The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (15-June-2005)
    PACRA Assigns Entity Ratings to Dawood Bank Limited (DBL)
 

 
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.

  

PACRA has assigned a long-term rating of “BBB-” (Triple B Minus), and a short-term rating of “A3” (A Three), to Dawood Bank Limited. These ratings denote a low expectation of credit risk emanating from an adequate capacity for timely payment of financial commitments. The ratings are applicable to the senior unsecured creditors (depositors) of the bank.

The ratings reflect the inherent constraints faced by a bank in its very early stages of operations in a highly competitive industry. Currently, the focus is on the preliminary building blocks, such as putting together a management team, establishing a branch network, and finalizing a comprehensive business plan. The success of the bank will then be inextricably linked to the success of these steps. For the time being however, the strength of the sponsors, as well as the equity cushion available to the bank, are the main sources of comfort for the bank's creditors.

About the bank: DBL commenced operations in March 2004 after the Dawood Group entered into a joint venture agreement with the Bank of Ceylon (BOC) Pakistan operations to amalgamate the business of BOC into a banking company. The Dawood Group holds controlling stake in the bank. The Group represents one of the oldest and well-established business groups in the country, with interests spanning the financial, chemical, oil and gas, and textile sectors. The support derived from association with the Dawood Group is critical to the future prospects of the bank.

While the bank is currently actively involved in money market operations, its main activities are expected to be consumer and trade related finance. The bank's CEO, with over three decades of banking experience, is building up a team of professionals to assist him in managing the operations of the bank.

 
 
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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