PACRA UPGRADES RATINGS OF

CRESCENT INVESTMENT BANK LTD. (CRESBANK)

 

Lahore: August 02, 2002

The Pakistan Credit Rating Agency (PACRA) has upgraded both the long-term and short-term entity ratings assigned to Crescent Investment Bank Ltd. (CresBank) to "BBB-" (triple B minus) and "A3" (single A three), respectively. These ratings are applicable to senior unsecured creditors of the bank and indicate that there is currently a low expectation of credit risk and an adequate capacity for honouring financial obligations. However the capacity is susceptible to adverse economic changes.

The bank's ratings were placed on RatingWatch and downgraded subsequent to marked deterioration in the capital structure and risk profile of the bank during September 2001. Since then, the capital structure has been strengthened through considerable reduction in liabilities and the enhanced capital base. PACRA is of the opinion that the bank's capacity to honour its financial obligations has been restored to an adequate level. However, the ratings also recognise the continuing potential market risk emanating from the bank's large exposure to the equity market.