Pakistan Credit Rating Agency downgrades ratings of Trust investment bank

Lahore, September 28, 2012 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has downgraded the long-term and short-term entity ratings of Trust Investment Bank Limited (TIBL) to ‘C’ (Single C) [Previous: B]. The rating of secured and listed TFC issue (TFC III – PKR 600 m) has also been downgraded to ‘C’ (Single C) [Previous: B]. The outlook on the ratings remains negative. The ratings indicate that there is an inadequate capacity to meet financial commitments and default is a real possibility.

The ratings reflect weak financial profile of the bank, given limited funding space, poor asset quality, and recurring business losses. This highlights high risk to operational viability of the bank. Meanwhile, without external support (from the sponsor or any other source), the bank is unlikely to service its financial obligations.

The key sponsor and the management of the bank are exploring various options which include interalia a) merger with other group entity/ies, mainly in real estate sector, to support the bank’s capitalization, b) sale of certain real estate assets to generate liquidity, and c) restructuring of its liabilities. However, any material progress in a short while is unlikely. Given significant pressure on liquidity of the bank, immediate materialization of these efforts is critical.

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