PACRA PLACES RATINGS OF

ALFAYSAL INVESTMENT BANK LTD ON RATINGWATCH

 

Lahore: October 12, 2001

The Pakistan Credit Rating Agency (PACRA) has placed the ratings of AlFaysal Investment Bank Limited (AFIBL) on RatingWatch owing to its expected merger with Faysal Bank Limited (FBL).

AFIBL was assigned a long-term rating of 'AA+' (double A plus) and a short-term rating of 'A1+' (A one plus), recognizing its ability to maintain a very low risk profile of assets, stable earnings from its core activities as well as from reverse repo transactions and demonstrated ability of the management to identify and benefit from emerging opportunities in the market. The support of the controlling shareholder Dar Al-Maal Al-Islami (DMI), an international banking and financial services group, was also duly factored in these ratings.

After the completion of the merger process, the asset size of the combined entity would be considerably larger than the current asset size of AFIBL. However, FBL's long-term rating of 'A+' (assigned by another rating agency) is considerably lower than that of PACRA's corresponding rating of AFIBL. This will obviously affect the rating of the merged entity.

PACRA's ratings for AFIBL will automatically stand withdrawn on its cessation as a legal entity after its merger with FBL.