recoveries in recent periods, reflect in a comparatively high level of non-performing financings. This is compounded by the latent risks posed by the still outstanding declassified portfolio. Although provisioning coverage provides cushion against potential credit losses and further recoveries are expected, the credit risk profile remains elevated and requires sustained improvement. The Bank’s capitalization profile is expected to improve from the proposed conversion of outstanding TFCs into equity, which will effectively release capital by strengthening the Tier-I capital base. The resultant improvement in capital adequacy is also expected to support risk absorption capacity.
Profitability indicators remain weak on a core basis, with earnings supported largely by non-recurring items and reversals of provisions rather than sustainable operating performance. Going forward, profitability is expected to improve gradually, supported by lower funding costs and incremental growth in core earning assets as regulatory constraints ease. However, core profitability will remain overall challenged in the near term, with net earnings dependent on recoveries. The assigned rating is sensitive upon the removal of SBP-imposed lending restrictions over the next few months, and continued improvement of core earnings, resolution of legacy exposures as planned, and recoveries along with the maintenance of a strong capital buffer to absorb higher risk.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Financial Institutions
https://docs.vis.com.pk/Methodologies%202024/Financial-Institution-v2.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf