The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (15-February-2006)
    PACRA Maintains Ratings of Atlas Investment Bank Limited and Places Them on RatingWatch
 

 
Analyst
Ambreen Irfan
(+92-42-586 9504)
ambreen@pacra.com

 

 

 











 

 

 

 

 

 

 

 

 

 

Disclaimer
This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.

  

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Atlas Investment Bank Limited (AIBL) at “A+” (Single A plus) and “A1” (A one) respectively. These ratings denote a low expectation of credit risk and a strong capacity for timely payment of financial commitments. The rating of the secured TFC issue of PKR 100mln has been maintained at “AA-” (Double A minus). This rating denotes a very low expectation of credit risk and a very strong capacity for timely payment of financial commitments.  All of these aforementioned ratings have been placed on Rating Watch pending the outcome of the expected merger with Dawood Bank Limited.

The ratings reflect successful execution of management strategy aimed at increasing diversification of earnings while retaining its niche in fund-based operations. The bank’s credit risk profile - as reflected in its asset quality - is being largely maintained through effective risk management systems and controls.

About the instruments: At present the bank has one secured TFC of PKR 100mln in issue carrying a profit rate of 15% p.a. payable semi-annually. This has an outstanding balance of PKR 33.3 million with the final payment due in August 2006. The issue is secured by a first pari passu charge on leased assets and related receivables with a 30% margin on the principal value.

About the bank: The Atlas Group continues to be the major stakeholder (around 68%) in AIBL, followed by National Investment Trust (NIT) (13%).  Its eight member BoD comprises one nominee of NIT, while the remaining seven represent the Atlas Group. The management team consists of experienced individuals, mainly MBAs and Chartered Accountants, and the management’s strategy is marked by a clear vision and continuity of policies. The Atlas Group, established in 1962, has diversified into various industrial and service-oriented businesses including auto, engineering, financial, and trading sectors. The Atlas Group has acquired majority shareholding in Dawood Bank Limited and plans to merge the two entities.  The new entity is expected to be better placed within the changing dynamics of a financial sector characterised by increasing competition. This merger is expected to offer several synergies, the most pertinent of which are a reduction in the cost of funds and increased outreach.

 
 
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.

PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings.

PACRA's opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.

 

    
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