Pacra Assigns Ratings To Sme Bank Limited

The Pakistan Credit Rating Agency Limited (PACRA) has assigned a long term rating of  "BBB" (Triple B) and short term rating of   "A3" (A Three) to SME Bank Limited (SMEBL). The ratings denote adequate capacity for timely payment of financial commitments.However, the ratings have 'negative outlook'

Bank Islami Mantain Rating with Positive Outlook

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of BankIslami Pakistan Limited(BIPL) at "A" (Single A) and "A1" (A One) respectively. These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments. Meanwhile, "Positive Outlook" has been assigned to these ratings.

PACRA Maintains Ratings of NIB Bank Limited

PACRA Maintains Ratings of NIB Bank Limited

 

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of NIB Bank Limited (NIB) at "AA-" (Double A Minus) and "A1+" (A One Plus), respectively. The rating of the unsecured TFC issue of PKR 4,000mln has also been maintained at "A+"(Single A Plus). These ratings denote a very low expectation of credit risk emanating from very strong capacity for timely payment of financial commitments.

The ratings reflect NIB's association with Temasek Holdings - the investment arm of Government of Singapore, internationally rated AAA. 

 

The ratings draw material comfort from historically demonstrated commitment of Temasek towards NIB. On a standalone basis, the new team has managed to bring recovery in the bank's financial profile. The key challenge remains non-performing loans; also carrying potential revenue drag. In this regard, an aggressive recovery drive is being pursued; the ensuing reversals are likely to support profitability, which has also observed uptick through different efficiency measures. The new management is re-aligning its business strategy to prevailing market dynamics, wherein, channelizing branch network for low cost deposit expansion and cautious buildup of advances, along with non-fund revenue are imperative.

About The Bank:

NIB Bank, headquartered in Karachi, is the largest foreign bank in Pakistan in terms of its branch network - 179 branches in 59 cities. TheBank's key business units include Consumer Banking, Small Medium

Enterprises and Commercial Banking, Corporate and Investment Banking and Treasury services.

 The bank, incorporated in 2003, after a series of mergers holds ~1% share in total banking deposits at end Dec-12. Bugis Investments (Mauritius) Pte. Limited, a wholly owned subsidiary of Fullerton Financial Holdings (FFH), which in turn is fully owned by Temasek Holdings, owns majority stake in NIB (89%). The eight-member BoD includes the President and seven non-executive directors, three of whom are representatives of Temasek and four are independent. Mr. Badar Kazmi, the CEO since January 2012, is a seasoned banker with extensive local and international experience. The management team, though new to the bank, comprises individuals with extensive banking experience.

About The TFC:

NIB issued listed unsecured, subordinated, 6-months KIBOR plus 115bps TFCs of PKR 4,000mln, for a tenor of 8 years, in Mar08 with semiannual profit payments. The major repayment in six (6) equal semi-annual installments,which started from 66th month (i.e. Sep 2013). The TFCs have a call option, in whole or in part, subject to the approval of SBP, exercisable on any profit payment date after 60 months i.e. from Mar-13.

Benefit of this TFC towards tier-2 CAR has started to diminish. To replenish this, NIB has lately announced issuance of another TFC upto PKR 6,000 mlnwhile availing call option on existing TFC.

The Pakistan Credit Rating Agency Limited P R RESS ELEASE PACRA MAINTAINS ENTITY AND INSTRUMENT RATINGS OF BANK ALFALAH LIMITED

PACRA MAINTAINS ENTITY AND INSTRUMENT RATINGS OF BANK ALFALAH LIMITED

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Bank Alfalah Limited (BAFL) at "AA" (Double A) and "A1+" (A one plus) respectively. The ratings of three unsecured subordinated TFCs issues of 1) PKR 1,325mln, 2)PKR 5,000mln, and 3) PKR 5,000mln have been maintained at "AA-" (Double A minus). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect BAFL's sustained market position along with improving profitability, strong liquidity, and strengthening equity base. The infection ratio of the bank, though less than peers, has experienced accretion and is concentrated in few accounts. The management, while maintaining cautious lending approach, is making significant recovery efforts to harness its asset quality. The bank's performance is expected to benefit from its expanding franchise enabling effective advances deployment and deposit mobilization. Bank Alfalah's Islamic operations have leading position amongst conventional banks; this, while supporting performance, has critical role in the bank's growth strategy. The ratings recognize demonstrated support of Abu Dhabi group as a key factor.

About the Company

Bank Alfalah Limited (BAFL), listed on all the bourses of the country, has a network of 471 branches, at end-Mar13, including 110 Islamic banking branches - the biggest network by any conventional bank. Abu Dhabi Group (ADG), comprising some of the prominent members of UAE's ruling family, leading businessmen of UAE and their associates, owns the majority shareholding in the bank. The bank has strategic investments in communication sector and other dimensions of financial sector - asset management, brokerage, and insurance. However, the non-financial investments are still far from reaching sustainable strength.

The seven-member BoD comprises four members from ADG, two independent directors and the CEO. The chairman of the board, H.H. Sheikh Hamdan Bin Mubarak Al Nahayan, is Federal Minister of Higher Education and Scientific Research, United Arab Emirates. Mr. Atif Bajwa, the CEO, has over thirty years of banking experience. He is supported by a seasoned management team, though a number of them are new to the bank.

About the TFCs

BAFL has three unsecured and subordinated TFCs in issue. TFC-III of PKR 1,325mln, issued in Nov-05 is for a tenor of 8 years. Principal repayment would be in three semi-annual installments commencing from 84th month of the issue. TFC-IV of PKR 5,000mln issued in Dec-09 and TFC-V of PKR 5,000mln issued in Feb-13, are also for a tenor of 8 years each. The principal repayment of TFC-IV would be in three equual installments commencing from 84th month of the date of issue while principal repayment of TFC-V would be in bullet form at the time of maturity.

PACRA UPGRADES ENTITY RATINGS OF THE BANK OF KHYBER

PACRA UPGRADES ENTITY RATINGS OF THE BANK

OF KHYBER

 

The Pakistan Credit Rating Agency (PACRA) has upgraded the long-term and short-term entity ratings of The Bank of Khyber to"A"(Single A)[previous: A-] and "A1"(A One) [previous: A2] respectively. These ratings denote a low expectation of credit risk emanating from strong capacity

for timely payment of financial commitments.

The ratings reflect BoK's improved relative positioning 

amongst peers emanating from better performance, sound liquidity, and supporting capital structure. The management, while following a well conceived strategy, has gradually expanded the bank's outreach, deposits, and credit book. The ratings incorporate BoK's ability to arrest infection in its lending portfolio as reflected in its controlled asset quality. However, given tough economic fundamentals, a careful monitoring of related risks would require active attention. The bank is eyeing branch expansion with focus on low-cost deposit mobilization, while approach toward credit expansion stays cautious. The ratings continue to draw comfort from the association of the bank with Government of Khyber

Pakhtunkhwa, wherein the management plans inroads into financial services needs of the government.

The ratings are dependent on bank's ability to hold its overall risk profile,while expanding its size. Improvement in the technology platform is critical to foster the control environment including reporting framework. Meanwhile, any significant infection in asset quality, thereby weakening the bank's risk absorption capacity, and/or political intervention compromising the governance standards would impact negatively.

About the Bank

The Bank of Khyber (BoK), established in 1991 under the BoK Act, was awarded status of a scheduled bank in September 1994. The Government of Khyber Pakhtunkhwa (GoKP) has majority stake in BoK (70%), whereas, Ismail Industries with ~9% is other major shareholder. The remaining shareholding is widely dispersed. The bank is on the privatization list of the provincial government, though there has been no material progress in this regard yet.

The board presently comprises seven members, including four nominees of GoKP, including Mr. Javed Hashmat, as Executive Director, one representative of Ismail Industries, and two independent directors. After

completion of the term of previous MD in March 2013, Mr. Hashmat has assumed the role as acting MD. The bank has an able team.

PACRA Maintains Ratings of First Women Bank Limited

PACRA Maintains Ratings of First Women Bank Limited

The Pakistan Credit Rating Agency (PACRA) has maintained thelong-term and short-term entity ratings of First Women Bank Limited (FWBL) at"A-" (Single A Minus) and "A2" (A two), respectively. These ratings denote a low expectation of credit risk while the capacity for timely payment of financial commitments is considered strong.

The ratings primarily reflect majority ownership of the bank by Government of Pakistan (GoP), which has gradually increased its shareholding through fresh capital injection. The bank's standalone performance is under pressure; weak risk management parameters and rising concentration risk has led to an increase in the bank's non-performing loans and thus deteriorated its profitability. FWBL's small size and limited outreach pose constraints to its growth. Meanwhile, it is non-compliant with the regulatory requirement of capital for which the bank has availed an extension. The ratings are dependent upon the bank's ability to strengthen its standalone standing, mainly by 

(i) improving its risk management framework, 

(ii) attaining sustainable profitability, and 

(iii) strengthening of technological platform. Meanwhile, any further lapse in asset quality may exert pressure.

The clarity from the government - the main sponsor - regarding the capital of the bank and the role it should play in the economy would facilitate them anagement in designing and following a comprehensive strategy.

About The Bank:

Formed in 1989, FWBL's mandate is to cater to the special banking needs of women in Pakistan. FWBL operates through a network of 41branches (end Mar-13) spread over 24 cities nationwide.Government of Pakistan owns majority stake, 58.8% through Ministry of Finance and NBP (at end-11: 48.4%), in the bank. The remaining stake is held by the four big commercial banks - HBL, MCB, UBL, and ABL. The President

of the bank is appointed by the Federal Government. Lately, the BoD has been reconstituted, whereby there are seven directors, four from GoP (Ministry of Finance), one each from MCB and HBL, and one joint nomiee from ABL, NBP, and UBL. Ms. Charmaine Hidayatullah, the acting President of the bank, has been with the bank for over 20 years. She is supported by a team of experienced professionals.

PACRA MAINTAINS RATINGS OF THE BANK OF PUNJAB

PACRA MAINTAINS RATINGS OF THE BANK OF

PUNJAB

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of The Bank of Punjab (BoP) at 'AA-'(Double A minus) and'A1+'(A one plus), respectively. The ratings denote a very low expectation of credit risk and indicate very strong capacity for timely payment of financial commitments.

The ratings primarily reflect strong association of the bank with the Government of Punjab (GoPb) as majority shareholder, which has demonstrated continued commitment and support in the dire need. This association has benefited the bank in terms of capital acquisition, sustainable deposit base, and letter of comfort against provisioning for major infected exposures. On a stand alone basis, though the financial profile of the bank is

improving, it remains weak in comparative terms, attributed to sizable non-performing loans - causing constrained earnings and significant potential provisions. Nevertheless, the bank's core operations have come out of losses and demonstrated profitability. Recoveries being the cornerstone of the bank's revival, the legacy NPL portfolio have seen reduction - though fresh infection remains a challenge.

The Bank:

The Bank of Punjab, established under the BoP Act 1989, is listed on all threestock exchanges of the country. The bank operates a vast network of 306 branches, mainly concentrated in Punjab. The Government of Punjab (GoPb) maintains majority stake in BoP (51%), whereas, 13% is owned by EOBI and

the rest by various stakeholders.

Mr. Naeemuddin Khan, the President of the Bank since Sep-08, has over three decades of diversified banking experience and has been associated with reputed international and domestic banks during his career. The senior

management consists of seasoned professionals with extensive experience in banking industry. The current team has played pivotal role in revival of the bank. Their continuity and cohesiveness is critical for successful execution of envisaged business plan