JCR-VIS Credit Rating Co Ltd had revised the outlook on the rating of Saudi Pak Commercial Bank in September 2006 to 'Negative.' This rating action had been taken in view of the observed delay in regularisation/recoveries of classified advances vis-à-vis amounts earlier indicated by the bank as being recoverable within a very brief time period.
A further increase in non-performing assets had been posted in the subsequent period. While sponsors had injected equity during the last quarter of 2005, the persisting weakness in asset quality indicators had continued to drag profitability indicators.
JCR-VIS was given to understand that the bank had a definite plan for addressing the issue of balance sheet impairment through recapitalisation within the next few months.-PR