Pakistan Credit Rating Agency assigns preliminary rating of ‘A+’ to proposed Term Finance Certificates issue of NIB Bank Limited

Lahore, December 30, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned preliminary rating of ‘A+’ (Single A plus) to the proposed listed, unsecured and subordinated TFC re- issue of up to PKR 5,000mn (including up to PKR 1,000mln green shoe option) by NIB Bank Limited (NIB). This rating denotes a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The rating reflects 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 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. To maintain adequate cushion in capital adequacy vis-à-vis expiration of relaxation by SBP on investment deduction from regulatory capital, the bank intends to re-issue its listed, unsecured and subordinate TFC.

For more information, contact:
Hammad Rashid
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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