PACRA MAINTAINS ENTITY RATINGS OF

HOUSE BUILDING FINANCE CORPORATION (HBFC)

FOR 2^nd CONSECUTIVE YEAR

 

Lahore: October 17, 2003

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating at 'A' (Single A) and the short-term rating at 'A1' (Single A One) of House Building Finance Corporation (HBFC). These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments. The ratings are applicable to the senior unsecured creditors of the Corporation.

The ratings reflect the Corporation's high liquidity, strong underlying security against loans and sound equity base signifying high risk absorption capacity. Additionally, the ratings recognize the concerted efforts by the new management to bring about the much-needed improvement in the image and operations of the Corporation through organizational restructuring principally aimed at (a) human resource development through induction of experienced professionals and skill training; (b) streamlining the policies and procedures and improvement in the management information systems; and (c) greater market orientation and improvement in client servicing. At the same time, the ratings also factor in the inconsistent performance in the core financing operations and substantial portion of overdue rentals.