October 18, 2021: VIS Credit Rating Company Limited has reaffirmed entity ratings of BMA Capital Management Limited at single A minus/A-two. Long-term rating of ‘A-’ signifies good credit quality with adequate protection factors.
Risk may vary slightly from time to time because of economic conditions. Short-term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors were sound and good access to capital markets. Outlook on the assigned ratings is stable. Previous rating action was announced on May 12, 2020, said a press release on Monday.
The assigned ratings continue to factor in BMA Capital’s sustained market share, strong retail client base and extensive branch network of 19 branches spread nation-wide, which was a major competitive strength.
Reaffirmation of ratings takes into account the healthy growth in client base and operating revenues. However, weak efficiency continues to remain a drag on earning profile and overall profitability was heavily supported by one off capital gains and other income during the outgoing fiscal year.
Conservative asset allocation strategy with small-sized proprietary book translates into low liquidity risk profile while capitalization level have depicted some improvement. Leverage indicators have trended upwards and are on the higher side vis-à-vis peers and on standalone basis as well. Going forward, managing gearing at levels commensurate with the ratings was considered important.
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