Press Release

JCR-VIS Upgrades Ratings of NRSP Microfinance Bank Limited
 

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October 28, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the entity ratings of NRSP Microfinance Bank Limited (NRSPB) to ‘A/A-1’ (Single A /A-One) from ‘A-/A-2’ (Single A Minus/ A-Two). The rating of Privately Placed Term Finance Certificate (PPTFC) has also been upgraded to ‘A’ (Single A). Outlook on the assigned rating is ‘Stable’. The previous rating action on Entity and PPTFC rating was announced on April 21, 2016 and September 21, 2016, respectively.

The ratings assigned to NRSPB takes into account growing market share of the institution and sustained improvement across key performance areas including asset quality, liquidity and internal capital generation. NRSPB is the third largest microfinance bank in the country. The ratings also take into consideration presence of reputable sponsors carrying experience and understanding of the microfinance sector. Sponsor’s commitment has been demonstrated in the recent years in the form of both technical knowledge transfer and financial support. While loan portfolio reflects product concentration, ratings draw comfort from bank’s experience and satisfactory track record in agriculture financing primarily in rural areas. Additionally, bank plans to offer high ticket individual loan products to community organization members with satisfactory repayment history. This is expected to rationalize product concentration while also increasing the average loan size.

High yielding micro credit portfolio along with declining cost of deposits and growth in earning asset led to significant growth in profitability during the ongoing year; the trend here is among the rating drivers to be tracked, going forward. Meanwhile, the bank maintains lowest overheads among peer microfinance banks. Ratings also take into account sound capital levels of the institution with bank maintaining buffer over and above the regulatory Capital Adequacy requirement. Liquidity profile is supported by adequate liquid assets in relation to deposits and borrowings.

For further information on this rating announcement, please contact the undersigned (Ext: 234) or Mr. Jamal Abbas Zaidi (Ext: 249) at 35311861-70 or fax to 35311872.


Javed Callea
Advisor

Applicable Rating Criteria:
Microfinance Banks (June 2016) (http://www.jcrvis.com.pk/kc-meth.aspx)


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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 2016 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