Press Release

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

Karachi, December 31, 2013: 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) with ‘Negative’ Outlook.

The assigned ratings take into account the shareholding structure of the institution, with National Bank of Pakistan (NBP) and Water and Power Development Authority, each having a stake of 30.8% in the institution. At end June 2013, the company’s reported equity of Rs. 650m was short of the minimum capital requirement by Rs. 350m. The Securities & Exchange Commission of Pakistan had setup a Non-Bank Financial Sector Reform Committee for revamping the NBFCs sector. The committee, in its report, proposed that minimum equity requirement of institutions undertaking investment finance services be fixed at Rs. 300m for the time being. Any decision in this respect has yet to be taken by the Commission.

Operating activities of FCIBL remained subdued over the last year. The quantum of borrowings has been scaled back considerably and leverage is under 1(x). The company has a long term loan from NBP, which is being gradually retired, in addition to which some Certificates of Deposits are also outstanding. Liquid assets provide adequate coverage against outstanding borrowings. Earnings capacity of the institution remains constrained. FCIBL holds restructured assets; performance of such assets in line with terms of restructuring is considered important to enable the company to post improvement in profitability.

During FY13, contract of the Chief Executive Officer had expired. The company is in the process of identifying suitable candidate for the position.

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 2013 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .