Karachi, December 01, 2025: VIS Credit Rating Company Limited (VIS) has upgraded the long-term entity rating of Sindh Bank Limited (‘SNDB’ or the ‘Bank’) to ‘AA’ (Double A) from ‘AA-’ (Double A Minus) while reaffirming the short-term rating at ‘A1+’ (A One Plus). Long-term rating of ‘AA’ indicates high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short-term rating of ‘A1+’ indicates Strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’ Previous rating action was announced on June 30, 2025.
SNDB is wholly owned by Government of Sindh (GoS), through its Finance Department and sponsor support is evident given prior capital injections, as and when required. The Bank has been providing Commercial, Corporate and Investment Banking services for over a decade.
Headquartered in Karachi, the Bank’s nation-wide branch network stood at previous year level with total 330 branches (including 8 sub- branches and 19 Islamic Banking branches).
The rating revision reflects the reviving of corporate and commercial lending activities and its expected impact on profitability going forward.
As such the Bank’s relative positioning in terms of earnings ability will likely improve, as the sector at large faces thinne r margins and higher taxes. A stable governance framework, an experienced management team, and the gradual strengthening of core operating fundamentals is supportive of the rating decision. Asset quality indicators have improved meaningfully due to sustained recoveries and prudent provisioning practices, which have helped contain residual credit risk, despite legacy NPL portfolio.
Profitability remained stable during the review period, driven by growth in earning assets and higher non-markup income, although the recent reduction in the policy rate has exerted some pressure on spreads. Capitalization continues to be strong, with comfortable buffers above regulatory requirements, supported by internal capital generation and a measured approach to balance sheet expansion. The Bank’s liquidity profile is sound, backed by a growing and diversified deposit base, an improved mix of low-cost accounts, and regulatory liquidity indicators
that remain well above the required thresholds.
