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Pacra ups First International Investment Bank rating to 'A'

RECORDER REPORT

KARACHI: The Pakistan Credit Rating Agency (Pacra) has upgraded the long-term rating of First International Investment Bank Limited to 'A' (Single A) while the short-term rating has been maintained at 'A 1' (A one).

The ratings assigned by Pacra to the senior unsecured creditors of the bank, represent high credit quality and the capacity for timely payment of financial commitments of the bank is considered strong.

The rating upgrade is in recognition of the bank's ability to operate successfully in the difficult operating environment. Although the reported profitability of the bank declined, the actual performance as measured by the pre-provisioning and pre-tax profits, improved significantly.

Due to the bank's provisioning (both against equity portfolio and potential loan and lease losses), the risk of potential loss has been minimised and quality of the bank's assets has improved.

While there has been a shift in the bank's operations into industrial and consumer leasing in urban areas and into micro-credit for farmers in milk producing rural areas, owing to careful client selection and prudent risk management policies, the overall risk profile is not likely to be adversely impacted.

The bank's potential to mobilise funds to support its leasing, term finance and investment operations also remains strong. With improvement in the asset quality and access to long term funding, the bank is well positioned to benefit from any improvement in the operating environment.

With a high quality asset base and reversal of existing provisions, the bank's profitability is also expected to improve.

As a consequence of the upgrade, the rating of the secured Terms Finance Certificate of Rs 325.6 million already issued and of the proposed TFC of Rs 262.5 million (inclusive of the green shoe operation) also stands upgraded to 'A+ (A plus).