Sindh Bank Limited (SNDB), a state-owned bank fully held by the Government of Sindh, has secured an upgrade in its long-term entity rating to ‘AA’ from ‘AA-’, while its short-term rating has been reaffirmed at ‘A1+’. The outlook for the bank’s ratings remains stable, according to a press release by VIS Credit Rating Company Limited.
The upgrade reflects strengthening operating fundamentals at Sindh Bank, driven by renewed momentum in corporate and commercial lending activities. These developments are expected to improve the bank’s profitability, even as the broader banking sector faces challenges such as tighter margins and elevated taxation pressures.
Operating across 330 branches nationwide, Sindh Bank continues to benefit from strong sponsor support, including past capital injections by the Government of Sindh, along with a skilled management team and a stable governance framework. The bank’s strategic approach to growth, combined with prudent risk management, has helped enhance confidence in its financial performance.
Asset quality indicators have shown marked improvement, supported by sustained recoveries and careful provisioning practices that have mitigated risks associated with legacy non-performing loans. This has enabled Sindh Bank to maintain stability in its loan portfolio while continuing to expand lending activities in key sectors.
While profitability remained stable during the review period, driven by growth in earning assets and higher non-markup income, the recent reduction in the policy rate has exerted some pressure on spreads. Despite this, capitalization levels remain strong, supported by internal capital generation and a measured expansion strategy, which collectively ensure financial resilience.
The bank’s liquidity profile is also robust, underpinned by a diversified and expanding deposit base. Regulatory liquidity metrics are comfortably above required thresholds, reflecting the bank’s strong position to meet short-term obligations while supporting ongoing lending and investment activities.
VIS Credit Rating highlighted that Sindh Bank’s continued focus on operational efficiency, risk containment, and strategic growth underlines its ability to navigate a competitive banking environment. The rating upgrade signals confidence in the bank’s capacity to sustain performance and deliver stable returns for stakeholders, including depositors, investors, and the government.
In conclusion, the rating enhancement to ‘AA’ underscores Sindh Bank’s improved fundamentals, sound governance, and strategic execution. With strengthened capitalization, enhanced asset quality, and robust liquidity, the bank is well-positioned to contribute to Pakistan’s financial sector development while maintaining stability amid market challenges.
This development highlights Sindh Bank’s ongoing commitment to maintaining financial strength and operational excellence, reinforcing its role as a key player in Pakistan’s banking landscape.
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