KARACHI: JCR- VIS Credit Rating Company Limited has reaffirmed the entity ratings of Habib Bank limited (HBL) at ‘AAA/A-1+’. JCR- VIS has also reaffirmed TFC rating of HBL at ‘AAA’ (Triple A), said a press release on Thursday. Outlook on the assigned ratings is ‘stable’. Previous rating action for entity and TFC was announced on June 30, 2015 and December 17, 2015, respectively. The assigned ratings reflect systematic importance of HBL in the demesne financial sector; being the Largest commercial bank operating in Pakistan. Growth in domestic operations during 20l5 also included acquisition of Barclays Pakistan business. Moreover, the bank acquired controlling stake in First Microfinance Bank Limited (FMFB) in May 2016. HBL also has sizeable presence outside Pakistan with 14% of the total assets of the bank deployed overseas. Assigned ratings incorporate the sound liquidity profile of the bank illustrated by a cost effective and granular deposit base coupled with the presence of significant liquid assets on the balance sheet; the same depicted improvement on a timeline basis. Managements’ strategy to reduce high cost term deposits has slightly reduced the market share of HBL. Capital adequacy ratio (CAR) of the bank at 15.9% remains healthy and maintenance of the same would commensurate with the assigned ratings, going forward. The bank was successful increasing its core earning and profit after tax, despite the compression in baking, spreads driven by the declining policy rats, on the back of volumetric growth in markup bearing assets, lower cost of deposits, higher fee and commission income and sizeable realized capital gains no sale of securities, especially PIBs. Going forward, the management plans to pursue growth in low cost deposits and increase financing in high yielding segments in order to mitigate the impact of reduction in income generated from capital gains. During 2015, HBL issued a subordinated tier 2 TFC amounting to Rs 10 billion, spanning a tenor of 10 years. A call option and lock-in-clause is embedded is the instrument.