Lahore, March 27, 2019 (PPI-OT): The ratings reflect FHM’s strong business profile emanating from healthy asset base, sound asset quality and sustained profitability. Although the cost of funding has increased, improved asset yield has resulted in increase in spreads. Furthermore, overall profitability has also been maintained through enhancement of financing asset size. Liquidity is being well maintained by investing in TDR. FHM managed to sail through its devised strategy to beef-up its business volumes to maintain its bottom-line performance by maintaining its asset quality.
FHM’s capital provides strong support to the funding structure of the Modaraba, equally aided by Certificates of Musharika (CoM). The overall capital structure shows an inclination towards leveraging. Going forward, the management, while continuing with its growth strategy, intends to expand its outreach to other areas of the country, especially those close to CPEC related projects and more focus would be on vehicle financing. The ratings take into account good management quality and a strong control environment and also reaching other customers through different business model.
The ratings are dependent on the management’s ability to sustain its competitive positioning while ensuring stable profitability. The ratings also depend upon keeping its financial profile intact. Any significant change in its risk profile may adversely impact the ratings.
For more information, contact:
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