Press Release
VIS Upgrades Corporate Governance Rating of Allied Bank Limited
Karachi, December 20, 2021: VIS Credit Rating Company Limited (VIS) has upgraded the Corporate Governance Rating of Allied Bank Limited (ABL) from “CGR-9+” to “CGR-9++”. The rating signifies very high level of corporate governance. The previous rating action was announced on December 21, 2020.
The corporate governance ratings are based on evaluation of key governance areas of the rated institution, including regulatory compliance, ownership structure, composition and operations of the Board of directors and executive management, self-regulation, financial transparency and relationship with the stakeholders. The assigned rating incorporates a well-established corporate governance framework underpinned by effectively functioning Board and Management Committees and strong financial transparency. Reconstitution of the Board and Board Committees was observed following the Board election. Structure of the Board and Board Committees is in compliance with the governance code. Overall attendance record of all Committee meetings was satisfactory with comprehensive discussion on various aspects of the bank. The management team comprises seasoned professionals and has depicted stability over the review period. The rating takes comfort from structured succession plan in place resulting in smooth transition of responsibilities. The rating also factors in further strengthening of control environment with the implementation of Quality Assurance and Improvement Program which focuses on regular monitoring and periodic self-assessments of all Audit and Risk Review functions. Meanwhile, a dedicated Compliance Committee is responsible for promoting high compliance culture and reporting to the Board on effectiveness of compliance risk management.
Comprehensive risk management practices, sound systems for monitoring and controlling risk exposures, and automation of a wide spectrum of information security and enterprise risks are in place. Information Technology (IT) governance focuses on alignment of continued IT investments with long-term objectives of the Bank and smooth delivery of business services. Significant emphasis is being placed on alternate delivery channels in order to provide customers digital and networked banking services and strengthening of cybersecurity defense system. The Board Remuneration Policy satisfies the SBP’s guidelines and is approved by the shareholders on a post facto basis. The remuneration structure of Material Risk Takers and Material Risk Controllers also fulfils the criteria set out by the SBP; overall remuneration structure of the Bank is considered in line with the industry standards. The Bank focuses more on internal elevations, career growth opportunities are offered to all employees through merit-based evaluations, and gender diversity is supported. The Bank makes sufficient and timely financial and qualitative disclosures in the public domain digitally through its official website. Level of financial and qualitative disclosures in the public domain is satisfactory. Annual reports are fairly descriptive and contain comprehensive disclosures. The institution maintains healthy stakeholder relations and actively engages in social and welfare causes. Going forward, the management is committed to continue the alignment of its governance practices with the newly announced SBP Corporate Governance Regulatory Framework and the international best practices.
For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at info@vis.com.pk
Javed Callea
Advisor
Applicable Rating Criteria: Corporate Governance Rating (August 2017)
https://docs.vis.com.pk/docs/CGR-Methodology-201708.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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .