HBFCL rating reaffirmed



LAHORE –JCR-VIS Credit Rating Company Limited has once again re-affirmed the entity rating of ‘A/A-2’ (Single A/A-Two), says a press release.The ratings incorporate the shareholding structure of HBFCL jointly held 62.5pc by the Government of Pakistan (GoP) and indirect stake of 37.5% by the State Bank of Pakistan (SBP). State Bank of Pakistan is both shareholder and major lender of HBFCL. As stated in the letter issued by the CEO of JCR-VIS, the assigned rating incorporates the strategic importance of HBFCL as a housing finance arm of GoP; implicit support of the GoP to restructure the institution in a manner that becomes financially viable has also been built into the ratings, says a press release.Liquidity cushion available to HBFCL against borrowing has increased over time with deployment of significant portion of recoveries in highly marketable t-bills and the balance in bank deposits over the past few years. Investment in t-bills represents a higher proportion of total assets at end-2011 as compared to prior years. Moreover, timely payments have been made against the outstanding Sukuk issue.Despite rise in non-performing loans the institution has managed to get sizable recovery against past dues. Even with these rising NLPs, profitability of the institution has witnessed a positive trend in relation to prior years, attributable to greater contribution of income from investments.

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