JCR VIS Rating Company has upgraded the short-term rating of Al-Zamin Leasing Modaraba (AZLM) to A-2 (A two) from A-3 (A three), while the medium to long-term entity rating has been maintained at BBB+ with stable outlook.
The instrument rating of the first tranche of TFC has also been maintained at A- (single A minus). The upgrade reflects the change in the funding mix of the institution with its now improved access to the capital market for long-term funds, enabling it to better match assets and liabilities.
AZLM has also achieved significant growth during the period while maintaining emphasis on credit quality and diversification.
Further, with adequate level of capitalisation, the modaraba has room to increase leverage to fund future growth. However, profitability indicators require strengthening to improve its internal capital generation capabilities.