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Pakistan Credit Rating Agency Maintains Ratings of Escorts Investment Bank Limited; Outlook Positive

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by February 22, 2013 General

Lahore, February 22, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the long term and short term entity ratings of Escorts Investment Bank Limited (EIBL) at ‘BBB’ (Triple BBB) and ‘A3’ (A Three), respectively. The ratings denote an adequate capacity of timely payment of financial commitments. The outlook on the ratings is positive.

The ratings of EIBL reflect its adequate business profile supplemented by improving operational performance, albeit gradually. Although the bank has managed to achieve breakeven in a few months, it is yet to maintain it on a sustainable basis.

Buildup of multiple small income streams – commodities, direct investment and market making, property rentals, strongly collateralized lending and freeing up of non-earning assets – tax refunds and group lending – are likely to lead to profitability. Meanwhile, the management is exploring various options, both fund and non-fund based, to support the revenues. Nevertheless, non-earning assets (mainly tax refunds and wholly owned brokerage house) would be sizeable, restricting earning potential. Success of the management’s initiatives, as and when fully materialized, is expected to bode well for the sustainability of the bank.

For more information, contact:
Hammad Rashid
Analyst
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
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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