Press Release

JCR-VIS assigns initial Entity Ratings to Trust Modaraba

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Karachi, December 6, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘BBB-/A-3’ (Triple B Minus/A-Three) to Trust Modaraba (TM). Outlook on the assigned ratings is ‘Positive’.

TM is a small sized modaraba. In 2009, SECP handed over the management rights of Trust Modaraba to Al-Zamin Modaraba Management (Private) Limited (AZMM) in view of its deteriorating financial and operating performance under the previous management regime. AZMM injected fresh capital of Rs. 25 million and sought to revive TM. The portfolio was largely infected at the time.

TM’s financing portfolio comprises varied financing arrangements; Ijarah, Musharaka and Murabaha. Subsequent to management takeover in 2009, vigorous recovery efforts were undertaken by the management. However, growth remained contingent on funding. Nearly 57% of the legacy portfolio Non-Performing Loans (NPLs) have been recovered by mid 2016 and remaining are projected to be recovered by end 2017. Fresh disbursement may warrant prudent underwriting in order to limit infection in the portfolio.

The assigned ratings incorporate adequate liquidity and capitalization indicators of the modaraba, however same remains constrained by asset quality indicators and stagnant asset base. Future growth is dependent upon recovery of projected NPLs and availability of fresh funding.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 92-21-35311861-70 or Mr. Jamal Abbas Zaidi (Ext: 207) at 92-21-35311861-70 or fax to 92-21-35311872-3.

Javed Callea

Applicable Rating Criteria: Modaraba Rating Scale (October 2002)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited