Muhammad Jhangeer Hanif
PACRA Upgrades Entity Ratings of Escorts Investment Bank Limited
The ratings reflect the strong parentage of the bank. The sponsors have injected sizeable equity into the bank; more injection is on cards. They have enabled the bank to settle off the bulk of liabilities to the deposit holders. The management team is in place and a new business strategy is in the offing. Synergistic support for Bahria Town is expected to play pivotal role in the business growth of the bank. Market for mortgage firm is huge, indeed there is sufficient room to expand in Bahria Town schemes. Going forward, revival of business operations and achieving breakeven will be the management focus; for that Housing Finance is the linchpin.The management core focus will be to achieve breakeven. The new sponsors have a good understanding of the real estate market.
The ratings are dependent on the continuous sponsor support and achievement of breakeven by the EIBL new management. Immaculate financial discipline is important. Any discrepancy in achieving its targets remains critical to the ratings.
Escorts Investment Bank Limited (EIBL), a Non-Banking Finance Company (NBFC), started its commercial operations in 1996. After the acquisition of EIBL in Jan-18, the major shareholding is held by Bahria Town (Pvt.) Limited (76.3%) while the other owned by the public sector companies and general public. Bahria Town (Private) Limited is a privately owned real-estate development company which owns, develops, and manages properties across Pakistan. It is the leading private real estate company in the country. The major ownership of BTPL is held by Chairman & CEO Mr. Malik Riaz Hussain.
The old board resigned in Jan-18 on the day of EIBL acquisition by BTPL. EIBL’s new board (BoD) comprises seven members including the CEO. The board included two independent directors. All other members are non-executive members except the CEO. Mr. Zain Malik is the Chairman of the new board, the only representation of the sponsoring family. He carries enriched experience in the real estate business, financial services and brokerage. The CEO, Mr. Naveed Amin, possess an experience of 27 years especially in the Non-Banking Financial Institutions (NBFIs).