KARACHI: VIS Credit Rating Company Limited (VIS) has reaffirmed the corporate governance rating of Allied Bank Limited (ABL) at “CGR-9+”.
The rating signifies a very high level of corporate governance. The previous rating action was announced on April 2, 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 rolled out by the bank supplemented by strong financial transparency and effectively functioning board and management level committees.
The management team of the institution comprises seasoned professionals; stability in the same is a key rating contributor. Level of financial and qualitative disclosures in the public domain is satisfactory. Moreover, the overall control environment of the institution is considered strong.
The rating reflects an effective and proactive approach of the Board for the strategic alignment of the bank’s manifestos with the implementation of the same by the management on both operational and tactical levels.
The ratings incorporate 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 same has been imperative in maintaining ABL’s risk profile during the current pandemic crisis.
The rating derives strength from major headways made on information technology (IT) front through digitalisation and automation to assist the banks’ growth prospects along with cost rationalisation during the medium to long-term.
IT and network support extended to the entire workforce during lockdown while maintaining information security played a significant role in keeping the institution afloat during the pandemic.
Moreover, the risk rating of branches showed improvement during the period under review with an increased focus on rectification of recurring issues along with no major fraud instances reported.
The rating takes comfort from a structured succession plan in place resulting in the smooth transition of responsibilities in the hierarchical pyramid.