PACRA Maintains the Entity Ratings of Export-Import Bank of Pakistan

The ratings reflect a strong prospect of state support for the Export-Import Bank of Pakistan (“EXIM” or “the Bank”), owing to its strategic importance to the Government of Pakistan (GoP). The ratings are further supported by global precedents, where export credit agencies with similar mandates have successfully replenished capital through government backing when needed. Additionally, EXIM’s sovereign ownership and its role as a key policy institution for promoting international trade and economic development reinforce the expectation of continued government support, an integral factor underpinning the ratings. EXIM’s strategic objectives are centered on enhancing Pakistan’s share in global exports while promoting sectoral and regional diversification. In pursuit of these goals, the Bank has launched short-term Trade Credit Insurance products, targeted at exporters and commercial banks. These products are being offered using capital in excess of the Bank’s core equity base of PKR 10 billion, in alignment with its risk appetite framework. The Trade Credit Insurance policies enable Pakistani exporters and their banking partners to extend open account terms to international buyers and their financial institutions, thereby improving the competitiveness of Pakistani exports in global markets. These policies protect against non-payment of receivables, with EXIM covering losses up to the agreed policy limits. To support its business growth while effectively managing risk exposure, EXIM has entered into a reinsurance arrangement with Pakistan Reinsurance Company Limited (PRCL). Despite the finalization of the reinsurance arrangements, EXIM remains firmly focused on capital preservation and financial stability. The Bank is guided by key strategic safeguards, including (i) maintaining a minimum capital base of PKR 10 billion, net of any losses; (ii) sustaining a strong Capital Adequacy Ratio (CAR) with a substantial buffer as required by the State Bank of Pakistan (SBP); and (iii) mitigating liquidity risk through prudent financial and operational management. During the initial phase of operations, EXIM anticipates a heightened underwriting concentration risk, primarily due to a limited number of buyers. Recognizing the potential liquidity challenges that may arise from claims during this early stage, the Bank has implemented a range of prudent risk mitigation measures. These include, reinsurance, conservative approach to credit underwriting, maintaining low leverage in terms of capital at risk, and enforcing low transactional limits to manage exposure effectively. As of March 2025, EXIM’s equity position remains strong at PKR 20.163 billion, entirely comprising Tier-1 capital. The Bank’s strong capitalization metrics are well-positioned to absorb potential asset quality-related shocks, thereby providing a solid foundation to support its growth trajectory.
As EXIM broadens its policy portfolio, it is likely to face increasing risks inherent to portfolio expansion. The Bank’s capability to proactively manage these evolving exposures and avoid significant credit deterioration within this segment will be a crucial for the ratings. The effective execution of a strong and well-defined risk management framework, formally adopted by the Bank, will be vital. Sustained compliance with this framework is imperative to preserving EXIM’s overall risk posture and ensuring the continued stability and strength of its credit profile.

About the Entity
EXIM was established in February 2023 as a state-owned enterprise under the provisions of the Export-Import Bank of Pakistan Act, 2022. It serves as the country’s official export credit agency, with a mandate to support, develop, and promote international trade and enhance Pakistan’s competitiveness in the global marketplace. To achieve this, the Bank provides a range of services, including trade financing, trade credit insurance, equity participation, and trade-related advisory services. The Bank is governed by a Board of Directors appointed by the Federal Government, providing strategic direction and oversight in line with national trade and development objectives.