Pak-Libya Holding Company (Pvt) Limited

The Pakistan Credit Rating Agency Limited	Press Release
a
Rating Action Lahore: (24-June-2005)

PACRA Maintains Ratings of Pak-Libya Holding Company (Pvt) Limited

Analyst
Bano Sheikh
(+92-42-586 9504)
bano@pacra.com

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The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating of "AA-" (Double A minus) and the short-term rating of "A1+" (A One Plus) of Pak-Libya Holding Company (Pvt) Limited. The ratings, applicable to the senior unsecured creditors of the company, denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The assigned ratings reflect the management's success in developing a stable revenue base by focusing on core operations. The ratings also take into account the strong risk absorption capacity; a direct consequence of enlarged equity base and the relatively low risk profile of the asset portfolio. However, while the management has succeeded in putting the company on a track of stable and sustainable performance, prospects remain constrained by external factors. Thus, PLHC, as a one-branch operation, and consequently, narrow deposit base will continue to have a higher cost of funds than commercial banks while competing with its larger peers for credit growth. This would inevitably put pressure on spreads and hence on the bottom line, going forward.

About the company: Pak-Libya Holding Company (Pvt.) Limited was established as a joint stock company on 14th October, 1978 equally owned by the Government of the Islamic Republic of Pakistan and the Socialist Peoples Libyan Arab Jamahiriya. The Board of Director (BOD) comprises six directors. The governments of Pakistan and Libya have nominated three directors each. The company utilizes two core avenues for asset deployment: asset building through loans/leases and investments.

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