Press Release

VIS Reaffirms Corporate Governance Rating of Allied Bank Limited

Karachi, November 11, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Corporate Governance Rating (CGR) of Allied Bank Limited (‘ABL’ or the ‘Bank’) at ‘CGR-9++’. The rating signifies very high level of corporate governance. The previous rating action was announced on October 25, 2023.

The corporate governance ratings assess various key governance areas of an institution, including its regulatory compliance, ownership structure, board composition and operations, financial transparency, and stakeholders’ relationship. ABL, incorporated in Pakistan and listed on the Pakistan Stock Exchange, is a scheduled bank engaged in commercial banking and related services. The Bank is predominantly owned by Ibrahim Holdings (Private) Limited, which holds 90% of the shareholding.

The rating reflects Bank’s strong corporate governance framework with a well-structured Board and its Committees, promoting best governance practices. Notably, all members of the Board Audit Committee are independent directors, enhancing the degree of oversight. Overall, participation of the members in the Board proceedings is excellent, while the diverse skill set of Board members ensures comprehensive oversight. The Board promotes and adheres to best Governance practices. The minutes of both Board and its committees’ meetings were observed to be well drafted and comprehensive. Agenda items and material information’s were timely disseminated to the Board members to facilitate effective decision making. The rating also reflects the management’s effective and proactive approach in aligning the Bank’s strategic objectives with operational implementation. The management team at ABL comprises seasoned professionals, demonstrating stability over the review period. This is further supported by a well-structured succession plan for key positions, ensuring a smooth transition of responsibilities. Limited turnover in senior management and a preference for internal promotions reflect positively on the Bank’s corporate governance framework.

ABL has put in place a comprehensive risk management framework, well aligned with the Bank’s risk acceptance criteria. This framework is overseen by management committees, which develop guidelines, procedures and systems, while the Board of Directors sets limits to prevent concentration of risk. The Bank has established effective systems for monitoring and controlling risk exposures, as well as automating a wide range of information security and enterprise risk processes as part of the business continuity plans. A robust internal audit function is in place to ensure compliance with regulatory requirements and promote transparency, with the Audit & Risk Review Group (A&RRG) operating under the Board’s Audit Committee to assess and strengthen internal controls on a continuous basis. Additionally, ABL's IT governance framework aligns with regulatory standards and significantly enhances service delivery. In digital banking, ABL has introduced various platforms to enhance customer experience, leading to significant growth in transaction volumes. The Human Resource Group (HRG) prioritizes internal recruitment and development, achieving high retention rates while actively promoting diversity within the workforce. In line with its commitment to sustainability, ABL emphasizes Green Financing by directing financial support toward environmentally friendly projects, thereby reinforcing its role in promoting sustainable practices. The Bank's Shariah governance framework ensures compliance with Islamic banking principles through ongoing policy development and rigorous audits, facilitating the growth of Shariah-compliant products that cater to diverse customer needs and also maintaining purity of earnings. Moreover, ABL maintains transparency by providing adequate financial and qualitative disclosures to relevant stakeholders, which further reinforces its commitment to effective governance and building stakeholder confidence.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.


Applicable Rating Criteria:
Corporate Governance Ratings
https://docs.vis.com.pk/docs/CoporateGovernance-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .