DARACHI – The Pakistan credit Rating Agency (PACRA) has upgraded the long-term entity rating of First Women Bank Limited (FWBL) to “A-” (Single A Minus) [Previous: BBB+], while maintaining the short-term entity rating at “ A2” (A Two). These ratings denote a low expectation of credit risk while the capacity for timely payment of financial commitments is considered strong, says a press release. The ratings reflect recent change in the ownership structure of the bank wherein the Government of Pakistan (GoP) has become the major shareholder (60pc). Notably, this is achieved through fresh equity injection in the bank. This is expected to bring clarity to the bank’s future strategy, likely to be instituted post- recomposition of the BoD. On a standalone basis, the business and financial profile of the bank improved slightly owing to enhanced profitability and better liquidity. However, the bank continues to feature small size, limited outreach, restricted asset deployment avenues, and asset quality as challenges. Although the bank’s nominal capital is well short of the statutory requirement, it has managed to secure its grounds on the basis of high capital adequacy; while respective exemptions from the central bank are in place.The ratings are dependent on focused support of the major sponsor which would be vital for the bank to secure sound business prospects. At the same time, capacity building, in terms of induction and retention of seasoned human capital and fortification of a sound technological platform are critical. The management expects to achieve the status of a nationalized bank under the terms of the Bank Nationalization Act (BNA), 1974, enjoying deposit guarantee from the GoP. This would further boost the bank’s profile.