KARACHI: VIS Credit Rating Company Limited has upgraded Sindh Bank Ltd’s long-term entity rating to ‘AA’ from ‘AA-’, while reaffirming its short-term rating at ‘A1+’, a statement said on Thursday.
The outlook on the assigned ratings is ‘stable’, the agency said. The previous rating action was announced on June 30, 2025.A long-term ‘AA’ rating reflects high credit quality with strong protection factors and modest risk that may vary slightly with economic conditions. The ‘A1+’ short-term rating indicates the strongest likelihood of timely repayment of short-term obligations and outstanding liquidity factors.
Sindh Bank, wholly owned by the Sindh government through its finance department, has received sponsor support in the form of capital injections when required. The bank provides commercial, corporate and investment banking services and operates 330 branches nationwide, including eight sub-branches and 19 Islamic banking branches.
VIS said the upgrade reflects the revival of corporate and commercial lending activities and the expected impact on profitability. The bank’s relative earnings position is likely to improve as the sector faces thinner margins and higher taxes. The agency cited a stable governance framework, experienced management and the gradual strengthening of core operating fundamentals as supporting factors.
Asset quality indicators have improved due to sustained recoveries and prudent provisioning, helping to contain residual credit risk despite a legacy non-performing loan portfolio. Profitability remained stable during the review period, supported by growth in earning assets and higher non-markup income, although the recent policy rate reduction has pressured spreads.
VIS said the bank’s capitalisation remains strong, with comfortable buffers above regulatory requirements, aided by internal capital generation and measured balance sheet expansion. Liquidity is sound, backed by a growing and diversified deposit base, an improved mix of low-cost accounts and regulatory liquidity indicators well above required thresholds.
