Lahore, January 14, 2016 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Standard Chartered Modaraba (SCM) at “AA+” (Double A plus) and “A1+” (A one plus), respectively. The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. The ratings remain under Rating Watch.
Standard Chartered Bank Pakistan Limited (SCBPL) signed a non binding MOU with ORIX Leasing Pakistan (ORIX) in Sep-14 to divest Standard Chartered Modaraba (SCM) along with its management company. Recently, SCBPL has entered into a share and certificate purchase agreement with ORIX. As per the agreement, ORIX will be acquiring SCBPL’s 100% stake in the Modaraba Management Company – Standard Chartered Services of Pakistan (Private) Limited and SCBPL’s 20% stake (direct and indirect) in SCM. The transaction remains subject to satisfaction of various conditions including regulatory approvals contained in the agreements; pending finalization, the ratings of SCM would remain on Rating Watch.
SCM has observed improvement in performance on the back of good quality asset book, better spread management and contained operational costs. Given the management’s cautious approach during the on-going acquisition process, SCM is likely maintains to its asset quality while following a conservative growth strategy. The ratings are dependent on the modaraba’s ability to sustain its risk profile. Successful execution of the share purchase agreement and a smooth change in ownership are important.
For more information, contact:
Hammad Rashid
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