The Pakistan Credit Rating Agency Limited
Press Release


Ayesha Qasim

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PACRA Maintains Entity Ratings of Mobilink Microfinance Bank Limited

Rating Type Entity
(30-Apr-18 )
(26-Oct-17 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Positive Stable
Rating Watch - -

The ratings of Mobilink Microfinance Bank Limited ("the Bank") take comfort from the relationship of the Bank with a leading global telecom group - Veon (formerly Vimplecom) - and with Pakistan's largest cellular operator – Jazz (formerly Mobilink). Sponsors' commitment to the bank is witnessed in the form of both technical collaboration and financial support. Ensuing synergies are strengthening the bank's penetration in target markets. Leveraging on the sponsors network and renowned brand name (JazzCash), branchless banking domain is taking on a rapid growth and being reinforced with the aim of expanding Mobile-wallets accounts. The bank's current strategy is pivoted around capitalizing on its digital banking base having strong support from its super agent cellular operator. The management's confidence lies in keeping this segment's margins sustained and bring it at the forefront of mobile banking services, amidst rising competition. The bank held a market share of ~5% in the total Gross loan portfolio and ~8% in the total deposits of the Microfinance industry by End-Dec'17. Overall asset quality is healthy supported by robust recovery framework. Deposit base is widening on year-on-year basis with branchless banking concentration of ~56% of the total deposits by the end of Dec'17. This provides a competitive edge to the bank in establishing a significantly low cost deposit base transpiring into better margins.

Positive outlook takes into account progress towards growth trajectory by means of increased market captivation in digital banking. The low cost branchless deposit base in relation to the absolute gross advances of the bank breeds into larger spreads eventually improving the profitability of the bank as a whole. Going forward, capitalization of this cost benefit into increased market share remains important.

About the Entity
Mobilink Microfinance Bank Limited commenced its operations in 2012 as a nationwide Microfinance bank. It is a wholly owned subsidiary of Global Telecom Holding (GTH), which in turn, is majority owned by Veon (formerly Vimplecom) - one of the world's largest telecom groups. Veon also owns Jazz (formerly Mobilink), the bank's super-agent in branchless banking.

The Board of Directors comprises of seven members - three representatives from Veon, one nominee from Jazz, two independent directors and the CEO - Mr. Ghazanfar Azzam. He is assisted by a qualified management team.

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.