The Pakistan Credit Rating Agency (Pacra) has downgraded the long-term entity ratings of Trust Investment Bank Limited (TIBL) to "BBB-" (Triple B Minus) [Previous: BBB] while maintaining the short-term entity ratings at 'A3' (A Three). Meanwhile the rating of TFC-III (PKR 600 million) has also been downgraded to 'BBB-' (Triple B Minus) [previous: BBB].
The ratings reflect continuous pressure on financial and business profile of the bank as evident from very low liquidity and recurring operating losses. Nevertheless, these ratings recognise the efforts of the management to subside the pressure, mainly through conversion of non-earning assets in earning resources. This would help in improving liquidity position.
The bank is currently pursuing few of its lenders for settlement of borrowings against certain assets, which are currently classified as non-earning. This, while rationalising interest cost, is expected to bring overall leveraging down. Meanwhile, the sponsors are exploring options to bring a new equity partner in the bank.-PR