Pakistan Credit Rating Agency maintains Ratings of Faysal Bank Limited


Lahore: PACRA has maintained the long-term and the short-term entity ratings of the bank at “AA” (Double A) and “A1+” (A One plus), respectively. Meanwhile, the ratings of the bank’s unsecured, subordinated TFC-III issue of PKR 800mln has been maintained at “AA-” (Double A Minus). These ratings denote the lowest expectation of credit risk emanating from an exceptionally strong capacity for timely payment of financial commitments.

The ratings reflect FBL’s ability to withstand tough operating environment and maintain its market standing. The recent merger of Royal Bank of Scotland (Pakistan) Limited (RBS) with and into FBL has ushered a new era of opportunities and challenges. While earning assets of the bank have witnessed substantial rise with simultaneous expansion in deposit base, FBL’s infected portfolio as well as operating cost structure has increased. Cognizant of the situation, the management is focusing on swift operational integration and consolidation with an aim to reduce infection and rationalize cost structure. FBL’s association with a financially sound business group (Dar Al Maal Al-Islami Trust) remains a key rating factor.

The ratings are dependant on the bank’s ability to effectively execute its medium-term business strategy while capitalizing on the potential of the combined entity in terms of its operating platform and extended market outreach. Cohesiveness and stability in the senior management and swift reduction in expanded cost structure while holding profitable business streams would be critical. The efficacy of the risk management framework aimed at improving the overall asset quality of the bank also remains important.

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

Leave a Reply