Karachi, June 24, 2014: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of NBP Leasing Limited (NBPL) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned ratings remains ‘Positive’.
NBPL is a wholly owned subsidiary of National Bank of Pakistan. The ratings of NBPL derive strength from the strong financial profile of the sponsor, i.e. National Bank of Pakistan, 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. 1.4tr at end-2013.
On a stand-alone basis, the company has maintained sound capitalization indicators, with equity growing over time on the back of internal capital generation. Debt leverage is projected to remain under 1.5x over the next 5 years. The company’s current ratio is comfortably high; projected matching of assets and liabilities is also considered prudent as long term loans will be mobilized to pursue lease growth targets. Funding sources of the company are currently limited to the parent bank.
Following the maturity of PIB holdings, the company’s investment portfolio has shrunk to a very limited amount and the liquidity so released has been deployed in core leasing operations. This strategy is projected to continue going forward. Portfolio quality has depicted some improvement on account of recoveries during the year, in addition to growth in lease portfolio. The NPLs currently carried on books pertain to legacy portfolio.
Growth in earnings was observed in FY13; maintaining positive momentum in earnings primarily depends on the management’s ability to keep asset quality intact. Spreads are largely expected to remain range bound given that the company is reliant on secondary market sources of funding.
For further information on this rating announcement, please contact the undersigned (Ext. 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311872-3.
Information herein was obtained from sources believed to be accurate and reliable; however,
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