The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Usman

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PACRA Maintains Entity Ratings of Mobilink Microfinance Bank Limited

Rating Type Entity
(18-Oct-19 )
(29-Apr-19 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Positive Positive
Rating Watch - -

The ratings take comfort from the bank's relationship with a leading global telecom group - Veon (formerly VimpelCom) - 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 rapid growth and being reinforced with the aim of expanding Mobile-wallet 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 ~7% in the MFBs Gross loan portfolio and ~9% in the total deposits of the Microfinance industry as at End-Jun'19. Overall asset quality is healthy supported by robust recovery framework. The bank's business model is directed towards fostering core and branchless banking simultaneously. Granular small ticket size deposits in the BB domain, as growing, adds benefit to performance indicators. The ratings take comfort on the financial risk profile depicted by healthy net interest/markup revenue (NIMR) on the backdrop of low cost of funds, translating into fine bottomline, while liquidity profile remains comfortable.
The ratings are dependent upon continued momentum of growth in digital banking domain, while expanding share in the core banking landscape. Meanwhile, the maintenance of asset quality is of importance.

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 Vimpelcom) - 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 seven members - four non-executive directors, 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.