December 05, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained entity ratings of First Punjab Modaraba at ‘A-’ for Long Term and ‘A2’ for Short Term, with a ‘Stable’ outlook forecast.
As per the press release issued by PACRA, the ratings reflect the sustained performance and continuous support of the sponsor (The Bank of Punjab).
The Modaraba has witnessed improvement in its standalone business profile exhibited in its performance trend; achieving profitability is a key highlight over the last couple of quarters.
The Modaraba managed to expand its earning assets, mainly lending book wherein vehicle financing contributed majorly. The key sponsor – The Bank of Punjab (BoP) – a bank majority owned by the Government of Punjab, continued its support in the form of a sustainable funding base, which the management expects to increase to fund envisaged growth plans.
The ratings are dependent on relative positioning of the Modaraba in the sector and sustained asset quality of the new portfolio: achieving bottom line profitability is important. Meanwhile, any weakening in the financial profile or support from the sponsor could have negative implications.
