The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of First Habib Modaraba (FHM) at "AA+" (Double A plus) and "A1+" (A One Plus), respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect FHM's sound financial profile emanating from low leveraging, managed liquidity, and sustained profitability. Good management quality, strengthening risk management systems, and strong control environment provide strength to FHM's profile. The modaraba maintains its performance - particularly asset quality and profitability. The management's business strategy envisages volumetric growth in assets to sustain its profitability. The growth is to be funded through mix of internal sources and debt. However, leveraging pattern would be held largely same - that is at comfortable level. FHM's association with the House of Habib remains a positive factor. The ratings are dependent on the management's ability to sustain its competitive positioning while ensuring stable profitability.-PR

Copyright Business Recorder, 2016