Pakistan Credit Rating Agency maintains Ratings of NIB Bank Limited


Lahore: The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of NIB Bank Limited at AA- (Double A Minus) and A1+ (A One Plus), respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. The rating of the unsecured, subordinated TFC Issue of PKR 4,000mln has also been maintained at A+ (Single A Plus), denoting a low expectation of credit risk.

The ratings reflect NIB’s association with Temasek Holdings – owned by Government of Singapore, internationally rated at AAA. On a standalone basis, the poor performance of its loan book caused NIB to experience material weakening. The bank reported significant credit losses, though mainly emanating from legacy loan book acquired from PICIC – the bank and DFI – NIB’s initiated program-lending book also experienced sizeable infection.

However, the sponsor, demonstrating continuing commitment towards its majority-owned subsidiary, injected fresh capital to keep the bank’s financial profile intact. Nevertheless, sizeable non-performing assets, thereby putting pressure on the bank’s earnings, in turn, risk absorption capacity in the form of high provisioning is the key challenge. The management, cognizant of this, is pursuing a recovery strategy, the success of which is dependent on the quality of execution and inherent uncertainty of market conditions.

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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