PRESS RELEASE

The Pakistan Credit Rating Agency Limited

Rating Action
Lahore : 12-May-2014

Analyst
Humza Hussain
(+92-42-35869504)
humza.hussain@pacra.com
www.pacra.com

PACRA Maintains Entity Ratings of Apna Microfinance

Bank Limited; Outlook remains Positive
The Pakistan Credit Rating Agency (PACRA) has maintained the
long-term and short-term entity ratings of Apna Microfinance Bank
Limited (AMBL) at "BBB" (Triple B) and "A3" (A Three),
respectively. Meanwhile the outlook for the ratings remain "Positive". These
ratings denote an adequate capacity for timely payment of financial
commitments.
The ratings reflect the sponsors' concerted efforts to streamline the business
profile of AMBL. Operational performance of the bank, though steadily
improving, is yet to achieve sustainability. Although the bank is expanding its
loan book, the challenge is to achieve good quality - portfolio at risk higher
than sector norm. This is also restraining consistent profitability. While the
bank has complied with capital requirements for provincial level license,
sponsors are making efforts to pursue a national level license. Meanwhile,
AMBL intends to expand its operations in interior Sindh; key focus would be
to tap potential agricultural community. However, successful materialization of
its strategy, while improving bottom-line performance is yet to be seen.
The ratings carry a positive outlook recognizing potential benefits from
increasing capitalization level, enhancing market share in its operating market
and improvement in technological infrastructure. However, stability in key
management team, along with strengthening of risk management framework
and related controls are critical.
About the Bank: Apna Microfinance Bank Limited, listed on Karachi Stock
Exchange, was established under the Microfinance Institution Ordinance 2001.
It started operations in 2005.The bank, though currently concentrated in
Karachi, has provincial licence - Sindh. The current group of sponsors,
acquiring control in 2012, comprises business entrepreneurs and professionals.
The seven member board is dominated by these shareholders. The Chairman of
the board is also the main sponsor of the bank - Mian M.A. Shahid. He is the
founder of United International Group (UIG), which has interests in financial
services, tilted towards insurance sector. Mr. Saleem Shaikh, the bank's
president, has around 35 years experience in the banking industry. He is
supported by a team of qualified individuals.

Applicable Criteria and

Related Research
- Bank Rating Methodology

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