Lahore, March 28, 2022 (PPI-OT):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.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com