Lahore, March 05, 2013 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term ratings of First Punjab Modaraba (FPM) at “BBB” (Triple B) and “A3″ (A Three), respectively. These ratings denote low expectation of credit risk and an adequate capacity for timely payment of financial commitments.
The ratings reflect strong association of FPM with the Bank of Punjab (BoP) – a bank majority owned by the Government of Punjab. On a standalone basis, FPM has weak financial profile, a result of continuous business losses, potential drag of un-provided non-performing loans on already thin equity base, and inadequate liquidity.
Nevertheless, BoP, besides providing funding support, is in the process of merging the Modaraba into it. The ratings are dependent on timely and successful execution of the sponsor’s plan. Considering the merger process, PACRA has placed the ratings of FPM on Rating Watch. In this regard, any weakening in the perceived support from the sponsoring bank would carry negative implications for the ratings.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425