Press Release
JCR-VIS Reaffirms Entity Ratings of Pak Oman Microfinance Bank Limited
Karachi, April 30, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pak Oman Microfinance Bank Limited (POMFB) at ‘BBB+/A-3’ (Triple B Plus/A-Three). Outlook on the assigned ratings is ‘Stable’.
Core business activities have remained limited with net loan portfolio comprising 13% of the asset base. The bank has projected modest growth in its loan portfolio in the coming years. Underwriting quality will be tested with greater activity on the lending side. Existing quantum of NPLs is considered manageable in relation to loss absorption capacity of the bank.
Liquidity profile of the institution is strong with its resource base largely deployed in liquid avenues. Income from investments has remained the primary source of revenues. Given the limited internal capital generation, external equity injection will be required to meet the enhanced minimum capital requirement. JCR-VIS has been given to understand that sponsors of the bank are committed to injecting additional equity as and when required to meet minimum capital requirement in the coming years.
Development of core banking system has witnessed delays on account of lack of specialized resource for this function. The timeline for its implementation has now been extended to end-June 2012. Strengthening of control mechanisms and human resources along with timely implementation of the core banking system are essential for future growth.
For further information on this rating announcement, please contact the undersigned (Ext: 408) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 or fax to 35311873.
Jamal Abbas Zaidi
Deputy CEO