Karachi, December 30, 2015 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of First Credit and Investment Bank Limited (FCIBL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 24, 2014.
The ratings incorporate strong sponsor backing with National Bank of Pakistan (NBP) and Water and Power Development Authority (WAPDA), each having a stake of 30.8% in the institution; more than one-third of interest is held by a third party. At end-September 2015, the company’s reported equity of Rs. 673.3m, which was short of the minimum capital requirement by Rs. 76.7m.
Historically, profitability of the bank has remained under stress on account of sizeable non-earning assets and incremental provisioning and non-accrual of income against non-performing exposures. In 2015, bottom line of the bank depicted an increase on the back of higher capital gains on investments and return on TDRs.
Operational activities at FCIBL have remained subdued and there has been a reduction in asset base of the bank. Investments represent more than half of the resource base of the bank. While additions have been made in investments, overall portfolio has declined on account of principal repayment and provisioning against non-performing exposures.
Management anticipates building its financing portfolio in the coming years. Asset quality indicators will continue to be monitored in this regard. Borrowings have also been scaled back and debt leverage of the institution is around 1(x). Liquidity position of the bank is considered comfortable with liquid assets over 100% in relation to total borrowings.
For more information, contact:
Ms. Sobia Maqbool
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi