Press Release

VIS Reaffirms Entity Ratings of First Credit and Investment Bank Limited

Karachi, December 31, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of First Credit and Investment Bank Limited (FCIBL) at ‘A-/A-2’ (Single A Minus/A-Two). The long term rating of ‘A-‘ signifies good credit quality; protection factors are strong. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 28, 2018.

Current ratings continue to derive strength from the strong sponsor profile comprising National Bank of Pakistan (NBP) and Water and Power Development Authority; each of these sponsors represents 30.8% shareholding in the company. Rating also reflects improving profitability profile of FCIBL. Existing governance framework of the company is considered satisfactory as indicated by the presence of three independent directors on the Board of Directors.

Asset base of the company largely comprises advances portfolio and short term placements, at end-June 2019. During the outgoing year, a sizeable proportion of the company’s cash and bank balances were diverted towards building its loan portfolio; growth in portfolio was a function of both higher exposure in existing clients as well addition of new ones. No infection is witnessed in the freshly disbursed loans. While credit risk emanating from the financing and investment portfolio is considered manageable, further diversification in sectoral exposures is desired.

In line with growth in its loan portfolio, liquid assets of the company reduced significantly. Subsequently liquidity indicators of the company declined during 2019. Balance sheet of the company is primarily funded through equity followed by short term borrowings. With higher borrowings mobilized, leverage indicators increased at end-June 2019. However, the same have remained within prudent limits on a timeline basis. Profitability levels have improved on a timeline basis due to growth in earning assets.

For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi (Ext: 207) or Ms. Muniba Abdullah, CFA (Ext: 215) at 021- 35311861-66 or email at

Atiq Anwar Mahmudi

Applicable Rating Criteria: Non-Bank Financial Companies (October 2017)

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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited