Ratings of Small Medium Enterprises Leasing revised

Karachi, July 05, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited has revised the entity ratings of SME Leasing Limited (SLL) from ‘BBB/A-3’ (Triple B/A-Three) to ‘BBB-/A-3’ (Triple B Minus/A-Three). Outlook on the assigned ratings remains ‘Negative.’

The revision in rating takes into account the diminished loss absorption capacity of the institution. Amidst a challenging environment, SLL has enhanced focus on recoveries, which have been partly utilized to repay outstanding borrowings. Resultantly, leverage is low. However, with lower income from leasing operations on the back of decrease in financing portfolio and income suspension against NPLs, the company continues to incur operating losses.

This along with incremental provisions against overdue receivables has adversely affected bottom line resulting in erosion in equity. Ability to scale up leasing operations remains constrained in the absence of fresh equity injection. Progress against raising equity from the sponsors will be closely monitored by JCR-VIS.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk