PACRA Maintains Entity Ratings of First Habib Modaraba

The ratings reflect First Habib Modaraba’s (‘the Modaraba’) sound business profile, emanating from a healthy asset base and asset quality, along with sustained profitability. Additional comfort is derived from the Modaraba’s affiliation with a renowned sponsoring entity, Habib Metropolitan Bank Ltd. The presence of industry veterans in the management structure, along with the implementation of a robust internal control system, is considered pivotal for the Modaraba's operational efficiency. The high policy rates supported the Modaraba’s topline, albeit with an impact on the finance costs. The Modaraba continues to maintain robust profitability. The Modaraba managed to sail through its devised strategy to support its business volumes so as to beef up its bottom-line. Going forward, the management aims to continue its growth strategy, supported by the revival in automobile demand and slight policy rate adjustments, while also diversifying its revenue streams through a varied product portfolio and different business models. The Modaraba’s capital provides strong support to the funding structure of the Modaraba, equally aided by Certificates of Musharaka (CoM). The strong capital adequacy ratio portrays Modaraba's strong capital position. Moreover, liquidity is being well maintained by investing in term deposits. The Modaraba is evolving its long-term strategic vision to remain competitive in the increasingly challenging financial landscape. The Modaraba sustains the highest ratings among the entire Modaraba sector across the country.
The ratings remain dependent on the management's ability to sustain its competitive positioning while ensuring stable profitability. The ratings also depend upon keeping its financial profile intact. Any significant change in its risk profile may adversely impact the ratings.

About the Entity
First Habib Modaraba ('the Modaraba'), established in 1985 and listed on the Pakistan Stock Exchange, is a perpetual, multi-purpose Modaraba engaged in Islamic modes of financing, mainly Diminishing Musharaka. Habib Metropolitan Modaraba Management Company (Pvt.) Limited, also owns Habib Metro Modaraba, is a wholly owned subsidiary of Habib Metropolitan Bank and is the management company of the Modaraba. Habib Metro Modaraba holds ~10% stake in the Modaraba.
The Board is chaired by Mr. M. Shams Izhar, possessing professional experience of over 36 years. All the Board members have vast experience in banking and finance. The CEO, Mr. Muhammad Shoaib Ibrahim has been associated with the Modaraba since its inception. He is supported by experienced team members.