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The ratings reflect improved risk profile of
Growth in advances was subdued when compared with the medium industry average growth of 3.7%. Hike in NPLs led to net provisioning expense being recorded; maintaining asset quality intact remains essential. The Bank grew its customers deposit base higher than the sector's growth, with particular importance to saving deposit.
The concentration of government and public sector deposits remain high. The bank's Capital Adequacy Ratio (CAR) clocked in at 14.8% as at end-Dec19 (end-Dec18: 13.17%), which is a healthy sign for BoP. Covid-19 has posed challenges to the banking sector, as almost all segments of the economy, worldwide and domestically, are getting negatively impacted. The ramifications would continue to unfold, warranting vigilance and timely actions where needed.
The ratings are dependent on the financial risk profile of the bank, mainly emanating from sustenance of capital adequacy and continued healthy profitability trend in line with the management's plans. Any weakening in asset quality will in turn put pressure on the bank's profitability and risk absorption capacity.
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