The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating at ‘A' (Single A) and the short-term rating at ‘A1' (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 and are applicable to the senior unsecured creditors of the Corporation. The ratings have been placed on Rating Watch pending a management review on assumption of office by the new chief executive and key management personnel.

HBFC's ratings reflect the Corporation's sound equity base signifying high risk absorption capacity, strong underlying security against loans and fairly high liquidity levels, though showing a decline from YE02. The ratings also factor in the inconsistent performance in the core financing operations and substantial proportion of overdue rentals. Additionally, the ratings recognize improvement in the image and operations of the Corporation as a result of restructuring process carried out by the management over the past few years. At the same time PACRA is concerned about the continuity of the process with the termination of service contract of the chief executive and uncertainty about the appointment of his successor. As a consequence, while affirming the previous ratings, PACRA has place these on Rating Watch pending a management review on assumption of office of the new chief executive and key management personnel.

About the Corporation: The House Building Finance Corporation (HBFC) was established in 1952 under the HBFC Act, to provide financial facilities for the construction, reconstruction, repair and purchase of houses, particularly to the low and middle-income groups of the economy. The Government of Pakistan (GoP) and the State Bank of Pakistan (SBP) jointly hold the share capital of the Corporation. The general direction and administration of the Corporation and its affairs is vested in the Board of Directors appointed by the GoP. HBFC has a large network of 58 offices spanning across the country, managed through 11 zones with headquarters at Karachi. The Corporation employs more than 1300 personnel.