Press Release

JCR-VIS reaffirms Entity Ratings of NBP Leasing Limited at A+/A-1

Karachi, April 20, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of NBP Leasing Limited (NBPLL) at ‘A+/A-1’ (Single A Plus/A-One). Ratings continue to be placed under ‘Rating Watch Developing’ status in view of the impending merger with NBPLL’s parent company, National Bank of Pakistan (NBP), subject to regulatory approvals. The previous rating action was announced on May 2nd, 2016.

The ratings of NBPLL derive strength from the strong financial profile of the sponsor (NBP) which is one of the largest commercial banks in Pakistan, with major shareholding vested with the Government of Pakistan and an asset base of Rs. 1.9tr at year end-2016.

For the past 2 years NBPLL has witnessed a declining trend in the lease portfolio, given its merger plans. However, given the delay in prospective merger, the company’s board has directed management to focus on revival of business. The company expects new lease arrangements to commence in the ongoing year.
Net Equity of the company has improved on account of retained profits. Assets of the company are largely financed by equity. This has resulted in a near zero debt leverage. In the near future, we understand that funding sources will be limited to the parent bank.

Quality of portfolio has depicted improvement on account of recoveries. Consequently, gross and net infection ratios witnessed improvement despite a reducing size of its lease portfolio. Given the decline in lease portfolio, income from leasing operations fell; culminating in a lower profit before tax. However, effect on the same was mitigated on account of sizeable recoveries.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Mr. Mohammed Khalid Ali (Ext: 208) at 021-35311861-71 or fax to 021-35311872-3.

Javed Callea

Applicable Rating Criteria: Non-Bank Financial Companies

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 2017 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