Press Release

VIS Reaffirms Corporate Governance Rating of Allied Bank Limited

Karachi, October 25, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the Corporate Governance Rating (CGR) of Allied Bank Limited (ABL) at ‘CGR-9++’. The rating signifies very high level of corporate governance. The previous rating action was announced on November 25, 2022.

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 (BoD) and executive management, self-regulation, financial transparency and relationship with stakeholders. ABL is one of the top-five commercial banks in Pakistan with sizable and sustainable market footprint in provision of financial intermediation services. The rating reflects effective and proactive approach of the Board for strategic alignment of the Bank’s manifestos with implementation of the same by the management on both operational and tactical levels. The rating derives strength from continued efficient and productive two-way communication amongst stakeholders, directors and management, for mitigation of any change adversely impacting the operating dynamics of the Bank. The Bank has a strong corporate governance framework with well-structured Board and its Committees. The Board promotes and adheres to the best governance practices. Notably, all members of the Board Audit Committee are independent directors. Overall attendance record of Board and its Committees’ meetings was satisfactory. Board Members possess highly diversified profile and maintain effective oversight and supervision. The minutes of Board and its Committees’ meetings were observed to be well drafted and comprehensive. Agenda items and material information were timely disseminated to the Board members to facilitate effective decision making. The Board Remuneration Policy satisfies the SBP’s guidelines and is approved by the shareholders. The extent of financial and qualitative disclosures available to the public is considered adequate. The management team comprises seasoned professionals and has largely depicted stability over the review period. This confidence is further bolstered by the formulation of a robust conflict-of-interest policy. The rating also takes into account a well-structured succession plan which is in place for the key positions, resulting in smooth transition of responsibilities at the top of the hierarchical pyramid.

The Bank has implemented robust risk management practices, established effective systems for monitoring and controlling risk exposures, and automated a wide range of information security and enterprise risk processes. Information Technology (IT) governance is centered on aligning ongoing IT investments with the Bank's long-term objectives while ensuring the seamless delivery of business services. Furthermore, the Bank is placing a strong emphasis on enhancing digital channels to offer customers digital and networked banking services and reinforcing its cybersecurity defense system. These advancements enable the Bank to better address the ever-changing cyber landscape and are expected to play a pivotal role in realizing growth opportunities and optimizing costs over the medium to long-term rating horizon. The Board has taken proactive steps to establish a robust internal audit function, along with the implementation of procedures for managing risk, overseeing the internal control framework, and defining the scope of acceptable principal risks, all aligned with the Bank's risk acceptance criteria. The leadership at ABL is dedicated to fostering a strong compliance culture by collaborating with all stakeholders, effectively integrating regulatory guidance, and persistently enhancing a comprehensive risk mitigation framework. Moreover, as an integral component of the Bank's long-term strategy, the institution is committed to enhancing the impact of Green Financing on environmental sustainability. This commitment serves as a means to steer the Bank's financial support towards environmentally friendly projects and initiatives within the country.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-64 (Ext. 207) or email at info@vis.com.pk.

Sara Ahmed
Director

Applicable Rating Criteria:

Corporate Governance Ratings (August 2017)
https://docs.vis.com.pk/docs/CGR-Methodology-201708.pdf

VIS 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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .