Pakistan Credit Rating Agency Limited maintains entity ratings of Modaraba Al Mali

Lahore, April 22, 2016 (PPI-OT):The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Modaraba Al Mali (MAM) at A- (Single A minus) and A2 (A two) respectively. The ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong.

The ratings reflect low risk financial profile of Modaraba Al Mali owing to largely equity based capital structure. Modaraba is gradually building up its financing book, mainly deploying funds in vehicle financing. BankIslami Modaraba investments Limited; the management company of MAM facilitates modarabas’ growth via recent musharakh financing. Although Ijarah book is increasing, MAM’s non-additive and fully provided non-performing book depicts management’s cautious strategy.

Moreover, revival of gasoline station adds value into the non-funding side of modaraba. The management would maintain equity based capital structure; however funding support from the management company and sponsor bank would be available.

The ratings are dependent on the management’s ability to ensure consistent improvement in its performance. Maintaining healthy asset quality while maintaining its current equity based capital structure is important to maintain the ratings at current level.

For more information, contact:
Hammad Rashid
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

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