Press Release

JCR-VIS Upgrades Entity Ratings of NRSP Microfinance Bank Limited

Karachi, April 29, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the entity ratings of NRSP Microfinance Bank Limited (NRSPB) from ‘BBB+/A-3’ (Triple B Plus/A-Three) to ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned rating is ‘Stable’.

The assigned ratings incorporate improving market share of NRSPB as growth momentum in asset base has been higher than that of the industry. Asset growth has also propelled profitability indicators in FY13. In addition to profit retention augmenting the bank’s capital base, equity injection of Rs. 500m has been approved by the sponsors to support the bank’s expansion plans and maintain Capital Adequacy Ratio (CAR) at a comfortable level vis-à-vis regulatory requirement.

Agricultural lending is the forte of the bank and accordingly the bank has greater presence in rural areas. The loan portfolio predominantly comprises agriculture and livestock financing. While the portfolio features geographic and single product risks, a well tested lending methodology with same having been in use by NRSP for several years mitigates the associated risk to some extent. Asset quality indicators of the bank have so far remained strong.

Funding mix of the bank comprises deposits and commercial borrowings, with a higher proportion of the latter. Deposit base of the bank has posted notable growth while the proportion of mandatory savings has declined on a timeline basis. There is room for improvement in the deposit profile. Given seasonal demand for credit, liquidity management of the bank poses additional challenges with funding requirements being notably higher during peak disbursement season.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA ( or Mr. Maimoon Rasheed ( at 021-35311861-70 and 042-36610681-84 or fax to 021-35311873.

Jamal Abbas Zaidi
Deputy CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.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 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited