VIS Credit Rating Company Limited (VIS) has upgraded Sindh Bank Limited’s (SNDB) entity ratings to ‘AA-/A-1+’ (Double A Minus/A-One Plus) from ‘A+/A-1’ (Single A Plus/A-One). The long-term rating ‘AA-‘ reflects high credit quality; protection factors are modest risk subject to economic conditions, while the short-term ‘A-1+’ signals the highest likelihood of timely repayments. The Outlook on the assigned ratings remains ‘Stable’. The upgrade considers the Bank’s sub-sovereign ownership, robust sponsor support, recent capital infusion, and government deposits. The Bank’s focus on secured financing, cautious lending expansion, NPL recovery, and prudent investments in sovereign issuances contribute to its credit strength. Sindh Bank investment portfolio leans towards Pakistan Investment Bonds (PIBs) having mostly floating rate instruments thus reducing market risk. Its emphasis on low-cost funding, strong liquidity ratios, and profit growth reinforce its financial resilience. In 2023, amid a high monetary policy rate, the sharper increase in yields on earning assets relative to funding costs, improved the Bank’s spread. Bank reported a profit after tax due to higher net markup and non-markup income, despite inflationary pressures on administrative expenses. Overall, further gains in markup income and significant improvement in pre-tax returns are expected for the full year. Despite initial challenges in 2022, Bank’s timely equity injection, improved profitability, and robust Capital Adequacy Ratio (CAR) surpassing regulatory requirements showcase a positive trajectory. Continued improvement in asset quality and stable management would drive future upgrades.