FLASHNEWS:

PACRA assigns Initial rating to Mobilink Microfinance Bank Limited – PPTFC – Dec-22

Lahore, February 03, 2023 (PPI-OT):The ratings take comfort from the bank’s association with a leading global group – Veon Microfinance Holdings B.V (VMH) – and with Pakistan’s largest cellular operator – Jazz (formerly Mobilink). Sponsor’s commitment to the bank is witnessed in the form of both technical collaboration and financial support.

Ensuing synergies have strengthened the bank’s penetration intarget markets. The management’s confidence lies in keeping this segment’s margins sustained and bring it at the forefront of mobile banking services, amidst rising competition. The bank held a market share of ~9% in the microfinance industry’s Gross loan portfolio as at End-Dec’21. While growth strategies for the Bank have been taken under consideration, overall performance indicators reflected a firm outlook in CY21 despite of economic slowdown, lately exacerbated by the aftermaths of global pandemic spread.

Consequently, the Bank’s GLP upsurged. Asset quality impaired on account of expiry of SBP’s deferment scheme period, along-with small portion being unprovided. The Bank has been maintaining a provisioning cushion of 2% (instead of 1%required). Markup earned and net markup income increased in line with GLP. Consequently, the Bank reported bottom-line of PKR 728mln in CY21 (CY20: 530mln).

The ratings are dependent upon the bank’s ability to aptly combat the emerging risks under the current scenario in order to keep its business and financial risk profile intact. Meanwhile, the bank’s propensity to protect its performance indicators amidst constrained business environment, is imperative.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com