Lahore: The Pakistan Credit Rating Agency (PACRA) has upgraded the long term entity rating of Escorts Investment Bank Limited (EIBL) to ‘BBB’ (Triple B) and maintained the short term entity rating at ‘A3′ (A three) [Previous: BBB-/A3]. Meanwhile, a “Positive Outlook” has been assigned to these ratings. The ratings denote an adequate capacity of timely payment of financial commitments.
The ratings reflect EBIL’s adequate business profile supplemented by management’s conservative strategy to limit its credit risk while keeping a tap on overall cost structure. Existence of sizeable non-earning assets – including investment in its subsidiary and tax asset – exerts pressure on earning capacity, besides undermining the liquidity profile of the bank. Operational losses, arising mainly on account of subdued business volumes, though lately tamed, continue to dent the equity base.
The management is exploring various non-fund based avenues while converting non-earning assets into earning to support its revenue base. Moreover, extent and timely materialization of these initiatives while achieving breakeven on a sustainable basis remains challenging.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425