Press Release

JCR-VIS Reaffirms Entity Ratings of First Credit and Investment Bank Limited

Karachi, December 28, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of First Credit and Investment Bank Limited (FCIBL) at ‘A-/A-2’ (Single A Minus/A-Two).

Given the weak macroeconomic indicators, operating environment for NBFCs remains challenging. In this backdrop, operational activities at FCIBL have remained subdued and there has been a reduction in asset base of the company. Investments represent more than three-fourth of the resource base of the company. While additions have been made in the investment portfolio, overall portfolio has declined on account of principal repayment and provisioning against non-performing exposures. Fresh lending was not undertaken during FY12. Borrowings have also been scaled back and debt leverage of the institution is around 1(x). Liquidity position of the bank is considered comfortable with liquid assets over 100% in relation to total borrowings and Certificates of Deposits.

Non-earning assets, comprising non-performing exposures and deferred tax asset, represent a sizeable proportion of assets and place a drag on the earnings profile of the institution. For this reason and coupled with incremental provisioning against non-performing exposures, profitability of the bank remained under stress during FY12. The bank may report improvement in operational performance in FY13 vis-à-vis FY12; however, earnings from recurring sources may remain under pressure owing to limited growth prospects. In view of this, Outlook on the rating remains ‘Negative’.

National Bank of Pakistan (NBP) and Water and Power Development Authority, each have a share of 30.8% in the institution. All borrowings at end-Sep’12 have been availed from NBP.

For further information on this rating announcement, please contact the undersigned (Ext: 408) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-35311870 or fax to 35311873.

Jamal Abbas Zaidi
Deputy CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .