JCR-VIS reaffirms ratings of National Bank of Pakistan Limited at AAA /A-1+

JCR-VIS has reaffirmed the credit ratings of National Bank of Pakistan (NBP) at AAA/A-1+ (Triple A / A-One Plus) with a Stable outlook.

The key strength of NBP remains its extensive outreach in the domestic and international markets, as well as its broad based, cost effective deposit base. Further strength is also derived from deposits being guaranteed by the Government of Pakistan.

With the lowest cost of funds in the market during 2008, the net finance margins of NBP remained amongst the highest in the sector, and core earnings rose considerably. However, marked increase in non-performance, which affected the entire banking sector, resulted in an increase in loan charge offs. Additionally, general inflationary pressures also increased administrative expenses reducing profits vis-à-vis 2007 results.

The rating committee has also favorably considered recent efforts made with the objective of improving internal controls and strengthening of the internal audit function of the bank.

JCR-VIS reaffirms ratings of JDW Sugar Mills Limited

JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of JDW Sugar Mills Limited (JDW) at A-/A-2 (Single A Minus / A-Two) and the rating of the Rs. 1.7b TFC issue of the company at A (Single A). Outlook on these ratings is Stable.

The ratings reflect unique position of JDW in the sugar industry emanating from its association with a backward integrated group leading to synergic benefits.

While emphasizing on supply side dynamics, the company has been able to maintain consistently high sucrose recovery rates (FY2008: 10.16%, FY2007: 10.35%) despite crop damage due to frost during FY08.

The management plans to consolidate the operations of the company while merging with United Sugar Mills Limited, a subsidiary company. While maintaining healthy cash flows, this is likely to help in reducing the gearing levels of the company.

Meanwhile, in order to mitigate risk at the group level, the sponsors intend to diversify in other business areas.

JCR-VIS places ratings of Invest Capital Investment Bank Limited on Rating Watch - Developing Status

JCR-VIS Credit Rating Co Ltd (JCR-VIS) has placed the entity ratings of A-/A-2 (Single A Minus / A-Two) assigned to Invest Capital Investment Bank Limited (ICIBL) under Rating Watch - Developing Status. This is in response to the potential merger of Al Zamin Leasing Modaraba (AZLM) and Al Zamin Leasing Corporation (AZLC) with and into ICIBL.

The Board of ICIBL has approved the proposed merger with AZLC and AZLM subject to approval of shareholders and regulatory authorities.

JCR-VIS reaffirms ratings of Zarai Taraqiati Bank Limited at AAA/A-1+

JCR-VIS places ratings of Invest Capital Investment Bank Limited on Rating Watch - Developing Status

JCR-VIS Credit Rating Company Limited has reaffirmed the credit ratings of Zarai Taraqiati Bank Limited (ZTBL) at 'AAA/A-1+' (Triple A / A-One Plus) with 'Stable' outlook. The 'AAA/A-1+' ratings of ZTBL are based on the federal government guarantee for timely repayment of credit lines obtained from the State Bank of Pakistan (SBP). The guarantee covers the principal amount of the lines together with profit payable in arrears. The safety of deposits mobilized by ZTBL has also been guaranteed by the Government of Pakistan (GoP) under the Banks' (Nationalization) Act 1974.

JCR-VIS has reaffirmed the standalone ratings at 'B+/B' (Single B Plus / Single B) with a 'Stable' Outlook. The bank's standalone ratings will be reviewed and may be positively influenced if the debt restructuring plan currently under negotiation is finalized.