The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (26-July-2005)
    PACRA Upgrades Entity Ratings of NDLC-IFIC Bank Limited (NIB)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@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 upgraded the long-term and short-term entity ratings of NDLC-IFIC Bank Limited to “A+” (Single A Plus) and “A1” (A One), respectively. The ratings have been assigned a positive outlook. These ratings, applicable to senior unsecured creditors (depositors) of the bank, denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings reflect fundamental changes in the bank's capital structure as well as in its profile. With the equity injection of PKR 2.7bln by Temasek, NIB has become one of the strongest capitalized banks in the banking sector, resulting in substantial improvement in CAR. While this ratio is likely to normalize overtime, as the advances portfolio increases, the risk absorption capacity of the bank is expected to remain strong. Meanwhile, with Temasek emerging as the majority shareholder, the bank is expected to benefit from the very strong financial profile and international identity of the principal shareholder. The management also expects operational support from Temasek owing to the latter's stake in other banks in the region. The recent changes have made NIB well positioned to cope with the challenges of an increasingly competitive banking sector environment in Pakistan. It is for this reason that rating outlook for the bank is considered positive. However, the extent to which potential benefits materialize and the timing thereof remain to be seen.

About the bank: NDLC-IFIC Bank was formed on October 03, 2003 as a result of the amalgamation of the National Development Leasing Corporation Limited (NDLC) and Pakistan Branches of International Finance Investment and Commerce Bank Limited -Bangladesh (IFIC). Later in April 2004, the bank acquired the Pakistan operations of Credit Agricole Indosuez (CAI), the Global French bank. NIB is listed on all the three stock exchanges in Pakistan and currently has a network of fifteen branches as against two at the commencement of operations.

Bugis Investment (Mauritius) Pte. Ltd., an indirect wholly owned subsidiary of Temasek Holdings, recently acquired more than two-third stake in the bank through subscribing to fresh allotment of shares. Temasek is the investment arm of the Government of Singapore and is currently rated AAA by Moodys and Standard & Poors. It was established in 1974 and manages a diversified portfolio of USD 54bln spanning across Singapore, Asia and OECD countries. Its investment is in companies that are involved in a wide range of activities. including, telecommunications and media, financial services, property, transportation and logistics, energy and resources, infrastructure, engineering and technology, as well as pharmaceuticals and biosciences.
 
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.