The Pakistan Credit Rating Agency Limited
Press Release


Maryam Arshad

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PACRA maintains the Rating of Escorts Investment Bank Limited | Rating Watch

Rating Type Entity
(25-Mar-22 )
(05-Apr-21 )
Action Maintain Maintain
Long Term A- A-
Short Term A2 A2
Outlook Developing Stable
Rating Watch Yes -

Escorts Investment Bank Limited (“EIBL” or “the Company”) is a subsidiary of Bahria Town (Pvt) Limited, a privately owned real-estate development company that owns, develops, and manages properties across Pakistan. The sponsoring shareholder is in process of divesting its stake, in lieu of which multiple notices have been disseminated on the country’s premier bourse. PACRA is monitoring the development keenly. The Company continues to follow a conservative approach towards writing new business, therefore the bank is funding its needs through equity at the moment. The bank has total long-term financing of PKR ~124mln at the end of Dec-21(Jun-21: PKR ~144mln; Dec-20: PKR ~137mln), tapered by 9.5% compared with the corresponding period last year. The house financing contracted by 6% reaching PKR 161mln and the micro-financing contracted by 71%, reaching PKR 5mln. The bank booked a net loss of PKR 35mln.
An initiative towards the proposed micro-lending branch network expansion plan is in progress, in accordance with which a new head of the micro-finance department has been appointed. This would help the Company improve its operational performance. The assigned rating further takes into account its association with Bahria Town (Pvt) Limited (BTPL). There's an expected transition in the sponsorship structure that's the implication on the financial profile is yet to unfold; hence Rating Watch.
The ratings are dependent on the continuous financial strength and maintained liquidity position. Immaculate financial discipline and corporate governance is important. Any discrepancy in achieving its targets or regaining its lost momentum remains critical to the ratings.

About the Entity
Escorts Investment Bank Limited (EIBL), a Non-Banking Finance Company (NBFC), started its commercial operations in 1996. Major shareholding is held by Bahria Town (Pvt.) Limited (~88%) while the rest is owned by the public sector companies and general public. Bahria Town is a privately owned real-estate development company which owns, develops, and manages properties across Pakistan. It is the leading private real estate company in the country. The major ownership of BTPL is held by Chairman & CEO Mr. Malik Riaz Hussain.
EIBL’s board of directors (BoD), currently comprises on five members after the resign of one director and the CEO. The board includes two independent directors. All other members are non-executive members. Ms. Zainab Malik is the Chairperson of the board, the only representation of the sponsoring family. She carries experience of corporate governance of more than nine years during her period of directorship over different companies. Mr. Naveed Amin resigned last month i.e., February 2022 from the position of the CEO. The future CEO of the Company is yet to be decided. The appointment of a new CEO after the resignation of incumbent CEO is essential for the smooth running of the Company’s operations.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.