Karachi, April 28, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pak Oman Microfinance Bank Limited (Pak Oman) at ‘BBB+/A-3’ (Triple B Plus/A-Three). Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on April 29, 2015.
Assigned ratings take into account the strong sponsor support; Pak-Oman enjoys being a subsidiary of Pak Oman Investment Company Limited and Sultanate of Oman as its major shareholders. Lending activities at Pak Oman picked pace with Net Advances reported at Rs. 358.7m (CY14: Rs. 221.0m) as of end-CY15. The quality of the assets needs to be monitored. As at end-CY15, gross infection increased to 8.9% (CY14: 1.6%) which is higher than the peer average of 3.5%. Strengthening in risk assessment function of the company would be warranted, going forward.
Capitalization indicators are reflective of significant room for growth in advances portfolio, while liquidity profile is supported by sizeable liquid assets carried on the balance sheet.
In contrast to preceding years, earnings are currently driven by both returns on investments and advances due to increased emphasis on lending. The bank posted a maiden profit for CY15; future profitability will depend on efficient management of advances and recoveries.
For further information on this rating announcement, please contact the undersigned (Ext: 508) or Mr. Javed Callea (Ext: 501) at 35311861-70 or fax to 35311873.
Mohammad Khalid Ali
Applicable Rating Criteria:
Micro Finance Institutions - Oct 2003
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