Lahore, November 07, 2018 (PPI-OT): The ratings take comfort from association with a strong sponsor – Telenor Group. The bank’s business profile emanates from its growing customer base and sustained relative position. Securing an ~19% share in the MFB’s gross loan portfolio (GLP) and ~21% in its gross deposits, the bank continues to hold a prominent position in the MFBs market. Significant developments in branchless banking (BB) are underway, including insistent steps to enhance the BB Mobile-wallet customer base.
The bank is all geared up to undergo induction of ~45% stake by Ant Financial – a Chinese Fintech affiliate company of the Alibaba Group. The transaction is expected to be completed in three tranches, wherein, first tranche would be injected by End-November-18. Net interest/mark-up revenue (NIMR) increased during the period but the bank’s bottomline closed in red due to high marketing OPEX incurred in pursuit of expanding BB customer outreach.
Core banking indicators remained sanguine while BB domain continued to generate losses. The bank’s business model is presently pivoted around developing a sustainable widespread M-wallet customer platform, with regards to which substantial results have been achieved. Liquidity profile reflects a comfortable outlook. Asset quality, however, slightly decreased (~1.7% infection ratio), mainly on the backdrop of unsecured lending. Currently. the management’s paramount focus lies in taking a boom in the BB segment with respect to which entry of a new equity partner is a salient feature.
The ratings are dependent upon successful strategic alliance with Ant-Financial and achievement of positive indicators in the BB domain. Meanwhile, simultaneous growth trends in the core and BB domain remain imperative.
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