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 risk absorption capacity emanating from low leveraged financial structure and sustained profitability. Good management quality, strengthening risk management systems, and strong control environment provide strength to FHM's profile. FHM's prudent business strategy has enabled the Modaraba to maintain impressive asset quality even in volatile economic conditions. Ijarah financing continues to remain FHM's strong forte, though the management is working to diversify its financing portfolio by enhancing its share of Diminishing Musharika which is expected to bring benefit of stable revenue streams.
Meanwhile, COMs would continue to be the main source of funding. FHM's association with the House of Habib remains a positive factor. The ratings are dependent on the management's strategy to sustain its competitive positioning while ensuring stable profitability.-PR