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PACRA Maintains Entity Ratings of First Punjab Modaraba

Lahore, September 21, 2022 (PPI-OT):The ratings reflect the strong patronage of the Modaraba; The Bank of Punjab (BoP) (Rated AA+ by PACRA). The topline increased on account of increase in interest rates and improved business profile. However, the impact of said incline was in turn subsided by considerable increase in finance costs. In way of better profitability, recovery of NPLs also helped. In order to mitigate the effect of accumulated losses, First Punjab Modaraba (FPM) intends to enhance its equity base through further injection of equity from the sponsor. The plan is at an advanced stage.

The company has managed to sustain its earning assets, mainly lending book wherein vehicle financing contributed majorly. The key sponsor is committed for its support in the form of a sustainable funding base. The management is in the process of generating new avenues of business. A comprehensive business plan is under development, which shall be approved by BoP’s board. The management’s efforts to sustain and ultimately improve its business profile is expected to yield sustainable results; however, materialization is contingent upon the timely implementation. Support from sponsor is vital.

The ratings are dependent on relative positioning of the Modaraba in the sector and sustained asset quality of the new portfolio: achieving bottom line profitability is important. Meanwhile, any weakening in the financial profile or support from the sponsor could have negative implications.

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

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