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Karachi, October 22, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited has maintained the medium to long-term entity rating of Silk Bank Limited (SBL) at ‘A-’ (Single A Minus). Short-term term rating has been adjusted from ‘A-2’ (A-Two) to ‘A-3’ (A-Three). Ratings continue to be placed under ‘Rating Watch-Developing’ status.
The bank remains short of the regulatory minimum capital requirement and capital adequacy ratio. To address the regulatory shortfall, the bank is soliciting investors for issuance of perpetual, non-cumulative, convertible preference shares; product structure for the transaction has been approved by the State Bank of Pakistan. The preference shares will be eligible as tier-1 capital. Equity injection is necessary for improving the risk profile of the institution.
The bank carries a sizeable amount of non-earning assets, which place significant drag on earnings. The management is pursuing a multi-pronged strategy to improve core earnings. JCR-VIS will closely track the implementation of this strategy. The bank has posted an overall profit for 2011 and for 1H2012 on the back of recoveries.
For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk