Press Release

VIS Upgrades Entity Ratings of First Credit and Investment Bank Limited

Karachi, December 31, 2021: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of First Credit and Investment Bank Limited (FCIBL) to ‘A/A-2’ (Single A/A-Two) from ‘A-/A-2’ (Single A Minus/A-Two). Long term rating of ‘A’ signifies good credit quality; protection factors are strong. Risk factors may vary with possible changes in the economy. 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’. Previous rating action was announced on December 31, 2020.

The ratings upgradation incorporates strong sponsor strength with two state-owned entities (National Bank of Pakistan & Water and Power Development Authority) holding the majority ownership. Business risk profile is supported by institution’s longstanding presence in the industry, satisfactory capitalization and moderate risk appetite. Liquidity metrics are sound given healthy investment portfolio while gearing has improved on account of decrease in debt levels. Ratings also take note of improvement in corporate governance framework with appointment of two additional directors on the board.

The loan portfolio has registered a declining trend over the past three fiscal years which has impacted the earning profile, however, the same is supported by investment income where the management continues to invest in arbitrage transactions of treasury securities. As per management, the plan to convert FCIBL into a deposit taking NBFC remains intact; however, built up of some liquidity cushion over the minimum equity requirement of Rs. 750m is being pursued. Moreover, there are two major plans envisaged for future business growth which includes the acquisition of money market brokerage license (with aim to target commercial banks and DFIs for provision of services) and diversification into housing finance. Management expects healthy revenue contribution from the planned initiatives, going forward.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 204) or the undersigned (Ext: 306) at 021- 35311861-66 or email at .

Faryal Ahmad Faheem
Deputy CEO

VIS Entity Rating Criteria: Non-Bank Financial Companies (March 2020)

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited