PACRA Maintains Entity Ratings of Modaraba Al-Mali

Lahore, June 29, 2018 (PPI-OT):The ratings of Modaraba is reflective of its equity based capital structure. The ratings draw comfort from the association of the Modaraba with Bankislami, via management Company (Bank Islami Modaraba Investment Limited). Its financing book mainly comprises of Ijarah and Musharaka. Although the Asset quality is fully maintained, as NPL’s are fully provided (Loan Loss Provisions / Impaired Lending: 100%).

Modaraba has been able to increase its income from financing and fuel business, which helped it registered slightly higher profits. The management would maintain largely equity based capital structure; however borrowing from the management company/sponsor bank would be an option available to the Modaraba.

The ratings are dependent on the management’s ability to focus more on its core business, adding more Musharakah financing and ensure consistent improvement in its performance. Maintaining healthy asset quality, while maintaining it’s current largely equity based capital structure is important to maintain the ratings at current level. Fluctuation in oil prices may impact the Modaraba’s income.

For more information, contact:
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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