PACRA has maintained the long-term and short-term entity ratings of Prime Commercial Bank Limited at “A+” (Single A Plus) and “A1” (Single A One) respectively. Additionally, the ratings have been assigned a positive outlook. The rating of the unsecured, subordinated TFC issue of PKR 800mln has been maintained at “A” (Single A). These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings reflect the bank’s stable performance and sound asset quality. The bank continues to pursue its efforts of reengineering its processes and systems. This is expected to help in implementing its long-term strategy of higher growth, improved productivity and service quality. While the bank’s performance remains on the lower side, it is well placed to handle any unexpected downturn owing to its well-diversified loan book. Meanwhile, given the likelihood of successful implementation of its well-conceived strategy, PCBL would be better positioned to cope with the intensifying competitive pressures.

PCBL’s ratings have been assigned a positive outlook owing to its current reengineering efforts and higher future growth reorientation, which is expected to translate into improved profitability. However, as these initiatives are still in the implementation phase, the expected benefits in quantitative terms are expected to be realized with a time lag. Additionally, considering the intensifying competition, the extent of the impact remains to be seen.

About the TFC Issue: PCBL issued an unsecured subordinated TFC in Feb-05 for a tenor of 8 years carrying mark-up at a floating rate of latest 6-month KIBOR plus 1.9% payable semi-annually. Principal redemption will be in four equal annual installments commencing from Feb-2009.

About the bank: After commencing operations in 1992, PCBL currently operates with a network of 63 branches. Arab Asian International Holding Company, registered in Bahrain, holds the major stake in the bank. This company is owned by members of a Saudi family belonging to a highly regarded, very sizeable and well diversified business group of Saudi Arabia.

The President and Chief Executive, who has held the position since the bank’s inception, possesses over 30 years of international and domestic banking experience. A team of senior executives who have extensive exposure to banking and finance assists him.