JCR-VIS Upgrades Entity Ratings of First Credit and Investment Bank Limited
Despite 2008 being a difficult year for the financial sector, especially NBFCs (Non-Banking Finance Companies) sub-sector on December 31, 2008 JCR-VIS Credit Rating Company Limited (JCR-VIS) announced upgrading of the medium to long-term entity rating of First Credit and Investment Bank Limited (FCIBL) from ‘BBB+’ (Triple B Plus) to ‘A-’ (Single A Minus). Short-term rating has been maintained at ‘A-2’ (A-Two). Outlook on the medium to long term rating is ‘Stable’.
FCIB’s rating upgrade stands out in contrast with the rating downgrades of a number of financial institutions in Pakistan due the difficult operating and financial environment, especially during the second half of 2008, which saw imposition of a floor at the stock exchanges, increase in interest rates, a severe liquidity crunch, inflationary pressures and diminished consumer spending. These negative developments combined to adversely affect manufacturing, services and the financial sectors. On the international front, many blue chip companies saw downgrades and several iconic financial institutions needed government support to stay solvent or were merged.
FCIB’s upgrade takes into account its enhanced equity base, providing the institution with additional loss absorption capacity, and the management’s cautious and prudent approach.
Link to JCR-VIS’s press release is given below: