Karachi, August 10, 2009: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of NBP Leasing Limited (NBPLL) at ‘A/A-2’ (Single A/A-Two). The outlook on the medium to long term rating is ‘Stable’.
NBPLL is a wholly owned subsidiary of National Bank of Pakistan and benefits significantly from this association in terms of access to funding, leading to a sound liquidity profile and capitalization. During 2008, the company phased out its discounting business. In view of the economic turmoil, a cautious stance was also adopted towards leasing activity while there was a deliberate reduction in the investment portfolio. Proceeds from sale of investments and maturity of leases were utilized to reduce borrowings leading to shrinking of asset base and leverage.
Although portfolio quality of fresh leases disbursed during FY08 has remained intact, there has been a significant increase in overall delinquency rates with management currently focusing on recoveries. Lower business activity and increasing provision requirement against financing and investments have adversely affected profitability. Business growth is required to achieve profitable operations; trends in this regard will be monitored by JCR-VIS.
For further information on this rating announcement, please contact Mr. Safdar Kazi (Ext. 501) or Ms. Sabeen Saleem (Ext. 510) at 35311861-70 (10 lines) or fax to 35311873.
President & CEO
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