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JCR-VIS Reaffirms Entity Ratings of Kashf Foundation

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by December 12, 2012 General

Karachi, December 12, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Kashf Foundation (Kashf) at ‘BBB/A-3’ (Triple B/A-Three).

Kashf has augmented its lending portfolio in recent periods by focusing on streamlining its lending methodology which advocates lending to individuals as against group lending in the past and includes additional measures to mitigate credit risk. Following the events in 2008 which impaired the equity of the institution, Kashf has re-built a sizeable performing portfolio over the past 3 years, which has allowed the institution to sustain its operational cost. Asset quality of the new portfolio has so far remained satisfactory.

In terms of internal capital generation, there is improvement on a timeline basis with an overall surplus reported in FY12 on the back of grant income. The availability of grants will continue to play an important role in generating positive earnings. Moreover, operating profit was reported in 1Q13, reflecting improvement in self-sufficiency indicators. Leveraging has increased as growth has been fuelled by commercial borrowings.

Sustainability in operational performance along with maintaining asset quality indicators is considered critical as current level of earnings has limited capacity to absorb the impact of any adverse development. JCR-VIS will monitor performance indicators on an on-going basis and any material deterioration may adversely impact outstanding ratings. In view of the above, ratings continue to be placed under ‘Rating Watch-Developing’ status.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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