Press Release
JCR-VIS reaffirms the Entity Ratings of The First MicroFinanceBank Limited at A+/A-1
Karachi, April 30, 2009: JCR-VIS Credit Rating Company Limited has reaffirmed the entity rating of The First MicroFinanceBank Limited (FMFB) at ‘A+/A-1’ (Single A Plus/A-One) with a ‘Stable’ Outlook.
The ratings of FMFB incorporate strength of sponsors and available group synergies. There has been some change at senior management positions; however, the bank is making efforts at improving depth in the organizational structure while focus on succession planning has increased. Level of controls may be considered adequate at present. Asset quality indicators have been maintained on account of timely shift towards rural areas and agricultural and livestock financing, which have been relatively less affected by the high inflation and economic and political turmoil in the country. Deposit mobilization targets have been met but, despite improvement on this front, concentration in deposit base is still significant.
Aggressive growth over the past two years has led to high operational expenses resulting in significant losses in FY08. With the management currently focusing on consolidation, performance is expected to improve going forward. Level of capitalization may need to be enhanced to meet growth targets for the current and next year. With growing focus on core operations liquidity management has become more critical. JCR-VIS will continue to monitor the bank’s ability to maintain quality of credit portfolio and meet performance targets.
For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Zia Usmani (Ext: 507) at 5311861-72 or fax to 5311873.
Safdar Kazi
Director